Interview with:

·  Councillor Christopher Garland, Leader of the Council; and

·  Paul Riley, Head of Customer Services and Finance.

The Chairman welcomed Councillor Garland, Leader of the Council, Alison Broom, Chief Executive and Paul Riley, Head of Finance and Customer Services to the meeting.

Councillor Garland summarised the Budget Strategy , highlighting that the revenue support grant from Government had been cut by 16.8% and nearly 5 million pounds worth of savings was required over the next four years.

He informed the Committee that with regards to the capital programme, there was no borrowing required for the next financial year, however it was not set in stone. The Council would need a flexible approach to the capital programme in particular as funding was from the sale of assets.

Mr Riley, Head of Finance and Customer Services gave a presentation to the Committee on the budget strategy 2011 onwards (attached at Appendix A).

In answer to a question, Mrs Broom informed the Committee that the government proposed a national policy to change the housing and council tax benefit parameters, whilst reducing the housing and council tax benefit grant by over £1m for the Council. Councillor Garland highlighted that the changes allowed each Council to determine its own local approach to housing benefit and council tax discounts this would in turn have an impact on the other authorities funded through the council tax including Kent County Council. Any discount or benefit applied would affect the amount they were given. The Council would favour a Kent wide system for council tax discount.

Mr Riley informed the Committee that provisions were being made to ensure that the delivery of the 4year budget strategy was achieved, not just planned. The Committee sought reassurance that the Council was looking ahead to identify new funding streams and ensuring that it remained fit for purpose in terms of its structure.  The Chief Executive explained that as part of the Strategic Plan they had introduced service design principles which set out new ways of working. The Head of Change and Scrutiny informed the Committee that the Council was undertaking a project to look at localism in Maidstone and a budget had been set aside for this in 2011-12.

The Leader stated that they would be lobbying for non-domestic rates income for Maidstone to be given directly to the Council, as presently whilst they were collected by the Council they were re-distributed at a national level by the Government as part of the Revenue Support Grant.

In answer to a question, Mr Riley confirmed that the concurrent functions budget will be reduced in 2011/12 by 30%.

Mr Riley explained the increase in council tax that is included in the revenue budget over the four year budget strategy. This had been calculated to include the cumulative effect of the freeze on council tax for one year and then an annual increase of 2.5%, as well as an increase in the tax base.  The Committee asked if council tax and domestic rates collection was performing well and whether the staffing was sufficient.  Mr Riley stated that the staffing was appropriate as reflected by the collection rate for Council tax being over 99%.

With regard to the Capital Programme, the Committee stated that they would be keen to see innovative ways of securing funds for the capital programme as the funding supply would finish within two years and the programme would then be reliant upon borrowing. The Committee considered the risk element of the capital programme, and highlighted that difficult times lay ahead. A Member asked about the incentives for development and the New Homes Bonus and whether this could be used to fund the Capital Programme. Mr Riley informed the Committee that the Council should receive funding via the New Home Bonus Scheme, however this had not been included in the funding for the Capital Programme. The Committee enquired into the cost of the High Street project. Mr Riley stated that the final phase cost is estimated at £3.4m however the Council was required to borrow £2.24m. 

Mrs Broom asked the Committee what levels of risk the Members were prepared to take, the Chairman stated that the Council should take a low-risk approach to the Capital Programme as potential future changes made it hard to make firm decisions now. Mrs Broom informed the Committee that the way Kent County Council and Maidstone Borough Council work together was very important to the future funding.  It was evident that the Council had a limited number of assets to finance the capital programme and borrowing would be required in 2013/14, she informed the Committee that recommendations to make improvements to the budget strategy would need to be established prior to the Cabinet meeting in February.

The Committee considered its approach to scrutiny of the capital programme. It was agreed that a working group should be formed to consider the capital programme in detail in order to make recommendations to Cabinet on priorities and funding.

Resolved:  That it be recommended that: 

a)  a Capital Budget Working Group be arranged with the Chief Executive, Leader of the Council, Head of Housing, Head of Finance, Head of Change and Scrutiny and Members to look at the capital programme and identify innovative ways of funding and priorities in order to make recommendations  to the Cabinet meeting in February;

b)  it be noted that the Committee support the Leader of the Council in lobbying the Government for non domestic rate funding; and

c)  a watching brief and regular scrutiny be maintained of the capital programme.