Agenda item

The County Council’s Director for Resources has been invited to deliver a presentation on the County Council’s Budget proposals for 2010/11.

The Panel received a report and detailed presentation from the county council’s Director for Resources on the county council’s budget proposals for 2010/11.  Appended to the report were appendices 1 to 4, being the 2010/11 efficiency plan; 2010/11 service policy options; 2010/11 charging policy options; and 2010/11 – 2013/14 capital investment strategy.

Members were advised that the county council’s cabinet had agreed a two-stage consultation process for the 2010/11 budget and a financial strategy for future years.  Cabinet had made specific budget and capital investment proposals for 2010/11 and future years, in the light of the consultation responses received. 

In the light of those consultation responses and of the overall financial strategy and forecast resources, cabinet had made specific revenue budget and capital investment proposals for 2010/11 and future years.

Responses on the proposals had been requested before 4^th February, when cabinet would again consider the budget and make final proposals.  These would be considered by full council on 18^th February 2010 in setting the revenue and capital budgets for 2010/11.

It was reported that when cabinet had considered the financial outlook for 2010/11 and future years, in September, the forecast of the level of savings that the county council would be required to make over the next four financial years included £16m for 2010/11 and ranged from a further £62m to £126m in total for the three years 2011/12 – 2013/14, dependent upon the level of government grant received.

An extensive review of the budget had been carried out in the intervening period by executive directors and cabinet members.  On 7^th January, cabinet had proposed that there be no increase in council tax in 2010/11 and identified efficiency savings of £21.7m in 2010/11, which would rise to £36.7m in 2011/12.

Legislative and demographic changes would result in increasing demands on services, adding £9m to the county council’s costs in 2010/11.  There would be a reduction in the budget provision for both pay inflation and general prices to help meet the savings targets. 

Consultation was being undertaken on policy options for service reductions totalling £1.5m and on options for increasing income through charging, totalling £0.3m.  Full details were set out in the appendices.

It was anticipated that for the three subsequent years 2011/12 to 2013/14, the county council would need to make total further savings of between £46m and £108m, in addition to the efficiency savings identified as part of the 2010/11 budget process and further budget options identified.

The four year capital investment strategy agreed by cabinet would enable consideration of investment priorities over the medium term and ensure both revenue and capital spending plans were closely aligned.  The strategy did not include any additional prudential borrowing to fund capital schemes.  The investment proposals comprised annual programmes of capital investment needed to keep the organisation working and specific scheme starts, which concentrated on delivering investment priorities.

Appendix 4 set out the resulting capital investment strategy totalling £58.8m, which included over programming of £6m, which was part of a range of measures agreed by cabinet in order to combat slippage.  Schemes within the schools and transport blocks were dealt with through separate processes.

The Director for Resources advised Members that there was a high level of uncertainty and risk around the forecast for 2011/12 and beyond as a result of the current economic and pre-election climate, with significant reductions in public expenditure being predicted.   The financial challenge to be faced was how to maintain services, and in some instances increase them, to meet increased demand on less money, and the county council would meet the challenge.

Following the presentation, the Director for Resources answered extensive questions from the Panel and stakeholders on county’s revenue budget and capital investment strategy.

Resolved:

(1)        That the Director for Resources be thanked for his presentation.

(2)        That members’ and stakeholders’ comments, specifically concerns regarding the proposed abolishment of Lancashire Locals, be considered as part of the county council’s revenue budget and capital investment strategy consultation process.