Decision details

As part of the half yearly monitoring and update arrangements of the approved MTFS, issues that require key decisions to be taken may well arise. It is planned that Property, Finance and Human Resources will also be included in this report.

(Cabinet Member with Special Responsibility Councillor Langhorn)

 

Cabinet received a report from the Head of Financial Services to provide an interim update on the Council’s strategic planning for finances and resources in context of the recent Government Comprehensive Spending Review (CSR).

 

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

 

Council Tax Targets:

 

For 2011/12 it is considered likely that there is a relatively narrow band of options available to the Council regarding tax increases, from say 0% to 2.5%, assuming that it wishes to avoid any form of challenge.  From the earlier consultation exercise on whether to introduce local referendum arrangements that could veto ‘excessive’ tax increases, it is clear that in one way or another, Government is prepared to tackle authorities that retain plans for higher tax rises.

 

That said, the outcome of that consultation is not yet known and therefore Government’s firm views on what level of increase may be deemed acceptable are not yet known.

 

There is a clear financial benefit in recommending a Council tax freeze; there is also a clear disincentive to increase council tax anywhere between just above 0% up to 2.5%.

 

The main risks attached to any option relate to the ability of the Council to take decisions on matching service levels with the money available to fund them.  Furthermore there is a real risk that actual savings targets prove to be substantially different from those indicated.  To help counter this to a degree, there will be further opportunities to review target increases during the forthcoming budget as more accurate information becomes available.

 

In terms of options, the impact on Council Tax payers is key and this is particularly so regarding the council tax freeze proposals. There will be reputational, operational and financial risks, opportunities and trade-offs attached to whichever option Cabinet chooses.

 

Officer Preferred Option and Comments

 

The decision regarding council tax targets is clearly a matter for Members but that said, both the Chief Executive and the s151 Officer consider it advisable for the Council to take advantage of Government’s proposals and aim for a Council Tax freeze for 2011/12, subject to no other conditions or changes arising in connection with the proposed scheme.

 

Regarding 2012/13 and beyond, both the Chief Executive and the s151 Officer would advise against planning for a general Council Tax increase outside of a range of say 0 to 2.5% at this time.  In due course more information will become available to inform such target setting.  It may well be the case that from 2013/14 specific changes to the council tax benefit scheme are to be financed through additional flexibilities on council tax and these would need to be considered at the appropriate time.

 

Whatever Council Tax targets are in place, Members need to have supporting plans in place to achieve a balanced budget.

 

Councillor Langhorn proposed, seconded by Councillor Kerr:-

 

“(1)      That Cabinet notes the broad outcome of Government’s Comprehensive Spending Review and the indicative savings required in order to balance future years' budgets.

 

(2)        That Cabinet recommends a Council Tax freeze for 2011/12 and target increases of between 0 – 2% for future years' at this stage, for referral on to Council.

 

(3)        That Cabinet agrees to continue with the current priorities in the Corporate Plan with the following amendments:

 

• Economic Regeneration – Energy Coast and Visitor Economy.
• Climate Change – Prioritising reducing the council’s energy costs and increasing income.
• Statutory responsibilities – fulfilling at least our minimum statutory duties – focus on keeping the streets clean and safe.
• Partnershjp working and Community Leadership – working with partners to reduce costs, make efficiencies and create resilience within the district.
• That Cabinet notes the intention to protect the most vulnerable in our society should also be a thread that runs through all our priorities.
• That these priorities will be discussed in a series of meetings to take place over the next month.

 

(4)        To request officers to bring forward proposals for generating further income from services.

 

(5)        To request officers to bring forward proposals to reduce expenditure on services which do not meet the current priorities outlined above.”

 

By way of an amendment it was moved by Councillor Barry and accepted by the mover and seconder of the original proposal as a friendly amendment:

 

“That the words ‘and/or to meet these priorities more efficiently’ be added to the end of recommendation (5).

 

At this point Councillor Kerr requested that the meeting be adjourned briefly in order for him to seek clarification from officers.   The meeting adjourned at 12.40 and reconvened at 12.45pm.

 

By way of a further amendment, which was not accepted as a friendly amendment, Councillor Kerr proposed and Councillor Robinson seconded:-

 

“That ‘and housing led regeneration’ be added to recommendation 3 – Economic Regeneration – Energy Coast and Visitor Economy.”

 

Councillors then voted on the further amendment:-

 

3 Members (Councillors Ashworth, Kerr and Robinson) voted in favour, 4 Members (Councillors Barry, Blamire, Fletcher and Langhorn) voted against and 1 Member (Councillor Bryning) abstained.

 

Members then voted on the original motion, as amended.

 

Resolved:

 

(7 Members (Councillors Ashworth, Barry, Blamire, Bryning, Fletcher, Kerr and Langhorn) voted in favour, 1 Member (Councillor Robinson) abstained.)

 

(1)        That Cabinet notes the broad outcome of Government’s Comprehensive Spending Review and the indicative savings required in order to balance future years' budgets.

 

(2)        That Cabinet recommends a Council Tax freeze for 2011/12 and target increases of between 0 – 2% for future years' at this stage, for referral on to Council.

 

(3)        That Cabinet agrees to continue with the current priorities in the Corporate Plan with the following amendments:

 

• Economic Regeneration – Energy Coast and Visitor Economy.
• Climate Change – Prioritising reducing the council’s energy costs and increasing income.
• Statutory responsibilities – fulfilling at least our minimum statutory duties – focus on keeping the streets clean and safe.
• Partnershjp working and Community Leadership – working with partners to reduce costs, make efficiencies and create resilience within the district.
• That Cabinet notes the intention to protect the most vulnerable in our society should also be a thread that runs through all our priorities.
• That these priorities will be discussed in a series of meetings to take place over the next month.

 

(4)        To request officers to bring forward proposals for generating further income from services.

 

(5)        To request officers to bring forward proposals to reduce expenditure on services which do not meet the current priorities outlined above and/or to meet these priorities more efficiently.

 

Officer responsible for effecting the decision:

 

The Head of Financial Services

 

Reasons for making the decision:

 

It is expected that the CSR will result in the Council needing to make significantly more savings than was previously forecast and whilst the exact implications are not known, this scenario is similar to that being faced by other local authorities nationwide.  The Council cannot expect to continue to deliver the same range and standard of services that it currently provides although clarity on certain aspects of Council tax helps to a degree with planning.   It is expected to be early December before reasonably accurate budget forecasts can be produced, in the interim the Council would be able to focus on how to tackle the financial challenges ahead, including reviewing its priorities and key strategies and objectives, to fit with what will be affordable.