Agenda item

(Cabinet Member with Special Responsibility Councillor Bryning)

Report of Head of Financial Services

(Cabinet Member with Special Responsibility Councillor Bryning)

Cabinet received a report from the Head of Financial Services which updated members on the Council’s financial prospects for future years in order to help inform development of its budget strategy.

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

The report was primarily for information and for seeking direction from Cabinet and other than for council tax, no specific options were put forward at this time. 

The options regarding council tax targets were basically to either:

-        retain the existing council tax target of no more than 2% for future years; or

-        recommend alternative council tax target increases for future years; or

-        delay making recommendations at this stage, until later in the budget process.

The level of any net savings requirement (and the associated risks) would depend on the tax level proposed.  Clearly the compensation arrangements in support of a council tax freeze required specific consideration.  For information, a 1% change in council tax amounted to about £84K.

The main risks attached to any option followed 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.  The impact on Council Tax payers was key, the reputation and public perception of the Council might well be affected.  The key risks were summarised as follows:

-          Actual savings targets prove to be substantially different from those shown, 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 council tax levels 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.

To counter these risks, there would be further opportunities to review target increases during the forthcoming budget as more definite information became available on forecast spending.

Although some progress had been made towards improving the Council’s financial outlook, unfortunately additional cost pressures had arisen and therefore, overall, its prospects were broadly the same as they were at the start of the year.  It is clear, however, that Cabinet was ambitious and wished to pursue growth in some service areas but to make this possible, the focus must now be on how and where to make savings.  In terms of council tax, targets for next year were expected to have implications for subsequent years and this needed to be factored into Members’ decision-making.  It was impossible to get away from the fact that lower government funding and lower council tax increases ultimately meant more savings being needed – with more pressure therefore to reduce service provision.

Councillor Bryning proposed, seconded by Councillor Barry:-

“(1)      That Cabinet notes the current position regarding current spending and forecasts for future years, together with associated risks and uncertainties.

(2)        That Cabinet reconsiders whether it wishes to recommend any changes to Council Tax targets in December when more comprehensive information should be available.

(3)        That the key issues arising from this review be reported to Council for information.”

Councillors then voted:-

Resolved unanimously:

(1)        That Cabinet notes the current position regarding current spending and forecasts for future years, together with associated risks and uncertainties.

(2)        That Cabinet reconsiders whether it wishes to recommend any changes to Council Tax targets in December when more comprehensive information should be available.

(3)        That the key issues arising from this review be reported to Council for information.

Officers responsible for effecting the decision:

Head of Financial Services

Reasons for making the decision:

The report was primarily for information and for seeking direction from Cabinet and other than for council tax, no specific options were put forward at this time.  The decision deferred the consideration of council tax targets until more comprehensive information became available.