Agenda item

O&S(I) 26      

The Committee considered a report that presented the annual review of the Council’s Medium Term Financial Strategy (MTFS).  The MTFS was based on a financial forecast over a rolling five-year timeframe to 2020/21, which would help to ensure that resources were aligned to the outcomes in Our Plan.

In the ensuing debate, particular reference was made to:-

(a)  the Government announcement in relation to Councils being able to keep all of the Business Rates generated in their local areas.  Officers informed that the implications of the announcement made earlier that week were as yet unknown and it was anticipated that further information would be forthcoming at the Autumn Spending Review on 25 November 2015;

(b)  the complexities of understanding local government finance.  In the event of any Members not fully understanding any of the issues relating to local government finance, the Chairman invited them to request a meeting with the Section 151 Officer;

(c)  Disabled Facilities Grants (DFGs).  Members noted that, whilst the Council had a statutory responsibility to fund and administer DFGs, it did not have any control over factors such as the number of referrals.  As a consequence, the Government only partially grant funded DFGs and the Council therefore had to fund the shortfall.  In an attempt to recognise the benefits that DFGs had on other public sector bodies (e.g. the health sector), officers informed that discussions were ongoing with local MPs in an attempt to establish a more joined up and co-ordinated approach towards the funding of DFGs;

(d)  Income Generation streams related to renewable energy.  In reply to Members’ questioning whether it was now a realistic aspiration to raise income through renewable energy methods, it was noted that the MTFS did not make any provision or specific reference to this being a potential income source.  However, at this stage, all income streams were being fully explored by the Business Development Group Manager;

(e)  the upcoming Budget Principles Workshop for Members on 20 October 2015.  Members were encouraged to attend this interactive Workshop, which would partly focus on the MTFS;

(f)   the proposed level of Council Tax for 2016/17.  Whilst regrettable, such was the extent of the continual budget reductions in central government grant funding, that Members felt it essential to continue to increase the Council’s base budget through modest increases in Council Tax.  The following motion was then PROPOSED and SECONDED and on being put to the vote was declared CARRIED:

‘That the level of Council Tax increase for 2016/17 be set at 1.99%’;

(g)  New Homes Bonus monies being used to support the revenue budget.  Some Members expressed their concerns at the level of reliance which the Council had placed on the New Homes Bonus monies underpinning the Revenue Budget.  However, the Members also acknowledged that the Council had little choice at present, but there was a general acceptance of a need to plan ahead for life after the New Homes Bonus;

(h)  the amount of Council Tax Support Grant to be passed on to Town and Parish Councils for 2016/17.  In light of the anticipated 11.2% decrease in Settlement Funding Assessment from central government, the majority felt it to be appropriate that the Council pass this on to town and parish councils.  Whilst unfortunate, Members recognised that if this reduction was not passed on to town and parish councils, then the Council would have to absorb it.  In addition, since town and parish councils were not subject to capping, then they maintained the ability to increase their precepts without any restrictions.  Should the Council ultimately endorse this proposal, Members emphasised the importance of this decision being appropriately communicated with town and parish councils;

(i)   establishing the minimum level of unearmarked reserves at £750,000.  In endorsing this principle, Members recognised that previous audit guidance recommended that it was prudent for unearmarked reserves to be set at least 10% of the Council’s net budget;

(j)  the anticipated 2016/17 budget surplus of £571,177.  The Committee was of the view that the anticipated surplus for 2016/17 should be ringfenced for future income generation opportunities and held in an earmarked reserve for that specific purpose.

It was then:

RECOMMENDED

That the Committee has considered the five-year Medium Term Financial Strategy and has provided an indication to the Hub Committee of the budget principles that the Committee would like to see adopted, with particular reference to:-

1.    the level of Council Tax increase for 2016/17 being set at 1.99%;

2.    New Homes Bonus monies being used to support the revenue budget;

3.    the amount of Council Tax Support Grant to be passed on to Town and Parish Councils for 2016/17 be reduced by 11.2% (in line with the reduction incurred by the Council in its Settlement Funding Assessment);

4.    maintaining the current Council policy on the minimum level of unearmarked reserves being set at £750,000 (paragraph 9.2 of the presented agenda report refers); and

5.    the anticipated 2016/17 budget surplus (£571,177) being ringfenced for future income generation opportunities and held in an earmarked reserve for that purpose.