Minutes:
The Chairman of the Finance and Budget Working Group, Councillor L. C. R. Mallett, provided an update on the work of the group and highlighted the following for Members’ consideration:
· The group had considered the Cabinet’s feedback in respect of the group’s previous recommendations and had amended its recommendation on the subject of virements of £40,000 or less; Members were suggesting these should be considered by the relevant Head of Service in consultation with the lead Portfolio Holder; any above £40k would be subject to Cabinet approval.
· Members had reviewed the content of the capital programme and concluded that whilst a lot of capital bids were scheduled for the first year additional planning was required from Heads of Service in the subsequent years of the capital programme.
· The inclusion of S106 agreements on the capital programme for approval was considered by the group to be confusing as these had effectively already been approved.
During consideration of this item the Executive Director for Finance and Corporate Resources also provided an update in respect of the New Homes Bonus (NHB) and Council Tax:
· There was an option to increase Council Tax by up to £5 over the 1.9 per cent for Band D properties which would provide the Council with an additional £40,000 in the budget.
· The Government consultation on the NHB had concluded and local authorities had been advised that the fund would not be sustainable in its current form.
· The Government was proposing that there would be a “deadweight” of 0.4 per cent.
· In future this would mean that approximately 165 new properties built in the district would not be subject to the NHB which would impact on Council finances.
· The Government was also proposing that some funding from the NHB would in future be allocated to County Councils in two tier authority areas to help fund social care.
· There was also a proposal to reduce the length of the NHB scheme from 6 to 4 years.
· This would lead to a loss in funding to the Council of £242,000 in 2017/17 and £1.8 million over 4 years until 2020/21.
· Members would need to give further consideration to discretionary services provided by the Council and whether these added value to the customer.
There were 3 key areas from the Efficiency Plan that remained to be addressed before the budget was set in February 2017:
- Alternative models of service delivery; only £70,000 in savings had been identified to date.
- Income and growth; over £300,000 more had been identified.
- The proposed Management Review which needed to identify further savings.
Following these updates the Board discussed a number of points in detail:
· The need to balance the Council’s budget and the point at which further reductions in funding would make local authority services unsustainable.
· The potential savings that could be achieved from the Management Review and the value of prioritising this as it was anticipated that this would have a limited direct impact on the customer.
· The achievements that had been made to date in terms of delivering the aspirations detailed in the Efficiency Statement and the need for further action to be taken.
· The finalisation of the Council’s fees and charges in 2017/18 and the role of the Finance and Budget Scrutiny Working Group in holding senior Officers to account for any proposed increases over 3 per cent.
· The total cumulative deficit predicted by the end of the 4 year period on the date of the meeting of £2.8 million. Members were advised that this would reduce by February when the Council set its budget.
· The need to be cautious about using funding from balances to balance the budget in any given year as this funding could only be used once.
· The need for Heads of Service to take responsibility for identifying savings and potential options to generate further income.
· The approach of the other local authorities that had received severe reductions in the government’s budget settlement. Members were advised that the Council was the only local authority in this position outside the M25 and the other Councils had had access to significant balances and New Homes Bonus funding to help address their budget gaps.
· The position of other local authorities in Worcestershire. The Board was informed that many local authorities in the county were using a traffic light system for their budget.
· The progress that had been achieved in respect of economic development within the district and the innovative ideas that were being put forward by Officers.
· The increase in Council Tax that would be experienced by local residents and the significant proportion of this funding that would be allocated to the County Council and other partner organisations.
· The anticipated recorded income from the Dolphin Centre of over £400,000. Members noted that this figure should actually be approximately £520,000 in line with the figures agreed for prudential borrowing costs.