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Scrutiny Select Committees Introduction to local government finance

Scrutiny Select Committees Introduction to local government finance. Agenda. The Council budget Why budget? The balancing act Key dates and activities Budget variances Revenue vs capital Expenditure Funding Retention of business rates Recommended reading. Why do we need to budget?.

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Scrutiny Select Committees Introduction to local government finance

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  1. Scrutiny Select CommitteesIntroduction to local government finance

  2. Agenda • The Council budget • Why budget? • The balancing act • Key dates and activities • Budget variances • Revenue vs capital • Expenditure • Funding • Retention of business rates • Recommended reading

  3. Why do we need to budget? • Planning • Monitoring • Controlling • Measuring performance

  4. The balancing act RSG Grants Business rates Council tax Rents Fees andcharges Employees Premises Transport Supplies and services Expenditure Income

  5. Key budget dates and activities

  6. Monitoring budgets Variances can occur due to: • Delays in processing payments/income • Uneven spending patterns • Incorrect profiling of budgets • Mis-codings • Centrally managed budgets e.g. repairs and maintenance • Activity/demand changes • Incorrect budget assumptions • Poor management of resources

  7. Revenue vs capital, expenditure • Revenue expenditure relates to the day-to-day running of the Council • Capital expenditure relates to the acquisition or improvement of a fixed asset such as land, buildings, vehicles or roads

  8. Revenue vs capital, funding • Revenue funded by: • Council tax • Central government grants • Redistributed business rates • Fees and charges • Capital funded by: • Capital receipts • Grants • Borrowing • Contributions from the revenue budget

  9. New developments: business rates • Position up to 2012/13 • Collect NNDR as an agent for the government • Rates set centrally • NNDR redistributed by govt according to perceived need • Redistribution NOT connected to amount collected • SCC net gainer • From 2013/14 • 50% retention by collecting authorities • System of tariffs/levies to ensure fairness • Rates still set centrally • Authority will keep any incremental increases in rates collected

  10. Recommended reading On the finance library intranet page at http://intranet.salford.gov.uk/customer/finance/finance-accountancy/finance-links.htm • A brief guide to local government finance for councillors (CIPFA) • A comprehensive guide to local government finance (CIPFA) • Finance for members (link to mini-site)

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