Agenda item

Report of the Cabinet Member Finance

The Mayor invited the Cabinet Member Finance to introduce the budget which would then be followed by a statement from the Director of Resources, Mark Sheldon as the Council’s Section 151 officer. To facilitate the presentation of the Budget, the Mayor proposed suspension of certain rules of debate, namely:-

 

That the time limit on speeches is relaxed with regard to the following speeches

• Cabinet Member Finance when moving the motion to adopt the budget being proposed by the Cabinet.

• Group leaders or Group spokesperson when making budget statements on behalf of their group.

 

The Cabinet Member Finance and Group Leaders could also speak more than once in the debate (in addition to any rights of reply etc.) for the purpose of putting and answering questions.

 

This was agreed unanimously by Council.

 

The Mayor reminded Members that a recorded vote must be held  on any significant decision relating to the budget or council tax (including any amendments) as set out in Part 4A – Council Procedures Rule 14.5 as required by the ‘Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014’. This will apply to agenda items 8 and 9.

 

The Cabinet Member Finance introduced the 2015/16 budget proposals with a detailed speech (please see Appendix 1).

 

The Cabinet Member Finance moved acceptance of the 2015/16 budget as set out in the report. The motion was seconded by Councillor Jordan who reserved his right to speak.

The Director of Resources referred to appendix 2 in the budget papers which set out his assessment of the budget and the financial risks which were set out in the form of a risk table. He explained that he had a statutory duty as the Council’s Section 151 officer to make this report to Council and they must have regard to it when making decisions on the Council's budget and at the council tax setting meeting.  He made the following points:

• A modest return was predicted as a result of treasury management activity.
• He was satisfied that sufficient provision had been made in the budget and MTFS for future pay awards and pension-fund costs.
• A prudent approach had been adopted in the New Homes Bonus projections after consultation with the budget scrutiny working group.
• Some reserves had been reduced this year through usage but overall the general reserve remained in his previously recommended range of £1.5 to £2 million.
• There was a sound business strategy to support the MTFS through commissioning, shared services and other projects. He acknowledged that there were still some gaps to be filled.
• He acknowledged that the decision to freeze council tax had been a political one but was justifiable given that there was some government funding to support a freeze
• The asset management plan was being reviewed and there would be important decisions to be made later in the year on the use of the North Place receipt and the council would need to look at all the options objectively.
  
  

In conclusion his overall view was that the budget was a sound response to continuing, challenging financial circumstances which maintained services as far as possible by delivering them through alternate delivery mechanisms, maximising efficiencies and responding to anticipated future financial challenges.

 

The Mayor invited questions to the Cabinet Member Finance.

 

In response to questions from Members, the Cabinet Member Finance gave the following responses:

 

• What steps would he take if the amount set aside for planning appeals was insufficient?
  • The Cabinet Member advised that if the council's planning policies required the authority to fight an appeal then that would happen. They would need to keep a watch on the use of this fund and come back at the outturn stage if more funding was needed.
• Referring to the additional underwriting of £90,000 to support the Art Gallery and Museum redevelopment scheme, what type of fund raising is the organisation planning to do to try and raise the money?
  • Although the Friend’s organisation had done all sorts of fundraising in the past, the organisation would be looking for fundraising particularly from sponsorship to fill this gap. The figure referred to would be the worst-case scenario if they were unsuccessful in this fundraising.  
• What is the additional corporate support referred to in the exempt proposals for growth? 
  • The Cabinet Member explained that the Executive Board is now very stretched and needs additional support on particular projects.  He would be happy to supply more detail if required outside the meeting.
• It was noted that the actual cash figures in the table in paragraph 4.4 were out by a factor of 1000.
• There is no explanation of the reasons for the increase in car parking equalisation reserve in appendix 6 and for how long that might be required. 
  • This fund was set up last year recognizing that with the North Place development under way there could be a hit on car parking income for a period of up to 18 months. There had been a small hit on car parking income but this has been contained within existing budgets and the reserve had not been used. The council was looking at options for increasing car parking revenue across the town.
• In previous years the council has published full details of the public consultation and could the results of this year's consultation be put on the Council's website?
  • Yes this could be done.
• What would the annual contribution to the pensions fund be if it was increased by the £406K per annum?
  • The Cabinet Member did not have the figures to hand but officers later confirmed that there were two elements £1,176,500 being employer’s annual contributions and £2,540,000 being pension back funding making a total contribution to the pensions fund in the next financial year of £3,716,500.
     

Councillor Harman gave a response to the budget on behalf of the Conservative party. He endorsed the thanks given to Officers and personally thanked the Members of the BSWG and the officers who had supported it from Finance. He explained that he was very supportive of lots of things in the budget and his party were committed to improving the town and so welcomed the improvements to the Royal Well Bus Station and the action on seagulls. They also felt the freeze on council tax and car parking charges was the right thing to do.  They had concerns that although the new Art Gallery and Museum was a fantastic asset to the town, the financial management of the development had been poor. Given that an overspend had already been reported they were concerned about Rec 7 as there was a risk of the development becoming a money pit with ongoing liabilities.  He requested a separate vote on the second part of recommendation listed as 7 in the report “including the additional underwriting of £90,000 to support the Art Gallery and Museum scheme”

 

He announced his intention to propose three amendments and he thanked the Director of Resources for his support in assessing their financial implications. His party had wanted to have a thorough look at the budget and see what further action could be done to reduce operating costs.

 

Councillor Stennett had no amendments to raise on behalf of the People Against Bureaucracy and he felt the administration had produced a sound budget which gave extremely good support to the town.  Their one concern was that the New Homes Bonus could be withdrawn by government at any time and it was now a big element of the council's revenue budget. 

 

Councillor Harman formerly proposed the following amendments to the budget which were seconded by Councillor Nelson.

 

Add the following to the recommendations in the report:

 

i.      Given the longer term need to reduce costs and protect services, the. Council resolves to consider at an early date changing to whole Council elections which would produce on going savings from 2018/19 in the region of £100,000 over a 4 year period.

 

ii.    The lack of Enforcement capacity in the fields of Planning, Public protection etc. has regularly been highlighted by Members from across the Chamber and was raised at the REST Seminar.
This Council requests the Cabinet to consider options to increase capacity with implementation taking place as soon as practicable in line with Council’s position.

 

iii.   The Cabinet consider the possible use of Apprentices across the council to offer opportunities for young people in local government.

 

In proposing the amendments, Councillor Harman felt that it was important to present people with the options and the business case for four yearly elections and then give them a democratic choice. He reminded Members that to date councillors themselves had not been affected by any budgetary saving measures.

 

Regarding amendment ii), this was a major issue and he hoped that the Cabinet Member would be prepared to take this on and bring back clear proposals to this Council.

 

Regarding amendment iii) he was aware that the council already took on apprentices but he felt there were opportunities to have far more. 

Councillor Nelson as the seconder for the amendment said  it was important to increase the capacity in the field of enforcement. At the national level there had been brilliant cross party working regarding apprentices and the council now needed to do its bit.

Councillor Jordan added his comments as seconder of the motion and on behalf of the Liberal Democrats. He indicated that they would be happy to accept amendments ii) and iii).  The council already had a policy on apprentices and there had been some difficulties in recruiting apprentices but they would be happy to revisit this. Regarding enforcement, the REST project was looking to improve effectiveness in this area.

 

Regarding the proposal in i), the Leader did not support this part of the amendment. There would be an opportunity to review this in 2016 so it may be looked at then and any savings from a move to 4 yearly elections would not be realised for at least three years.

 

The Mayor invited Members to debate iii)

 

Speaking for the amendment, a Member supported the change to four yearly elections and in addition thought that there should also be a drastic reduction in the number of councillors. 

 

Speaking against the amendment, a member questioned whether even if the £100 K savings were realised it would be worth it. The council would be more unstable during the change and lose continuity if all 40 Members were elected at one time. There were also savings anyway as borough elections often double up with general elections. Other members felt the timing was premature given the potential change in government after the May elections. Another Member said there was clear evidence to show that a change to a four-year cycle would reduce the number of women candidates coming forward to stand as Councillors.It was important that the council encouraged more women candidates to stand for election.  Another member highlighted that this issue had been looked at by a cross-party working group and a report brought to Council in 2013. Repeating the process so soon would give the same result and so would be a waste of resources.

 

As proposer of the amendment, Councillor Harman thanked members for their support to ii) and iii). He felt that 4 yearly elections would save money and he wanted to give people a clear choice.   He was keen to see more diversity in the members of Council and he couldn't see that this would be affected by the change as members would still be elected for a four-year term.

 

A recorded vote was required upon the amendment i) and this was LOST

 

Voting

For 13: Councillors Babbage, Chard, Fletcher, Harman, Lillywhite, Nelson, Payne, Prince, Regan, Ryder, Seacome, Smith,Stennett.

Against 22: Councillors Barnes, Britter, Clucas, Coleman, Fisher, Flynn, R Hay, C Hay, Holliday, Jeffries, Jordan, McCloskey, McKinlay, Murch, Rawson, Reid, Sudbury, Thornton, Walklett, Wheeler, Whyborn and Williams

 

The substantive motion then became the recommendations as listed in the report with the addition of ii) and ii) from the amendment.

 

The Leader as seconder of the motion, highlighted the huge amount of effort by officers and members in bringing this budget to Council. He highlighted the £100K support for the local plan.  Theoretically this could be done in house but as there would already be pressure on resources to support the JCS enquiry and the Leckhampton planning appeal, looking for some external support seemed a sensible option. The town's economy was also buoyant with a higher than expected business rates return and there was much evidence of development sites around the town. The contribution made by this council was a factor in the success as was the leisure and culture provision by the Trust, the work done by the CDTF and the retail support from the Cheltenham Business Partnership. There had been a consistent effort by all parties over a series of years to raise business confidence.

He concluded that this was the right budget for Cheltenham.

 

During the debate Members referred to the overspend on the Art Gallery and Museum project and it was highlighted that the original budget was maintained despite the tender price being lower. One member suggested that the Cabinet Member had hoped to be in a position to report a large underspend to Council if the project was delivered within the tender price. Given the budget was not reduced at the same time it would be too easy for the project team to dip into that as a contingency fund.

 

In his summing up, the Cabinet Member Finance responded to some of the points made in the debate. He felt that the budget did represent a cautious approach in its use of the New Homes Bonus compared with other councils who had used 100% of it in their revenue budgets.

 

In response to the points raised regarding the Art Gallery and Museum, he assured members that at all times the project team had been working to the tender price and the member had misconstrued his motives for maintaining the budget at its original level.  Regarding the additional underwriting recommended in 7. for the Art Gallery and Museum, he saw little point in voting against the authorisation of this money which had already been spent. The amount would come from capital receipts and therefore there would be a very small impact on the revenue budget. He reminded members that he had brought the original report to councillors in 2009 in which he had highlighted the importance of fundraising to support the development. What was more important was that the council should learn lessons from this development which could be applied to other similar capital projects in the future. The Audit Committee would be considering the outcomes of the internal audit review once completed.

He urged members to support the recommendations in the report.

 

A recorded vote was required upon the substantive motion and this was CARRIED

Recommendations  excluding the second part of recommendation listed as 7 in the report “including the additional underwriting of £90,000 to support the Art Gallery and Museum redevelopment scheme”

Voting For 34: Councillors Babbage, Barnes, Britter, Chard, Clucas, Coleman, Fisher, Fletcher, Flynn, Harman, R Hay, C Hay, Holliday, Jeffries, Jordan,  Lillywhite, McCloskey, McKinlay, Murch, Nelson, Payne, Rawson, Regan, Reid, Ryder, Seacome, Smith, Stennett, Sudbury, Thornton, Walklett, Wheeler, Whyborn and Williams

 

Against 0:

 

No Abstentions

 

Recommendation on the wording excluded from the previous vote

 

Voting For 23: Councillors Barnes, Britter, Clucas, Coleman, Fisher, Flynn, R Hay, C Hay, Holliday, Jeffries, Jordan, McCloskey, McKinlay, Murch, Rawson, Reid, Stennett, Sudbury, Thornton, Walklett, Wheeler, Whyborn and Williams

 

Against 11: Councillors Babbage, Chard, Fletcher, Harman, Lillywhite, Nelson, Payne, Regan, Ryder, Seacome and Smith.

No abstentions.

 

RESOLVED THAT:
 

1.    The revised budget for 2014/15 be noted and the one-off contribution from general balances of £178,250 as detailed in Section 3.2 be approved.

Having considered the budget assessment by the Section 151 Officer at Appendix 2 the following recommendations be agreed :

 

2.    the final budget proposals including a proposed council tax for the services provided by Cheltenham Borough Council of £187.12 for the year 2015/16 (a 0% increase based on a Band D property) be approved.

3.    the growth proposals, including one off initiatives at Appendix 4 be approved.

4.    the savings / additional income and the budget strategy at Appendix 5 be approved.

5.    the use of reserves and general balances be approved and the projected level of reserves, as detailed at Appendix 6 be noted.

6.    the proposed capital programme at Appendix 7, as outlined in Section 10 be approved, including the additional underwriting of £90,000 to support the Art Gallery and Museum redevelopment scheme.

7.    the Pay Policy Statement for 2015/16, including the continued payment of a living wage supplement at Appendix 8 be approved.

8.    a level of supplementary estimate of £100,000 for 2015/16 as outlined in Section 15 be approved.

9.    there be no change to the Local Council Tax support scheme in 2015/16 (para 4.19).

10.  it be noted that the Council will remain in the Gloucestershire business rates pool for 2015/16 (para 4.9).

11.  In view of the lack of Enforcement capacity in the fields of Planning, Public protection etc. that has regularly been highlighted by Members from across the Chamber and was raised at the REST Seminar, Cabinet be requested to consider options to increase capacity with implementation taking place as soon as practicable in line with Council’s position.

Cabinet be requested to consider the possible use of Apprentices across the council to offer opportunities for young people in local government.