Issue - meetings

The Executive Councillor for Resources, Councillor J A Gray to present the 2016/17 Budget, the Medium Term Financial Strategy (MTFS) for 2017/18 – 2020/21, the related Prudential Indicators and the Treasury Management Strategy for 2016/17 for approval.  In accordance with Section 30 (2) of the Local Government Finance Act 1992, the Council will be required to approve resolutions as to the levels of Council Tax in 2016/17 for the various parts of Huntingdonshire District. A report by the Head of Resources is enclosed.

In accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, the Council will be asked to resolve that a recorded vote be taken on the conclusion of debate on this item.

(The recommendations of the Cabinet are included within the report of their meeting on 11thFebruary 2016. See item 7a.)

In conjunction with a report by the Head of Resources (a copy of which is appended in the Minute Book) and Item Nos. 49 and 50 of the Report of the Cabinet, the Executive Councillor for Resources presented to Members the 2016/17 Revenue Budget, the Medium Term Financial Strategy (MTFS) for the period 2016/17 to 2020/21, the Treasury Management Strategy and other associated matters for the Council’s consideration and approval.

In accordance with Section (30)2 of the Local Government Finance Act 1992, the Council also considered proposals for levels of Council Tax in 2016/17 for various parts of the Huntingdonshire district.

In his opening remarks, the Executive Councillor reflected back on previous budgets that he had presented since 2012 and was pleased to present a surplus budget to Members once again. By way of reflection, Councillor J A Gray reminded Members that Council Tax had risen by 7.25% over the past six years and over the same period pensions had risen by 18.76% and average weekly wages had risen by 10.9%. Thereby illustrating that the Council had succeeded in keeping increases in line with working residents and pensioners.

Councillor Gray outlined the budget setting process that had been undertaken this year, including a robust Zero Based Budgeting (ZBB) exercise for all services, with £1.9m previously identified for removal from the 2015/16 budget and a further £4m of identified savings by the end of the MTFS. In referring to the monthly budget ‘dashboard’ that had been received by Members, Councillor Gray reported that all services has been achieving their targets, whilst being prudent in the delivery of their services and expressed his appreciation to his fellow Cabinet Members and Officers for the end result.

Member’s attention was drawn to the inclusive budget review process that commenced with the Star Chamber review in July 2015 with the outcome reported to the Overview and Scrutiny Panels and the Cabinet. This was concluded with the presentation of the draft budget to Overview and Scrutiny and the Cabinet in January 2016. Alongside this there was consultation with residents and businesses in the District.

Councillor Gray updated the Council on the MTFS Capital Programme and Commercial Investment Strategy (CIS), including the borrowing strategy to facilitate the capital programme and CIS. In summarising the funding statement, Members were advised of the key assumptions including the commitment to freeze Council Tax for 2016/17 and removal of the Revenue Support Grant as core funding by 2020/21.

Members were reminded of a previous consideration to place the Leisure Centres in Trust status to alleviate the deficit, but the Council would have continued to be required to make ongoing financial contributions to the Trust. As previously reported to Members, Councillor Gray confirmed that the Council had no longer been subsidising the five Leisure Centres and had now been making a small contribution to the Council’s budget.

In acquainting Members with the Treasury Management Policy and Strategy and Annual Minimum Revenue Provision for 2016/17, Councillor Gray explained that the Council remained committed  ...  view the full minutes text for item 57

To receive a report by the Head of Resources on the 2016/17 Budget and Medium Term Financial Strategy 2017/18 to 2020/21.

RECOMMENDS

that the Council approve:

i.  the budget for 2016/17 and MTFS 2017/18 to 2020/21 (this includes Revenue at Section 2 and the Capital Programme at Section 3 of Appendix 1 of the submitted report) subject to the following amendments;

a.  Section 3 – Capital - Table G

Regarding the Disabled Facility Grant that the gross amount in the budget remains the same and the ‘Grants and Contributions’ and ‘Internal Borrowing’ amended to reflect the additional £0.5m in Disabled Facility Grant that has been awarded to the Council for 2016/17. 

b.  Section 6 - Formal 2016/17 Council Tax Resolution (as tabled at the meeting)

6.1 .b (i)  £82,326,188

    6.1.b (ii)  £68,949,819

    6.1.b (iii)  £13,376,369

    6.1.b (v)  £5,471,086

ii.  fees and charges for 2016/17 (Appendix 1, Section 7 and Annex A of the submitted report);

iii.  freezing of the Council Tax for 2016/17 at £133.18 at Band D; and

iv. new ‘Plan-on-a-Page’ financial savings targets.

By way of a report from the Head of Resources (a copy of which is appended in the Minute Book), the Cabinet considered the final budget for 2016/17, detail of the draft service budgets and the Medium Term Financial Strategy (MTFS) for the period 2017/18 to 2020/21.

At the meeting of the Cabinet in January 2016 the Cabinet approved the draft budget and MTFS.  Since then it was explained that there had been significant changes.  The One Leisure draft income budgets had been re-profiled and reduced over the period of the MTFS in order to better reflect the service demands, the impact across the MTFS being a reduction in income of £0.9m. The revenue projections, the cost base and capital investment levels beyond 2016/17 were estimates pending the publication of the 2016-2021 Strategic Plan in February 2016.

Following a detailed analysis of the draft Local Government Settlement issued by the Department for Communities and Local Government (DCLG) in December the Revenue Support Grant (RSG) had been increased by £0.4m over the MTFS period.

The Local Government Finance Settlement in respect of the Non-Domestic Rates (NDR) Base Line had indicated an increase of 2.1% in 2017/18 rising to 3.5% by 2019/20.  As a consequence of the appeals the Council had received regarding NDR, it was explained that this growth was considered optimistic.  Therefore in the final 2016/17 budget and MTFS, the NDR income remained as reported in the draft budget of a 1% growth each year, on the basis that business rates still proved to be volatile and a more prudent view of NDR income was appropriate.

Regarding the Revenue Support Grant (RSG) the Local Government Finance Settlement had confirmed the decisions made by the Council were correct when setting the 2015/16 budget and MTFS, as RSG would be removed as core funding by 2019/20. However, the profile of decline in RSG was less than the Council had modelled in the draft 2016/17 budget and MTFS.  Therefore the amounts shown in the Local Government four year settlement were included in the final 2016/17 budget and MTFS.

The other significant change from the draft budget was that the Voluntary Sector Grant budget had been reduced over the four years from 2016/17 to 2019/20 by £0.2m following the decision of the Cabinet at its meeting in January 2016.

The net impact of these changes was that by 2020/21 additional contributions of £0.4m were required from the General Reserves.

The submitted report had provided the Cabinet with the risks associated with the budget.  The Cabinet were referred to Table 5 within of the Officer’s report which reflected the final budget and MTFS including the freezing of Council Tax.

In the 2016/17 budget there was a surplus of £2.3m.  However, by 2018/19 there was a funding gap of £0.8m which increased to £3.5m by 2020/21.  The Cabinet were referred to Table 6 within the Officer’s report which illustrated that the funding gap for 2018/19 and 2019/20 could be met from the estimated General Fund Reserve.  ...  view the full minutes text for item 86

To Panel is to consider the Final 2016/17 Revenue and Capital Budgets and the Medium Term Financial Strategy 2017/18 To 2020/21.

With the aid of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Revenue and Capital Budgets 2016/17 and the Medium Term Financial Strategy (MTFS) was presented to the Panel. Members were told of two significant changes since the report was present at the January 2016 meeting of the Panel. They are:

·  The One Leisure draft income budget had been reprofiled and reduced over the period of the MTFS in order to better reflect the demands on the service. As such there has been a reduction in income of £0.9m across the MTFS period, and

·  Following a detailed analysis of the draft Local Government Settlement, an increased Revenue Support Grant (RSG) has been used in the MTFS. This equates to an additional £0.4m over the MTFS period.

This has had an impact upon the predicted deficit position in 2020/21 with the deficit increasing from £637k to £837k. Since the last meeting of the Panel the Cabinet have decided to continue with the Commercial Investment Strategy (CIS) and Zero Based Budgeting (ZBB). ZBB has analysed services bottom up but will now analyse across all services.

Following a question regarding the One Leisure income reprofiling and the benchmarking of figures, the Panel were told that the projected income streams of One Leisure had been reduced as when the original profiling took place the costs did not increase at the same level as revenue.

When pressed on benchmarking Members were advised that benchmarking with other local authority owned leisure centres is difficult as the majority of local authority owned leisure centres make losses. Although the commercial leisure centres have profits of 10-12%.

Following a question regarding the leisure facility at Alconbury, the Panel was informed that the leisure centre is expected to begin trading after quarter two in 2016/17. For the first three years the developers Urban and Civic will pay for any operating losses that occur.

The suggestion was put forward that the word electorate should be deleted and replaced with the word resident in the paragraph ‘section 4 has shown that the Council continues to face significant challenges over the medium term in its obligations to provide cost-effective services to its electorate’.

In response to a concern over the MTFS, Members were informed that although they still had to consider the MTFS the more pressing issue was the setting of the budget for 2016/17.

A Member addressed the Panel with a statement which outlined the problems the County Council was facing in regards to the adult, children and families budget. An alternative proposal was put forward which proposed that the Council raises council tax by 2% so that the voluntary sector could provide adult and social services which may help to alleviate the County Council’s budget shortfall and assist the more vulnerable residents of the District. Furthermore an additional proposal was advanced which proposed that Members could surrender a proportion of their car allowance in order to give the savings to  ...  view the full minutes text for item 16