Agenda item

[Report of the Interim Chief Financial Officer. To be introduced by the Cabinet Member for Finance and Health.]The Cabinet will consider the Council’s Medium Term Financial Strategy 2018/19 - 2022/23 including the Capital Programme. These documents will be released for consultation and Scrutiny consideration .

The Cabinet Member for Finance and Health introduced the report which set out the Medium Term Financial Strategy for 2018/19-2022/23 which now reflected and refined the priorities for the challenges that the Council and its residents and businesses faced. This was based on further reductions in resources over the next 5 years.

The Cabinet Member outlined that this report builds on the Medium Term Financial Strategy agreed last year. The Cabinet Member reiterated the present challenging financial period. There had been a 63% reduction in real terms to council budget at a time when more support was required to residents that were living longer with complex needs and at a time of increased homelessness. The Council had previously taken the decision to freeze Council Tax and this would continue. The levy for social care precept for adult social care to support pressures would be applied.

The Cabinet Member reminded the meeting that, in this financial year, the Council had accessed £8.8m of reserves to help smooth effects of cuts. The Council would also need to rely on reserves in 2018/19and it was proposed to access a further £7.5m. This was not sustainable long term solution but at the moment a reasonable step. The budget would therefore have a £15m gap which would need to tackled in the next and future financial years.

 In response to Councillor Morris questions:

• Beyond 2018/19, the council tax figure in the report was modelled and subject to a decision by the next administration.

• The budget assumes greater level of growth for adults than had been assumed in February 2017 budget. The Children’s budget was now protected but not assumed in Feb 2017 budget. There were only new savings assigned for P2 which the service feel is achievable but will be tested.

• The Cabinet Member wanted to ensure back office savings were completed but where there was no impact on the efficiency of Council.
• Overall the strategy focussed on transformation and growth and included efforts to support residents stay in their home longer and gave priority to intervention.
• It was important to note, that by the end of the decade, the Council will rely on 86% of funding from local sources and this was why regeneration schemes were being taken forward to increase homes and businesses and in turn the income from council tax and business rates.

• The Capital programme makes allowances for land acquisition with short term low rate borrowing methods used to fund this at the moment. The value of the acquisition will come back into the budget later on in those schemes.

RESOLVED

1. To note the initial budget proposals and financial planning assumptions set out in this report and note that they will be refined and updated after the provisional Local Government Finance Settlement is published in December;

2. To consider and note that the draft 5 year MTFS 2018/19 to 2022/23 is to be reviewed at Cabinet in February 2018, and to be recommended for approval at Full Council’s meeting in February 2018 to set the budget for 2018/19;

3. To note new savings proposals summarised in section 9 and Appendix 2;

4. To note the draft capital budget for as set out in Appendix 3;

5. To agree to commence consultation with residents, businesses, partners, staff and other groups as necessary on the draft revenue proposals for 2018/19-2022/23;

6. To note that the results of the consultation on the draft revenue proposals will be considered by Cabinet in February 2018 and recommendations made to Full Council at its meeting in February 2018 for the Council’s formal budget setting for 2018/19;

7. To note that the detailed proposals will be submitted to Scrutiny Committees in December and January for scrutiny and comments;

8. To note proposed changes to fees and charges in respect of executive functions will be considered by Cabinet in February 2018 and those requiring approval by the Regulatory Committee to be considered at its meeting in January 2018;

9. To note that the Housing Revenue Account (HRA) budget will be considered by Cabinet in February for approval – this will include:

·         Council housing rent charges for 2018/19;

·         Proposed weekly tenants service charges 2018/19;

·         HRA hostels rent charges for 2018/19.

10. To note the proposed changes to the draft Dedicated Schools Budget (DSB) set out in section 18 and that the final agreed budget will be presented to Cabinet in February.

Reasons for decision

The Council has a statutory requirement to set a balanced budget for 2018/19 and this report forms a key part of the budget setting process by setting out the likely funding and expenditure for that year. Additionally, in order to ensure the Council’s finances for the medium term are put on a sound basis, this report also sets out the funding and expenditure assumptions for the following four years in the form of a Medium Term Financial Strategy.

Alternative options considered

This report recommends that the Cabinet should consider proposals to deliver a balanced and sustainable MTFS over the five-year period 2018/19 to 2022/23, to be reviewed further at Cabinet in February, and ultimately adopted at the final budget meeting of Full Council in February 2018, which is a statutory requirement in terms of agreeing the Council’s 2018/19 budget.

Clearly there are a number of options available to achieve a balanced budget and officers have developed the proposals for determining levels of both income and service provision in this report taking account of the Council’s priorities, the extent of the estimated funding shortfall and the Council’s overall financial position.

These proposals are subject to consultation both externally and through the Overview & Scrutiny process and the outcomes of these will inform the final budget proposals.