Agenda item

Report of the Cabinet Member Finance and Community Development

The Cabinet Member Finance and Community Development explained that the budget process had been easier this year despite the continued recession. This was partly due to the targeted decisions that had been made in the last budget round but also due to the Icelandic bank decision which had been dealt with more expeditiously than expected. In addition £250 000 of New Homes Bonus had been built into the 2012/13 base budget and the impact of HRA self-financing was positive. In addition the projected overspend in 2011/12 of £476k had been avoided due to the immediate freeze on recruitment and supplies and services.

The Cabinet Member highlighted the following structural issues, which included low level investment interest. Car parking income continued to decline, as was the case nationally. Concessionary fares also played a role in this decline. The Garden Waste scheme had not generated as much income as envisaged and whilst the scheme funded itself the estimated revenue had been reduced in next year’s budget.

Whilst this year’s budget saw the continuation of the council tax freeze the Cabinet Member warned that the situation would be very difficult in the following financial year as there would effectively be 5 % uplift in the level of council tax.

In terms of the Housing Revenue Account the Cabinet Member stated that it was a huge year of transformation for housing revenue and capital would be liberated by coming out of the national subsidy system. He did however express concern for tenants who, as a result of government policy, would be faced with increasing rents whilst benefits would be decreasing. Officers would be monitoring this closely.

Sarah Didcote, Group Accountant, gave a brief presentation on the budget, which is attached to these minutes for information.

The following responses were given by the Cabinet Member Finance and Community Development and the Group Accountant, to questions from members of the committee :

• The grant to the Cheltenham Festival for the Performing Arts had been reduced last year.
• Funding for the Arts Council would no longer exist in 2012/13 but £6 k had been given as a one off grant in 2011/12.
• The budget for Cheltenham Festivals had been entirely cut in 2011/12 but the Festivals had been awarded £50 k in New Homes Bonus funds and they would be eligible to bid for the same funds in the coming financial year.
• Bids had been received and analysed for the renewed Single Advice Contract and the results would be made public in the very near future.
• CBC had a good record of financial management. Producing a balanced budget was a statutory requirement. Quarterly monitoring reports were produced to flag up any deviations so that remedial action could be taken.
• Usage of the concessionary fares scheme had increased and this had an impact on reduced income from car parking. Cheltenham had a higher percentage of over 60s who were eligible for the scheme.
• Rents from allotment sites had been built into the base budget.
• In the context of the New Homes Bonus funding and in particular the Promoting Cheltenham Fund the purpose of this fund was to promote the image of the town on the back of enterprise. Government was examining the possibility of phasing in rates for new start ups. This would ensure that the town was an attractive place for small businesses.
• In terms of the £50 k allocated to youth work CCP was working closely with CBC and this money funded a youth worker. The scheme would be reviewed next year to evaluate its effectiveness and a decision would be made at that stage as to whether this arrangement should continue. In addition the County had allocated £50 k to CBC for youth projects and a second bidding round had just been concluded which had addressed certain gaps in the town.

The Cabinet Member was asked to explain why Cabinet had deemed it appropriate to freeze Council tax this current year bearing in mind that a 5 % increase would be necessary next year due to the time limited allocation from government. He said that the funding allocated by government had been built into the Medium Term Financial Strategy.  In taking the decision this year Cabinet was mindful that there could have been a less steep transition for council tax payers next year but on the whole felt it was what government had intended. Cabinet had however written to central government explaining that this would put extra pressure on next year’s budget.

With regard to housing commitments a question was raised as to whether there was any correlation with housing targets in the Joint Core Strategy (JCS). In response the Cabinet member replied that the commitments were based on the five year period of the MTFS in terms of the number of planning permissions and recent history of building and not against JCS targets but the Government drive for new build and perceived demand.

Concern was expressed by members that the risk analysis did not take account of the risks associated with the introduction to the base budget of part of the new homes bonus, the impact of the 0 % council tax freeze and the timing of the delivery of key projects.

The issue of Grosvenor Terrace car park was raised. Funds were, in one members view, continually invested in the car park but it was asked at what point the council would agree that this was not the right location for a car park.

In response the Cabinet Member explained some of the funds were directed at providing cctv on the site and that with the future development of North Place and Portland Street car parks this car park would be required.

Members also requested details of the equality and diversity impact assessment to be reassured that this had been undertaken correctly.