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MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet Member for Regeneration
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Decision Made: |
29 January 2010 |
Estimates 2010/11
Issue for Decision
To consider the Revenue and Capital estimates for 2010/11 along with the revised estimates for the current financial year.
Decision Made
1. That the revised
revenue estimates for 2009/10 and the provisional revenue estimates for 2010/11
as contained in Appendices
A, B and C to the Report of the Head of Finance, be approved.
2. That the Capital
Programme as detailed in Appendix D to the Report of the Head of Finance be
approved.
Reasons for Decision
At the July meeting, Cabinet considered the initial projection for 2010/11
onwards and agreed the following:
a) That the current Medium Term Financial Strategy as set out in Appendix B of the report of Management Team be noted and that it be updated in line with best practice to integrate service and financial planning for the next 3 year planning period.
b) That the levels of council tax set out in Appendix F of the report of Management Team be used for budget planning purposes but the final council tax level will be set as low as possible.
c) That the “most likely” scenario set out in Appendix F(ii) of the report of Management Team forms the basis of the need to identify savings of £1.4m in 2010/11 and that officers work with Cabinet Members to present proposals for savings at the December Cabinet Meeting.
d) That the current Capital Programme be noted.
e) That the use of public consultation to inform the budget strategy be supported and that officers bring a report setting out the most effective consultation methods of the next Cabinet meeting.
f) That
the timetable for the 2010/11 Budget Strategy, as set out below (in the July
2009 report), be approved.
The initial financial projection was selected by Cabinet as the most likely of three scenarios. The key assumptions from that scenario were:
a) An overall inflation rate of 2.5% per annum over the period.
b) Anticipated grant based on the indicative figures provided by Government in 2007. This allowed for a 0.5% cash increase in the grant received over the level received in 2009/10 followed by 0% increases in future years.
c) Additional resources for the completion of the new recycling contracts and for resolution of other budget pressures following changes to disposal arrangements.
d) A continuation of the annual increase in the national concessionary fares scheme, based on previous trends in take up of the scheme.
e) The use of all available capital receipts to fund the capital programme, reducing the level of investment income. The investment income is also affected by the rate of interest on the current investments, estimated at an average rate of 1.5%.
f) A need to borrow up to £2.0m to finance capital expenditure, creating a need for revenue resources to service the debt.
g) That the current policy to maintain a minimum balance of 10% of net revenue spend is maintained.
h) That Council Tax increase be equivalent to the 2009/10 increase for the purpose of developing the strategy.
i) That no increase in the Council Tax Base be assumed.
A number of risks were identified as part of the initial projection as follows:-
a) The uncertainty surrounding the costs of the national concessionary fares scheme and the future proposals to transfer the function to upper tier authorities in two tier regions.
a) The potential non-delivery of the capital receipts from sale of assets assumed during the programme period, leading to the possible need for borrowing to finance the programme.
b) The potential future loss of HCA grant aid to the Council’s capital programme following the intensive investment programme in 2008/09 and 2009/10.
c)
The continuing risk of income shortfall on the revenue budget due to the
recession.
Following these decisions, further reports, to approve the medium term financial strategy and to agree the approach to budget consultation for 2010/11, were approved by Cabinet.
At its meeting on 16 December 2009, Cabinet considered the latest information relating to the budget strategy for 2010/11 onwards and agreed the following:-
a) That a provisional spending level based upon the revised strategic projection set out in Appendix B of the report of Management Team, incorporating the revisions to growth items as identified in Appendix A of the report of Management Team and the savings as identified in Appendix C of the report of Management Team be agreed.
b) That updates, as soon as available, on progress to achieving the savings targets from staffing as outlined in the report of Management Team be requested.
c) That the updated Capital Programme detailed in Appendix D of the report of Management Team, along with the budget set out therein for 2012/13, be agreed.
d) That the outcome of the budget consultation exercise set out in section 1.11 and Appendix G of the report of Management Team be noted and Cabinet’s gratitude be expressed to all those who participated.
e) That the updated medium term financial strategy as set out in Appendix H of the report of Management Team and its stronger connection to the strategic plan be agreed.
f) That a continued Council Tax strategy which is materially within the Government’s Council Tax capping strategy as outlined in the report of the report of Management Team be agreed.
g) That the Corporate Services Overview and Scrutiny committee be consulted on the budget strategy based on the above decisions.
Revenue Budget 2010/11
Attached at Appendix A and Appendix B to the Report of the Head of Finance are the detailed estimates for 2010/11 along with:-
a) actual
spend for 2008/09;
b)
original estimate for 2009/10;
c) revised estimate for 2009/10.
Appendix A to the Report of the Head of Finance,
gives a summary of the net expenditure for each service head, which produced a
total of £7,841,630 for 2010/11. This will be reported to Cabinet and included
within this Council’s spending plans for 2010/11 to be considered by Council on
3rd March 2010.
Following the summary of net budget requirement more
detailed estimates for each service head are given at Appendix B to the Head of
Finance. Each service head details the individual expenditure requirements
analysed between employee expenses, other running expenses, internal recharges,
central recharges and capital costs. The expenditure is then reduced by
income, such as fees and charges, and recharges to other service heads.
Against each service head are notes which identify any special circumstances
relating to that service head and any major items of budget variance.
The cumulative impact of recent reviews of the structure and the impact of the recession has altered the focus of staff resources. The consequence of this shows in the alterations in internal and central recharges.
Also attached at Appendix C to the Report of the Head of Finance are detailed growth and savings proposals that have previously been considered by Cabinet. These proposals have been incorporated into Appendices A and B to the Report of the Head of Finance, in order to properly reflect their potential effect upon the portfolio.
The estimate for 2010/11 totals £7,841,630 a reduction of £2,379,560 (23.3%) on the original estimate for 2009/10. The main reasons for the variation are as follows:-
a)
Homeless Temporary Accommodation – recharges to this cost centre have
reduced. Costs have been reallocated to Housing Register & Allocations and
Housing Advice & Homelessness prevention.
b)
Strategic
Housing Role – this is the most significant variation and relates to the effect
of the changes to the capital programme on the budget provision to write off
the capital grant aid to registered social landlords.
c)
Private
Sector Renewal – costs have increased due to increased costs in the Capital
Programme that are written off to the service head. Capital write off and
depreciation entries are reversed through the appropriation account in
Corporate Services and this growth does not affect the demand upon council tax
payers.
d)
Planning
Policy – this service head controls the cost of the local development framework
and increased costs are funded from allocated resources within the Council’s
balances.
e)
Development
Control – the costs of this service has reduced as a result of the restructure
reducing the level of recharges.
f)
Conservation
– a combination of reduced levels of recharges into the service and the
transfer of income budgets from Planning Policy have reduced costs in this
service head.
g)
Development
Control Enforcement – the costs of this service has reduced as a result of the
restructure reducing the level of recharges.
h)
Development
Control Appeals – as with the enforcement service head, the cost of the appeals
service has reduced as a result of lower recharges following the restructure.
i)
Business
Development – growth within the service head is matched to growth point revenue
grant. The full grant is reported as income in this service head whereas some
expenditure budgets have been set in other service heads.
j) Sustainable Development – increased recharges for community planning co-ordinator.
The revised estimate for 2009/10 is £11,771,750, an increase of £1,550,560 (15.2%) on the original estimate for 2009/10. In many cases the same movement in recharges effect the revised estimate, as affect the estimate for 2010/11 as detailed in paragraph above. The major reasons for the variance are as follows:
a) Homelessness;
Development Control; Conservation and Sustainable Development – all these
service heads are affected by changes to recharges.
b) Strategic
Housing and Private Sector Renewal – these services heads are affected by
changes to the capital programme.
c) Planning
Policy – in addition to the work on the local development framework, which is
funded from allocated balances, this cost centre controls the Council’s costs
in relation to the Kent International Gateway. The cost, up to completion of
the public enquiry, has been previously reported to Cabinet. The increased
budgets in this service head are funded from one off resources as reported to
Cabinet.
d) Business Development – as with the 2010/11 estimate, this service head is the main focus for growth point revenue grant. The full grant is reported in this service head, whereas some expenditure is reported in other service heads
Capital Budget
Attached at Appendix D to the Report of the Head of
Finance is the proposed medium term capital programme for services covered by
this portfolio.
The Appendix includes information scheme by scheme, for
the current year and the following three years. Support for the High Street
Regeneration and Social Housing are key schemes that are focussed on the
Council’s priority of regeneration. The majority of other schemes are focussed
on the development of options for future regeneration matters under the
Council’s growth point proposals.
Due to the Council’s current financial situation the future programme is constrained by available resources and the ability to finance potential borrowing in future years.
Alternatives considered and why rejected
I have previously considered alternatives and they are not
appropriate at this stage of the Budget Strategy process.
Background Papers
Budget working papers file held in Corporate Finance.
Documents can be viewed at the Council offices
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Scrutiny Manager by: 5 February 2010. |