The Executive Councillor for Resources to present a report by the Head of Financial Services on the process leading towards approval of the Budget/Medium Term Plan 2013/14 at the meeting of the Council in February 2013.
Minutes:
With the assistance of a report by the Head of Financial Services (a copy of which is appended in the Minute Book) and referring to Minute No. 34, (d), Item No. 5 post, the Executive Councillor for Resources presented the interim financial forecast to the Council and updated Members on issues which could impact upon the process leading to approval of the 2013/2014 budget and Medium Term Plan at the Council meeting in February 2013. The Executive Councillor also invited the views of the Council on the basis on which the Minimum Revenue Provision should be calculated. The Council was reminded that the financial forecast was the first stage in the process towards approval of the 2013/2014 budget.
Councillor Gray reminded Members that the financial objectives of the Cabinet were –
¨ to achieve a balanced revenue budget by the financial year 2016/2017;
¨ to maintain an appropriate level of revenue reserves;
¨ to establish a clear protocol for borrowing and investment; and
¨ to plan for the withdrawal of the new homes bonus should this occur.
Having updated the Council on the progress of the Cabinet towards each objective, Councillor Gray drew Members’ attention to the content of the report of the Head of Financial Services and mentioned in particular the impact on the 2011/2012 outturn of work projects being delivered by Officers under or within budget. Councillor Gray wished to place on record his gratitude to staff for their efforts in this respect.
The Council was reminded that provision had been made in the budget for a 3.5% increase in pay although a decision had not yet been made on the precise pay award for 2013. The Executive Councillor drew attention to risks or uncertainties which might impact on the Council’s budget. These included the possibility that the forecast for delivery of new homes might not materialise thereby affecting the level of the new homes bonus which could be allocated by the Government. He added that the Cabinet had recognised this uncertainty and requested Officers to monitor development more closely so that the position could be updated on a quarterly basis. Other areas of risk included the scheme for the localisation of business rates and council tax support which might require the Council to meet a reduction in funding from the Government. Lastly, the Council was acquainted with potential for the District Council to contribute towards the liability created by the demise of Municipal Mutual Insurance, a company in which the District Council and its predecessor authorities formerly held policies.
The Council was reminded that the Cabinet continued to consider ways to deliver further efficiencies either by service reorganisation or by generating income. Details of these schemes would be shared with the Overview and Scrutiny Panels and the Council when appropriate.
Councillor Gray concluded by commending to the Council the annuity basis as the means of calculating the Minimum Revenue Provision and before inviting the Council to debate the financial forecast alerted the Council to the prospect of further difficult decisions which may lay ahead.
In response to a question from Councillor P L E Bucknell in respect of issues identified as possibly impacting on the Council’s budget, the Executive Councillor anticipated that new legislation could reduce the income recovered from planning application fees given the suggestion that no formal planning permission would be required for home extensions. Similarly, the continuing uncertainties in the housing market also could impact on fee income. However, the Executive Councillor was able to confirm that the sale of Castle Hill House was progressing but that there were no plans currently to develop the vacant site adjacent to Pathfinder House.
On behalf of the Liberal Democrat Group, Councillor P J Downes thanked Councillor Gray for his presentation and indicated that his colleagues would continue to robustly contribute to and challenge the work of the Overview and Scrutiny Panel (Economic Well-Being) in their consideration of the Council’s financial plans.
Having been moved by Councillor Gray and duly seconded, the Council
RESOLVED
that the content of the report be noted and the annuity basis for the calculation of the Minimum Revenue Provision as described in Annex B of the report now submitted approved.
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