Agenda item

The report of the Director of Finance and Transformation referred to the responsibility of the Cabinet under the constitution for formulating initial proposals in respect of the budget.  Reference was made to the role of the Advisory Board in assisting the Cabinet and Council in the preparation of the budget within the context of the Medium Term Financial Strategy (MTFS) and the Council’s priorities.  An outline was given of the process for referring the Advisory Board’s recommendations to the Overview and Scrutiny Committee prior to consideration by the Cabinet on 11 February and thereafter by the Council at its Budget meeting.

The report set out the framework for considering the estimates in terms of the MTFS together with a number of Service specific issues.  The report indicated the factors to be taken into account when updating the MTFS and referred to the Savings and Transformation Strategy considered by the Cabinet on 17 November 2015 which would provide a structure and focus for addressing the significant financial challenge facing the Council.  It was noted that the MTFS would continue to be updated during the Budget cycle as more information became available.

The Director of Finance and Transformation drew attention to the key messages arising from the consultation on the provisional Local Government Finance Settlement including the position regarding New Homes Bonus funding; the new methodology taking into account the amount capable of being raised locally from council tax; and a change in the split of funding between tiers of local government in favour of authorities with responsibilities  for social care and larger reductions for district councils.  Such an approach would result in the Council’s revenue support grant (RSG) being reduced to zero by 2017/18 and, thereafter, further reductions by way of a “tariff adjustment” under the business rates retention scheme.

It was considered that a robust response to the settlement consultation should be submitted by the 15 January deadline in view of the radical and unexpected changes proposed which would place the Council’s services at severe risk.  The Director of Finance and Transformation circulated and presented the suggested response which was endorsed by Members.  The Leader referred to representations made to the Secretary of State by the 15 authorities that would be losing RSG in 2017/18 (earlier than the majority) and commended the work of the Finance team in formulation of the combined response.

RECOMMENDED:  That

(1)        the fourth objective of the Medium Term Financial Strategy set out at paragraph 1.2.1 of the report be replaced by the following:

“Continue to identify efficiency savings and opportunities for new or additional income sources and to seek appropriate reductions in service costs in delivery of the Savings and Transformation Strategy approved by Members.”

(2)        The proposed response to the provisional local government finance settlement 2016/17, as circulated at the meeting, be supported and copies be sent to the two local Members of Parliament;

(3)        the draft Revenue Estimates contained in the Booklet be endorsed;

(4)        within the context of the financial pressures outlined in the report, the Overview and Scrutiny Committee be requested to consider the draft Revenue Estimates contained in the Booklet and make appropriate recommendations to the Cabinet for its special meeting on 11 February 2015;

(5)        the Savings and Transformation Strategy be updated to reflect the financial impact of the provisional local government finance settlement; and

(6)        appreciation be conveyed to the Finance team for their work in response to the provisional local government finance settlement.

*Referred to Cabinet