Agenda item

To provide detail of the draft budget preparations to date.

Approve:

 i.  the overall draft Budget 2017/18 and Medium Term Financial Strategy 2018/19 to 2021/22 (as attached in Appendix 1 of the report);

ii.  the savings and growth proposals (as per paragraphs 3.1 to 3.3 and attached as Appendix 2 of the report), and specifically:

a.  approval of an Economic Development Officer and Business Administrator Apprentice, and

b.  consideration of the Apprenticeship Scheme proposal to mitigate the impact of the apprenticeship levy;

iii.  removal of Zero Based Budget savings as detailed in Table 3 of the report;

iv.  the draft Capital Programme 2017/18 to 2021/22 (as per paragraphs 3.6 to 3.7 of the report); and

v.  the planned increase in Council Tax of 2% for 2017/18 and for the duration of the Medium Term Financial Strategy (as per paragraphs 4.4 to 4.6 and Table 9 of the report).

By way of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Cabinet were presented with the detail of the Draft Budget preparations to date for consideration and comment.

Tabled at the meeting was supplementary information on the Draft Budget 2017/18 which included a Summary Budget with Gross Income, Gross Expenditure and Net Expenditure separated per Service area and a list of the main growth and savings items.

Regarding the Revenue Budget it was explained that at the present time the draft Net Service Expenditure Budget for 2017/18 was £16.7m.  In comparing the draft 2017/18 Net Service Expenditure Budget to the 2016/17 Forecast Outturn and the Original Budget, there had been a net saving of £0.4m (2%) and £1.2m (7%) respectively, the draft figures for 2017/18 included:

•  savings from detailed line by line Budget reviews of £0.7m;

•  growth of £0.5m, as detailed in Appendix 2 of the submitted report;

•  non-realisation of previously approved Zero Based Budgeting (ZBB) savings of £0.4m;

•  the impact of all other unavoidable budget adjustments which added £0.96m; and

•  the increased income from the Commercial Investment Strategy of £1.0m.

Regarding the Capital Programme it was explained that there was a capital requirement of £9.5m in 2017/18, £4.3m funded from borrowing and the balance from external sources and internal contributions. The Minimum Revenue Provision (MRP) had been calculated at £2.2m.

The Commercial Investment Strategy (CIS) had a capital requirement of £31.5m in 2017/18. This was funded from borrowing of £26.4m, a MRP of £1.9m and an earmarked reserve contribution of £3.2m.

In previous years the Council had been cautious in incorporating Government funding into the Budget, which had proved to be the correct decision.  The Government had previously offered local authorities a Four Year Financial settlement on submission and approval of a Four Year Efficiency Plan.  The Council had since received approval for its Plan.  Subsequently the Secretary of State for the Department for Communities and Local Government had announced the provisional finance settlement for 2017/18, which indicated that Revenue Support Grant (RSG) and New Homes Bonus (NHB) allocations were in line with the indicative Four Year Settlement announced the previous year. By 2019/20 the RSG would no longer exist and new criteria had been announced for NHB with a transitional year for 2017/18.

Within the current Medium Term Financial Strategy (MTFS) the Council had an aspiration to be self-financing by 2020/21. With the changes in NHB, the aspiration would be achieved one year earlier, by 2019/20.  Any NHB received from 2019/20 onwards would be allocated to the CIS Earmarked Reserve, the CIS being a key strategy for the Council to continue to progress.

The Four Year Efficiency Plan included a proposal to increase Council Tax by 2% which was included in the 2017/18 draft Budget and MTFS.

With regard to Reserves it was the Council’s policy that the General Fund Reserve was to be maintained at a minimum level of 15% of net revenue expenditure of the authority.

The Executive Councillor for Strategic Resources commended Members and Officers for having previously made the difficult decisions so enable the Council to now report a positive draft Budget position.

The ZBB exercise had been ambitious and it was accepted that not all savings identified would be delivered.  However, the draft Budget demonstrated that the non-realisation of the ZBB savings had been absorbed.

Members were referred to Table 9 detailed within paragraph 5.6 of the submitted report, in particular the Net Expenditure which demonstrated that the Council was in a position of control and strength.

Members were further referred to Table 10 detailed within paragraph 5.7 of the submitted report, which demonstrated the impact on the Budget if the Council opted to not increase the Council Tax by 2%.  It was noted that 2% was lower than the increase in pensions and the average wage growth in Huntingdonshire.

It was noted amongst the Cabinet that the format of how the budget was now presented to Members had greatly improved over recent years.  The CIS provided an example of how the Council had progressed in a way that some would never have once contemplated.  However, the Council had to continue to identify further efficiency savings and all of those involved in the budget process were congratulated for the excellent work.

Referring to the comments from the Overview and Scrutiny Panel (Performance and Customers) which had been circulated to the Cabinet subsequent to the agenda publication, further narrative within the Budget was required to better explain that the restructure of Community Service although had generated £3k in savings for 2017/18 would in the future generate further savings.

Further narrative was also required within the Budget regarding the comments from the Overview and Scrutiny Panel (Performance and Customers) relating to the new post of Executive Assistant for the Leader and the Cabinet, to encompass that the post was required as the emerging Combined Authority would change some of the priorities for the District and demands on the Council.

In response to questions regarding an Economic Development Officer and Business Administrator Apprentice and the Apprenticeship Scheme, it was explained that from 2018 the Council was required to pay an apprenticeship levy and that 3% of its workforce had to be apprentices.  The departments of the Council that would be able to best accommodate apprentices were within the administrative support functions and the Operations Team, particularly as the Operations Team used a high number of temporary staff.  For each apprentice the Council was able to draw-down from the levy.

Appreciation was expressed to the Executive Councillor for Strategic Resources for his assured management of the Council’s finances and the support he had provided to both the Leader and Managing Director.  Appreciation was further expressed to the Head of Finance and his Team for the comprehensive budget which had been straightforward for the Overview and Scrutiny Panel (Performance and Customers) to review.  The Overview and Scrutiny Panel were also commended for the scrutiny of the budget. Having noted that the Council continued to deliver quality services on limited resources, the Cabinet,

RESOLVED

to approve:

  i.  the overall draft Budget 2017/18 and Medium Term Financial Strategy 2018/19 to 2021/22 (as attached in Appendix 1 of the report);

  ii.  the savings and growth proposals (as per paragraphs 3.1 to 3.3 and attached as Appendix 2 of the report), and specifically:

a.  approval of an Economic Development Officer and Business Administrator Apprentice, and

b.  consideration of the Apprenticeship Scheme proposal to mitigate the impact of the apprenticeship levy;

  iii.  removal of Zero Based Budget savings as detailed in Table 3 of the report;

  iv.  the draft Capital Programme 2017/18 to 2021/22 (as per paragraphs 3.6 to 3.7 of the report); and

  v.  the planned increase in Council Tax of 2% for 2017/18 and for the duration of the Medium Term Financial Strategy (as per paragraphs 4.4 to 4.6 and Table 9 of the report).