Issue - meetings

To receive an update report by the Head of Resources on the draft 2016/17 Revenue Budget and Medium Term Financial Strategy for the period 2017/18 to 2020/21.

  i.  approves the freezing of Council Tax for 2016/17;

  ii.  approves the removal of the savings proposal to charge a bus departure levy within the District;

  iii.  approves the draft Capital Programme 2016/17 to 2020/21;

  iv.  approves the overall draft Budget 2016/17 and Medium Term Financial Strategy (MTFS) 2017/18 to 2020/21;

  v.  considered the current MTFS position with regards to the General Fund Reserve and agrees to continue the use of the Zero Based Budgeting principles and commits to continue to develop the actions and programmes as set out in the ‘Plan on a Page’ to find further savings and efficiencies in order to maintain a prudent level of reserves throughout the MTFS;

  vi.  approves the Council Tax Base 2016/17 as detailed in Appendix 2 of the submitted report;

  vii.  considered the offer by Government to all Councils of a four-year financial settlement and agrees that if the deadline for submission of an efficiency plan is before the February Cabinet meeting, that delegated authority is given to the Head of Resources to approve the plan subject to agreement by the Executive Councillor for Resources;

 viii.  that following the resolution regarding Voluntary Sector Grant Funding 2016/17 – 2019/20 (Minute No. 77) changes be reflected in the Voluntary Sector Grants budget for 2016/17 and over the MTFS period.

The Cabinet received a report by the Head of Resources (a copy of which is appended in the Minute Book) regarding the draft budget preparations to date. 

The 2016/17 budget and Medium Term Financial Strategy (MTFS) had been established following agreed policies and the completion of the Zero Based Budget (ZBB) exercise that started in the autumn of 2014. All departments within the Council had received a fundamental review of the service and the resources required to deliver those services. Tranche 1 savings from the ZBB programme delivered in December 2014 were incorporated into the 2015/16 budget. Tranches 2 and 3 had taken place during the current financial year and had been incorporated within the draft Budget for 2016/17 and the MTFS 2016/17 to 2020/21.  The Cabinet were referred to the total savings agreed via Tranches 2 and 3 of the ZBB exercise as detailed within the 2016/17 Budget and MTFS document.

In addition, the draft Budget and MTFS had also taken account of the following:

•  conclusions of ZBB Light reviews;

•  revenue implications of the draft Capital Programme;

•  grant settlement relating to New Homes Bonus and Council Tax Freeze Grant and Funding Estimates for Revenue Support Gant and New Homes Bonus; and

•  the draft Capital Programme 2016/17 to 2020/21.

It was noted that the Budget 2016/17 and MTFS included a Council tax freeze and that overall ZBB, Capital and Growth had resulted in a net reduction in the Council’s budget of £1.4m (7%) and £0.9m (5%) when compared to the 2015/16 Forecast Outturn and the original Budget.

Included in the Tranche 2 proposals was a recommendation to implement a bus departure levy in the District.  However, this proposal was removed from the ZBB savings and its removal had been incorporated into the draft Budget.

In respect of the New Homes Bonus (NHB) the Government had announced the 2016/17 settlement.  Although the Council presently relied on Government funding the Council continued to work towards its financial ambition of reducing reliance to nil by 2020/2021.

The impact on the General Fund Reserve of the grant settlement from Government, the Council’s policy to freeze Council Tax and the savings and growth were built into the Budget 2016/17 and MTFS and the Cabinet were referred to Table F on page 10 of the Budget 2016/17 and MTFS document.

The Cabinet were informed that there was an unsustainable budget position in that the Council would have an unbalanced budget in 2020/2021 and therefore an additional £3.2m of savings/income was required to address this deficit.  As a result it was proposed that the Council maintained the current level of reserves and Commercial Investment Strategy investments and continued the programme of ZBB reviews in order to find the necessary savings to bring the General Fund reserve to prudent recommended levels.

The Cabinet congratulated Members and Officers for the achievements to date and noted that the next stage in the savings process was transformation and delivery.  The Council also needed to address the culture  ...  view the full minutes text for item 78

The Panel is to receive an update on the 2016/17 Draft Budget and the Medium Term Financial Strategy.

By means of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Panel was updated on the Draft Budget for 2016/17 and the Medium Term Financial Strategy (MTFS). Members were informed that savings of £2.2m had been found through the Zero Based Budgeting (ZBB) process and this was expected to rise to nearly £4m by 2021.

The Panel had been advised that there has not been any growth within the budget except for items where it was unavoidable such as additional pension costs, statutory technical adjustments and some limited budget corrections.

Members noted that the budget for 2016/17 and MTFS was based on a Council Tax freeze over the period of the MTFS. As the Government has indicated that they would like Local Authorities to be self-financing the Council is expected to see a reduction in the number of grants received.

A cause for concern was highlighted in respect to the anticipated deficit of £637k the General Fund would have by the end of 2021. This would be as a result of a reduction in Government funding and contributions from the reserve towards the budget over the life of the MTFS. As such Members were told that budget savings of £3m would have to be sought by 2021.

The Panel has been acquainted with three options the Council has to consider in order to ensure it is budgeting in a sustainable manner both in terms of on-going revenue and funding and its reserves. The options are:

1)  Maintain the current level of reserves and Commercial Investment Strategy (CIS) investments and continue the programme of ZBB reviews in order to find the necessary savings to bring the General Fund reserve back to prudent recommended levels.

2)  The decision to transfer £6.8m from the General Fund reserve to the CIS earmarked reserve is reversed. As a result the approved CIS business case will need to be reviewed.

3)  Take a less aggressive view on the reduction of Government funded New Homes Bonus and therefore anticipate higher levels of government grant in future years or growth in business rates.

Following a question regarding business rates the Panel was informed that the current situation is that Local Authorities will keep 100% of business rate growth however this would become 100% of all business rates at a future date. Although the Government had not stipulated how business rates would be distributed between the Local Authorities.

In response to a concern over the effect a reduced budget would have upon services the Executive Councillor for Resources informed the Panel that the focus was to provide services as well as an improved customer experience. The Executive Councillor emphasised that it is important that Members were involved with the budget process and were fully informed of the proposals.

Members discussed the possible introduction of the Bus Departure Levy. The levy was suggested as part of the ZBB process however it was decided by the Head of Service and Executive  ...  view the full minutes text for item 6