Agenda item

To consider and comment on a report by the Assistant Director, Finance & Resources prior its submission to the Cabinet.

(Councillor J D Ablewhite, Executive Leader, and Councillor J A Gray, Executive Councillor for Resources, were in attendance for this item).

Consideration was given to a report by the Assistant Director, Finance and Resources (a copy of which is appended in the Minute Book) in relation to the Council’s financial forecast. By way of introduction, the Executive Leader explained that the Authority faced a significant challenge. The outcome of the latest Government Spending review had placed additional pressures on the Council’s finances and on its ability to deliver its current portfolio of services. This would require all Members to work together to bring forward tangible and innovative solutions. The Cabinet would be receiving an options paper for this purpose at the earliest opportunity. He emphasised that the forthcoming months would be difficult for the Authority, as work would need to be undertaken to develop Budgets for 2014/15 and 2015/16 in tandem.

Councillor J A Gray emphasised that the Authority faced a difficult situation. This would require decisions to be taken on the provision of Council services and service levels, taking into account the requirements of Huntingdonshire residents. Consideration would need to be given to the ways in which the Authority engaged with the public to establish what local communities want local government to deliver.

The Assistant Director, Finance and Resources provided the Panel with an explanation of detailed aspects of the report. Members’ attention was drawn to the progress which had been made to achieve the previously identified savings requirements and the factors which had been taken into account in establishing the forecast position. Whilst uncertainty about the final figures remained, it was reasonable to assume that extra savings of around £2.6M need to be found for 2015/16 increasing to £3.7M by 2018/19. To begin the process of identifying savings, the Cabinet would be considering a report at its September meeting that outlined a range of options and approaches.

In considering the outcome of the recent Spending Review, the Panel discussed the Government proposal to require local authorities to pass on a percentage of their New Homes Bonuses to their Local Enterprise Partnerships. In response to a question whether this should have been foreseen, the Executive Councillor explained that it had not been expected that this would have materialised before 2015 and that he and the Executive Leader intended to lobby the Department for Communities and Local Government to reduce the level of the Council’s loss. He suggested that if funding were to be changed in this way it should be done in a more constructive or phased manner.

Members were reminded that the Local Enterprise Partnership comprised local Council leaders and that the majority of spend thus far had been on local government initiatives. In response to an observation that there had been no scrutiny of the Local Enterprise Partnership thus far, it was suggested that its Chairman and the Chief Executive should be invited to a future meeting of the full Council to give a presentation on its business plan.

In terms of the level of the New Homes Bonus which was likely to be directed towards the Local Enterprise Partnership, Members’ attention was drawn to the table in Section 5.4 of the report which demonstrated the impact of losing different amounts. There had been no assumption made within the Financial Forecast that the Authority would receive any money back from the Local Enterprise Partnership. If this did happen it was envisaged that it would be for capital as opposed to revenue purposes.

Councillor P D Reeve expressed concern at the proposal not to provide a further grant to Town and Parish Councils to mitigate the impact of changes to the Council Tax support system. He suggested that this was a retrograde step which might have an adverse impact on Town and Parish Councils’ willingness to work in partnership with the District Council. In response, Members were reminded that the additional government grant for this purpose had now been subsumed into the Revenue Support Grant and that Town and Parish Councils had been given sufficient time to make alternative provision through their precept. Members welcomed the early notice which would be given to Towns and Parishes on this. The Executive Leader assured the Panel that it would not prevent constructive work from being undertaken between the District Council and the Towns and Parishes on joint initiatives. However, Councillor P L E Bucknell stated that there might be a change in legislation which might require the Council to reconsider its position.

With regard to the figures which had been included within the forecast for pay inflation, Members were of the view that this provision was necessary if the Council was to retain dedicated and talented staff. The Panel was reminded that pay levels were subject to an annual negotiation process with the Staff Council and that the Employment Panel was overseeing work to establish a new pay structure which would be fit for purpose. In response to a question by a Member, it was reported that the forecast for Council Tax reflected the increase in the tax base from new builds, together with rises in the level of Council tax.

Members commented on the need to focus upon the larger areas of the Council’s expenditure to achieve the required level of savings by 2018/19. They also stressed the importance of communication to ensure that Huntingdonshire residents were able to influence and remain informed of the process. The Options in the report to the Cabinet would be generic and would provide a framework to identify costed savings proposals.

The Panel requested a list of the functions the Council had a statutory duty to perform to help with the task of identifying savings. The Executive Councillor for Resources recognised that work would be required to establish what the Council was legally required to provide and whether there were more effective ways of carrying out these functions. The Assistant Director, Finance and Resources explained that although it may be possible to provide a list of services that the Council had a statutory duty to provide, it would not be possible to cost these activities because minimum levels of services were not defined.

Being mindful that it would not be possible to commence any work prior to the options paper being considered by the Cabinet, the Chairman suggested that the process of allocating work would begin at the next Panel meeting. It was, therefore, agreed that the proposed review of Shared Services should be put on hold. The Executive Leader then explained that the paper would include areas which might have an impact on the other Overview and Scrutiny Panels so the Joint Chairmen’s meeting should consider the allocation of this work. Whereupon, it was

RESOLVED

that the Cabinet be recommended to

(a)  confirm, subject to there being no change in government legislation, that there will be no grants relating to the impact of Council Tax Support to Town and Parish Councils in 2014/15 and subsequent years;

(b)  recognise local authorities’ significant financial uncertainty;

(c)  accept the Forecast report in order to estimate the potential level of savings required; and

(d)  request the Chief Officers’ Management Team to identify proposals for additional major savings for 2015/16.

(In accordance with Council Procedure Rule 14.5, Councillor P D Reeve requested that it be recorded that he had voted against resolution (a) above.)