About council tax and how it is spent

Our funding comes from a number of sources. This includes central government, council tax, business rates and fees and charges on services we provide. The table below reflects the estimate of gross income to be received in 2023/24.

Schools are funded by a dedicated schools grant from central government and £534m has been allocated in 2023/24. This amount includes both maintained schools and academies but excludes sixth form funding and pupil premium.

We plan to spend £1,074m on providing services to our residents. The total gross expenditure for 2023/24 is allocated as follows.

The adult social care precept is a portion of council tax which is set aside specifically for adult social care services. In the last financial year, we directly supported more than 14,000 older people and younger adults, including people with learning disabilities, physical disabilities and mental ill health. Adult social care services are delivered in a number of different ways including prevention and supporting people to live independently in their own homes as well as residential and nursing care.

We spent more than £290m on adult social care services in 2022/23, supporting people to live longer, healthier, more independent lives. We currently receive over 70,000 enquiries every year relating to adult social care and demand for services, and the cost of providing those services, continue to increase.

For 2023/24, the adult social care precept has been increased by 2% of the total council tax charge made for services for the previous year (2022/23). This was approved at the full council meeting on 22 February 2023. We have illustrated how the adult social care precept is calculated with an example below using a Band D property.

2022-23

2023-24

Although everyone benefits from some of our services such as highways and transport, only those with children will receive education support and most people would like to remain sufficiently independent and healthy so that they never need council support such as residential care. However, it is often these statutory services, which benefit the smaller number of people that cost the most. Similarly, the adult social care precept is part of council tax rather than a service charge and so is not linked to whether or not you receive social care services. You could think of council tax as an insurance premium. You hope you will never have to claim but you have the comfort of knowing that if you, or a member of your family, need to then there will be support available to help you.

The government sets out the rules on how much councils can increase council tax. For 2023/24 the government confirmed the limit for increases to core council tax at 2.99% and 2% for the adult social care precept.

If we want to increase it by any more than these levels set by the government, we must hold a local referendum.

Local authorities are required by law to have a balanced budget. That is a financial plan based on sound assumptions which shows how income will equal spend over the short and medium-term. Plans would take into account deliverable cost savings and/or local income growth strategies as well as usable reserves.

Reserves are like household savings. The money has been put away to pay for something in the future like a car or as a resource for emergencies such as when the boiler breaks down unexpectedly.

There are two types of council reserves:

1. Earmarked reserves - these are already committed to be spent.
2. General reserves - these are for responding to unexpected events such as major funding issues.

Like savings, reserves can only be spent once. If we are not careful in making the best use of our reserves we will be exposed to the risk that if some serious unexpected expenditure is necessary, the money just will not be there.

Our capital budget is spent on fixed assets. That includes new buildings and major refurbishments, buying land or buildings and investment in shares or bonds. The capital budget can be funded from the revenue budget, through borrowing within strict parameters set by the government or from capital receipts. We can only borrow to support the capital budget not to pay for everyday services. Capital receipts such as the sale of assets can only be used to either repay debt or to support the capital budget.

If, for example, we were to sell an office building we owned, the money received would be a capital receipt and could only be used to repay debt or for the capital budget. It could not be used for funding social care or home to school transport costs or other revenue funded services. Repayment of debt might sound like a good option, however much of our debt is at low fixed interest and we may have to pay significant penalties for paying off debt early.