Agenda item

Interviews with Paul Riley, Head of Finance and Resources, Councillor Chris Garland, Leader of the Council and Councillor Brian Moss, Cabinet Member for Corporate Services.

Councillor Garland, Leader of the Council, Councillor Moss, Cabinet Member for Corporate Services and Paul Riley, Head of Finance and Resources were invited to inform the Committee on the Budget Strategy which included reports on the following three areas: Capital, Revenue and Fees and Charges.

In relation to the Capital Budget specifically the Leader informed the Committee of the following:

·  Maidstone had received the largest New Homes Bonus in Kent – £3.7 million;

·  Maidstone was the only district Council who did not use its New Homes Bonus to support revenue, i.e. day to day spending;

·  Maidstone major capital projects included the Maidstone Business Hub, the implementation of the Play Areas Strategy, the conversation of business units to housing and investment in infrastructure.

Mr Riley confirmed that the three reports before the Committee had been amended in line with the Government’s financial settlement in December 2013.  As a result of this further savings of £61,000 were required for the Budget Strategy for 2014/15, 35,000 had been identified.

In response to Members questions it was suggested that the remaining £35,000 needed for the 2014-15 Budged Strategy could come from a rise in Council Tax. A rise of 1.9% would equate to £4.32 per year for a band D property and a rise of 1.99%, £4.50 per year.

The Committee was also informed that provisional information provided by Government for 2015/16 estimated that the Council would receive £350,000 less than assumed in its current Medium Term Financial Strategy. This suggested that Government was moving more swiftly to meet its objective for Local Authorities to be self-sufficient, receiving no central funding (i.e. Revenue Support Grant) by 2021.  It was explained that at present assumptions were being rolled forward in the Council’s Medium Term Financial Strategy (MTFS). The information necessitated a rewrite of the MTFS.

Members raised concerns about where future savings would come from and whether or not frontline services would be affected next.  A member also highlighted confusion at the revenue underspend that had occurred in the past two years at a time when savings where being found.

The Leader informed the Committee that it was not about cutting frontline services, it was about continuing with MKIP shared services and delivering services in a different way.  It was also made clear that a future revenue underspend was unlikely.

A member questioned whether an increase in S106 payments could provide an extra source of funding for the Council.  The Leader explained that S106 payments were assessed on a case by case basis, they were specific to the local area to mitigate the impact of development and improve the quality of life. CIL (Community Infrastructure Levy) payments would be calculated per square metre of the development.

The Committee considered the following entries within the reports presented:

• The annual capital sum of £0.9m for Supported Registered Housing Providers and Private Sector Housing Landlords (PSH) within the current Capital Programme (Appendix A, page 22 of the agenda);
• The one off sum of £23,400 for 2012/13 for Environmental Land Drainage and whether or not this related to the recent floods;
• The fees and charges report (pages 52-88 of the agenda) and whether or not legal services could be offered to Parish Councils as Kent County Council provided this service and made £1.3 annual profit;
• £700,000 for Corporate Services – high priority Legislative/Health & Safety Projects; and
• £30,000 allocated to market income, Appendix A Budget Strategy 2014-15 onwards revenue - strategic revenue projections, (page 45 of the agenda).

The Committee was provided with the following responses:

• £300,000 of the £0.9m was allocated for PSH Grants, for example to bring empty properties back into a habitable state.  A condition of the grant payment was that the property could not be sold for 5 years;
• The sum for Environmental Land Drainage did not relate to flood mitigation.  The sum of money required to mitigate future flood risks was an estimated £25m.  Maidstone Borough Council would be meeting with Kent County Council, the Environment Agency and other organisations to address this;
• The £700,000 for Corporate Services – high priority Legislative/Health & Safety Projects had only been entered once under 2013/14 as it related to King Street Car Park and the recent works undertaken to bring it back into use as a surface level car park; and
• The £30,000 allocated to market income was not a subsidy because the market was making a continued loss but it had been allocated as it had been set an unachievable income target that it had failed to deliver for a number of years.

The Committee questioned the quarterly monitoring process of the Budget with Cabinet and whether this worked satisfactorily.  Mr Riley explained that it had been introduced in 2007 and the process had been established over a number of years.  It was a substantial piece of work, bringing together a number of strands and included underspends of £30,000 or more being closely monitored.

The Committee observed that as part of its Capital Programme Review 2012/13 it had recommended that there be a stand alone Capital Strategy, a draft of which had been include at Appendix B, page 26 of the agenda. A member reflected that whilst this could provide the basis for a stand alone strategy it was appreciated that a holistic approach was needed and the MTFS as a whole achieved this.

The Committee questioned the cost of the recent floods to the Council.  It was informed that the Government’s emergency fund would cover 85% of the cost as long as this equated to 1% of the Council’s revenue spend which was approximately £39,400.  Therefore the Council would cover 15% of the costs.

RESOLVED:  That the Budget Strategy 2014-15 Onwards reports and recommendation on Capital, Revenue and Fees and Charges be noted.