To address the recent rise in town and parish council tax (an increase of 30.6% on the 7.46% share of the total council bill which Ivybridge Town Council receives), we have brought together information from various sources such as budgets and meeting minutes to provide a comprehensive explanation of how the additional funds will be used.
As in past years, we are seeing more pressure on certain
budget lines, in the main, our utility supply costs, food costs for The
Watermark, and the implications of the employers National Insurance
contribution announcement.
We have also experienced a
significant pressure on finances caused by urgent repair or
replacement works, particularly in
The Watermark. This building is now 16 years old and
subsequently many elements
installed at the time of construction are now failing. When designed, the
building specification was high, and as such replacements of fixtures,
fittings, equipment, etc is expensive if replaced at the same level.
In our parks and open spaces, we have seen a significant
amount of tree work carried out following a recent detailed tree inspection,
with more aboricultural work to come.
Council has suggested the idea of taking grounds maintenance
and grass cutting in-house, and the feasibility of this is to be considered in
coming years. In the meantime, the contract for next year’s grass cutting and
grounds maintenance contract will shortly be announced, with costs for these
services approximately £18,200.
While the council has demonstrated prudent budgeting in past
years, we must now enhance our long-term financial strategy, future-proofing
our finances and concentrating on building up our reserves. This is absolutely
vital to ensure that we have funds available for unexpected or major cost
items.
Examples of upcoming large cost/major expenditure:
Watermark
One of the four boilers is not operating, and requires
replacement, at a cost of around £6,500. However, this fourth boiler has
not been operational for a few years and therefore may have caused additional
operational pressure on the three working boilers, thereby increasing the risk
of complete failure, and subsequent required replacement of the whole boiler
system.
We have a recommendation that the BMS (Buildings Management
System) should be replaced as it is out of date, at a cost of around £50,000.
The flooring in the coffee shop and toilets requires replacing.
The toilet facilities have recently required multiple repairs
and require refreshing.
The solar panels on the roof are not operating correctly,
and require invertor replacement, at a cost of around £2,500.
Following a fire inspection, we have been advised that the
entire fire control system in The Watermark requires replacement – detectors
and control panel, at a cost of around £30,000.
Town Hall
The Town Hall houses the Ivybridge Town Council offices.
It is a public building and is regularly used by councillors, community groups
and businesses. The windows require repairing and replacement and the entrance
door mechanism needs to be replaced. Current indications are that the required
repair works will cost in the region of £8,500.
As with The Watermark, the fire inspection has identified
defects and omissions in fire safety. For example, there is no roof void fire
detection or compartmentalisation to reduce fire spread, particularly in the
area above the boiler flue. The fire detection system in the Town Hall is also
not at the correct standard and requires work to bring it up to the correct
level. This work is estimated to cost £82,000.
The Town Hall solar panels have never been inspected or
serviced since installation and require works to ensure that they are
functioning correctly.
Woods, Parks, Open Spaces and Woodlands Cemetery
The additional aboricultural work required by the tree
inspection, will see a cost of around £32,000 in the next financial
year, and this will deplete reserves allocated for this purpose, and so
contingencies need to be budgeted for future years.
As we are the landowners of such vast spaces, a habitat
management plan is crucial for conserving biodiversity, maintaining ecosystem
balance, and ensuring sustainable land use for wildlife and human needs. The
cost for this plan is approximately £2500 (+costs for any works or
projects identified within the plan).
The lease agreement with South Hams District Council on the
current Woodlands Cemetery site ends in 2028. South Hams District Council is
already seeking to end this agreement early, offering the existing site plus
the extension to Ivybridge Town Council – it is unlikely that we will receive a
sum with transfer of ownership. The end of the lease will also mean that we
will no longer receive the £25,000 per year management agreement for the
site. A brief assessment of the condition of the extension area has found that
works are required in order to be able to use for interments. Costs for this
are currently unknown.
Staffing
Council acknowledges that in order to provide the services
and facilities to benefit the community of Ivybridge, appropriate level
staffing is required. The Government’s announcement regarding employers
National Insurance contributions has significantly impacted our budgets for
next financial year. Not only has the percentage contribution increased from 13.8%
to 15%, the threshold at which employers are to pay contributions on salaries
has lowered markedly, from £9,100 down to £5,000. This means that with this
change, every member of staff employed by the council will earn sufficient
salary that will see the council paying employer’s NI contributions.
The council has recently invested in two new members of
staff to strengthen community engagement and enhance local initiatives. A
dedicated Marketing and Communications Manager will focus on improving
outreach, ensuring residents stay informed about key services, events, and
developments. Meanwhile, the newly appointed Events and Projects Officer will
work to deliver engaging activities and initiatives that bring the community
together. This investment reflects the council’s commitment to fostering stronger
connections with residents and creating a more vibrant and inclusive local
environment.
The Importance of Reserves
Council is required to hold two different types of reserves
– General Reserves and Earmarked Reserves (EMR).
General Reserves should be a minimum of 3 months but
ideally up to 12 months of Net Revenue Expenditure (NRE), depending on the size
of the authority and its services and facilities provided.
Reserves may be used throughout the year, as
required, and if there is a net deficit at the end of the financial year, they
may also be drawn upon.
If there is a net surplus, then council will consider how to
allocate that surplus between the Earmarked Reserves and the General Reserve.
This surplus cannot be carried over into the next financial year’s budgets.
Having healthy General Reserves gives a council more
options, particularly in an operating environment that is uncertain. The more
asset-rich a council is, the closer to the 12 months it should try to be
(because of the risk of an asset needing sudden, unexpected, and unbudgeted
expenditure). The purpose of General Reserves is also to ensure that should the
Precept or other expected income not be forthcoming; council has sufficient
funds to continue to operate – the period of time these funds cover is to be
determined by council.
As at month 8 (2024/2025), when budgets were considered, reserves
held by Ivybridge Town Council were:
£327,492 Earmarked
Reserves
Comprising: £50,962 Restricted
Reserves – money given to the council for a specific purpose, e.g. a grant or
S106
£276,530 Committed Reserves –
money the council has decided to allocate to specific future projects, or to
build up for future expenditure, e.g. a ‘sinking fund’ for unplanned/planned
large maintenance issues or equipment renewals
£368,412
General Reserve We currently hold
approximately 4.05 months NRE1, which is a decrease on previous
years (4.25 months 23/24).
Ivybridge Town Council’s General
Reserves are considered low, particularly considering
its current facilities and service
provision, and its aspirations for the future.
1NRE
- Net Revenue Expenditure is the difference between budgeted income and expenditure
less any
budgeted capital expenditure, expenditure from earmarked reserves
and budgeted transfers to reserves
