Agenda item - Medium Term Financial Plan 2017/18 - 2020/21

Agenda item

Medium Term Financial Plan 2017/18 - 2020/21

Minutes:

The Cabinet considered the report on the Medium Term Financial Plan 2017/18 – 2020/21.

 

The Executive Director Finance and Resources outlined the issues which had impacted upon to the development of the MTFP. These would continue to result in pressures on the Council over the next four years and included:

 

·         Potential further reductions in the New Homes Bonus Grant;

·         Impact of the Negative Revenue Support Grant;

·         Impact of the Localisation of Business Rates Scheme; and

·         Transfer from Housing Benefit to Universal Credit

 

Changes introduced by the Government  to the New Homes Bonus funding scheme included reduced years for which NHB was payable and the assumption of a “baseline” for housing growth of 0.4%.  During 2017/18 however funding had been confirmed as £1.912m which was £210k more than anticipated in the MTFP. Further changes were anticipated and there was a risk to the funding stream in future years.  

 

There was more certainty around the Revenue Support Grant in view of the Council accepting the offer of a four year settlement. The transitional support for 2017/18 was £114k but there was an assumption of a £750k repayment to the Government in 2019/20.

 

It was noted that Council would consider the level of Council Tax for 2017/18 at its meeting on 28th February 2017. If the recommendations in this report were approved the demand on the collection fund to meet this Council’s own needs would be £7,580,550 which represented a £5 increase on Band D Council Tax compared to the current financial year.

 

In relation to the General Fund it was anticipated that the draw down over the four years of the MTFP would be £739k. This projected draw down was £1.3m less than originally included in the Efficiency Plan.   

 

It was reported that the Efficiency Plan, which had been agreed by Council  in October, had included a number of areas where the Council’s costs could be reduced in a variety of ways. The budget included the delivery of savings and income as identified in the Efficiency Plan. It was noted however that whist annual savings had been included to meet those referred to in the Efficiency Plan, there may be changes to funding and services delivered from 2018/19 which require alternative savings and income profiles to be delivered.

 

The report set out three pressures and income shortfalls which could not be managed by improved marketing or price increases . These were:

 

·         Shortfall in income from Land Charges due to a reduction in demand on the service (£50k);

·         Cost of Licences for Smartphones and iPads to ensure that officers have appropriate resources to undertake their roles (£11k);

·         Unavoidable cost increases from Microsoft for Licences £108k by 2020/21)  

   

In addition to the unavoidable pressures a revenue bid of £15k had been proposed to provide funding for St Basil’s Foyer Scheme to enable them to provide 24 hour support for vulnerable young people.

 

Members acknowledged  the significant amount of work undertaken by officers which had resulted in a reduction in the funds required  to be taken from balances. Work was still on going to reduce costs without cutting front line services. This would include increasing income by looking at ways of taking advantage of commercial opportunities. It was noted that there would be continual reviews every three months of the budget position.

 

With regard to the Capital Programme at Appendix 3 of the report,  the Leader reported that Councillor C. A. Hotham and Councillor S. R. Colella had requested to speak in support of specific Capital bids from within their Wards and invited them to do so.  

 

Barnt Green Millenium Park  - Toilet

 

Councillor Hotham gave additional information on the bid for £62k  in relation to the provision of a unisex pod toilet in proximity to Barnt Green Millenium Park to ensure there were appropriate community facilities for those visiting the local park and shops and using Barnt Green Railway Station.

 

Further to the information provided by Councillor Hotham, reference was made to the potential availability of Section 106 funding associated with housing development in Fiery Hill Lane, Barnt Green which amounted to £44k which would leave the remaining sum of £18k to be met from Council balances.

 

Hagley Scout Hut

 

Councillor Colella gave additional information on the bid in relation to the proposed replacement of the existing Hagley Scout Hut which was in poor condition and was uneconomic to repair. There was an increased demand for the facility,  particularly in view of the new housing developments within Hagley. The Head of Leisure and Culture had advised on the project and a Planning Application had been submitted.  A business case was in place. 

 

 Hagley Community Hub

 

Councillor Colella gave additional information on the project relating to the proposed replacement of the existing Hagley Community Centre building which was now in its 50th year, having had an original life expectancy of 25 years. It was intended that a new Community Centre could serve Hagley and the wider community to provide a “One Stop Hub” for services provided by the Council and other public sector organisations.

 

Additional facilities were required within the area due to an increase in demand and expansion of households due to new housing developments.  Councillor Colella confirmed that the Head of Leisure and Culture had advised on the project and was of the opinion that the business case was viable. At present the bid was under further development but it was likely to come forward during 2017/18.

 

Councillor Colella responded to queries from Cabinet regarding the bids as far as he was able to do so. Councillor Colella confirmed that if necessary, more detailed information could be provided. Cabinet recognised the benefits of the two schemes. 

 

Following discussion it was

 

RECOMMENDED:

(a)       that the following return/release from balances be approved:

 

            2017/18 - £259k (return)

            2018/19 - £37k (release)   

            2019/20 - £467k (release)

            2020/21 - £494k (release)

 

(b)       that the additional income/efficiencies as attached at Appendix 2 be approved:

 

            2017/18 - £1.113m

            2018/19 - £626k

            2019/20 - £177k

 

(c)        that with the exception of the bids in relation to Hagley Scout Hut and Hagley Community Centre  the Capital Programme bids as attached at Appendix 3 be approved:

 

            2017/18 - £145k

            2018/19 - £46k

            2019/20 - £1.108m

 

(d)       that the increase of Council Tax by £5 per Band D equivalent for 2017/18 be approved.

 

(e)       that the budget savings and pressures for 2018/19 – 2020/21 be subject to change due to the potential impact of changes to service delivery and the localisation of Business Rates together with any changes to the New Homes Bonus.

 

(f)        that consideration of  the Capital Programme bids in respect of Hagley Scout Hut and Hagley Community Centre be deferred to enable further consideration of the Business Cases for the proposals. In addition officers  include additional information to the report to Council on 28th February 2017 to explain the position in respect of the deferral.   

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

     

 

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