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Budget guide 2019/20

The Revenue Budget​​

  • The revenue budget is the amount of money the Council has to spend on day-to-day services
  • These services include running our schools, caring for the vulnerable, collecting waste, maintaining the highway and parks and operating libraries and cultural venues.
  • The costs incurred in providing these services are called revenue expenditure and the income they generate is called revenue income. 
  • The key types of revenue expenditure and income are:-

  1. ​​​​Employee Costs - paying the salaries of staff who provide the services such as teachers, refuse collectors, social workers and librarians.
  2. Premises Costs - heating, lighting, cleaning and repairing our buildings
  3. Transport Costs - operating our vehicle fleet including refuse collection vehicles, gritters and sweepers
  4. Supplies – for example office equipment, teaching materials, telephony and IT 
  5. Other External Spend – for example paying others involved in service provision such as care providers and foster carers, paying levies to bodies such as the Fire Service or paying Council Tax Support to eligible recipients.
  6. Capital Financing – repaying debt and interest on borrowing taken out to fund capital expenditure. In an personal context this would be similar to mortgage or loan repayments
  7. Specific Income - We may get a Government Grant for a specific initiative – these are called specific grants, must be used for a particular purpose, and have strict terms and conditions attached. Income may also be generated from charges associated with the provision of service, for example entry to the castle, attending the theatre, pest control, bereavement services. 

  • Taking into account both revenue expenditure and income, the Council’s net revenue budget for 2018/19 is £609 million
  • Around 65% of the £609 million is spent on schools and social services.
  • The £609 million budget is funded through a combination of general grant funding from WG, council tax and reserves:- ​​

funding-sources.jpg 
 

The Capital Programme

  • The capital programme reflects what the Council plans to spend on creating new assets or enhancing existing assets.
  • In simple terms, capital expenditure is spend that should benefit the Council for a number of years. 
  • Examples include the costs associated with building a school, refurbishing a building, or repair of the highways (over and above pothole repair). 
  • Similar to the revenue budget, councils receive some general and specific grant funding to support capital expenditure. However, other than that, there are some significant differences to how capital expenditure is funded. 
  • One of these is that Councils are permitted to borrow to fund capital expenditure. They may also sell existing assets to buy new ones, or to reinvest in refurbishing others. 
  • Borrowing is NOT permitted to fund revenue expenditure and neither can we fund it from sale of assets. 
  • This makes sense, if you think of it in a personal context. Generally, you wouldn’t take out a loan to buy groceries, but you may consider borrowing to fund something that will benefit you or your children for a number of years, like an extension on your house or a car.
  • In deciding whether and how much to borrow the Council has to consider things you may consider yourself if you were taking out a loan or mortgage. For example, are the repayments affordable, how long is what you are buying likely to last? These questions are important because in a Council context, the interest and repayments associated with borrowing must be met from the revenue budget. 
  • Other things the Council may consider in taking out borrowing are whether undertaking the planned investment will generate additional income for the Council that may help it meet future borrowing repayments (invest to save.)
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Cymraeg