Issue - meetings

(See report at agenda item 5 (pages 15 to 23) of the Cabinet agenda of 6 December 2016 and pages 1 to 10 of the supplement to the agenda)

RECOMMENDED BY THE CABINET

That the Council:

1)          Approves the key financial principles and actions of the five-year financial strategy set out in appendix 1 to the agenda report.

2)          Notes the current five-year Financial Model in appendix 2 to the agenda report.

3)          Approves the setting of a minimum level of general fund reserves, having considered the recommendations from the Corporate Governance and Audit Committee.

4)          Approves the continuing participation by Chichester District Council in a West Sussex NDR pool for 2017-2018.

5)          Notes the current resources as set out in appendix 3 to the agenda report.

Mrs Hardwick (Cabinet Member for Finance & Governance Services), seconded by Mr Dignum (Leader of the Council), moved these recommendations to the Council.

Mrs Hardwick introduced the report, saying that the strategy and plan had been updated for the next five years from 2017-18 and set the scene for the Council’s forthcoming budget in February and the setting of Council tax in March.  The backdrop to this strategy was the continuing challenging economic climate in which we continued to operate, the autumn statement and our own four year settlement with central Government.  The Council’s current model assumed an increase in Council Tax of £5 for 2017-18.

The five year financial model reflected the four year Government settlement and the most up to date estimates for the wider council activities including the Programme Boards and other planned savings totalling £3.9m as agreed by Cabinet and Council in the September 2016 Deficit Reduction report.

Mrs Hardwick highlighted an amendment to recommendation 3 which should read:

That having considered the recommendations from the Corporate Governance and Audit Committee that the minimum level of general fund reserves should be maintained at £5m.

She thanked Mr Ward and officers in the finance team for pulling together this strategy and for their continuing hard work and diligence in what were undoubtedly particularly challenging times for local authority finance.

Mr Oakley queried the Cabinet’s confidence in achieving the planned levels of savings and asked whether the financial strategy made provision for continuation of the cultural grants out of revenue and if so by what figure and by what means it was covered i.e. by council tax rises and/or by diversion from other spending areas.  He was concerned that the Council may be prejudging any debate on cultural grants by their inclusion in the strategy.

Mrs Shepherd (Chief Executive) responded saying that the cultural grants report was a confidential Part 2 item for later in the agenda.  It was not possible to divulge that information as the discussion had not yet been held.

Mrs Hardwick stated that some figures on cultural grants were covered in the models.  The Council was seeking to maximise its returns on reserves.  There was a plan to continue to seek savings from support services by implementing internal changes.  Her colleagues on the Cabinet had confidence that savings identified would be achieved but it would not be easy.  She reminded members that revenue income, such as car parking, was used to deliver council services.

Mr Dignum (Leader of the Council) assured the Council that the Cabinet was determined to achieve the identified savings. He commended the Financial Strategy as an extremely prudent one, looking five years ahead, which was the reason this Council was solvent.

Mrs Shepherd (Chief Executive) reminded members that they were being asked to agree the principles of the Financial Strategy. The Council’s budget would be coming to Cabinet for consideration in February and on to Council in March 2017.  The decisions the Council made today would feed into that budget.  ...  view the full minutes text for item 176

The Cabinet is requested to consider the agenda report and its three appendices and to make the following recommendations to the Council namely that it:

(1)  Approves the key financial principles and actions of the five-year financial strategy set out in Appendix 1.

(2)  Notes the current five-year Financial Model in Appendix 2.

(3)  Approves the setting of a minimum level of general fund reserves, having considered the recommendations from the Corporate Governance and Audit Committee.

(4)  Approves the continuing participation by Chichester District Council in a West Sussex NDR pool for 2017-2018.

(5)  Notes the current resources position as set out in Appendix 3.

RECOMMENDED TO THE COUNCIL

That the Council:

(1)  Approves the key financial principles and actions of the five-year financial strategy set out in appendix 1 to the agenda report.

(2)  Notes the current five-year Financial Model in appendix 2 to the agenda report.

(3)  Approves the setting of a minimum level of general fund reserves, having considered the recommendations from the Corporate Governance and Audit Committee.

(4)  Approves the continuing participation by Chichester District Council in a West Sussex NDR pool for 2017-2018.

(5)  Notes the current resources as set out in appendix 3 to the agenda report.

The Cabinet considered the agenda report and its three appendices in the agenda supplement appendix pack (copies attached to the official minutes).

The report was presented by Mrs Hardwick.

No specific officers were present for this item.

Mrs Hardwick explained that the report updated CDC’s financial strategy and plan for the year 2017-2018 and prepared the ground for the budget-setting in February 2017 and the council tax-setting in March 2017. She alluded to the prevailing economic climate in which local government had to function, the government’s recent autumn statement and CDC’s recently agreed four-year settlement. Whilst the settlement afforded a degree of certainty for aspects of CDC’s funding stream, much of its revenue requirement was unpredictable, which reflected uncertainties about the economy and the nature of retained non-domestic rates and to what extent central government would seek to reclaim that income. It had been confirmed that CDC would be entitled to raise council tax by 2% or £5 whichever was the greater without a referendum, as it had done for 2016-2017 and the current model assumed a similar increase for 2017-2018 with increases of 2% beyond that.  Appendix 2 (page 9 of the agenda supplement) showed the updated five-year model, reflecting the four-year settlement and the most up-to-date estimates for wider CDC activities including the commercial boards and other planned savings. The model incorporated estimates in the context of various uncertainties and risks set out in para 4.11, not least given the climate of political and economic uncertainty following the outcome of the EU referendum. She highlighted (a) income from fees and charges, (b) effects of inflation, (c) pay settlement pressure and (d) new homes bonus. The key financial principles behind CDC’s financial strategy were set out in appendix 1. The report had been considered by CDC’s Corporate Governance and Audit Committee on 24 November 2016; it had made various recommendations to the Cabinet, which were set out in section 9 of the agenda report.

Members commended the prudent approach to and the guiding principles in the financial strategy and plan in view of the financial uncertainty

Mrs Hardwick and Mr Ward replied to members’ questions with regard to (a) the services mentioned in the second bullet point (effects of inflation) in para 4.11 of the agenda report which had struggled to pass on the effects of inflation to customers (Careline and Development Management) and (b) when the figure in the ninth bullet point (amended waste regulations and increased recycling targets) in para 4.11, currently a best estimate, might be reviewed (it would kept under review in any event and could be addressed again for example in the 2018-2019 financial strategy and plan).

Decision

At the conclusion of the debate the Cabinet voted on a show of hands unanimously in favour of the five recommendations.

RECOMMENDED TO THE COUNCIL

That the Council:

(1)  Approves the key financial principles and actions of the five-year financial strategy set out in appendix 1 to the agenda report.

(2)  Notes the current five-year Financial  ...  view the full minutes text for item 292

The committee is asked to consider the attached report and to make recommendations to Cabinet on the Council’s five year financial strategy.

The committee considered the report circulated with the agenda (copy attached to the official minutes). Mr Ward introduced the report, providing an update on the outcome from the Chancellor’s Autumn Statement the day before. The four year settlement to 2019/20 had been agreed.

He pointed out two key changes in terms of financial principles. The first was reflected at paragraph 4.9. The Council had invested the full £10m in the Local Authority Property Fund which should achieve a return of between 4 and 5%. Officers were investigating alternative investment vehicles for further investments and a report would be brought to Council in the New Year on the Treasury Management Strategy. The second was that return on the Local Authority Property Fund  could be used for revenue purposes. This was included in the five year financial model and was part of £3.8m savings target approved in deficit reduction plan which Cabinet had agreed.

Mr Ward reminded the committee that their role was to consider the Financial Strategy from a risk perspective and to focus on the key recommendations at 3.1 (maintaining a minimum level of reserves) and 3.2 (maintaining the current provision of revenue support to smooth the impact of funding reductions).

The committee made comments, including the following:

·         The rural grants which the council gives to rural shops – These are discretionary grants. These grants are applied to local businesses after any mandatory grants such as those announced by the chancellor since those will be at least partly funded by the government.

·         The council was not using revenue reserves to fund recurring revenue expenditure, the exception to this being the cultural grants which were funded from revenue reserves and which expire next year. There was a proposal to Cabinet at its December meeting that future cultural grants be funded from base budget in future, if supported.

RECOMMENDED TO CABINET

1)          That in the short to medium term the Council maintains a minimum level of reserves of £5m for general purposes.

2)          That the current provision of £1.3m of revenue support be maintained to smooth the impact of funding reductions and volatility associated with localisation of business rates.

3)          That the Council should continue to aim to set balanced budgets without the use of reserves, although some use of reserves in the short term may be necessary.

4)          That in order to achieve a balanced budget over the medium term, officers should monitor delivery of the agreed deficit reduction plan.