Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance, introduced the report on the budget process, which proposed a broad strategy and outlined a process for setting the budget and council tax for 2017/18.

She referred to the fact that between 2009 and the present Government core funding had been reduced from £8.8 million to £3.1 million a year.  The proposed settlement for 17/18 was indicating a further reduction of 17.5 % or £0.677 million in cash terms. She explained that radical changes in the way services were organised had already been embraced to cope with these reductions. 2017/18 thus represented a further challenge.

The Cabinet Member explained that in February the Government had announced proposals for councils including retaining 100% business rates, permission to spend capital receipts on cost saving reforms, increasing council tax and the offer of a guaranteed 4 year budget. Details were awaited however as to how the 100% business rates would be divided up, or the full implications of the proposed changes to New Homes Bonus.

She informed that the new budget strategy focussed on two major areas of work :

·         Driving business growth in order to increase the income received from business rates. The Government’s decision to allow councils to retain a share of the business rates they collect has given the council a direct financial interest in promoting business growth and development. The Cabinet Member explained that the longer term approach to finding growth and efficiencies to close the funding gap was fundamentally through economic growth and investment. She informed Members that a report would be brought to Council in December to consider approving a substantial sum for the purchase of a property investment portfolio in December 2016. In addition, resources would be geared towards supporting and delivering the growth agenda including major developments in North West and West Cheltenham.

She explained that promoting economic growth was a key function of the Cheltenham Development Taskforce, and she gave the example of the Brewery development and proposed new John Lewis store at the Beechwood Arcade. She added that working with the business community, local employers and other public bodies in the town, the focus should be on encouraging the growth of existing businesses and the establishment of new ones.  This would not only support the council's finances but, even more importantly, jobs and career opportunities in the town.

·         Closing the financial gap as set out in the Medium Term Financial Strategy (MTFS) (Appendix 3 of the report) which includes savings targets, the accommodation strategy, sharing management and staff costs, asset rationalisation which includes the depot, future waste initiatives and savings targets for commissioning reviews.

The Cabinet Member concluded by saying that Cabinet would ensure that Government funding cuts did not feed through into big council tax increases and rises in charges. It represented a huge challenge, but was one to be embraced if Cheltenham was to be a town with good services and a strong economy.

The Leader recognised the significant amount of work which had been involved in developing the MTFS and paid tribute to all involved.

RESOLVED THAT

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

2.    the budget strategy and MTFS outlined in section 5 and Appendix 3 be approved.

3.    the reserve realignments outlined in section 8 and the level of reserves projected at Appendix 4 be approved.

4.    the expected cut in government baseline funding of £677k for 2017/18, the estimated funding gap of £1.721m and the large amount of work done so far to close this gap be noted.

5.    the Section 151 Officer be authorised to submit a Four Year Efficiency Plan to the DCLG using the approved MTFS as the basis for that submission as outlined in section 6.

6.    the intention for this Council to remain in the Gloucestershire Business Rates Pool in 2017/18 as outlined in section 7 be noted.

7.    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 2017/18 as outlined in section 9.