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007/2013 – Notification of the Precept Proposal for 2013/14 to the North Yorkshire Police and Crime Panel – 29 January 2013

Executive Summary and recommendation:

The Commissioner is required under Schedule 5 to the Police Reform and Social Responsibility Act 2011 and associated regulations to notify the Police and Crime Panel of her proposed precept for 2013/14 by 1 February 2013.

Throughout the budget planning and public consultation exercise, two options have been considered by the Commissioner:

  1. Continuing to freeze the Council Tax for a further year in 2013/14, or
  2. Increasing the Council Tax by 1.99%.

The Commissioner will be requested to determine which option to put forward to the Police and Crime Panel as her precept proposal for 2013/14.

Given the short and longer term financial needs of North Yorkshire Police, she is mindful of the need not to unnecessarily add to the current financial pressures on council taxpayers and is inclined to freeze the council tax for 2013/14.

She is therefore currently seeking public views before making her final decision.

Police and Crime Commissioner decision: approved

Signature Date 29 January 2013
Title Police & Crime Commissioner for North Yorkshire

Part 1 – Unrestricted facts and advice to the PCC

Introduction and Background

The Commissioner is required under Schedule 5 to the Police Reform and Social Responsibility Act 2011 and associated regulations to notify the Police and Crime Panel of her proposed precept for 2013/14 by 1 February 2013.

The Panel must review the proposed precept by 8 February and make a report to the Commissioner. The Panel has a right to veto the proposed precept if at least two thirds of the persons who are members of the Panel at the time when the decision is made vote in favour of making that decision.

The Commissioner must have regard to and give the Panel a response to their report. Where no veto is exercised the Commissioner may issue the precept. If the Commissioner’s proposal is vetoed by the Panel, a revised proposal must be notified to the Panel by 15 February.

The Panel must review the revised proposal and make a report to the Commissioner by 22 February. The Commissioner must respond to the report and issue her precept by 1 March.

Rejection by the Panel of the revised precept does not prevent the Commissioner issuing it as her precept for the forthcoming financial year.

Matters for consideration

Two options have been identified through the strategic planning process for consideration by the Commissioner:

  • Continuing to freeze the Council Tax for a further year in 2013/14, or
  • Increasing the Council Tax by 1.99%.

A detailed analysis of the budget is shown in the attached Information Pack, and is summarised below:

Option 1 – Council Tax Freeze 2013/14 £000
Gross Expenditure 148,196
Income 9,165
Contribution to/(from) Reserves and Balances 615
Total Budget 2013/14 139,646
Funded by:
Home Office Grant 46,286
Department for Communities and Local Government Grant 29,568
Council Tax Support Grant 5,536
Council Tax Freeze Grant 2011/12 1,532
Total Government Funding 82,922
Estimated Collection Fund Surplus 160
Balance required from the Precept/Freeze Grant 56,564

Final notification of the Billing Authorities’ taxbase figures are still awaited, but based on the best available estimates the precept raised without any increase to the Council Tax would be some £55,946k. This would be supplemented in 2013/14 and 2014/15 by Council Tax Freeze Grant of £618k.

An increase of 1.99% in the Council Tax, equivalent to £4.07 per annum at Band D taking it from £204.55 to £208.62, would raise an estimated £57,060k in precept.

In both cases a balanced budget can therefore be achieved in 2013/14, there being additional resources available of £606k for option 2.

Other options considered, if any

A third option with a Council Tax increase of 3.135% had been identified. This represents the increase which would be required to compensate for the loss of Council Tax Freeze Grant for 2011/12 which was guaranteed for the period of the Spending Review but which is anticipated to fall out in 2015/16.

The Government’s excessiveness criteria, notified on 19 December 2012, would mean a public referendum would automatically be triggered for any increase over 2% by a local policing body in the top three quartiles for Council Tax nationally.

The potential costs and risks associated with a public referendum render this option unviable.

Contribution to Police and Crime Plan outcomes

There is an integrated strategic planning process to align financial planning to the outcomes included within the Police and Crime Plan

Consultations carried out

The Commissioner has consulted on the precept proposal by various means, and the publication of this paper seeking public views is a further avenue.

Financial Implications/Value for money

The annual budget decision must be considered in the context of the longer term financial position, to ensure continued financial health and sustainability of service provision.

Forward planning is relatively more complex at present because of the uncertainty surrounding future Government Funding, particularly in the period following the current Spending Review, and the ongoing impact of Council Tax Support localisation.

Based upon assumptions of future withdrawal of government funding as set out in the Information Pack, and Council Tax increases of 1.99% in 2014/15 and beyond, the overall budget position is as follows for the two options.

(Surplus)/Gap 2013/14 £000 2014/15 £000 2015/16 £000 2016/17 £000 2017/18 £000
Option 1 4,699 7,278 10,934 13,805
Option 2 (606) 4,069 6,003 9,636 12,492

There is potential for a significant degree of variation to the forward projections presented above, which represent a worst case scenario. It is anticipated however that the minimum level of additional savings which will be required by 2016/17 will be in the order of £5m.

Relevant considerations for the Commissioner in making her decision include:

  • The goal of maintaining frontline operational capacity
  • The impact on council taxpayers
  • Future financial health, including the adequacy of reserves and balances
  • The robustness of financial and organisational management processes in place
  • Levels of demand and Force resilience
  • Savings made to date and the capacity for future savings
  • Public views obtained during consultation

Legal Implications

The statutory duty to notify the Panel of the proposed precept is set out in Section 1.

Information Pack comprising:

Medium Term Financial Plan Scenario 1A (Option 1)
Medium Term Financial Plan Scenario 2A (Option 2)
Capital and Revenue Development Programme
Reserves Projections

Tick to confirm statement
Director/Chief Officer has reviewed the request and is satisfied that it is correct and consistent with the NYPCC’s plans and priorities.
Legal Advice Legal advice has been sought on this proposal and is considered not to expose the PCC to risk of legal challenge.
Financial Advice The CC CFO has both been consulted on this proposal, for which budgetary provision already exists or is to be made in accordance with Part 1 or Part 2 of this Notice
Equalities Advice An assessment has been made of the equality impact of this proposal. Either there is considered to be minimal impact or the impact is outlined in Part1 or Part2 of this Notice.
I confirm that all the above advice has been sought and received and I am satisfied that this is an appropriate request to be submitted for a decision Judith Heeley – Chief Finance Officer, Office of Police and Crime Commissioner Date 18 January 2013
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