Agenda item

Cabinet report of the Cabinet Member Finance & Community Development and Chief Finance Officer and presentation by Finance Officer

The Cabinet Member Finance and Community Development introduced the general fund budget proposals in the form of the Cabinet report dated the 13 December. 

The Cabinet Member explained that the budget process for the coming year had been easier than expected.  This was as a result of targeted decisions that had been made in the last budget round but also the Icelandic bank decision which had been dealt with more expeditiously than expected. In addition £250k of New Home Bonus had been built into the 2012/13 base budget and the impact of HRA self-financing was a positive one. On top of this a predicted overspend of more than £500k had been addressed by an immediate freeze on recruitment, supplies and services.

He highlighted the following structural issues, which included low level investment interest.  Car parking income continued to fall, as was the case nationally and he considered that concessionary fares played a role in this decline. The Garden Waste scheme paid for itself but had not generated as much income as envisaged and therefore the estimated revenue had been reduced in next year’s budget.

Whilst this year’s budget had been relatively pain free and saw the continuation of the Council Tax freeze, he warned that the situation would be very difficult in the following financial year as there would effectively be 5 % uplift in expenditure.

Nina Philippidis, Accountant, gave a brief presentation on the budget (see attached).

The Cabinet Member Sustainability elaborated further on a point raised by the Cabinet Member Finance & Community Development and explained that last years budget proposals had included a reduction in mowing of verges.  Whilst this was reinstated last year it was not from the base budget but this year it had been built into the base budget.  This formed part of an agreement between the Council and Gloucestershire County Council (GCC) which included other work such as clearing of ally ways, etc.  GCC were being asked to reconsider their proposal to reduce the budget by £35k and maintain it at the current level in light of this Council’s decision to maintain the ‘top-up’.  At this time there were no plans to renegotiate the contract with GCC.

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

• The renewal of the electricity contract had been postponed last year and a 6 month extension entered into.  This formed part of the base budgets and it was hoped that a competitive renewal could be achieved.
• Invest to save schemes with a longer than 5 year pay back period were not considered prudent given the 5 year term of the MTFS. 
• The criteria for recruitment was refined as part of the freeze so vacancies were only filled where entirely necessary. 
• £250k of the New Home Bonus had been built into the base budget and ideally capital would be reinvested in capital.  The Cabinet Member agreed that this funding should not be used to maintain revenue expenditure unless it was to cover debt.  The New Home Bonus formed part of a 6 year commitment and the figures were linked to historical planning figures and NOT the JCS figures.
• The budget consultation closed last Friday (13 January) and the Cabinet Member had only just received details of the responses.  There had not been a high response and the suggestion was that this was a result of there being no major cuts.  He noted that the Focus Group from last year had been reconvened and had made some good points.   There was one particularly well thought through suggestion that services should be reorganised to generate enough income to allow for nil Council Tax within 10 years. 
• There was a statutory requirement to achieve a balanced budget and this was based on assumed levels of income which were reviewed in the outturn report. 
• Improvements to Grosvenor Terrace car park were necessary in order for it to be, first and foremost, a car park people would consider using.  There were no major structural problems but it was a very unattractive building.  There were discussions to be had about price structuring but reduced charges as an introductory offer was an option.
• Prices at Leisure@ had been increased by inflation across the board but when the Service Manager had reviewed each area of his service individually and using his judgement and knowledge he considered that certain areas could withstand additional increases.  Full details of these areas would be provided to Members.  The Cabinet Member felt strongly that whilst in a recession and though private organisations were reducing costs, the Council mustn’t be pulled into a race to the bottom.
• In terms of maintenance, savings had been made as a result of the uncertainty about the future of the Municipal Offices.  Admittedly, such assets were held for the people of Cheltenham and therefore cuts to maintenance could not continue. 
• The Council papers would identify where services that were not transferred to the Local Authority Company would now sit as this was not entirely clear but very important for Members to understand.

The Chair thanked the Cabinet Members and Accountant for their attendance.