Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report which proposed a broad strategy and outlined a process for setting the budget, housing rents and council tax for 2016/17. It outlined a number of principles that needed to be established at this stage to enable budget preparation to commence.

He explained that the council was experiencing unprecedented financial squeeze with Government core funding having halved since 2009 and with it likely to reduce further by 25%-40% over the next four years. He referred to the savings that were being achieved from embracing radical change in the way that the council had organised its services or from sharing services. He made reference the £231 000 new saving which the Cheltenham Trust would deliver next year and the £100 000 from the accommodation strategy next year.

The Cabinet Member added that it was still necessary to think creatively and explained that the focus was on sharing services at a new level via 2020 Vision which would deliver £800 k of savings per annum by 2019-2020 and the drive for further business growth in the town in order to attract an increase in its share of business rates. The council’s direct financial interest in business rates would grow between now and 2020 as the Government devolved more to local councils. He referred to the role of the Cheltenham Development Task Force in promoting growth in terms of attracting John Lewis to the Beechwood Arcade. He also added that the council was strengthening its economic development work by appointing a senior director to drive this forward shortly.

The Cabinet Member Finance said that for the first time a target had been set in the MTFS to increase income as a result of economic development and expansion. This represented a huge opportunity for council as it faced substantial risk as Government was talking about removing core funding to councils.

He emphasised that Cabinet was endeavouring to ensure that Government funding cuts would not mean an increase in Council tax and fees and charges. Car parking income had been frozen for 5 years and the MTFS anticipated no increase between 2010-2020. He added that Council tax had been frozen since 2011 which may be difficult to do for a sixth year.

The Cabinet Member Finance wished to put on record his thanks to the S151 Officer for his work in these extremely difficult circumstances. He added that reserves were tight with little room for manoeuvre. It was important that the strategy worked and was a success.

The Leader added the importance of the role of the Managing Director REST in boosting extra income for the council.

RESOLVED THAT

1.    the budget setting timetable at Appendix 2 be approved.

2.    the budget strategy and MTFS outlined in section 5 and Appendix 3 be approved.

3.    the reserve realignments outlined in section 7 and the level of reserves projected at Appendix 4 be approved.

4.    the expected cut in government baseline funding of £277k for 2016/17, the estimated funding gap of £1.825m and the large amount of work done so far to bridge this gap be noted.

5.    the intention for this Council to remain in the Gloucestershire Business Rates Pool in 2016/17 as outlined in section 6 be noted.

6.    the Section 151 Officer and the Cabinet Member for Finance be requested to consider suggestions from the Budget Scrutiny Working Group in preparing the interim budget proposals for 2016/17 as outlined in section 8.