Agenda item

Update of the Medium Term Financial Plan 2010/11-2012/13

Minutes:

The Board received a report and presentation by the Head of Financial Services which reviewed the position of the Medium Term Financial Plan 2010/11 – 2012/13 and invited the Board to make recommendations to Cabinet in relation to the Budget.

The Head of Financial Services outlined the general assumptions made in the Medium Term Financial Plan 2010/11 – 2012/13. These were a reduction in the Formula Grant from Central Government of 5% (£252k) from 2010/2012 (approximately 15% reduction over a 3 year period), a General Inflation rate of 2.5%, an increase in the cost of utility bill payments in access of 5%, interest of investments down to between 1.75% - 2.75%, vacancy management costs of 4%, a Council Tax increment increase at 2.5% (lower than the previously anticipated 4.45%) and a general staff salary increase of between 0-1%.

The Head of Financial Services also outlined the key unavoidable budget pressures: Dolphin Centre Car Park Refunds (£20k), Concessionary Travel Passes (£50k), Audit Inspection Fees (£30k), the loss of income from the Market Hall (£16k), and over 60s swimming facilities (£12k). In addition, Members attention was drawn to the significant departmental budget bids for 2010/11-2012/13: Strategic Planning – Flooding (£15k), the Age Well Scheme (£10k), Discretionary Housing Payments (£5k), funding for the Local Strategic Partnership (£25k), and the Mosaic system (£8k).

The Head of Financial Services also drew attention to the planned Key Savings/Income: management restructure as a part of shared services with Redditch (which was already in the base budget) (£246k), communal waste (which was already in the base budget) (£200k), increased car parking income (£133k), Dolphin Centre service changes (£100k).

The Board also received details of the proposed Capital Programme 2010/11-2012/13; which included depot site alarm system (£25k), funding for DFG’s (£90k), the Pavilion roof enhancements (£55k), Cemetery maintenance (under review) (£95k).

The next stages of the budget setting process were outlined. These included the review of identified high and unavoidable budget pressures, the continued assessment of savings / efficiencies / joint working arrangements, a further report to Cabinet on 2nd December 2010 and a Member Briefing on 14th January 2010. The final budget for 2010/11 – 2012/3 Council Tax was due to be approved by full Council on 20th January 2010.

Members of the Board questioned the Head of Financial Services on various aspects of the Medium Term Financial Plan. She explained that only the “high” bids would be considered in the final budget, that the “medium” and “low” bids were inspirational and that if Members of the Board were so minded, they had the opportunity to recommend reprioritisation to the Cabinet before the final budget was approved.

She was asked what penalties may be imposed by Central Government if the budget did not balance; she responded that she would report back to Members of the Board with details of any possible penalties.

Members also queried Royal Mail charges as Royal Mail had levied additional postal charges and asked if a contract with an alternative postal service provider had been considered. The Head of Financial Services responded that it was not clear that this would deliver any savings but that she would investigate whether a lower priced competitor was available. It was suggested that the Council might lobby the LGA to see if it was possible to negotiate jointly for a nation wide contract with an alternative postal service provider at lower costs that through Royal Mail.

In response to questions about the high (significant) bids, the Board was informed that the housing payment of £5k would attract additional match funding from the Government and that the Mosaic system (a bid of £8k)was a software marketing tool that classified all consumers in the United Kingdom and profiled UK consumers in terms of demographics, socio-economics, lifestyles, culture and behaviour. It was explained that this would help to improve areas of weakness in the Council’s Comprehensive Area Assessment (CAA) rating, as it was proposed that the Mosaic system be employed to improve customer knowledge of residents across the District.

The Head of Financial Services was also asked about sponsorship of roundabouts and she agreed there was a need to find more sponsorship for roundabouts to raise revenue.

RESOLVED that the Board note:

(a) the pressures as identified in Appendix A of the report;

(b) the unavoidable pressures identified at Appendix B of the report;

(d) the new bids for the Capital Programme as included at Appendix D of the report.

Supporting documents: