(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.
Minutes:
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.
Mr Plowman commended the strategy adding his concern that the trend with inflation seemed to be permanently upward. This was something which needed to borne in mind. He requested that when raising fees the Cabinet made sure they were transparent and fair.
Mr Ransley wanted reassurance that the Council would be given some budget risks models to consider. Mr Ward (Head of Finance & Governance) stated that he took risks into account when preparing the five year projections. He had in the past produced various models but had taken the middle model which was the most likely scenario. Financial projections were also updated quarterly.
Mr Dunn commended Cabinet on a Financial Strategy with a marked strength of reserves.
Mr Cullen was concerned by the Leader’s comments regarding car parking as the OSC had discussed this issue that morning. Mr Dignum advised that he would look at car parking carefully and consider all the options.
RESOLVED
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 in appendix 2 to the agenda report be noted.
3) That, having considered the recommendations from the Corporate Governance & Audit Committee, the minimum level of reserves should be maintained at £5m.
4) That the continuing participation by Chichester District Council in a West Sussex NDR pool for 2017-2018 be approved.
5) That the current resources as set out in appendix 3 to the agenda report be noted.