Agenda item

Budget & Policy Framework Update - General Fund Revenue Budget and Capital Programme

(Cabinet Members with Special Responsibility Councillors Blamire & Bryning)


Report of Head of Financial Services


(Cabinet Members with Special Responsibility Councillors Blamire & Bryning)


Cabinet received a report from the Head of Financial Services to inform Cabinet of the latest position following Council’s consideration of the Budget and Policy Framework at its meeting held on 01 February, and to make recommendations back to Council in order to complete the budget setting process for 2012/13.


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


Cabinet was now requested to finalise its preferred revenue budget and capital programme proposals for referral on to Council, using the latest information available and taking account of the decisions already taken by Cabinet earlier in the meeting.


A separate updated schedule of proposals was circulated and discussed during the meeting.  In particular, specific consideration was given to managing the capital financing risks surrounding the capital programme and their potential effects.  Advice was sought from the Head of Financial Services, who outlined the provisions within existing Financial Regulations to help manage such situations.  In addition a further report on the General Fund capital position would be scheduled for April Cabinet, when there should be more clarity on timescales and resulting risks.  This would provide an opportunity to take action if needed to protect the Council’s financial position.


Revenue Budget

As Council had now determined the City Council tax rate for 2012/13, there were no options to change the total net revenue budget for next year (recommended at £20.190M) but Cabinet now needed to put forward detailed budget proposals that add back to that amount. Detailed options would be dependent very much on Members’ views on spending priorities.  Taking account of these, the Head of Financial Services (as s151 Officer) continues to advise that wherever possible, emphasis should be on achieving recurring reductions to the revenue budget.


Capital Programme

Cabinet could adjust its capital investment and financing proposals to reflect spending commitments and priorities but overall its proposals for 2011/12 and 2012/13 must balance.  Whilst there was no legal requirement to have a programme balanced over the full 5-year period, it was considered good practice to do so – or at least have clear plans in place to manage the financing position over that time.  Inevitably capital investment needs and funding opportunities would change, but it was important to consider and manage stakeholder expectations regarding investment too.

In deciding its final proposals, Cabinet was asked also to take into account the relevant basic principles of the Prudential Code, which were:

-          that the capital investment plans of local authorities are affordable, prudent and sustainable, and

-          that local strategic planning, asset management planning and proper options appraisal are supported.


Budget Framework (Reserves and Provisions / MTFS)

Given known commitments, risks and approved council tax targets there was little flexibility in financial terms, but Cabinet could consider different arrangements for approving the use of various reserves, or consider different budget strategies for future years.  On the whole, however, the current arrangements had worked reasonably well and so no fundamental changes were proposed.


For General Fund the officer proposed option was that proposals to be put forward by Cabinet should fit with any external constraints and the budgetary framework already approved.  The recommendations as set out meet these requirements; the detailed supporting budget proposals were then a matter for Members.


Councillor Bryning proposed, seconded by Councillor Barry:-



“That Council be recommended to approve recommendations (1) & (2) as set out in the report as amended to reflect the updated schedule.”


Resolved unanimously:


That Council be recommended to approve:


(1)        The General Fund Revenue Budget at £20.190M for 2012/13, resulting in a Council Tax Requirement of £8.363M excluding parish precepts.


(2)        The budget proposals as summarised at Appendix A, as amended, subject to any amendments arising in the Cabinet meeting and with the balance of any remaining savings requirement in 2012/13 being met from Revenue Balances.


Councillor Bryning proposed, seconded by Councillor Barry:-


“That Council be recommended to approve recommendations (3) (4) & (5) as set out in the report, as amended to fit with recommendation (2) above.”


Resolved unanimously:


That Council be recommended to approve, as amended:


(3)        The policy on provisions and reserves included at Appendix B.


(4)        The Capital Programme set out at Appendix C.


(5)        The Medium Term Financial Strategy (MTFS) and Prudential Indicators set out at Appendix D.



Officers responsible for effecting the decision:


Head of Financial Services


Reasons for making the decision:


The decision enables Cabinet to make recommendations back to Council in order to complete the budget setting process for 2012/13.  The approval of the capital programme recognises that some items would not be progressed until funding was in place.  A further report would be brought to Cabinet in April to provide an update with regard to the South Lancaster receipt and how to best manage any potential gap in funding in the event of a judicial review of the planning decision.

Supporting documents: