Agenda item

The Cabinet considered the report on the Medium Term Financial Plan 2016/17 – 2018/19.

The Executive Director Finance and Corporate Resources reminded Members, that as stated by the Chairman at the commencement of the meeting, Recommendation 2.1.7 in the report had been revised.  The revised Recommendation was provided for Members consideration.

In light of the revised Recommendation 2.1.7; the Overview and Scrutiny Board Minutes of the meeting held on 23rd June 2016, with regard to the Member Capital Locality Bids from elected Members was acknowledged and noted as requested.

The Portfolio Holder for Finance expressed his sincere thanks to the directors and officers for their assistance with the preparation of the Medium Term Financial Plan.  Directors and officers had been challenged with working towards achieving the delivery of a balanced budget, whilst taking into account the unexpected announcement from Central Government on the proposed changes and cuts to be implemented. 

The Executive Director Finance and Corporate Resources acknowledged the Recommendation as detailed in the minutes of the Overview and Scrutiny Board meeting held on 23rd January 2016 with regard to the Fees and Charges for 2016/17; and informed Members that, as detailed in her report, it was proposed that the Fees and Charges for 2016/17 be increased by 3%, with charges outside of the 3% including a proposed 5% increase in 2017/18 for the garden waste collection service, presented in detail in the main report.

The Executive Director Finance and Corporate Resources referred to the background to the Medium Term Financial Plan and the Government proposed changes to the allocation of central government funding to the Council going forward. 

A new calculation called ‘Core Funding’ would be used as the basis for reducing the funding given to the Council from Central Government.  The Core Funding now included the Council Tax Requirement (Council Tax Revenue) from 2015/16 together with the Settlement Funding Assessment, as detailed in paragraph 3.4.  The Core Funding for Bromsgrove was worth £9.879m in 2015/16, including Council Tax Requirement of £6.990m.

It was proposed that between 2015/16 and 2019/20, uniform annual cuts would be applied to each tier of local authorities’ Core Funding.  Over this four year period, the cumulative cut to lower tier services (District) would be 19.2%. This would result in the new Core Funding Assessment to be £7.981m, as detailed in section 3.6 in the report.

The Executive Director Finance and Corporate Resources drew Members’ attention to paragraphs 3.7 and 3.8 in the report, highlighting the table at paragraph 3.10 which reflected the reductions to the Revenue Support Grant (RSG) funding for Bromsgrove based on the Grant received in 2015/16 and the table at paragraph 3.11 which illustrated the impact of the settlement on the Council, the loss of RSG over the next four years up to and including 2019/20 compared to previous forecasts.

The other element of significant income to the Council was New Homes Bonus.  This fund would continue on the current basis for 2016/17.  The position beyond 2016/2017 had not been confirmed.  The financial plan assumed that the Community New Homes Bonus Scheme continued with 25% of the new funding from the grant allocated to schemes in communities affected by growth.

As part of the budget projections the grant attributed to Parish Councils had been reduced by the same percentage (54%) as the Revenue Support Grant (RSG) and therefore £13,800 was recommended to be paid to the Parishes with the remaining £7,000 to be utilised for projects in non-parished areas.

The table at paragraph 3.31 in the report detailed the three year financial summary and included the reductions in grant and the proposed pressures and savings. 

Due to the current surplus of £154k in the overall budget for 2016/17, the Executive Director Finance and Corporate Resources drew Members’ attention to the figure shown for the ‘Release of reserves to fund shortfall’ for 2016/17 (£-551k).  The current surplus would be used to reduce the amount required from reserves and the ‘Release of reserves to fund shortfall’ for 2016/17 would reduce to £397k.

RESOLVED:-

a)    that the Member Capital Locality Bids as detailed at Appendix 6 (i – v) to the report, be deferred as Cabinet recognised that currently there was not a robust mechanism in place for processing and evaluating proposed projects; and

b)    that officers bring a comprehensive process and evaluation scheme to Members in due course for consideration.

RECOMMENDED:-

a)    that the Fees and Charges for 2016/17 (and garden waste for 2017/18) as detailed in Appendix 1 be approved;

b)    that the savings and additional income for 2016/17 of £401k as detailed in Appendix 3 be approved;

c)    that the unavoidable pressures for 2016/17 of £507k as detailed in Appendix 4 be approved;

d)    that the Capital bids for 2016/17 of £280k as detailed in Appendix 5 be approved;

e)    that the payment of Parish Council Grant for 2016/17 of £13,800 be approved;

f)     that the increase in Council Tax for 2016/17 of 1.9% be approved, and

g)    that, as detailed in the preamble above, the surplus shortfall figure for 2016/17 be used to reduce the ‘Release of reserves to fund shortfall’ figure for 2016/17 be approved.