Agenda item - Revenue & Capital Budget Planning and Resources Update 2018/19

Report of the Executive Director, Finance & Resources

That the Policy, Resources & Growth Committee:

1)        Note the resource and net expenditure projections for 2018/19 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and appendices 1 and 2 based on annual 1.99% Council Tax increases and a 3% Adult Social Care precept in 2018/19 only.

2)        Note the revised savings requirement of £21.5 million over the 2 years 2018/19 to 2019/20, including £11.6 million in 2018/19, to be used for budget setting purposes as detailed at paragraph3.49.

3)        Instruct the Executive Leadership Team (ELT) to refresh the current 4 Year Service & Financial Plans and develop further savings proposals to address any outstanding budget gaps for 2018/19 and 2019/20, based on the MTFS assumptions in this report for consideration by Policy, Resources & Growth Committee.

4)        Agree the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.18 to 3.20.

5)        Note the resource projections for the Capital Investment Programme as shown in appendix 3.

9.1         The Committee considered a report of the Executive Director, Finance & Resources that provided a budget planning and resource update for the 2018/19 budget process including an updated Medium Term Financial Strategy (MTFS) based on latest information and resource projections.

9.2         Councillor Sykes queried the reduction in working balance from £9 million to £7.5 million when the council’s external auditors had appeared content with £9 million and that would release a further £1.5 million for investment in services.

9.3         The Executive Director, Finance & Resources explained that in previous years £1.5 million had been held back as a risk provision and the rationale behind the decision to reduce the working balance was to increase accountable of services and that meant moving the risk provision into the general reserves.

9.4         Councillor Sykes expressed his disappointment that the council now undertook little or no public and stakeholder consultation of its budget process as it previously had done as he believed it had value in terms of public input into service continuity. Councillor Sykes stated that he had some sympathy with officers and the administration relating to the extraordinary circumstances of budget setting meaning it was very difficult to plan and was overall a chaotic process. Councillor Sykes reflected that the majority of decisions made in dealing with austerity had been made by the previous administration including resolving equal pay issues and funding for the i360. Councillor Sykes observed that he believed more could have been done by the current administration to resist making cuts to services as it was very difficult to reinstate those services once they had been removed.

9.5         In relation to the provisional 1% pay award for 2018/19/20, Councillor Wealls noted that did not include escalation through pay scales. Councillor Wealls noted that the council’s pension contribution rate would rise from 20.5% to 21% and reflected that employer contributions in the private sector were on average 6%.

9.6         In relation to budget consultation, Councillor Hamilton noted that whilst he supported such exercises in principle, in some areas, specifically council tax reduction, the response rate was very low meaning the consultation was costly. Councillor Hamilton noted that the current administration had been obligated to make an immediate £8 million of budgetary savings upon taking office and a further £60m over the course of the next two years. Councillor Hamilton stated that whilst the council’s financial position was looking better, there would be significant challenges over the following two years with a number of issues unclear such as business rate retention and overall support from central government.

9.7         RESOLVED-  That the Policy, Resources & Growth Committee:

1)        Note the resource and net expenditure projections for 2018/19 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and appendices 1 and 2 based on annual 1.99% Council Tax increases and a 3% Adult Social Care precept in 2018/19 only.

2)        Note the revised savings requirement of £21.5 million over the 2 years 2018/19 to 2019/20, including £11.6 million in 2018/19, to be used for budget setting purposes as detailed at paragraph 3.49.

3)        Instruct the Executive Leadership Team (ELT) to refresh the current 4 Year Service & Financial Plans and develop further savings proposals to address any outstanding budget gaps for 2018/19 and 2019/20, based on the MTFS assumptions in this report for consideration by Policy, Resources & Growth Committee.

4)        Agree the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.18 to 3.20.

5)        Note the resource projections for the Capital Investment Programme as shown in appendix 3.