Agenda item

(Cabinet Member with Special Responsibility Councillor Newman-Thompson)

 

Report of Chief Officer (Resources)   -  Report to Follow

(Cabinet Member with Special Responsibility Councillor Newman-Thompson)

 

Cabinet received a report from the Chief Officer (Resources) to inform Cabinet of the latest budget and council tax position so it could make recommendations back to Council in order to complete the budget setting process.

 

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

 

Cabinet is now requested to finalise its preferred council tax, revenue budget and capital programme proposals for referral on to Council, using the latest information as set out in the supplementary report.

 

Council Tax

Three basic options are set out in section 4 of the supplementary report.

 

Revenue Budget

Cabinet may adjust its revenue budget proposals, as long as the overall budget for 2016/17 balances and fits with the proposed council tax level.  The Chief Officer (Resources), as s151 Officer, continues to advise that wherever possible, emphasis should be on reducing future years’ net spending.

 

Capital Programme

Cabinet may adjust its capital investment and financing proposals to reflect spending commitments and priorities but overall its proposals for 2015/16 and 2016/17 must balance.  Whilst there is no legal requirement to have a programme balanced over the full 5-year period, it is considered good practice to do so – or at least have clear plans in place to manage the financing position over that time.

 

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

-                 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.

 

Other Budget Framework Matters (Reserves and Provisions / MTFS)

Given known commitments, risks and approved council tax targets there is limited flexibility in financial terms, but depending on priorities Cabinet may consider putting forward alternatives for various reserves, or different approaches for addressing the medium term budget deficit through the MTFS.

 

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 are then a matter for Members.

 

This report outlines the actions required to complete the budget setting process for 2016/17 and for updating the MTFS to 2019/20.  The associated update to the Corporate Plan is now scheduled for consideration at Cabinet in March, prior to being referred on to April Council.  That will then conclude this year’s corporate planning and budgeting exercise.

 

 

Councillor Blamire proposed, seconded by Councillor Clifford:-

 

“(1) That in light of the extra flexibility in council tax referendum thresholds now provided by the Government through the final Finance Settlement, Council be recommended to approve a City Council basic tax increase of £5 (at Band D) for 2016/17, together with a year on year target of £5 at Band D for future years, subject to local referendum thresholds.

 

(2)    That in line with the above, Council be recommended to approve a General Fund Revenue Budget of £16.258M for 2016/17, resulting in a Council Tax Requirement of £8.296M excluding parish precepts, and a Band D basic City Council tax rate of £208.97.

 

(3)   That in terms of the feedback received from Council, it be noted that:

 

-        Adopting a zero-based budgeting approach may be considered at some point in the medium to longer term, as already allowed for under current financial strategy  (likely to be for 2018/19 at the earliest).

 

-        Marsh Community Centre funding is to be considered as part of the Housing Revenue Account budget proposals.

 

-        Salt Ayre redevelopment takes priority in the future use of the Invest to Save Reserve, to help reduce capital financing costs.

 

-        Subject to other work demands and priorities, council tax discretionary charging policy for empty homes will be reviewed for 2017/18.

 

(4)  That Cabinet endorses the review of Provisions, Reserves and Balances undertaken by the s151 Officer, and notes her advice regarding minimum Balances increasing by £0.5M to £1.5M, subject to annual review.

 

(5) That Cabinet’s full supporting budget proposals (as set out in Appendices A,B,D and E to the report) be updated to reflect the recommendations above.

 

(6) That the Leader and Finance Portfolio Holder be given delegated authority to finalise the Medium Term Financial Strategy, reflecting all the above, for referral on to Budget Council.”

 

Councillors then voted:-

 

Resolved unanimously:

 

(1)  That in light of the extra flexibility in council tax referendum thresholds now provided by the Government through the final Finance Settlement, Council be recommended to approve a City Council basic tax increase of £5 (at Band D) for 2016/17, together with a year on year target of £5 at Band D for future years, subject to local referendum thresholds.

 

(2)    That in line with the above, Council be recommended to approve a General Fund Revenue Budget of £16.258M for 2016/17, resulting in a Council Tax Requirement of £8.296M excluding parish precepts, and a Band D basic City Council tax rate of £208.97.

 

(3)   That in terms of the feedback received from Council, it be noted that:

 

-        Adopting a zero-based budgeting approach may be considered at some point in the medium to longer term, as already allowed for under current financial strategy  (likely to be for 2018/19 at the earliest).

 

-        Marsh Community Centre funding is to be considered as part of the Housing Revenue Account budget proposals.

 

-        Salt Ayre redevelopment takes priority in the future use of the Invest to Save Reserve, to help reduce capital financing costs.

 

-        Subject to other work demands and priorities, council tax discretionary charging policy for empty homes will be reviewed for 2017/18.

 

(4)  That Cabinet endorses the review of Provisions, Reserves and Balances undertaken by the s151 Officer, and notes her advice regarding minimum Balances increasing by £0.5M to £1.5M, subject to annual review.

 

(5)    That Cabinet’s full supporting budget proposals (as set out in Appendices A,B,D and E to the report) be updated to reflect the recommendations above.

 

(6) That the Leader and Finance Portfolio Holder be given delegated authority to finalise the Medium Term Financial Strategy, reflecting all the above, for referral on to Budget Council.

 

Officer responsible for effecting the decision:

 

Chief Officer (Resources)

 

Reasons for making the decision:

 

The recent Finance Settlement provides greater flexibility with regard to referendum thresholds and given the Council’s ambition in trying to protect services it makes sense to maximise council tax income. The decision enables Cabinet to make recommendations back to Council in order to complete the budget setting process for 2016/17.