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Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report which outlined the revised budget 2012/13 and provided a budget monitoring position to November 2012. It also set out the Cabinet’s Interim Budget Proposals 2013/14 for consultation.

He explained that it had been a difficult time for all local Councils. Government funding had already been cut by 23 % and a further 7 % cut had been announced this week for the coming financial year representing a further cut of just under £400 000. The sluggish state of the national economy had affected investments and pension fund and sources of income such as car park fees and building control fees have also fallen.

The Government had also decided that councils should freeze council tax, but is offering to cover only half the cost of implementing the freeze and only for a two year period. For Cheltenham the council tax freeze equated to £75 000.  Freezing council tax had not been easy to achieve for the third year running but it was the right thing to do at this time. Car parking charges would also be frozen for the third year running.

The Cabinet Member Finance announced that the budget proposed savings of £1.29 million which could be made without any major impact on frontline savings. It recognised the need to change the way the Council delivers its services. It delivers £478 000 from organizational changes, including commissioning of leaisure and culture, a further £428 000 of savings from shared services, including the GO project and Ubico.

Longer term, the financial challenge was to bridge a projected funding gap of £3.5 million. This is why a detailed, quantified five-year strategy for cutting costs and maximising income and bridging the medium term funding gap is being developed at outlined in Appendix 4 of the report.

The Cabinet Member Finance explained that the way that the New Homes Bonus (NHB) was used had been rethought and last year it was accepted that it needed to be treated as a regular source of income so part of it was taken into the revenue budget. He proposed that £200 000 of the NHB be put towards the Planned Maintenance Reserve. He explained that this was prudent since if there were fluctuations in NHB income in future years, the contribution to the reserve could be adjusted without having any immediate impact on services.  He proposed to use New Home Bonus money to fund a new initiative to bring empty properties back into use, which would have the effect of increasing income from the NHB. It would also be used for funding a number of one-off costs.

The Cabinet member also proposed that the current multitutde of bidding funds currently funded from the NHS should be combined into one Community Pride fund, for which the budget would be £50 000 in the coming year. This would be funded using projected underspends in the current financial year.

Finally,he informed the meeting that the projected overspend of £281 000 outlined  ...  view the full minutes text for item 4.

The Cabinet Member Finance introduced the report which summarised the Housing Revenue Account (HRA) revised budget for 2012/13 and the Cabinet’s interim budget proposals for 2013/14 for consultation. He explained that this was work in progress and more information would be available once the final budget had been approved at the end of February.

The HRA budget proposals reflected the impact of the new self financing regime for local authority housing. In February 2012 the Council approved a new 30 year HRA business plan which anticipated significant additional resources arising from the implementation of self financing. The 2013/14 budget contained exciting proposals for new build and improvements to existing stock as well as helping tenants through welfare reform. The Cabinet Member Finance commended Cheltenham Borough Homes on its approach to addressing the impact of benefit changes and the impending universal credit system on its tenants.

The proposed rent increase of 3.43 % was a disappointment but this was due to the application of government rent restructuring guidelines. More discretion could be exercised on other service charges.

Members welcomed the approach CBH was taking with regard to investing and protecting the most vulnerable in the context of welfare reform.

The Leader explained that the Council was proposing to consult on these budget proposals during the period to 31 January which would allow CBH to respond at their Board meeting on 30 January. He said that CBH was doing a valuable job in managing the council’s housing stock and providing supportive advice to tenants was welcomed.

RESOLVED THAT

1.      The revised HRA budget for 2012/13 be noted.

2.      The interim HRA budget proposals for 2013/14 be approved for consultation including a proposed average rent increase of 3.43% (applied in accordance with national rent restructuring guidelines) and increases in other rents and charges as detailed at Appendix 5.

3.      The proposed HRA capital programme for 2013/14 be approved as shown at Appendix 3.

4.      Authority be delegated to the Director of Resources, in consultation with the Cabinet Member for Finance, to determine and approve any additional material that may be needed to support the presentation of the interim budget proposals for consultation.

5.      Consultation responses be sought by 31st January 2013.

The Cabinet Member Sustainability informed the meeting that the £36 charge for garden waste formed part of the budget consultation and this was the third year running that it was held at this level for the third year running. He reported that more than 12 500 garden waste bins had been delivered. In terms of the £2 discount on garden waste bins for those who renewed promptly and new business this had been extended to the new financial year but would then come to an end. With regard to allotments he reported that rents would increase by 2.5 % on 1 January 2014 and all allotment tenants would have new tenancy agreements from this date, the consultation for which was currently underway.