Issue - meetings

(Cabinet Member with Special Responsibility Councillor Thomas)

Joint report of the Corporate Directors (Finance and Performance, and Regeneration) and the Head of Financial Services (Appendix D to follow)

(Cabinet Member with Special Responsibility Councillor Thomas)

The Corporate Director (Finance and Performance) and Head of Financial Services submitted a joint report updating Members on proposed changes to the Council’s strategic planning framework, to promote greater understanding of the linkages and co-ordination needed between the different elements, in order to deliver improvements in the Council’s management of resources.

In line with those aims, the report also sought to gain approval of an updated Corporate Property Strategy; approval of Cabinet’s future aims for Council Tax, for referral on to Council and approval of draft capital investment criteria and initial financing assumptions.

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

Council Tax Targets

The options regarding targets are basically to:

Retain the existing Council Tax target of no more than 4% for future years

Previous approved forecasts indicate that this would require net savings of around £1,053K and £1,302K to be identified for 2010/11 and 2011/12 respectively, although these will change as the budget develops.

Recommend an alternative Council Tax target increase for future years.

The level of any net savings requirement (and the associated risks) would depend on the tax level proposed.

The main risks attached to either option follow on from the information in the report and the ability of the Council to take decisions on matching service levels with the money available to fund them.  In addition, the reputation and public perception of the Council may be affected. The key risks can be summarised as follows:

·         Actual savings targets prove to be substantially different from those shown above, due to changes in financial projections.

·         Required savings targets can’t be met, without having an unacceptable impact on service delivery – either from the Council’s own viewpoint or from public perception.

·         Government / the public perceive the increase to be too high, resulting in capping action being taken against the Council and/or a negative impact on public relations and the Council’s reputation

·         Council tax targets are too low, resulting in them being unsustainable in the longer term, without having adverse effects on future service delivery and/or the Council’s financial standing and reputation.

The report highlights that there is significant scope for budget projections to change, as a result of both internal and external factors. To counter this, there will be further opportunities to review target increases during the forthcoming budget as more definite information becomes available on forecast spending.

With regard to capping, Government has demonstrated a firm commitment to using its capping powers – although this could be affected in future by the General Election.  Should Cabinet wish to support spending levels that result in a Council Tax increase much higher that the current MTFS target, then there are strong indications that the current Government is likely to challenge this course of action.  This may well result in the Council’s budget being capped – in such a situation it would be forced to cut spending / services  ...  view the full minutes text for item 77