Minutes:
The Financial Services Manager delivered a presentation on financial planning at the Council for the period 2016/17 to 2019/20 and also outlined key points in a report on the Medium Term Financial Plan 2016/17 to 2018/19. During the delivery of this presentation the following issues were highlighted for Members’ consideration:
· The intention of the report and presentation was to provide Members with an opportunity to identify areas suitable for further scrutiny as part of the budget setting process.
· When planning the budget for the following three year period officers considered various different scenarios and the risks that could impact on funding levels.
· Assumptions had to be made when considering budget projections, which also needed to take into account risks such as the potential for a change to occur to inflation levels during the year.
· Officers would review all potential savings in order to determine whether these would be one off savings or could be achieved again in subsequent years.
· Worcestershire County Council (WCC) had recently agreed to reduce funding for positive activities for young people in the district. Funding for Bromsgrove would consequently be reduced from £125,000 to £50,000 from April 2016.
· The financial implications for the Council following any reductions in funding received from WCC.
· Balances of £4.2 million placed the Council in a relatively strong financial position.
· Capital receipts could only be used for capital expenditure, not for revenue spend.
· Councils had been advised that in due course they would be able to keep 100 per cent of business rates. However, the full detail of how this would operate and the timeframes for the implementation of this process remained to be confirmed.
· GP Practices had been appealing over their business rates and the potential for other retailers to also appeal and the implications in the long-term to Council finances.
· Councils could utilise financial support from the “safety net” in cases where total business rates fell below the baseline level. However, Bromsgrove was not eligible to access this safety net whilst it remained a part of the business rates pool which was set to continue for at least 12 months.
· Officers were anticipating that the national living wage would increase to £9 per hour by 2020.
Members proceeded to discuss a number of matters in further detail following the delivery of the presentation:
· The work of Cabinet Members to review assumptions underpinning the budget setting process and the potential for the Overview and Scrutiny Board to assist in this process.
· The decreasing size of the revenue support grant allocated to the Council by the Government and the likelihood that this would cease to be provided by 2020.
· The cost of borrowing for the replacement of the Dolphin Centre and the use of reserves.
· The focus of the appendices to the report on the costs of service delivery in relation to the Council’s strategic purposes.
· Additional financial costs which did not relate to service delivery and were not therefore included within the figures that had been provided in the report.
· The anticipated shortfall of £196,000 in 2016/17 and the action that would need to be taken to ensure that the Council secured a balanced budget by the end of the year.
· The provision of figures within the report originally included within the Medium Term Financial Plan 2015/16 to 2018/19. Members commented that it would be useful for figures to also be provided which demonstrated how the Council’s budget was varying from these projections during the year.
· The value of further information about pressures on the budget. Members were advised that this information would be presented for their consideration in the following edition of the report.
· The assumption that Council Tax would rise by 1.9 per cent during the year and the potential for the government to change the level of the cap on increases in Council Tax before triggering a referendum.
· The likely impact of changes to tax credits on demand for Council services and the possible support that the Council could provide to residents placed in a difficult financial position by these changes.
· The impact of universal credit on residents living in the district and the support that could be provided to those effected.
· The use of reserves to cover expenditure in 2016/17 and 2017/18 and the overall impact that this might have on the Council’s budget.
· The pension deficit for local government staff and the contribution from the Council towards employees’ pensions. The Council had reached agreement with the actuaries to make contributions in increasing amounts over a 21 year period. Members requested further information about the schedule for these payments.
Following this debate Members
RESOLVED that the following information be provided in future budget reports to the Overview and Scrutiny Board:
(1) Figures for service delivery which had been budgeted for when the Council’s budget was set in February 2015;
(2) Comparable figures showing actual and anticipated spend by the end of the year;
(3) Areas of concern within the budget; and
(4) Budget assumptions and the different scenarios that had been considered when calculating these assumptions.