Chichester District Council
Agenda item

Agenda item

Financial Strategy and Plan 2018-2019

The Cabinet is requested to consider the agenda report and its three appendices and to make the proposed recommendation to the Council set out below:

 

PROPOSED RECOMMENDATION BY THE CABINET TO THE COUNCIL

 

That the Cabinet recommends to the Council:

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

 

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

 

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

 

(4)  That Chichester District Council participates in the West Sussex 100% Business Rates Pilot for 2018-2019 if the bid is accepted by the Department of Communities and Local Government or continues to participate in a West Sussex Business Rates pool for 2018-2019 if the pilot bid is unsuccessful.

 

(5)  That the current resources position as set out in appendix 3 to the agenda report be noted.

 

Decision:

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 that a minimum level of general fund reserves be set at £5m and the £1.3m provision for revenue support be maintained, having considered the recommendations from the Corporate Governance and Audit Committee.

 

(4)  Approves that Chichester District Council participates in the West Sussex 100% Business Rates Pilot for 2018-2019 if the bid is accepted by the Department of Communities and Local Government or continues to participate in a West Sussex Business Rates pool for 2018-2019 if the pilot bid is unsuccessful.

 

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

Minutes:

The Cabinet received and considered the agenda report and its three appendices, the third of which had been omitted from the agenda papers and was circulated subsequently in the first agenda supplement.

 

The report was presented by Mrs Hardwick.

 

Mrs Belenger was in attendance for this item.

 

In commending the recommendations to the Cabinet, Mrs Hardwick said that the report updated the financial strategy and plan for 2018-2019 and created the framework within which the council tax base would be set (agenda item 9) and set the scene for the budget in February 2018.

 

The backdrop to the strategy was the uncertain geo-political climate and reducing central government funding for local government. CDC was two years into its four-year agreed settlement with central government, so there was a degree of certainty over some parts of the funding stream, although only until 2019-2020. Thereafter retained business rates would provide an increased proportion of funding but that source and much of CDC’s other income eg from car parks and planning fees was fairly unpredictable, reflecting the state of the wider economy. Thus CDC would have to navigate through financial uncertainty into a new era outside the EU.

 

Appendix 2 showed the updated five-year model, reflecting the consolidated budget from the service areas, the four-year settlement and the most up-to-date estimates for the wider CDC activities including the Programme Boards and other planned savings. 

 

Confirmation was awaited from the government as to whether CDC could raise council tax by 2% or the higher rise (for CDC) of £5 (for a so-called Band D property) without a referendum. This higher rise was applied in 2016 and the current model assumed the higher (£5) increase this year as the government’s consultation proposed that option for at least one more year with increases of 2% thereafter. 

 

The model reflected various uncertainties and risks set out in para 4.16, from which she drew particular attention to (a) income from fees and charges; (b) pay settlements; (c) localisation of business rates; and (d) the new homes bonus (the parish allocation in respect of which was the subject of the next agenda item).

 

Appendix 1 set out the key financial principles behind the financial strategy and appendix 3 summarised the resources position, with the up-to-date position of CDC’s reserves and assets, demonstrating that CDC remained in a sound and sustainable prospective financial state.

 

As previously notified to the Cabinet and circulated on a sheet immediately prior to the start of this meeting, the third recommendation in para 3.3 of the report had been amended twice so that it now read:

 

‘That a minimum level of general fund reserves be set at £5m and to maintain the £1.3m provision for revenue support, having considered the recommendations from the Corporate Governance and Audit Committee.’

 

She expressed her own and the Cabinet’s gratitude to Mrs Belenger and her team.

 

Mrs Belenger did not wish to add to Mrs Hardwick’s introduction.

 

The Cabinet noted and agreed with the amended version of the third recommendation in para 3.3 of the report.

 

The Cabinet did not debate this agenda item.

 

Mr Dignum commented that it was proposed to continue the same strategy with its cautious approach and maintaining reserves in view of economic uncertainties. He highlighted the financial impact on CDC if there was a fall in planning and car parks income, which were especially vulnerable to the vicissitudes of the economy. If allowed to do so, the Cabinet would recommend to the Council in due course a £5 council tax rise, which whilst being a very modest increase for residents would nevertheless materially improve CDC’s income stream.  

 

Decision

 

At the end of the debate the Cabinet voted unanimously on a show of hands to support the recommendations, with the aforesaid agreed amendments to para 3.3 of the report, to be made to the Council.

 

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 that a minimum level of general fund reserves be set at £5m and the £1.3m provision for revenue support be maintained, having considered the recommendations from the Corporate Governance and Audit Committee.

 

(4)  Approves that Chichester District Council participates in the West Sussex 100% Business Rates Pilot for 2018-2019 if the bid is accepted by the Department of Communities and Local Government or continues to participate in a West Sussex Business Rates pool for 2018-2019 if the pilot bid is unsuccessful.

 

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

 

Supporting documents:

 

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