Agenda item

To consider a report by the Assistant Director (Finance and Resources) prior to its consideration by Cabinet.

(A copy of the separate appendix of budget tables has been circulated separately to Panel Members and is also available at www.huntingdonshire.gov.uk

(All Members of the Council have been invited to attend for the discussion on this item).

Councillor J A Gray, Executive Councillor for Resources, was in attendance for this item).

With the assistance of a report by the Assistant Director (Finance and Resources) (a copy of which is appended in the Minute Book) the Panel considered the Council’s proposed Budget, Medium Term Plan and Council Tax level for 2014/15. A note on the decision by the Department of Communities and Local Government on the Council Tax Freeze Grant and its implications for the Council had also been circulated prior to the meeting.

Councillor J A Gray reported that significant progress had been made during the past year. The forecast outturn had been better than expected and savings continued to be successfully identified and delivered which would result in forecast savings of £1.6M being achieved in the current year. This meant that the level of the Council’s reserves remained higher than anticipated. He then outlined the Cabinet’s aspiration to deliver a balanced budget for 2017/18 which required the Council to push forward with a programme for the delivery of savings in the region of £2.4M during this period. Loss of income from the New Homes Bonus continued to be a major risk for the Council. He then explained why he thought there should be no increase in Council Tax for the forthcoming year.

The Chairman reported on the discussions he had held with a number of Panel Members and his intention to establish a small working group to examine the gross costs of capital. It was agreed that Councillors S Greenall, P G Mitchell, T V Rogers and A H Williams should be appointed to the Working Group for this purpose.

Following a detailed explanation of each section of the report by the Assistant Director (Finance and Resources), Members were advised that the combination of a robust budget process and the Council’s current level of reserves should give Members no concerns over the Council’s financial position for 2014/15. It however, remained critical that effective progress was made in identifying how the required savings for future years would be achieved and that careful monitoring continued to take place.

In response to questions, Members received clarification of the increased costs that had been identified since the draft budget was published. Councillor M F Shellens requested information on the geographical area of the car parking volume reduction. Members also discussed the provision that had been made for NNDR appeals and were informed that there was an ongoing drive from the District Council’s Network to address this issue.

The Panel discussed the Council Tax Freeze Grant. Members were informed that the impact of this Grant would be equivalent to an increase in Council Tax of 1%. It was suggested that representations should be made to Government that offering the Grant on a percentage basis rewarded high taxing Councils. In terms of those items that were outstanding and would require assumptions to be made in order to finalise the Budget, the Panel discussed the impact of the pay review on employee turnover.

With regard to the risk provision which had been included in the MTP and the other potential risks which had been identified, the Panel discussed the projections for house building, the cautious approach which had been taken to making provision for the New Homes Bonus, the low demand for sites in Huntingdon and the use of capital receipts. Members also questioned whether any provision had been made for occasions when planning fees might need to be returned to applicants and when awards were made against the Council following planning appeals. A suggestion was made that risk provision should be broken down into high, medium and low risk items. Whilst it was accepted that this was not straightforward, Officers undertook to consider it for next year’s Budget.

The Panel gave consideration to the level of Council Tax for 2014/15. The view was expressed that the Council Tax should not be increased for the forthcoming year and the Freeze Grant should be accepted. However some Members expressed reservations about this because future income from a Council Tax increase would continue, whereas there could be cuts to other funding streams. They were also of the view that Members should be provided with information on the value of the services, which would allow them to make fully informed decisions. With regard to the savings which had been identified by the Facing the Future exercise, the Chairman reported that he was confident that sufficient savings could be found without having to consider those that were politically sensitive.

Members acknowledged that in accepting the proposed MTP, interest and borrowing costs would exceed 15 % of the Council’s net expenditure. However it was accepted that in the current circumstances the current MTP should be approved. Members were pleased to note that the Cabinet planned to undertake a review of the capital programme in the coming year. The Panel would continue to focus its attention in this area and would also have a role to play in monitoring the financial outcomes of Facing the Future and ensuring that savings were delivered.

The Panel reviewed the appendices to the Budget report. A number of questions were raised in relation to the budgets for specific service areas. These included the assumptions which had been made should legal and IT services be delivered differently and Members were informed that the projections for Disabled Facilities Grants in 2014/15 were based upon the predictions of colleagues in the Housing section. The Accountancy Manager was asked to provide further information on the increase in the salary budget for the Assistant Director (Finance and Resources) and on the increase in fees and charges during the MTP Period. Having been asked about the significant increase in the capital contribution for 2014/15, he also undertook to provide a copy of the MTP form to Councillor M F Shellens. Following a further question, it was suggested that Councillor Greenall should discuss admission prices for One Leisure with the General Manager or the Executive Councillor for Healthy Communities.

Councillor M F Shellens addressed the Panel on his concerns for those employees who had been significantly affected by the recent pay review. He requested information on the cost of extending the period of pay protection including, for example, the effect if the extension was applied to those who were losing more than 10% of their salary. Councillor Shellens also suggested that any cuts that involved a significant loss of service should be deferred until the outcome of the next General Election was known and clarity had been obtained on the future funding arrangements for local government. In response, the Executive Leader explained that whatever the outcome of the next election, the District Council needed to take steps fundamentally to reduce its expenditure and reminded the Panel of the extent of the savings which needed to be identified. In any case it would take some time to research and deliver some of the savings opportunities. Members were also reminded of the efficiencies that had been generated thus far with very little impact on the services that were provided. Whereupon, it was

RESOLVED

1)  that the Cabinet should recommend to full Council

  i.  that, subject to the amendments in the Budget Update note and any detailed consequential amendments to the tables, the proposed Budget and MTP as shown in the Budget Tables in the Appendix to the report now submitted be approved;

  ii.  that it be accepted that the 15% limit on Net Interest and Borrowing Costs has been breached but that the actions described in paragraph 8.6c of the report be undertaken over the next year to mitigate the impact, and

  iii.  that there should be no increase in Council Tax for the 2014/15 Financial Year;

2)  that, subject to approval of the Budget, the Cabinet should recommend the Council to endorse the additional approvals for those MTP Schemes highlighted in the table in Appendix 4 to the report now submitted; and

3)  that Councillors S Greenall, P G Mitchell, T V Rogers and A H Williams be appointed to a working group for the purpose of giving further consideration to the gross costs of capital.

(Councillors S Greenall and M F Shellens requested that it be recorded that they had abstained from voting on items 1 and 2 above).