Agenda item

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

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 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 be set at £6.3 m.

(4)  That the Director of Corporate Services be given delegated authority, following consultation with the Cabinet member for Corporate Services, to accept the Government’s offer to participate in the 75% localisation business rate pilot for 2019-2020, if the West Sussex Councils’ bid is successful, or if not, to revert back to the Coastal West Sussex existing pooling arrangement for the coming financial year.

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

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 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 be set at £6.3 m.

(4)  That the Director of Corporate Services be given delegated authority, following consultation with the Cabinet Member for Corporate Services, to accept the government’s offer to participate in the 75% localisation business rate pilot for 2019-2020, if the West Sussex councils’ bid is successful, or if not, to revert back to the Coastal West Sussex existing pooling arrangement for the coming financial year.

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

The Cabinet received and considered the agenda report and its three appendices in the main agenda supplement.

This item was presented by Mr P Wilding (Cabinet Member for Corporate Services).

Mrs H Belenger (Divisional Manager Financial Services) was in attendance for this matter.

Mr Wilding explained that the report updated the Financial Strategy and Plan for 2019-2020 and created the framework within which the council tax base was set (agenda item 8) as well as setting the scene for approval of the budget in early 2019. The backdrop to the strategy was one of increasing political uncertainty and reducing central government funding for local government. CDC was in the fourth and final year of its agreed settlement with central government, so there was certainty over its government funding stream in 2019-2020. Retained business rates would continue to provide an increased proportion of CDC’s funding. However, much of its other income, for example car parks and planning fees, was dependent on the state of the wider economy and so was much less predictable.

He drew attention to the following:

(1)  CDC’s key priorities set out in appendix 1, one of which was to manage CDC’s finances prudently and effectively. The Finance Strategy was linked to this specific corporate priority, as were also the key financial principles which underpinned CDC’s financial planning approach listed in annex A.

(2)  The updated five-year financial model in appendix 2, which reflected the consolidated budget from the service areas, central government funding and the most up-to-date estimates for wider CDC activities including the commercial boards, and other planned savings.

(3)  The risks and opportunities estimates in section 4 of appendix 1. The key assumptions were:

(a)  An assumed £5 increase in council tax (for a band D property) for each year in the five-year financial model (equivalent to approximately 3% increase per annum). The Council would make the decision in March 2019 as to the council tax level for 2019-2020 following the local government settlement.

(b)  Recent quarterly revenue monitoring had identified some deterioration in car park and planning income and in recognition of this an adjustment of £300,000 had been built into the model for each year of the five-year period.

(c)  A number of costs during the past year which could not be met from the Asset Replacement Programme and so were financed from reserves.  An extra provision of £200,000 for asset replacement had therefore been included in the model for each year over the five-year period. A detailed review was underway and the precise amount required would be built into the annual budget.

(d)  The provisional finance settlement for 2019-2020 and the outcome of the bids for participating in the pilot 75% Business Rates Retention Scheme for 2019-2020 were expected to be announced by the Ministry of Housing, Communities and Local Government on 6 December 2018. CDC was assuming no further reduction in overall local government funding but a shift to upper-tier councils (West Sussex County Council (WSCC)) to meet social care costs. It had, therefore, assumed a £500,000 reduction in government funding from 2020-2021 onwards.

(e)  The New Homes Bonus (NHB) was being reduced but the shape of its future was uncertain. Significant reductions in the model beyond 2018-2019 were assumed. CDC had never relied on this source of income to balance the budget given its attendant uncertainty and risk.

(4)  The five-year financial model contained many assumptions which would become more precise with time, so it would evolve and have changed by the time the Council considered it on 22 January 2019.

(5)  The anticipated resources position of CDC’s reserves and assets in the medium term in appendix 3, demonstrating that CDC remained in a sound and sustainable financial state going forward.

Mr Wilding thanked Mrs Belenger and her team for their efforts in compiling the Financial Strategy and Plan. 

Mrs Belenger did not add to Mr Wilding’s presentation. 

Mrs E Lintill (Deputy Leader of the Council and Cabinet Member for Community Services) commended the excellent report and emphasised the importance of maintaining during the next five years a position of non-dependency on reserves (third key financial principle in annex A to appendix 1).

Mr A Dignum (Leader of the Council and Cabinet Member for Growth and Place) emphasised the conservative financial principles and prudent assumptions which would underlie the budget, making particular reference to taking account of an anticipated lower income from planning and car parks, an augmented asset management programme, the retention of the NHB for unforeseen contingencies and recurring expenditure being met only out of current revenue.

In reply to specific points raised by members:

·       Mr Dignum informed Mr R Barrow (Cabinet Member for Residents Services) that CDC was currently in negotiations with WSCC about recycling credits.

·       Mr J Ward (Director of Corporate Services) summarised for Mrs Lintill how CDC’s membership of the West Sussex Business Rates Pool (WSBRP) worked and the benefits derived from it eg in applying some of the funds for local infrastructure projects. Mr Dignum pointed out that CDC had an equal voice in the WSBRP. Mrs D Shepherd (Chief Executive) cited some of the many examples of how WSBRP funding had been made available to and benefitted CDC: the Gigabit scheme, shop front grants and cycle-ways.  

Decision

The Cabinet voted unanimously to make the recommendation set out below.  

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 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 be set at £6.3m.

(4)  That the Director of Corporate Services be given delegated authority, following consultation with the Cabinet Member for Corporate Services, to accept the government’s offer to participate in the 75% localisation business rate pilot for 2019-2020, if the West Sussex councils’ bid is successful or if not to revert back to the Coastal West Sussex existing pooling arrangement for the coming financial year.

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

ANNOUNCEMENTS OF RECENT AWARDS MADE TO CHICHESTER DISTRICT COUNCIL

As foreshadowed in his chairman’s announcements (minute 614 above refers), at the end of this item Mr Dignum invited Mrs J Hotchkiss (Director of Growth and Place) and Mr R Barrow (Cabinet Member for Residents Services) to give details of recent awards made to CDC as follows:

(1)  Mrs Hotchkiss said that CDC had received a Platinum Loo of the Year award for three of its public conveniences: Little London, Florence Road and Avenue de Chartres. The assessments were made with regard to 101 criteria and the award was recognised and supported by national tourist bodies. Such awards were not only very pleasing but very important since the quality of public conveniences was one of the first and most obvious ways in which visitors formed an impression of a city or town. Mr J Connor (Cabinet Member for Environment Services) endorsed Mrs Hotchkiss’s remarks.

(2)  Mr Barrow said that CDC’s Litter Strategy launched in 2016 was a fine example of service areas working together: Residents Services, which he led and Environment Services, led by Mr Connor. He paid a special tribute to CDC’s Public Relations team which had done a fantastic job in promoting the anti-litter campaign and securing widespread acceptance of its aims and local participation by Chichester District’s communities in its implementation. As a result CDC’s Against Litter campaign had been recognised by the Chartered Institute of Public Relations as the best community relations campaign of the year at the South of England and Channel Islands Pride awards, securing the gold award. The judges praised the strong community involvement in the campaign, as well as the reduction in litter. They also were impressed by the campaign’s clear message – that littering is a crime and will be treated as one. He congratulated everyone who had played a part in the campaign and winning the award.