Issue - meetings

(See report at agenda item 5 (pages 25 to 33) of the Cabinet agenda of 7 February 2017, pages 1 to 48 of the first supplement to the agenda and page 1 of the second supplement to the agenda)

RECOMMENDED BY THE CABINET

1)    That a net budget requirement of £12,362,700 for 2017-2018 be approved.

2)    That council tax is increased by £5 from £145.81 to £150.81 for a band D equivalent in 2017-2018.

3)    That the Investment Opportunities Reserve is increased by £470,600.

4)    That, should the final settlement differ from the provisional settlement, any increase or decrease be dealt with by adjusting the transfer to the Investment Opportunities Reserve above.

The Council received a report from Mr Ward (Head of Finance and Governance Services and the council’s S151 Officer), circulated with the supplement to the agenda (copy attached to the official minutes).

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

Mrs Hardwick introduced the report.  She advised that taking up the government’s offer of allowing, without a referendum, a rise in Council tax by £5 (band D equivalent) to offset the continued withdrawal of government funding would generate an extra £260,000 and assist in closing the budget deficit that would otherwise emerge in the medium term.  This measure would be taken alongside the continuing work on the deficit reduction plan which aimed to generate further income and savings amounting to £3.9m over the next 5 years so as to minimise future council tax increases.

The budget process identified the planned variances from the current year’s budget.  The Capital and Projects Programme detailed the projects, like Enterprise Gateway and Plot 21 Terminus Road, which had already been approved by the Cabinet and Council.  The Statement of Reserves remained robust and healthy, highlighted the purpose of specific reserves and the respective authorisations for their use and demonstrated that the Capital Programme and Asset Replacement programmes were fully funded.

The budget and the supporting council tax resolutions incorporated spending plans that support the council’s corporate plan objectives of looking after our community and the environment, facilitating the supply of affordable housing, and helping the local economy to prosper.  At the same time this budget demonstrated the council’s financial resilience by meeting all the tests of financial prudence.

Mrs Hardwick extended thanks to Mr Ward, and Group Accountants Mr Cooper and Mr Catlow and to all the finance team for their hard work and diligence on this year’s budget.

Mr Hayes and Mrs Duncton commended this positive budget.

Mr Plowman queried the total amount of money, both revenue and capital, which was to be spent on the Novium alone.  Mr Cooper (Group Accountant) responded that the total costs for the Novium alone (ie excluding the tourist information centre and Guildhall) were £586,000 in cash terms in 2017/18 (£239,000 staffing, £481,000 running costs and £134,000 income) plus an additional £33,000 in the Asset Replacement Programme.

Mr Oakley supported the budget however he was concerned that an amount for the A27 road cleaning had not been included in the revenue budget.  He was also concerned that a proportion of the cultural grant payments were being included in the revenue budget.  Mr Ward advised that the current cultural grant payments had been funded from an earmarked reserve which would be depleted part way through2017/18. This has arisen because interest earned on the balance had not been added to the reserve, but instead credited to general reserves.  The new cultural grant payments had been built into the base budget in accordance with the financial strategy principles, and rather than top up the cultural  ...  view the full minutes text for item 189

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

That the Council approves:

(a)   A net budget requirement of £12,362,700 for 2017-2018.

(b)   An increase in council tax by £5 from £145.81 to £150.81 for a band D equivalent in 2017-2018.

(c)   An increase in the Investment Opportunities Reserve by £470,600.

(d)   An adjustment in the transfer to the Investment Opportunities Reserve above should the final settlement differ (by way of an increase or decrease) from the provisional settlement.

It is also requested to consider the following matters:

·       The capital programme, including the asset renewal programme (appendix 1c and 1d).

·       The current resources position (appendix 2).

·       The budget variances included in the Draft Budget Spending Plan as set out in appendix 1b including growth items.

RECOMMENDED TO THE COUNCIL

(1)   That a net budget requirement of £12,362,700 for 2017-2018 be approved.

(2)   That council tax is increased by £5 from £145.81 to £150.81 for a band D equivalent in 2017-2018.

(3)   That the Investment Opportunities Reserve is increased by £470,600.

(4)   That, should the final settlement differ from the provisional settlement, any increase or decrease be dealt with by adjusting the transfer to the Investment Opportunities Reserve above.

RESOLVED

(1)  That the capital programme including the asset renewal programme (appendix 1c and 1d to the agenda report) be noted.

(2)  That the current resources position (appendix 2) be noted.

(3)  That the budget variances included in the Draft Budget Spending Plan as set out in appendix 1b to the agenda report including growth items be noted.

The Cabinet received and considered the agenda report, its three appendices (appendix 1 consisted of appendices 1a to 1d) in the main agenda supplement, and the second agenda supplement (copies attached to the official minutes).

In addition to the public copies of the main and the second agenda supplements, hard copies of appendix 1b (pages 8 to 13) in the main agenda supplement were available to those observing the meeting. 

The report was presented by Mrs Hardwick.

Mr Ward and Mr Cooper were available to answer members’ questions on points of detail.

Mrs Hardwick explained that this report was a sequel to the approval by the Council in January 2017 of CDC’s Financial Strategy and, ahead of setting the budget and council tax in March 2017, it focussed on the budget spending plans of each Cabinet portfolio and how these aggregated and with various funding streams underpinned the balanced budget now before the Cabinet.

She acknowledged at the outset that the budget process involved an impressive co-operation between individual budget managers and CDC’s finance team, overseen by the Corporate Management Team, to ensure that service delivery priorities were met within the inevitably tough constraints of limited public sector financial resources.

The report identified CDC’s current funding sources and set out the best estimate for funding going forward. The final details would not be received from central government until after 20 February 2017 as part of the local government annual financial settlement. However, given that CDC had accepted the government’s offer of a four-year settlement prior to Christmas 2016, no significant change was anticipated in the final settlement.

CDC undertook balancing the revenue budget (an important statutory requirement) in the context of a five-year financial strategy. The key variables and issues that influenced the strategy included income from fees charges and rents and the use of reserves and council tax. As to council tax, it was considered correct to take up central government’s offer of allowing, without a referendum, a rise in council tax by £5 (band D equivalent) to offset the continued withdrawal of central government funding. This would generate an extra £260,000 per annum and assist closing the budget deficit which would otherwise emerge in the medium term. That measure was taken alongside the continuing work on the deficit reduction plan with aims to generate further income and savings amounting to £3.9m over the next five years so as to minimise future council tax increases.

The budget process assessed whether and how CDC’s actual performance differed from the year’s budget. Para 9.1 of the agenda report (as amended by the second agenda supplement) highlighted that overall in 2016-2017 CDC was likely by the year end to underspend the budget by some £400,000.  This was due largely to staff vacancies (£505,000) and additional revenue generated from the Local Authority Property Fund (LAPF) investment (£360,000), which set off against car parks shortfalls (£360,000) and less housing benefit subsidy (£120,000). 

Overall the 2017-2018 budget summarised in the income and expenditure statement on  ...  view the full minutes text for item 321