Agenda item

To consider a report by the Head of Financial Services.

(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 reviewed the Financial Strategy, Medium Term Plan (MTP) 2011-2015 and the Budget and level of Council Tax for 2010/11 in advance of their consideration by the Cabinet and final determination by the Council.

By way of introduction Councillor Rogers, Executive Councillor for Finance, reminded Members of the process involved in developing the Financial Strategy in the current year and explained that a number of changes had been made to the draft Strategy, which took into account £1.2m in savings that had been identified. These savings had been transferred into a Special Reserve in order to help facilitate the achievement of future spending adjustments. 

Members were advised that the medium term impact of the changes was a reduction in the Council’s budget deficit which would allow spending adjustments to be phased in at a more regular rate.  Overall spending would fall significantly from previous assumptions mainly owing to lower provision for pay and price inflation but also as a result of lower assumptions on Government Grant and the proposed reduction in the level of Council Tax increase to 2.49%, a figure which it was considered would avoid capping. The result was that a reduced level of spending adjustments would be needed in the Medium Term Plan period, though in the longer term there would be few changes.

The Director of Commerce and Technology drew Members’ attention to his conclusion contained in the report that the combination of a robust budget process and the current level of reserves should give Members no concerns over the Council’s financial position for 2010/11. However, he drew attention to the fact that a significant level of work would be required to plan the spending adjustments required in future years in order to avoid the Council making sub-optimum decisions as reserves were depleted. 

In highlighting the uncertainties and risks associated with the financial forecast Members were reminded of the possible impact of the Guided Bus on the Council’s parking income, the unknown length and depth of the recession, changes in grant funding and the revaluation of the pension scheme. These were likely to require further spending adjustments in the future. Following a question from a Member on investments, it was explained that lower than planned expenditure in 2008/09 had allowed investments to be made. In addition, previous investments over long periods had meant that the Council was benefiting from favourable rates.

In discussing expected income of £150k in respect of public conveniences, the Panel was advised that this was an estimated figure, which would be received following the sale to developers of the public conveniences at South Street, St Neots. Members also discussed the figure for future wheeled bin replacement and were advised that although in the future developers would be charged for new wheeled bins, provision had to be made for bin replacement. The Panel endorsed the figure contained in the report for wheeled bins.

In response to a question regarding the allocation of £800k for bus station improvements, Members were informed that the scheme was under review. They were also advised of the potential effects of recycling savings, VAT refunds and civil parking enforcement income.

Following discussion on the effect of introducing a higher rate of Council Tax increase the Panel expressed support for an annual increase of 2.49% in Band D equivalent Council Tax and for the proposed Budget and Medium Term Plan. They also supported the creation of a Special Reserve for use in achieving future spending adjustments. Having received assurances that the Financial Strategy would allow the Council to meet its objectives, the Panel

RESOLVED

  that the Cabinet be informed of the Panel’s support for:

(a)  the proposed Budget, MTP and Financial Plan as submitted;

(b)  an increase of 2.49% in Band D equivalent Council Tax for 2010/11, and

(c)  the creation of a Special Reserve on the terms set out in the report now submitted.