Issue - meetings

Report of the Cabinet Member Finance

RESOLVED THAT

1.    The budget setting timetable at Appendix 2 be approved.

2.    The budget strategy outlined in section 5 be approved

3.    The expected cut in government baseline funding of £364k for 2018/19, the estimated funding gap of £1.079m and the large amount of work done so far to close this gap be noted.

4.    The intention for this Council to remain in the Gloucestershire Business Rates Pool in 2018/19 as outlined in section 6 be noted and to consider the merits of applying to the Government to pilot 100% Business Rates Retention in 2018/19.

5.    The Section 151 Officer and the Cabinet Member for Finance be requested to consider suggestions from the Budget Scrutiny Working Group in preparing the interim budget proposals for 2018/19 as outlined in section 7.

The Cabinet Member Finance introduced the report which proposed a broad strategy and outlined a process for setting the budget and council tax for 2018/19. It also outlined a number of principles that needed to be established at this stage to enable budget preparation to commence.

The Cabinet Member said that between 2009 and the present Government core funding for the council had been reduced from £8.8 million to £2.4 million a year.  The proposed settlement for 18/19 was indicating a further reduction of just under 11.5 % or £0.364 million. Radical changes in the way services were organised had already been embraced to cope with these reductions.

There was still huge uncertainty around future funding settlements. By not including the Local Government Finance Bill in the Queen’s Speech, the Government had given a very strong indication that it would not be proceeding with 100% business rates retention yet. In addition Members were reminded of the late changes to the New Homes Bonus calculation, through the introduction of a 0.4% baseline target, which had significant financial consequences for the council.

The Cabinet Member informed that a consultation paper on the 2018/19 settlement had been launched which suggested proposals for further reforms to the New Homes Bonus calculation which may include further increases to the baseline target. It was assumed that the consultation would feed into the Autumn Statement announcements on 22^nd November 2017.

The Cabinet Member expressed concern that decisions relating to New Homes Bonus continued to be made only a few months before the start of the new financial year impacting on the ability for district councils to understand the impact on their budgets. This was contrary to the stated aim of 4 year settlements which was to reduce this uncertainty.

The Cabinet Member referred to the Medium Term Financial Plan for 2017 – 2020, approved in February this year which projected a funding gap of £3.961m. The projections had now been updated to reflect the best estimates of the financial pressures impacting on the Council, including an updated view on business rates income and the potential funding cuts after the Autumn Statement was announced. The updated estimate of the funding gap for 2018/19 was now £1.079m.

She explained that given the current uncertainty surrounding business rates retention, new homes bonus and pay awards for the public sector, it was prudent to defer the full publication of the MTFS to the Cabinet meeting in December 2017 as part of the interim budget proposals. This would enable the Cabinet to react positively to any changes announced in the Autumn Statement and to ensure that the MTFS was robust and fit for purpose.

In terms of closing the projected funding gap of £1.079m a proactive approach in identifying budget savings, had identified potential savings and additional income of £635k, leaving £444k to find, assuming a £5 council tax increase.

The Cabinet Member Finance believed the longer term approach closing the funding gap was fundamentally through economic growth and investment and  ...  view the full minutes text for item 10