Budget Q&A

Kingsclere Parish Council’s Chairman, Cllr Clive Mussett, answers some common questions about the Parish Council budget and the increase in the precept.

What is the council tax precept?

The Parish 'precept’ is the portion of everyone’s council tax that goes to Kingsclere Parish Council (KPC) to fund many of our activities. It is the smallest part of the whole council tax bill, with most of the bill going to Hampshire County Council, Basingstoke and Deane Borough Council and other organisations.

Why has KPC increased the precept on the council tax for 2023/24?

The general income that KPC requires is raised from the precept. Any income from the cemetery, allotments or council grants is received to cover specific costs and liabilities. When the cost of running the Council increases, the precept rises. For 2023/24 the operating cost has increased because of planned legal costs for land and lease work, our staffing costs because we are an employer, and some general inflationary and liability issues are anticipated.

Why didn't I know about the rise in precept until my Council Tax bill arrived?

The budget is prepared and discussed in public meetings and the minutes are published on our website. All members of the parish are welcome to attend and observe any of the meetings.

Why is the percentage increase so high?

Whilst the percentage figure is relatively high, the actual amount of money raised is quite modest. For the budget year 2023/24 a 1% increase in the precept raises approximately £650 for KPC. The rise for 2023/24 adds less than £1 per month for a band D council taxpayer.

Last year and this year the precept has increased by a lot but didn’t in the years before that. Why the sudden change?

For many years KPC operated with a large reserve of c.£100k. This did not meet the financial audit guidance and KPC was instructed by the auditor to reduce the reserve. Therefore, for many years, development projects and some operational costs were funded from the reserve and not the annual precept. That meant that the annual precept review and increase were lower than reality. This way of operating continued until 2021 when reserves had reduced to a level acceptable to the auditor. The budget was then restructured to operate on the more usual annual costs-and-revenue model and not subsidised by the reserve. This change needed the 2022/23 budget to be restructured to ensure long-term sustainability and compliance with current audit requirements. Unfortunately, that one-off restructure caused a spike in the precept charge for 2022/23.

When does the Parish Council prepare the budget each year?

The annual budgeting process runs from September to January each year. During the preceding summer, the budget is reviewed and proposals for the next financial year are considered. So, the financial year 2024-25 will be considered in August/September 2023. We try and identify all the costs, liabilities and anticipated expenditures that could arise in the following financial year. Any proposed development projects such as new equipment and facilities are reviewed. Councillors discuss the budget regularly at meetings during the September to December period and finally in January.

Why does the Parish Council not cut its expenditure while there is a cost-of-living crisis?

To function, KPC is required to operate within a statutory framework, address liabilities and meet obligations. This costs money. The budget is prepared from the bottom up every year, which means we start at zero and add in all the lines of expenditure. The current budget closely aligns to a minimum operating base to meet our statutory obligations and the basic services required, for example, operating the cemetery.

Continued in Part 2.