Minutes:
* O&S 37
The Section 151 Officer delivered a presentation that outlined a series of recommendations on the Medium Term Financial Strategy.
In the ensuing discussion, reference was made to:-
(a) an alternative to recommendation 1. To reflect the need to be realistic in the current budgetary climate, an alternative recommendation was PROPOSED and SECONDED to read as follows:-
‘That the strategic intention be set to raise Council Tax by the maximum allowed in any given year (without triggering a Council Tax Referendum) to endeavour to continue to deliver services. (NB. the actual Council Tax for any given year will be decided by Council in the preceding February);
When put to the vote, this alternative recommendation was declared CARRIED.
(b) the pressure being placed on low income households. By continuing to raise Council Tax, some Members highlighted the additional pressure and financial burden being placed on residents. Officers advised that this point was recognised and a revised Council Tax Reduction Scheme was due to be presented to the next Hub Committee that would recommend the adoption of a revised Council Tax Reduction Scheme. It was confirmed that the proposed revisions would result in a more needs assessed approach being adopted;
(c) the Business Rate Pilot status for 2019/20. Assuming that the bid was supported, then the intention was for Central Government to inform those applicants who had been successful before the end of the year;
(d) the planning reserve. Having been informed that there were very little monies remaining in the planning reserve, the Committee recognised the need for it to be replenished;
(e) levels of Reserves. A Member expressed his opposition to any potential proposal being put forward to draw down reserves in order to balance the Council’s 2019/20 Budget;
(f) the Pension Strategy. Some Members felt that there were opportunities in respect of the Strategy and, in expressing the view that the investment return on the Pension Fund had not been particularly good, it was suggested that Fund Committee representatives should be invited to attend a future meeting of the Committee;
(g) setting an Upper Limit on External Borrowing. The majority of Members were supportive and considered it to be prudent to cap an upper limit on Council borrowing;
(h) Informal Council sessions. Since a number of elements of the Committee debate had referred to discussions at a recent Informal Council session, some Members were of the view that the format of these should be reviewed. In particular, requests were made for consideration to be given to an agenda being circulated in advance and notes being recorded;
(i) the Employment Green Book. Whilst Members felt it incumbent to review all options in relation to the Green Book, it was recognised that any proposals to vary terms would be difficult to resolve.
It was then:
RESOLVED
That the Committee express the following views to the Hub Committee and the Council as part of the development of the Medium Term Financial Strategy:
1. That the strategic intention be set to raise Council Tax by the maximum allowed in any given year (without triggering a Council Tax Referendum) to endeavour to continue to deliver services. (NB. the actual Council Tax for any given year will be decided by Council in the preceding February);
2. That an application be submitted for Business Rate Pilot status for 2019/20, with agreement being given to a 40% District / 34% Devon County Council / 1% Fire split for the 75% scheme. In the event of the Pilot bid being unsuccessful, that agreement be given to the Council remaining part of the Devon Business Rates Pool for 2019/20;
3. That Central Government and Devon MPs be actively lobbied to support a 2019/20 Devon Pilot bid;
4. That the Council actively lobby and engage with the Government, Devon MPs and other sector bodies (e.g. the District Councils Network and the Rural Services Network) for a realistic Business Rates Baseline to be set for the Council for 2020 onwards;
5. That the Council responds to the technical consultation in support of the Government eliminating Negative Revenue Support Grant. In addition, the Council should continue to lobby for Rural Services Delivery Grant allocations that adequately reflect the cost of rural service provision;
6. That £375,000 of New Homes Bonus funding be used for 2019/20 to fund the Revenue Base Budget and then reduce this funding to £100,000 by 2020/21 and £50,000 by 2021/22 for modelling purposes;
7. That a review be undertaken by the Financial Stability Review Group into the annual level of contributions to Earmarked Reserves (£50,000) and the adequacy of the existing level of Unearmarked Reserves (£1.2 million) and Earmarked Reserves (£4 million) with recommendations being made by the end of October 2018. (NB. this will assess the adequacy of Reserves levels in light of future plans and pressures);
8. That the Council takes specialist pension advice on the options for the Council’s Pension position, with the aim of reducing the current contributions, increasing affordability, whilst best managing the pension deficit;
9. That the Council sets an Upper Limit on External Borrowing (for all Council Services) as part of the Medium Term Financial Strategy of £50 million;
10. That the Council continue with the Local Government Terms and Conditions of the Employment Green Book for at least 2019/20. That a review of all options for reducing staff costs (by varying terms from the Green Book from 2020/21) be undertaken, with an initial report being presented back before the end of 2018/19.