Despite a reprieve in the latest government funding announcement, Huntingdonshire District Council (HDC) will still need to deliver almost £2.4 million of savings by 2019/20.
The government's final settlement announcement awarded us an extra £79,000 grant for 2016/17, rising to £303,000 in 2019/20. The announcement also confirmed that 2018/19 is the last year that we will receive revenue support grant, which the government provides to councils to help deliver services. This grant stood at £2.5 million in 2011/12.
We have been looking at new and innovative ways to reduce costs and generate income. Since starting our zero-based budgeting review process two years ago, we have made savings of £3.8 million. In addition, we have implemented a Commercial Investment Strategy which sets out plans to invest further in commercial property. We currently have just over £20 million invested in property, and the business case aims to invest a further £50 million over the next three years in a combination of property shares and commercial property within Huntingdonshire and across the region.
We will be investing our own reserves, as well as borrowing from the Public Works Loan Board, to fund the Commercial Investment Plan. We hope to gain a revenue return of £2.5 million by the end of 2018/19, giving us a return on equity of 9%. The combination of different property assets, shares and buildings, spreads the risk and allows us to receive revenue as well as capital growth.
The government is also consulting with councils on plans to reduce the amount of money they receive in New Homes Bonus – a grant which helps meet some of the costs of growth. This reduction has already been included in our budget, with this grant being removed by 2020/21.
Cllr Jonathan Gray, Executive Councillor for Resources, said: "Your district council has been transformed in response to the cuts in government funding that have taken place and those that are yet to come. We have always tried to ensure that your council is not one that simply cuts services to balance the books, but has looked at new, efficient and innovative ways of operating that will actually improve the experience of our residents in dealing with HDC. I am very pleased with the progress we have made; however we still have a significant gap in funding to close and this budget is a step closer to dealing with this."
Our budget will be set for the next financial year at full council on Wednesday 24 February.