Agenda item

(Cabinet Member with Special Responsibility Councillor Whitehead)

Report of Chief Officer (Resources)   -  (Report to follow)

(Cabinet Member with Special Responsibility Councillor Whitehead)

Cabinet received a report from the Chief Officer (Resources) which provided information on the latest budget position for current and future years, to inform Cabinet’s budget and policy framework proposals and to allow it to make final recommendations to Council regarding council tax levels for 2017/18.

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

Options are dependent very much on Members’ views on spending priorities balanced against council tax levels.  As such, a full options analysis could only be undertaken once any alternative proposals are known and it should be noted that Officers may require more time to do this.  Outline options are highlighted below, however.

–               Regarding council tax, two basic options are set out at section 6 of the report.  Other alternative options can be modelled at Cabinet’s request.

-               With regard to including savings and growth options to produce a budget in line with preferred council tax levels, any proposals put forward by Cabinet should be considered affordable, alongside the development of priorities.  Emphasis should be very much on the medium to longer-term position.

Under the Constitution, Cabinet is required to put forward budget proposals for Council’s consideration, in time for them to be referred back as appropriate.  This is why recommendations are required to feed into the Council meeting in early February, prior to the actual Budget Council in March.

The two-phased budget strategy adopted by Cabinet is considered to be an effective way of managing the main risks of budget affordability and financial sustainability, by allowing more time for prioritisation and planning.

Generally Officer preferred options are reflected in the recommendations, with the exception of council tax.

In view of the level of savings still needed in future years, the ongoing impact that council tax freezes have, the Council’s current financial strategy and the fact that the Council is not yet clear about how and when it will achieve a financially sustainable budget, the Officer preferred option for council tax is to retain the existing £5 year on year increase, subject to confirmation of local referendum thresholds.  Although a budget surplus is currently forecast in next year, one-off spending pressures could easily swallow that up.

The Officer preferred option would change only if the Council fundamentally reduces its ambitions regarding service delivery, evidenced through the adoption of a clear statement and strategy for doing so.

The Council’s financial challenges continue and in order to protect its future viability, it has no real choice other than to focus on balancing its budget for the medium term.  The two-phased budget strategy adopted is in support of this aim, as is the Council’s wider financial strategy.  The approach also allows the Council to respond to new information and developments and this is crucial, given the forthcoming fundamental finance reforms underway and the huge inherent uncertainties that currently exist.

Councillor Whitehead proposed, seconded by Councillor Pattison:-

“That the recommendations, as set out in the supplementary information, be approved.”

Councillors then voted:-

Resolved unanimously:

(1)          That the 2016/17 Revised Budget be referred on to Budget Council for approval, with the net overspending of £39K being met by reducing the in-year contribution to Balances from £56K to £17K.

(2)          That Council be recommended to approve a City Council tax increase of £5 for 2017/18, together with a year on year target of £5 for future years, subject to local referendum thresholds.

(3)       That Cabinet approves its initial budget proposals as set out in the following Appendices to the supplementary information report:

Appendix 1:     Savings and growth for implementation following approval at           Budget Council.

Appendix 2:     Savings and growth options to be developed and considered            during 2017/18, to inform corporate planning, prioritisation and     budget setting for 2018 to 2022.

(4)       That the above proposals and the resulting Revenue Budget position and Capital Programme for 2017/18 onwards, as set out at Appendices 3 and 4 of the supplementary information report respectively, be referred on to Council for initial consideration as well as being presented for scrutiny at the open meeting of Budget and Performance Panel, in order that feedback can be provided to Cabinet at its February meeting.

(5)       That drawing on the above, it be noted that:

–        regard to the advice of the section 151 Officer. currently the revenue budget proposals for 2017/18 are balanced, allowing for a net contribution to earmarked reserves in next year, but some key figures (such as the provisional Settlement) are still subject to change;

–        there is still a need to make estimated savings of £414K in 2018/19, rising to £2.117M by 2020/21,

–        the planned local government finance reforms scheduled for 2020 create huge uncertainties, and it is essential that the Council develops its understanding and monitors the potential implications in order that it can respond positively and appropriately, as Government’s plans become clearer.

(6)       That at its February meeting Cabinet considers the use of available Reserves and Balances in support of finalising its Budget and Medium Term Financial Strategy (MTFS) proposals to 2021, having regard to the advice of the section 151 officer.

Officer responsible for effecting the decision:

Chief Officer (Resources)

Reasons for making the decision:

The decision enables Cabinet to make recommendations back to Council in order to complete the budget setting process for 2017/18.