Agenda item

To consider and comment on a report by the Head of Financial Services on the Budget and Medium Term Plan prior to its submission to the Cabinet.

Councillor T V Rogers, Executive Councillor for Finance, was in attendance for this item.

With the aid of a report by the Head of Financial Services (a copy of which is appended in the Minute Book) the Panel considered the draft 2010/11 budget, the Medium Term Financial Plan (MTP) to 2014/15 and the longer term financial forecast to 2023/24, prior to their submission to Cabinet and final determination by the Council.

In introducing the report the Executive Councillor for Finance explained that the financial forecast considered by the Cabinet in September had not been altered. The current proposals had been the subject of extensive discussion by Executive Councillors. Current revenue reserves of £19m would be drawn on over the next four years until the recommended minimum level of £3m remained to cover unexpected expenditure. Income from government grant and Council Tax was likely to be substantially lower than the level assumed in the financial plan approved by the Council in February 2009. Councillor Rogers then informed Members of the initial responses to consultation with the Town Councils on proposals relating to the District’s public toilets.

The Director of Commerce and Technology advised the Panel that the forecast increase in Council Tax had been reduced from 4.99% to 2.49%. This combined with an expected reduction in the Revenue Support Grant for 2011/12 equated to an income £567k lower than the approved MTP.  The figure did not include an adjustment for Concessionary Bus Fares, which were expected to be transferred to the County Council in April 2011. This was likely to reduce net expenditure by £0.9m but a corresponding reduction of £1.4m was expected in the Council’s Revenue Support Grant. On the other hand substantial efficiency savings had been made in waste recycling and leisure centres and as a result of holding empty posts vacant. In addition, increases in provision for pay had also been limited with an uplift of 1% proposed for 2010/11. Finally, the Panel was advised that, following the three yearly revaluation of the Local Government Pension scheme, requirements for additional payments were forecast to be £180k in 2011/12 and £800k per year by 2014/15. As a result of these and other factors overall savings to be identified for the following three years amounted to £1m, £2.5m and £5.7m.

In response to a question by a Member the Panel was informed that with the exception of the Arts Service, the proposed budget should enable the Council to achieve its service delivery targets. While Members expressed reservations at the proposal effectively to end the Council’s direct activities in the arts, it was noted that the Council would continue to promote the arts through grant funding.

Following a further question on whether the Council’s Corporate Plan had been taken into account in devising the budget, assurances were provided that this had been the case. Although the point was made that the proposals relating to parking charges could conflict with the Council’s objectives to promote the local economy, it was stated that this had been considered in planning the budget.

In discussing plans to transfer to Town Councils responsibility for cleaning and maintenance of the District’s public conveniences, Members were informed that the current cost of this was £156k per year. The rationale was that Town Councils knew the level of local need for toilets and consequently would be better able to mange them. This was in the context of Town Councils asking the District Council for more responsibilities. The Panel discussed the effect of this proposal on tourism, though consensus was not reached on this. The significance of the proposal lay in the fact that the District Council could achieve a saving on this service but, depending on the response by Town Councils, it could also mean the District Council might not construct the new toilets proposed in MTP bid No. 302.

Members raised concerns at the proposed level of spending on Huntingdon Bus Station and requested that Cabinet review and justify the bid. It was suggested that the Cabinet might consider, instead, undertaking some refurbishment. Other matters discussed included the level of investment in the leisure centres. While the figures involved were high, the Panel felt the Council should recognise that it was likely to make a return from its investment and that many local people benefited from the service. Similarly, Members accepted that the figure for the A14 Inquiry was necessary to ensure the Council’s perspective was adequately represented during the Inquiry process and to enable to Council to address detailed aspects of the scheme.

The Panel debated the assumptions on which predictions about the effect of the Guided Bus had been made. Members also questioned the level of provision made for the Great Fen Project. However, this would be pursued separately during ongoing scrutiny of the project. Having noted that the level of Council Tax increase being proposed could change as circumstances altered, that the options available could include a higher increase and that the proposed increase represented a decrease in income of £175,000 compared with some previous forecasts, it was

RESOLVED

  that, subject to review and justification of  the proposed Capital expenditure on Huntingdon bus station, the Cabinet be recommended to endorse the draft Medium Term Financial Plan for submission to the Council as the basis for the production of the 2010/11 budget, the revised MTP for 2011/12 to 2014/15 and the financial plan to 2023/24.