Agenda item

Report of the Chief Finance Officer

(Please refer to the budget papers circulated in December 2010)

The Cabinet Member Finance and Community Development introduced the report as circulated with the agenda and referred members to the budget papers circulated on the 21 December 2010.

He stressed that these were the biggest reductions in public expenditure in the history of local government, exceeding those made after the war.

The cuts had been greater than those initially indicated by Government as they had recalibrated the model so that places like Cheltenham took a bigger hit than authorities in areas that were more dependent on welfare services. 

The challenge for Cheltenham Borough Council (CBC) was how to deliver services differently whilst maintaining effectiveness, but reducing expenditure.

There were two ways of looking at the ‘Big Society’, one was to cynically assume that it was simply doing things on the cheap and the other was that it would mean more power to the community. 

He highlighted that the Medium Term Financial Strategy identified that cuts would be required over the next 4 years.  It was important to note that, were all these cuts to be made over night that the Council would cease to function and as such, the commissioning approach was its only way forward.

Human Resources and IT had not been subjected to the same level of cuts as other areas as these services would be critical in supporting future changes from which savings could be derived.

There were a number of issues and he asked that the committee focus on those that related to their remit, highlighting some to members. 

One off funding was available and given that the County Council would now be focussing on vulnerable people, CBC would contribute £50k to enable the provision of youth work in Cheltenham.  This funding would not be used to save Youth Workers from redundancy though, as the model was not sustainable and the funding was not necessarily long term.

He referred members to page 87 of the budget papers and the Housing Revenue Account (HRA).  Rents were to be increased by an average of £188.76 a year, which was higher than Council Tax for a Band D property.  He did not wish to comment further given that this was being imposed by Government but did note that this could see those in low-paid work and living in social housing, worse off.

The Chairman was aware that for some members of the committee, this was the first time they would have been involved in assessing budget papers and as such asked the Head of Financial Services to give a brief explanation of the various appendices.

The Head of Financial Services talked through each of the appendices, highlighting that Appendix 4 (page 47) was expected to be the focus of most debate as this document outlined the various measures to address the budget gap.

The Chairman suggested that all members turn to page 49 – 53, areas for member approval which had not been built into the base budget, commenting that the employee parking levy (Item 6) was long overdue and should be implemented ASAP in his opinion.

The following responses were given by the Cabinet Member Finance and Community Development (with input from the Assistant Director Wellbeing and Culture) to questions from members of the committee;

• Item 18 – Since purchasing their own box office system, Cheltenham Festivals would receive commission that would have previously been received by CBC.  This was a separate issue and CBC were looking at how to recoup this.
• Item 21 – Whilst regrettable, the reduction in grant to the Performing Arts Society was necessary and a casualty of circumstances.
• Item 62 – The forums referred to were the Disability Forum and the Pensions Forum.  Both had, had their budgets cut from £500 to £250, though there was talk that the Disability Forum may disband.
• Benefits would continue to cover rents in Cheltenham for those that qualify, despite the increase in rents and such it was not envisaged that there would be a significant increase in rent arrears although those tenants who did not qualify for benefits would be significantly worse off and the arrears would have to be monitored closely.  The rent increase and changes to benefit rates would likely affect some areas within London.
• The HRA reform in April 2012 would offer a one off deal to come out of the subsidy system at the expense of taking on debt via a loan. Previous consultation had suggested CBC would be better off but the revised offer was likely to be less generous and therefore would need to await the revised proposal.
• The additional £35k on the ALMO management fee was in respect of CBH’s contribution towards the purchase of an Enterprise Resource Planning (ERP) system as part of the ‘GO Programme’.  Only one property was sold last year under the Right to Buy Scheme and it was unlikely that any number would be sold this coming year and as such there were no plans to reduce the fee paid to CBH.  Equally, CBC would not expect CBH to request an increase once the development in St. Pauls was completed.
• The figure for disabled adaptations was an estimate based on current demand.  This service was mandatory so adaptations would have to be undertaken.  Both CBH and private sector housing promoted the adaptation service.

The Cabinet Member Finance and Community Development made a final, important point.  The ear-marked reserve and general reserve were very different and Cabinet were determined to go ahead with certain schemes that formed part of long term plans.

The Chairman thanked the Cabinet Member Finance and Community Development and the Head of Financial Services for their attendance.