Agenda item

CM 33                                                                                                                                               

The Council considered a report that sought to approve its Medium Term Financial Strategy from 2019/20 to 2023/24.

In discussion, the following points were raised:-

(a)  The importance of as many Members as practically possible attending the informal Budget Workshop on 8 October 2018 was stressed.  It was noted that the overriding aim of the Workshop was to provide officers with a clear steer over options to close the 2019/20 Budget gap;

(b)  An additional recommendation was PROPOSED and SECONDED as follows:

‘That new measures to balance the 2019/20 Budget be brought forward in time for the Council Budget meeting in February 2019.’

(c)  With regard to the recommendation to review the Council’s pension position, Members requested that the message be relayed to staff that this proposal did not impact upon them and was only related to the Council’s employer pension deficit contributions;

(d)  Some Members expressed their belief that the proposal to set an Upper Limit on External Borrowing at £50 million was overly restrictive and could potentially be a barrier to one method of the Council closing its Budget gap.  As a result, an amendment was PROPOSED and SECONDED as follows:

‘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 (as outlined at exempt Appendix G of the presented agenda report).  However, this Upper Limit can be reviewed at any time’;

Whilst there was some support expressed for this amendment, other Members felt that the Council should not overlook the external treasury management advice and considered the establishment of a cap to be good practice.  In addition, these Members quoted the following two provisions in the Council Constitution and felt that the amendment was therefore unnecessary:

1.     Any motion can be revisited after six months of the decision being taken; and

2.     Within the preceding six months, a motion to rescind a decision can be moved if it is recommended to Council by a Committee or notice of such a motion has been given by a quorum of Members of the Council.

When put to the vote, the amendment was declared LOST.

It was then moved by Cllr P R Sanders, seconded by Cllr L Samuel and, upon being submitted to the Meeting, was declared to be CARRIED and “RESOLVED that:

1.     the forecast budget gap for 2019/20 of £0.45 million and the position for future years be noted;

2.     the current options identified and timescales for closing the Budget gap in 2019/20 and future years (to achieve long term financial sustainability) be noted;

3.     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 the Council in the preceding February);

4.     an application be submitted for Business Rate Pilot status for 2019/20, with agreement being made to a 40% District / 34% Devon County Council / 1% Fire split for the 75% scheme.  In the event of the Pilot bid not being successful, then the Council will remain part of the Devon Business Rates Pool;

5.     Central Government and Devon MPs be actively lobbied to support a 2019/20 Devon Pilot bid;

6.     Central Government, Devon MPs and other sector bodies (such as the District Councils Network and the Rural Services Network) be actively lobbied and engaged with for a realistic Business Rates baseline to be set for the Council for 2020 onwards;

7.     the Council responds to the technical consultation in support of the Government eliminating Negative Revenue Support Grant.  Furthermore, the Council continue to lobby for Rural Services Delivery Grant allocations that adequately reflect the cost of rural services provision;

8.     for modelling purposes, £375,000 of New Homes Bonus funding for 2019/20 be used to fund the revenue base budget, with this reducing to £100,000 by 2020/21 and £50,000 by 2021/22;

9.     the annual level of contribution to Earmarked Reserves (£50,000) and the adequacy of the existing level of Unearmarked Reserves (£1.2 million) and Earmarked Reserves (£4 million) be delegated to the Cross Party Member Working Group (the ‘Financial Stability Review Group’) to review and make recommendations by the end of October 2018.  (NB. this will assess the adequacy of Reserves levels in light of future plans and pressures;

10.  the Council takes specialist pension advice on the options for the Council’s Pension position (informing the actuarial valuation) with the aim of reducing the current deficit contributions, increasing affordability, whilst best managing the pension deficit.  Also, the Council recognises the need to have early dialogue with Devon County Council and the actuaries with regard to the Council having an input into the actuarial assumptions used for the 2019 Actuarial Valuation.  (NB. options will be presented to the Audit Committee meeting on 22 January 2019 to consider);

11.  the Council sets an Upper Limit on External Borrowing (for all Council services) as part of the Medium Term Financial Strategy of £50 million (as outlined at exempt Appendix G of the presented agenda report);

12.  the Council continues with the Local Government terms and conditions of employment Green Book for at least 2019/20.  That all options be reviewed for reducing staff costs by varying terms from the Green Book from 2020/21, with an initial report being presented back by the end of 2018/19; and

13.  new measures to balance the 2019/20 Budget be brought forward in time for the Council Budget meeting in February 2019.”