Agenda item

Review of the Budget proposals 2013/14 which are out for consultation and consideration of the recommendations of the budget scrutiny working group. The budget working group is meeting on 7 January so their recommendations will follow.

Councillors Smith, Hay and Driver retired from the meeting for this agenda item (see Agenda item 2). Councillor Klara Sudbury, as vice chair of the Overview and Scrutiny Committee, assumed chairmanship of the meeting.

Councillor John Rawson, Cabinet Member for Finance, introduced the General Fund Revenue and Capital – Interim Budget proposals – 2014/15 Consultation Paper which had been circulated with the agenda.

The Cabinet Member explained that the Budget Scrutiny Working Group had considered the budget proposals in depth with a view to determine whether the council was doing what it had said it would do. He felt that it had been a challenging and constructive review and commended the report to the Committee.

The Cabinet Member highlighted the main aspects of the proposals. There is a reduction in funding from Government and the loss to the Council is likely to amount to £844,000 which equates to 13.6%.

The Budget Scrutiny Working Group had considered the budget proposals at their meeting on 9 January 2014. As a result they had come up with a number of recommendations for this committee to consider. Councillor Rob Garnham as chair of the working group talked through their recommendations.

• BSWG recognises the approach to using New Homes Bonus funding in the past and supports increasing the use of this funding stream to support the revenue budget, particularly in view of guidance issued with the provisional settlement which confirms that councils are free to spend the bonus as they chose, including on front-line services and keeping council tax low. The proportion of money in the interim budget (64%) used to support the budget is in line with the BSWG view that a cautious approach should be taken to its use.

• The BSWG questions why the Cabinet is proposing a further Council tax freeze whilst it is warning that cuts in funding are worse than expected. It recognises however that the proposal to maintain the freeze has been influenced by the reversal of the Government proposal to top-slice New Homes Bonus funding and the provisional settlement proposal that the funding for past council tax freezes (2011/12 and 2013/14) and for the next two years freeze will be built into the spending review baseline, protecting us against a cliff edge of freeze funding falling away in due course.

• The BSWG supports the view from the Section 151 Officer that CBC should remain in the Gloucestershire Business Rates Pool based on preliminary monitoring considered by the BSWG during the course of the year. The BSWG acknowledges the complexity and uncertainty in budgeting and monitoring the pool resulting from continued issuing of government guidance and acknowledges that it will only be at the outturn of the current year that the benefit of the pool can be properly assessed. 

• The BSWG supports the view by the Section 151 Officer that, in line with the other councils in Gloucestershire, that no changes should be made to the Localised Council Tax Support Scheme (LCTS) although members had been approached by some private landlords expressing their disquiet with regard to the changes to the council tax empty property exemptions and second homes discounts.

• BSWG note that the interim budget is in line with Government guidance to district councils outlining a clear expectation that billing authorities will carry on passing on support to parishes to help mitigate against any reduction in the Council tax base due to the LCTS.

• BSWG notes the proposal to increase councillors’ parking passes in line with inflation but questions whether the councillors parking scheme is being enforced

• BSWG notes that the proposed average rent increase of 4.03% was calculated in accordance with national rent restructuring guidelines but considers this to be a steep increase for tenants. It recognises however that the changes to the Housing Revenue Account subsidy system ensure that the funds raised would be retained locally and reinvested in properties and communities and the new build programme.

In response the Cabinet Member Finance advised the following:

The New Homes Bonus will be an integral part of the financing of local government. The Cabinet  has proposed that it will take a cautious approach to using this revenue stream and will incorporate 64% of the fund into the budget.

The Council will remain in the Gloucestershire business rates pool for 2014/15 but will monitor what benefits accrue.

The Council will continue operating the Council Tax Benefit Scheme unchanged for 2014/15; this had been part of a public consultation.

The Council will continue to make a grant of about £10,000 available to the Parish Councils to give them a degree of financial stability for 2014/15.

Car parking charges will be frozen although Councillor Rawson highlighted that the council may consider enforcing the councillor’s parking passes.

There will be an average rent increase of 3.04% for council tenants which is higher than the rate of inflation but the subsidy and rent increases are retained locally and are reinvested for residents.

Mark Sheldon, Director of Corporate Resources (Section 151 Officer), stated that the Council faced a budget gap of £4 million due to a reduction in grant funding of £844,000 as well as reduced revenue over the last few years. There has been an increase in pension contributions and the council has had to commit more to the pensions fund than it had intended. The council has addressed the shortfall by seeking efficiency savings and will use more of the New Homes Bonus. The council does not seek to cut back on investment in the future and will continue with a maintenance programme of £1 million for 2014/15. It will also maintain investment levels in CCTV cameras, play equipment in parks and IT. There will also be an expanded Capital programme in March if the sale of North Place is completed.

Thanks were expressed to all councillors and staff who had contributed to the preparation and scrutiny of the budget proposals.

The committee queried two items in the bridging the gap strategy. In response it was advised that there would be no impact on services with the reduction of a part-time post as that post has been vacant for some time.  The scale of fees and charges for planning applications are published and available on the web site.

The Budget proposal will now be debated in full by Council

Resolved that the recommendations of the budget scrutiny working group be endorsed and Cabinet be requested to take these into account before finalising their budget proposals for consideration by Council.