Issue - meetings

Provisional Local Government Finance Settlement

Meeting: 12/01/2021 - Cabinet (Item 11)

11 Provisional Local Government Finance Settlement 2021/22 pdf icon PDF 254 KB




The Cabinet accepted this report as urgent to enable consideration of the matter at the earliest opportunity given that the final budget proposals would be submitted to the next scheduled Cabinet meeting on 2 February 2021.


This report provided details of the provisional local government settlement announced by the Secretary of State on 17 December 2020. It also provided updated assumptions in relation to locally raised taxes.


The report explained that the Council Tax referendum limit had remained at its historic level of 2%, however the Adult Social Care precept had been extended for a further year, allowing upper tier authorities the flexibility to increase Council Tax by a further 3% above the referendum limit. Medway’s Draft Budget assumed that Council Tax would be increased by 1.994%. However, this report now assumed the Council would avail itself of this flexibility and increase the Council Tax by 4.995%.


Concerning business rates, the report explained that the widely anticipated review of the Business Rates Retention scheme and plans to reset the baseline from next year had once again been deferred, whilst the Government continued to focus on other, more pressing issues. In the meantime, the 50% business rate retention scheme would continue in its existing form and Medway remained a top-up authority.


The report also provided details of the impact on other grants, set out at sections 6 to 12 of the report.


During the discussion of this item, the Leader of the Council clarified a typographical error at paragraph 13.1 of the report. The date should read 17 November 2020.


Decision number:


The Cabinet noted the implications of the provisional settlement in formulating its 2021/22 budget proposals.




These provisional levels of grant are a fundamental component of the 2021/22 budget, and their announcement is a further stage in the process of preparing a balanced budget.