Agenda item

Budget Scrutiny Report

Minutes:

The Executive Director of Finance and Corporate Resources presented the Medium Term Financial Plan 2015/16 to 2017/18. She explained that the financial position for the Council had altered slightly since the agenda had been published and for this reason she provided an update on the revised position.

During presentation of the report the following matters were highlighted for Members’ consideration:

· The government grant allocation for 2015/16 was £500,000 less than the settlement for 2014/15 and had fallen by approximately 50 per cent since 2011.

· Officers were assuming that the Council would lose at least 5 per cent of the revenue grant over the next few years, though there were concerns that the figure could be higher.

· Bromsgrove District Council would receive £23,000 from the Greater Birmingham and Solihull Business Rates Pool.

· Officers had not yet allocated any of the New Homes Bonus settlement to the community as no decision had been made on this subject by the Council.

· The budget included an assumption that there would be an increase in Council Tax of 1.9 per cent.

· The previous 10 year funding agreement with the Artrix was due to end. Officers were proposing to allocate a grant of £60,000 to the Artrix in future years.

· In February 2014 Members had agreed to share the Parish Grant Precept to provide Members with a ward funding scheme. This had been a relatively labour intensive scheme though there had been some positive outcomes.

· A number of savings had been achieved. The focus of Officers in forthcoming years would be on how the Council could achieve further efficiency savings.

· The budget position for 2015/16 had changed since the publication of the report as figures for Council Tax had subsequently revealed a higher surplus than anticipated.

· There was one bid to support the Essential Living Fund (ELF). The settlement from the Government for the fund had decreased resulting in a reduction. Whilst the bid would help to support the fund the budget would be much lower than in previous years and therefore could only provide minimum support.

· Officers calculated that the pay award for an Officer would increase in the first two years of their employment as the employee rose through their incremental pay. Once the Officer reached the top of their scale they could only expect to receive the standard pay increase.

· Further detail would be provided for the Board’s consideration in February, including an update on the Cabinet’s recommendations for the budget.

Following presentation of the report Members discussed a number of points in further detail:

· The reasons why the Ward Members’ Fund scheme was labour intensive. Officers explained that the application process was relatively simple, however, the process for transferring funds was quite complicated.

· The distribution of Council Tax funding to relevant public sector bodies. Officers confirmed that the district Council received 14 per cent of the Council Tax, the Police received an equivalent amount, the Fire Service received approximately 6 per cent and Worcestershire County Council received the remainder.

· Changes to the recording of savings achieved through vacancy managers, which had been made at the request of Members in previous years.

· The notice provided to the Artrix regarding the reduction in funding at the end of the 10 year agreement and the funds to be allocated to outreach work.

· Whether the Artrix was responsible for the maintenance costs to the building.

· The turnover of staff retiring or taking redundancy and the number of new employees who would be at the bottom of their scales.

· The costs of borrowing. Members were advised that the majority of the borrowing costs for the leisure centre would be met from balances.

· There would be costs from borrowing for replacement of fleet vehicles.

· The Council would also be borrowing in the first year after the move to Parkside to cover costs, though it was anticipated that this would be recouped relatively quickly through the sale of the Council House site.

· Interest in the Council House site for development, and the designation of the site as housing land in the Area Action Plan.

· The need for a market rate to be achieved for the sale of the Council House site.

· The potential for multi-year budget settlements to be announced by the Government in future years.

· The impact of the New Homes Bonus in terms of both funding and housing development. Officers confirmed that the New Homes Bonus had had a positive impact from a financial perspective, however, the impact on housing development needed to be discussed further with the planning department.

· The need for Councils to plan to be financially dependent by 2018/19, due to the possibility that the Government grant would be withdrawn altogether in the long-term.

· The implications for Heads of Service and fourth tier managers who were accountable for managing budgets and the need for careful planning.

RESOLVED that the report be noted.

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