MAIDSTONE BOROUGH COUNCIL
Cabinet
Wednesday 12 February 2014
REPORT OF CORPORATE LEADERSHIP TEAM
Report prepared by Paul Riley
1. Budget Strategy 2014/15
1.1 Issue for Decision
1.1.1 This report brings together the Revenue and Capital Budgets for 2014/15 with a view to recommending them to Council on the 5 March 2014 along with a proposed level of Council Tax.
1.1.2 The budget outlined in this report incorporates the growth and savings agreed at the Cabinet meeting on 18 December 2013. The report also identifies issues emerging since that time and requests Cabinet to consider the issues in the context of the agreed Budget Strategy.
1.1.3 The report also gives further guidance on the financial position beyond 2014/15, the prospect for growth and savings and the delivery of a sustainable budget in the medium term
1.2 Recommendation of Corporate Leadership Team
1.2.1 It is recommended that Cabinet:
a. Agree the revised revenue estimate for 2013/14 as set out in Appendix C as modified, if necessary, by any actions agreed as a result of the Third Quarter Budget Monitoring Report for 2013/14;
b. Agree the revenue estimate for 2014/15 including proposed savings as set out in Appendices C & D and section 1.9;
c. Agree to recommend to Council that the minimum level of General Fund balances be maintained at £2m for 2014/15;
d. Agree to set a level of working balances for day to day activity for 2014/15 of £2.3m;
e. Agree the revised Capital Programme set out in Appendix F;
f. Consider options for the level of Council Tax and agree a recommendation to Council for 5 March 2014;
g. Endorse the Medium Term Financial Strategies for Revenue and Capital budgets as set out in Appendices G & H;
h. Note the results of the budget consultation exercise;
i. Consider as necessary any issues referred to Cabinet by Audit Committee following their consideration of the risk assessment set out at Appendix J;
j. Agree to make the appropriate recommendations to Council regarding Council Tax requirement and the Estimates for 2013/14 based on the Cabinets decisions relating to this reports recommendations and as required by the Local Government Finance Act 1992 as amended by the Localism Act 2011.
1.3
Reasons
for Recommendation
1.3.1 The Cabinet has on
two previous occasions this year considered the developing budget strategy for
2014/15 onwards. It has agreed a strategic revenue projection and a level of
council tax for planning purposes that have been used in consultation with the
public and with overview and scrutiny.
1.3.2 The Strategic
Leadership and Corporate Services Overview and Scrutiny Committee, at its
meetings, through its budget working group and through an all member workshop
has given consideration to the budget and the savings proposals. The Committee
has in general agreed with the approach taken by Cabinet but has expressed
concerns about the size of the task ahead of the Council to maintain a balanced
budget in future years.
1.3.3 Only a low level
public consultation has been carried out this year. This is because a major
review of the budget strategy will be carried out in 2014/15 alongside the
Strategic Plan review in time for 2015/16. This work will incorporate
significant consultation and the work may result in the introduction of a new strategy.
The results of the consultation are considered further at section 1.15 of this
report.
1.3.4 The Cabinet has
received two quarterly budget monitoring reports for 2013/14 that have both
considered revenue, capital and other balance sheet items. These reports have
shown an expectation that certain income sources will be significantly above
target and concerns regarding the pressure on budgets in areas such as housing,
the museum, the market and parking. A third quarter report is elsewhere on this
agenda which updates the Cabinet with the position at December 2013.
1.3.5 Despite the budget
pressures that have been in evidence throughout the year there is a developing
under spend arising in the main from the fact that income levels relating to
planning and recycling are continuing to over achieve budget targets by a
significant margin. Actions taken by budget managers are partially managing
areas of over spend and, during the third quarter, there has been a developing
level of employee vacancy. The report elsewhere on this agenda predicts an
under spend of £0.5m by year end.
1.3.6 At its meeting on
18 December 2013 the Cabinet agreed the level of fees and charges for 2014/15
and the influence of the amended charges on the budget have been incorporated
into this report. The Cabinet also considered the Capital Programme 2014/15 to
2018/19 and a position statement on the Budget Strategy for 2014/15 onwards. On
the day of that meeting the Government announced the provisional finance
settlement for 2014/15 and indicative figures for 2015/16. The figures were a
reduction over the assumptions in the strategic revenue projection and this
meant that the budget strategy did not produce a balanced budget for 2014/15.
The Cabinet tasked officers to identify further savings to achieve a balanced
budget during January 2014.
1.3.7 The budget strategy
has been developed in parallel with the Cabinets consideration of a number of
other plans. In particular the budget strategy incorporates consideration of
the following:
a)
The
Strategic Plan the budget strategy has been developed in parallel with the
revision to the strategic plan. The medium term financial strategy has been
produced to ensure the efficient use of the Councils resources in delivering
the strategic objectives.
b)
The
People Strategy budget provision is included for expected employee costs.
c)
The
Asset Management Strategy the budget requirements identified in this strategy
have been previously included within the budget strategy and have been
maintained for 2014/15 onwards at their current levels. The asset management
strategy recognises the pressure on the capital programme from the need for
future funding and assesses options for the appropriate utilisation of assets,
the pressures upon the
capital programme are considered as a complete package and not as individual
schemes.
d) ICT Strategy the
resources for this strategy are limited but some resources for developments in
ICT remain available. The exact nature of the strategy and the arrangements for
the use of resources for the ICT Strategy are currently evolving as the MKIP
Shared Service commences across Maidstone, Swale and Tunbridge Wells Councils.
Funding for both partnership requirements and local requirements for this
authority are available and will be used subject to a satisfactory business
case for each proposal.
e)
The
Infrastructure Delivery Plan budgets for the initial projects required by the
plan are set out in the Capital Programme and funding assumptions from
developer contributions and new homes bonus are also built into the programme.
f)
Strategic
Risk Register the strategic risks are reviewed regularly by Audit Committee
and Cabinet. The funding for actions within the risk actions plans are, where
appropriate, incorporated into the budget strategy.
g) Other Strategies appropriate resources to aid various other strategies are incorporated into the budget strategy. These include strategies for areas such as Regeneration and Economic Development, Housing, Climate Change, Equalities, Integrated Transport and Community Development.
1.4
Strategic
Leadership and Corporate Services Overview and Scrutiny Committee
1.4.1 The Committee, at
its meeting on 7 January 2014, considered the three budget strategy decision
made by the Cabinet on 18 December 2013. The Committee considered all aspects
of the reports and the Councils ability to produce a balanced budget.
1.4.2 Due to the
Committee involvement during 2013/14 in developing the strategy the Committee
was aware of a number of the issues and through first hand involvement had influenced
some. The Committee was able to conclude that the decision of Cabinet arose
from a comprehensive assessment of the situation but pressed the officers and
members in attendance to resolve the issue of the additional need for savings
for 2014/15 and work with them to solve the future budget pressures facing the
Council.
1.5 Audit Committee
1.5.1 The Committee will,
at its meeting on 10 February 2014, consider the operational risk assessment of
the budget strategy. The Committee normally considers strategic risk but makes
an exception in this case. The strategic risk for the budget is the ability to obtain
the right level of resources to achieve the Councils objectives. This risk is
controlled in the main by the responses to the operational risks set out in the
Finance Sections service plan.
1.5.2 The debate and any
reference from the Audit Committee will be reported to the Cabinet at its
meeting, during the consideration of this report.
1.6 The Finance Settlement
1.6.1 The provisional finance settlement was announced on the same day as the last meeting of the Cabinet, 18 December 2013. The settlement for 2014/15 will be confirmed as final by the Government no later than the day of this meeting of the Cabinet, 12 February 2014. Changes to the settlement are not expected but it is hoped that the finalisation of the settlement will be reported as a verbal update to the Cabinet at the meeting.
1.6.2 The provisional figures provided in the settlement are given in the table below, along with the indicative figures for 2015/16 that were also provided at that time. The table compares these figures to the estimates that had been used during the development of the budget strategy prior to that date. Members will note that for both years there is a reduction in both the revenue support grant and the business rates retained by this Council.
1.6.3 The table demonstrates the reduction in grant over the three available years of the new system. This also clearly indicates the slow transfer of the burden special grants from RSG funding to business rates baseline funding.
1.7
Local
Council Tax support Scheme
1.7.1 Incorporated into
the finance settlement for 2014/15, rather than shown as a separate grant, is
the funding for the local council tax support scheme (LCTS). In 2013/14 total
funding was £1.455m as shown in the table above. This included an additional
one year grant from the Department for Communities and Local Government (DCLG)
to maintain the reduction in LCTS discount to 8.5%. Up to the point of that
announcement the Councils expected scheme, on which it had consulted, was a
reduction of 13%. At the Council meeting in December 2013, following further
public consultation, the Council agreed to revert to the original scheme of a
13% reduction in support for 2014/15 (i.e. a discount on council tax equivalent
to 87% of the council tax benefit that could have been claimed under the
previous national system).
1.7.2 The reduction in funding within the finance settlement from 2013/14 to 2014/15 is 13% and while the Government has suggested that LCTS funding has remained stable within the overall grant this cannot be directly demonstrated and all elements of grant, where evidence exists, are shown to be reducing. In addition the LCTS grant is not ring-fenced, increases or reductions in the discount granted to claimants are a direct cost or benefit to this Council. As the distinction no longer exists around the grant for this scheme, in developing and monitoring the strategy for LCTS it will be assumed a reduction in line with the overall reduction in the finance settlement has occurred to the LCTS element.
1.7.3 Included in the main grant for the Council is an element that the DCLG states is funding for the loss incurred by Parish Councils from reductions in their precept due to the discount. In 2013/14 the full amount of this funding of £0.11m was distributed to Parish Council by this Council based upon their loss of income from Council Tax due to the introduction of the scheme. A similar approach was agreed by Cabinet at its meeting on 18 December 2013 with the total amount distributed being reduced by 12% in line with the Councils expected, rather than actual, loss of government funding. Shortly after the Cabinet meeting on 18 December 2013 the distributed amounts were notified to Parishes as provisional figures along with their tax base figures. The provisional nature of the figures recognises the fact that the final decision will be made at Council on 5 March 2014 when the Cabinet present their budget. To assist the Cabinet the agreed distribution is set out in Appendix A.
1.8
Business
Rates
1.8.1 The finance settlement outlined in section 1.6 above reported the baseline need value for retained business rates in 2014/15. The full set of Government assessed figures is tabled below.
1.8.2 The Council applied
for and was approved as a partner in the Kent business rates pool. The pool for
2014/15 is a partnership between Maidstone Borough Council and Kent County
Council. The primary objective of the pool is growth within the region (i.e.
within the Maidstone borough area but would expand if other district councils
join the pool in future years) and the benefit it brings is to enable the levy
on business rates growth to be retained locally. The risk of the pool is that
the Council may slip below the safety net for business rates collected but will
receive no national support to reduce its losses.
1.8.3 The pool agreement
shares any levy saved between the Council, the County Council and a Growth Fund
in equal shares after a charge of 10% which is used to fund a safety net
provision. The growth fund will be used to support growth in the region.
1.8.4 The Councils own estimate of business rates has to incorporate the recent changes in exemptions announced in the autumn statement by the Chancellor of the Exchequer. The calculation given in the table below suggests that after allowance for all exemptions the Councils actual business rates income will be below safety net however the Government has confirmed that it will reimburse local authorities for the loss of business rates from its latest exemptions and these payments will form part of the levy and safety net calculations. Allowing for these payments, officers currently predict that all relevant income will be above the baseline need set out in the table above and without the Kent pool the Council would be subject to a levy at the end of 2014/15 of 50% of the increase shown in the table.
1.8.5 The main risk to
the estimate of business rates above is the level of outstanding appeals to the
Valuation Office Agency that existed at the time the new system was introduced.
In Maidstone approximately 30% of the rateable value of the borough was under
appeal on 1st April 2013 and a provision was set up to allow for
backdated payments that would be required by the pool. Provision for current
and future appeals form part of the overall mechanism of the localisation of
business rates.
1.9
Strategic
Revenue Projection and Savings Proposals
1.9.1 The strategic
revenue projection (SRP) is given at Appendix B and has been updated to
show the finance settlement figures reported verbally to Cabinet on 18 December
2013.
1.9.2 The inflation index
for business rates paid by the Council has also been adjusted. This is because
the Government has confirmed the increase at 2% whereas the inflation index
used in previous SRPs presented to the Cabinet was 3.1%. The Council Tax income
has also been adjusted to reflect the maximum increase available within a 2%
referendum limit. This is 1.99%.
1.9.3 The increase in savings requirement that this SRP identifies is £41,000 after the two adjustments above. Officers have reviewed the proposed savings for possible additions, have reviewed budgets for new items of saving and have reconsidered all growth pressures. At this late stage the proposals that came forward were proposals with an ability to influence future years savings targets and by proposing to produce the savings early increased the risk of delivery and the risk for future years.
1.9.4 One proposal has
been identified that has certainty at this late stage in the budget planning
cycle and will provide the necessary saving. The proposal is to reduce the
revenue support provided to the Capital Programme. The revenue support,
currently £0.35m, was introduced in recent years through the budget strategy
process during a period when the Council expected there would be little or no
funding for capital projects. From more recent decisions of Cabinet and Council
the future programme is supported by the full amount of new homes bonus. This
means that the revenue support now has more significance when considered
against the pressures on the SRP rather than the requirements of the Capital
Programme. This report therefore proposes the removal of that support over
2014/15 and 2015/16 and the revenue budget and capital programme reported here
incorporate the necessary changes.
1.10
Revenue
Estimates
1.10.1 A summary of the
revenue estimate by portfolio is attached as Appendix C. This also
summarises the approved use of balances. This estimate assumes the final
approval of all growth and savings set out in the SRP and savings detailed in
this report. The estimate is based upon the funding available from a 1.99%
Council Tax increase. Any alternative decision will require amendment to the
revenue estimates as set out above.
1.10.2 Details of the
savings proposals, as amended following the finance settlement, are given at Appendix
D.
Revised Estimate 2012/13
1.10.3 The revised
estimate 2013/14, shown in Appendix C, totals £26.74m. This compares to an
original estimate of £19.499m as approved by Council in March 2013. The
increase reflects the decisions of Cabinet to approve the carry forward of
resources from 2012/13 and the decision of the Leader of the Council on the use
of the revenue under spend in 2011/12 and 2012/13.
Original Estimate 2013/14
1.10.4 The estimate
2014/15, given in Appendix C, shows a cost of service estimated at £19.031m.
After net contribution from balances of £0.012m, the budget requirement for
2014/15 will be £19.019m. This figure excludes the funding of parish councils
for loss due to the local council tax support scheme that is incorporated in
the SRP at Appendix B.
1.10.5 Cabinet will recall
that the budget, as proposed in this report, has been
based on a number of initiatives completed during the year. These include:
a)
A
final refresh of the strategic plan before producing anew plan during 2014/15.
b)
A
budget consultation exercise.
c) Membership of the Kent business rates pool.
d) The introduction of a council tax
premium on long term empty homes
1.11
Statement
of Balances
1.11.1 Attached as Appendix
E is a statement of the general fund balances. The statement identifies in
detail the agreed use of balances arising from the 2013/14 budget, approved by
Council in March 2013, and subsequent decisions by Cabinet and the Leader of
the Council.
1.11.2 During the development
of the budget strategy for 2014/15 there has been one proposal for the use of
balances agreed. This is support in the medium term for the increase in
employer contributions to the pension fund deficit. This support totals £0.2m
over a three year period. In addition there is a possible need for resources to
cover the unexpected cost of the recent flood emergencies. Elsewhere on this
agenda the third quarter budget monitoring report projects an under spend at 31
March 2014 that may be available as an alternative to direct use of balances.
1.11.3 It is necessary at
this time for Cabinet to consider the level of working balances it wishes to
set for operational purposes. There are two levels set:
a)
The
first is a practical minimum below which Cabinet cannot approve the use of
balances without agreement of Council. In the past this has been set at 10% of
net revenue spend, which equates to £1.91m. However in recent years, as net
revenue expenditure has declined due to Government reductions in public sector
spending, the balance has been retained at £2m. It would be prudent to continue
at this level and Cabinet is recommended to propose this level to Council;
b) The second is an operational minimum, set for daily use of balance by Cabinet. In the past this has been £0.3m greater than the Council set practical minimum. This would be £2.3m and it is recommended that Cabinet set this operational minimum.
1.12
Council
Tax Levels
1.12.1 The SRP given at
Appendix B has been developed with a council tax increase of 1.99% which is above
the level of previously planned increase by 0.09%. The change is as part of the
proposed response to the reduction in the funding provided by the finance
settlement announced on 18 December 2013.
1.12.2 For 2014/15 and
2015/16 the Government has again offered a 1% council tax freeze grant. The
grant benefits from two issues over previous years. Firstly the fact that the
grant is paid on the gross tax base before amendment to account for local
council tax support discount and secondly that it will be rolled into the base
figures for the finance settlement.
1.12.3 A 1.99% Council tax
increase provides £0.19m additional resources in perpetuity and would cost a
band D full tax payer an additional 38 pence per month. A band D tax payer on
maximum local council tax support would pay an additional 5 pence per month.
Acceptance of a small increase of this size was responded to positively in the
budget consultation, which is detailed later in section 1.15.
1.12.4 The government
grant for a freeze on council tax would be £0.16m (1% but on a higher base
value). This would be rolled in to the finance settlement and be available long
term. However it is clear from the trend between the 2013/14 and 2015/16
finance settlement figures set out in paragraph 1.6.2, that revenue support
grant will decline to almost zero in the next five years. Business Rates Baseline
Need will remain steady over the same period. In summary the council will
initially receive additional resources from a freeze in Council Tax but should
expect those resources to decline in line with the already announced reductions
to support government austerity measures.
1.12.5 Over the five years
of the SRP the loss of resources would be a minimum of £0.16m plus any
additional reduction in the finance settlement which cannot be estimated at
this time but could be up to an additional £0.4m.
1.12.6 The Cabinet should
note that at this time the level of increase requiring a referendum has not
been announced by Central Government. The report assumes 1.99% for consistency
with the 2013/14 limit of 2%. The latest date that the Government can announce
the referendum limit is 12 February 2014, the day of the Cabinet meeting. This
is also the day that the Government will confirm as final the finance
settlement figures for 2014/15. It is possible that either or both of the
values used in developing the budget strategy will change. If necessary officers
will identify the consequences of any changes on the day of the meeting.
1.13
Strategic
Assessment of the Revenue Estimate
1.13.1 The revenue estimate for 2014/15 as detailed in this report requires net resources of £19.019m. This can be balanced by a 1.99% increase in the Council Tax charged and the additional savings from revenue support to the capital programme as set out in section 1.9. The funding is detailed in the table below:
1.13.2 Should cabinet wish
to consider an alternative approach a 1% change in Council Tax charged will
result in a £95,000 change in the level of income. Cabinet should be aware that
council tax freeze grant is offered only when there is no increase in council
tax. It cannot be claimed proportionately.
1.14
Capital
Programme
1.14.1 The Capital
Programme as agreed by the Cabinet on 18 December 2013 is given at Appendix
F with one amendment. The amendment relates to the proposal to remove the
revenue support to the capital programme as discussed in section 1.9 in order
to achieve the necessary level of savings. The programmes funding for
transport and other infrastructure has been amended to compensate as this is
not project specific funding at this time.
1.14.2 The Cabinet should
be aware that the Government is to review the new homes bonus scheme in 2014/15
and the funding set out in the programme assumes a 30% loss of funding from
2015/16 onwards. The actual review and the consequences will be considered as
part of the development of the 2015/16 budget.
1.15
Consultation
1.15.1 In recent years Cabinet
has taken a coordinated approach to the views it has sought during
consultation. This has been done with the intention of building a body of
knowledge of opinions on various elements of the budget.
1.15.2 During the
development of the 2009/10 budget strategy the consultation was through a
budget simulator to allow respondents to create their own budget and asked them
to achieve a council tax increase below 5%. The choices available for growth or
savings were larger key service areas that most respondents displayed a desire
to protect, such as refuse and street cleansing.
1.15.3 During the
development of the 2010/11 budget strategy the consultation was carried out by
formal market research. This research focused on income generating services
through consideration of price and elasticity of demand. Questions included the
preference for payment for services by council tax or by direct fee at time of
use.
1.15.4 During the
development of the 2011/12 budget strategy members and officers completed
comprehensive public engagement under the banner of My Council, What Matters
to ME which reviewed opinion on discretionary services and Cabinets proposals
for savings. It also gave an opportunity for respondents to put forward further
ideas for consideration.
1.15.5 Consultation on the
2012/13 budget followed a similar format requesting ideas for savings beyond
those already identified and an evaluation of seven statutory services that
were not placed as high priority in the Cabinets priority matrix. The
consultation looked at the potential from variations in the level of customer
service.
1.15.6 Two consultations
were carried out for the 2013/14 budget strategy. The first was on the Local
Council Tax Support Scheme proposals. The second related to alternative methods
of delivery related to the developing commissioning strategy, plans to acquire
commercial property through prudential borrowing and the channel shift strategy
through questions on the cost of contacting the Council.
1.15.7 For the 2014/15 budget the consultation has again been in two separate elements. The Council consulted on the Local Council Tax Support scheme proposals in order to ensure compliance with regulations and to confirm, after the first year of operation that the proposals for year two remained acceptable. The Council also consulted on a the budget through a series of direct questions on the sources of revenue resources. The response levels to each question are set out in Appendix G attached but of note are the following issues:
a) There is general support for the Councils proposals
b) A 52% yes answer was received to the possibility of a 36 pence per month increase in Council tax but only a 45% yes vote to a Government Maximum 2% increase. As these are essentially the same (2% would equal 38 pence per month) it indicates the influence of percentage quotes over value quotes and the need to promote to tax payers the real value of the services provided.
c) The proposal to
reduce staffing by £0.25m received a 42% no answer, combined with not sure this
was 66% of answers to the question.
1.16
Future
Actions to set the Council Tax
1.16.1 As Members will be
aware, it is a statutory requirement of this Authority to resolve the level of
Council Tax for the area. To achieve this objective the recommendations
detailed in this report need to be addressed. In addition the precepts of Kent
County Council, the Police Authority, the Fire Authority and all parish
councils are required. These will all be incorporated into a resolution to the
Council meeting on 5 March 2014.
1.16.2 The Cabinet will
note that the date of the Council meeting has been put back by one week. This
is because of the concerns expressed by major preceptors regarding the
announcement of the referendum limit arriving after their precept setting
meetings and the potential this gave for delay. By setting the date as 5 March
2014 the Council has allowed time for the preceptors to amend their precept
setting meetings if required.
1.16.3 It is the intention
of officers to collate the decisions from this meeting and incorporate them
into the necessary resolutions to achieve the above in time for the Council
meeting on 5 March 2014.
1.16.4 In addition it is
necessary for the section 151 Chief Financial Officer to give her opinion to
Council, when setting the above requirements, that the budget calculations are
based upon robust estimates and that the level of reserves is sufficient for
the purposes of the budget exercise. Based upon the process undertaken this
year, and the information contained within this report, it is not anticipated
that this opinion will include any adverse comments.
1.17
Medium
Term Financial Strategy
1.17.1 For the first time
the Council will publish two separate financial strategies. One for revenue
plans and one for capital plans. This arises from the proposals of Strategic
Leadership and Corporate Services Overview and Scrutiny Committee. The desire
of the Committee is to make the capital programme and strategy more evident and
clear. Cabinet agreed to the proposal earlier this year when considering the
Committees SCRAIP following their review.
1.17.2 Attached as Appendix
H is the Revenue Medium Term Financial Strategy (RMTFS) for 2014/15 and at Appendix
I is the Capital Medium Term Financial Strategy (CMTFS) for 2014/15. The
strategies are focused on the five year period of the Councils planning cycle.
In some local authorities plans of ten years and plans of three years are often
seen. It is considered that a three year plan is too short to meet the
requirements of the Councils strategic planning environment and that ten years
is too long a period for a reasonable level of assessment about the future to
be made.
1.17.3 The financial
projection that complements the RMTFS is given at Appendix B. It summarises the
growth and savings items detailed in Appendix C. The financial projection
considers the targeted need for growth and savings over the period of the RMTFS
and incorporates a number of assumptions about inflation and changes in local
and national initiatives. These are all detailed in the RMTFS statement given
at Appendix H.
1.17.4 Both strategies may require amendment following Cabinets consideration of this report and following consideration by Council on 5 March 2014. The final versions will be published as part of the budget documents on the Councils website following the Council meeting.
1.18
Alternative
Action and why not Recommended
1.18.1 The major
alternatives are included within the report for consideration.
1.18.2 The Cabinet could
recommend to the Council the setting of a Council Tax level greater than that
used as a planning assumption in the strategic revenue projection. The
Department for Communities and Local Government are expected to announce the
level of increase that would trigger a local referendum on Council Tax for 2014/15
on 12 February 2014 and this will be reported to the meeting if possible and
amendments may be required to the recommendations in this report. Any increase
above the limit will trigger a referendum for this Council at significant cost
and, due to the issue being tested, the most likely response to a referendum
will require the Council to reset its budget, re-bill all tax payers and incur
further additional cost.
1.18.3 The Cabinet could
chose not to accept the additional saving proposal and retain the revenue
support for the capital programme at its current level. This will mean a need
to identify further savings prior to the meeting of Council on 5 March 2014 and
seek approval from the Cabinet before the final recommendation to Council.
Officers have considered a number of alternative approaches to the additional
need for savings. The reduction in revenue support has been recommended because
it is achievable for the immediate need of the strategy at this late stage and
the full budget saving has greater impact and relevance to the revenue budget
than it does to the current capital programme.
1.18.4 The setting of a
balanced budget is a statutory obligation. To choose not to set a budget and a
Council Tax level for 2014/15 is not an option.
1.19
Impact
on Corporate Objectives
1.19.1 The capital and revenue budgets developed from this budget strategy provide resources for the achievement of corporate priorities and have been developed in conjunction with the refresh of the Strategic Plan.
1.20
Risk
Management
1.20.1 The budget strategy
process is a major element of the mitigation of the strategic risk of having
the right resources available to achieve the Councils priorities. The robust
process followed, along with the Council policy to deliver a balanced budget,
ensures that the budget produced is appropriate for the delivery of council
services.
1.20.2 The policy on balances addresses the strategic risk of budget pressures arising from unbudgeted spend or the financial consequences of unplanned costs.
1.20.3 The key risks identified during the budget strategy process and in this report are detailed in the risk assessment attached as Appendix J. The risk assessment has been considered by Audit Committee in the format given.
Other Implications
1.20.4
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1. Financial
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X |
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2. Staffing
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X |
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3. Legal
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X |
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4. Equality Impact Needs Assessment
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5. Environmental/Sustainable Development
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6. Community Safety
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7. Human Rights Act
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8. Procurement
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9. Asset Management
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1.20.5 Financial
Implications
These are dealt with comprehensively in the body of the report.
1.20.6 Staffing
Implications
The current budget provides the resources necessary to fund the proposed
staffing levels and support the Governments public sector pay strategy.
1.20.7 Legal Implications The Localism Act 2011 and the review of local government finance have introduced a number of changes to the recommendations to Council for setting the Council Tax and agreeing a balanced budget from 2013/14. These changes are the subject of national discussion and the most up to date guidance will be used at the time required to produce the report to Full Council for 2014/15. In other respects this report and the recommendations it proposes will enable Council to set a balanced budget and a Council Tax within the time limits and other constraints of legislation.
1.21 Relevant Documents
1.21.1 Appendices
Appendix A Distribution of Parish LCTS Funding 2014/15.
Appendix B Strategic Revenue Projection 2014/15 to 2018/19
Appendix C Summary Revenue Budget 2014/15
Appendix D Savings Proposals 2014/15 to 2018/19
Appendix E Statement of General Fund Balances
Appendix F Capital Programme 2014/15 to 2018/19
Appendix G Consultation Responses
Appendix H Medium term Financial Strategy Revenue 2014/15 Onwards
Appendix I Medium term Financial Strategy Capital 2014/15 Onwards
Appendix J - Risk Assessment
1.21.2 Background
None.
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IS THIS A KEY DECISION REPORT? THIS BOX MUST BE COMPLETED
Yes No
If yes, this is a Key Decision because: ..
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Wards/Parishes affected: ..
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