Issue - meetings

The material relevant to this item is the report on pages 17 to 22 of the Cabinet agenda for 5 November 2019 and pages 33 to 51 of the Supplement to the Cabinet agenda for 5 November 2019.

The following recommendations were made to Council:

1.    That the key financial principles and actions of the five year Financial Strategy set out in appendix 1 to the agenda report be approved.

2.    That the current five year Financial Model detailed in appendix 2 and the Resources Statement in appendix 3 to the agenda report be noted.

3.    That, having considered the recommendations from the Corporate Governance and Audit Committee, the Minimum Level of the General Fund Reserves is set at £6.3 million.

The Chairman invited Mr Wilding to introduce the report and referred members to pages 17 to 22 of the Cabinet agenda for 5 November 2019 and pages 33 to 51 of the supplement to the Cabinet agenda for 5 November 2019.

Mr Wilding explained that the report updates the Financial Strategy and Plan for 2020/21 and creates the framework for how the council’s budget and council tax is set which will be considered by the Cabinet in February 2020. The 2020/21 financial strategy is set in the context of current political uncertainty and the continuing expectation of reduced central government funding for local government. The major changes that were expected to come in from the 2020-21 settlement have been delayed by a year, so now the 2020-21 settlement will be for one year only. Due to the delay the council will retain the business rates growth achieved so far for one year longer than anticipated. Much of the council’s other income remains dependent on the local economy and is therefore less predictable.

Mr Wilding outlined Appendix 1 which describes the council’s key priorities, one of which is to manage its finances prudently and effectively. He explained that the financial strategy is linked to this specific priority along with the council’s key financial principles that underpin the Council’s financial planning approach. Appendix 2 outlines the updated 5 Year Financial Model, reflecting the consolidated budget from the service areas, central government funding and the most up-to-date estimates for the wider council activities. There are a number of estimates contained within the Model including the assumption of a 2% increase in council tax each year. However, Mr Wilding explained that low taxing local authorities like Chichester District Council may be allowed to set a £5 increase in council tax. The final decision on the council tax rates will be made by Full Council in March 2020.

Mr Wilding then referred to the assumptions relating to pensions, West Sussex County Council cuts and the New Homes Bonus scheme and how it is likely that the Financial Model will continue to evolve. He then outlined Appendix 3 which sets out the anticipated resources position of reserves and assets in the medium term and confirmed that the capital programme remains affordable without the need to borrow.

Mr Hughes commented that a number of grammatical errors within the document. He gave examples relating to Outside Bodies and Investment Strategy. He also drew attention to the Brexit deadline which required updating. He explained that he was unhappy to support the document given the amendments required. Mr Ward clarified the reference to Outside Bodies referring to the number of examples across the council where Outside Bodies are used and the extensive shared services exercise across a number of services. With regard to investment strategy he confirmed that members had been invited to Treasury Management training on 16 December 2019 and the Treasury Management Strategy would come to Full Council for sign off next year. With regard to the  ...  view the full minutes text for item 67

The Cabinet is requested to consider the agenda report and its appendices and make the following recommendations to Council as set out below:

1.    That the key financial principles and actions of the five year Financial Strategy set out in appendix 1 to the agenda report be approved.

2.    That the current five year Financial Model detailed in appendix 2 and the Resources Statement in appendix 3 to the agenda report be noted.

3.    That, having considered the recommendations from the Corporate Governance and Audit Committee, the Minimum Level of the General Fund Reserves is set at £6.3m.

RECOMMENDATION TO THE COUNCIL

1.    That the key financial principles and actions of the five year Financial Strategy set out in appendix 1 to the agenda report be approved.

2.    That the current five year Financial Model detailed in appendix 2 and the Resources Statement in appendix 3 to the agenda report be noted.

3.    That, having considered the recommendations from the Corporate Governance and Audit Committee, the Minimum Level of the General Fund Reserves is set at £6.3 million.

Mr Wilding introduced the item. He explained that the report updates the Financial Strategy and Plan for 2020/21 and creates the framework for how the council’s budget and council tax is set which will be considered by the Cabinet in February 2020. The 2020/21 financial strategy is set in the context of current political uncertainty and the continuing expectation of reduced central government funding for local government. The major changes that were expected to come in from the 2020-21 settlement have been  delayed by a year, so now the 2020-21 settlement will be  for one year only. Due to the delay the council will retain the business rates growth achieved so far for one year longer than anticipated. Much of the council’s other income remains dependent on the local economy and is therefore less predictable.

Mr Wilding outlined Appendix 1 which describes the council’s key priorities, one of which is to manage its finances prudently and effectively. He explained that the financial strategy is linked to this specific priority along with the council’s key financial principles that underpin the Council’s financial planning approach. Appendix 2 outlines the updated 5 Year Financial Model, reflecting the consolidated budget from the service areas, central government funding and the most up-to-date estimates for the wider council activities. There are a number of estimates contained within the Model including the assumption of a 2% increase in council tax each year. However, Mr Wilding explained that low taxing local authorities like Chichester District Council may be allowed to set a £5 increase in council tax. The final decision on the council tax rates will be made by Full Council in March 2020.

Mr Wilding then referred to the assumptions relating to pensions, West Sussex County Council cuts and the New Homes Bonus scheme and how it is likely that the Financial Model will continue to evolve. He then outlined Appendix 3 which sets out the anticipated resources position of reserves and assets in the medium term and confirmed that the capital programme remains affordable without the need to borrow.

It was also noted that the Corporate Governance and Audit Committee (CGAC) had recommended a minimum level of reserves at £6.3 million to provide flexibility in managing the council’s financial risks.

Mrs Taylor commented that the report illustrates prudent management of the council’s resources.  Mr Briscoe added that it illustrates a good use of investments.

Mrs Lintill congratulated officers involved in the report. She emphasised that the 5 Year Model remains fluid. She requested clarification on the new cost pressures against benefit administration reduction referring to the figures £0 for 2019/20 and £400,000 for 2020/21. Mrs Belenger explained that the figures reflect the change in housing benefit repayment recovery as fewer claimants are overpaid due to various initiatives, which creates a smaller recovery base. Mr Ward added that if a claimant is overpaid the council receives subsidy payment for the claimant and in addition if the council is successful in recouping the overpayment that can also be  ...  view the full minutes text for item 63