Agenda item

Verbal update from the Cabinet Member Finance, Councillor Rawson

The Cabinet Member Finance, who had the Deputy Section 151 Officer on hand to answer any technical questions, reminded members that the draft budget had been agreed by Cabinet on the 15 December.  However, on the 17 December the Government’s provisional financial settlement for local authorities was announced and the cut was significantly more than anticipated, at £839,000 rather than £331,000.  Government’s strategy was to phase this funding out over the coming 4 years and instead give local councils a bigger share of business rates, but the cuts being announced equated to a 74% grant reduction and £1.5m over the next two years.  The timing of the announcement, just before Christmas, left the council with only 4 weeks to achieve a balanced budget.

In October 2015, Cabinet had agreed a budget strategy which proposed that a budget strategic support reserve be developed to cushion the council against situations such as that which the council now faced.  An immediate response to the Government’s announcement was that the current year budgets had to be reviewed to identify measures which could generate savings and/or additional income, which could be rolled over into 2016/17.  He suggested that in an ideal world the council would be able to identify sustainable savings and income of £0.5m, without having to make any rash decisions. He was keen that the council did not deplete the £1.599m of general balances which had been declared in the draft budget; as using reserves did not absolve the council from having to find sustainable savings in years to come.  There would undoubtedly be two lean years ahead for the council and they would have to work hard to protect reserves and services, but he felt it was important that it did not lose sight of longer term objectives, such as supporting the BID, as such initiatives would help the local economy to grow, which would ultimately go towards providing a solution. 

A budget monitoring report was being prepared to be taken to Cabinet at the same time as the budget in February.  He had attended a useful meeting of the Budget Scrutiny Working Group at which members had asked some very useful questions, and officers had circulated detailed responses, which he was happy to share with a wider audience of members.  He noted that he had also attended some useful consultative meetings with the public, key stakeholders and parish councils and thanked all of those that took the time to participate, which was very much appreciated.

The following responses were given to member questions;

·         Sensible assumptions were being made about a possible council tax base rate rise.  The DCLG had given an indication of what the settlement would be, but there was then a change of policy at a late stage.

·         As far as he was aware, other councils were planning to raise their council tax by 2%, but he was not able to comment any further than that.  He suggested that, in hindsight, had the Council known that the support in revenue fund was going to be phased out so abruptly, it may not have chosen to freeze council tax for the previous 5 years.

One member commented on the Governments change in policy.  Whilst he accepted that the reduction in grant would be mitigated by an increase in business rate retention, there would be a two year gap which had left the council in a difficult budget situation. 

The Chairman reminded members that they would get an opportunity to discuss the budget, in detail, at the council meeting on the 12 February.

No decision was required.