Issue - meetings

Budget Strategy - Risk Assessment Update

Meeting: 20/11/2017 - Audit, Governance and Standards Committee (Item 59)

59 Budget Strategy - Risk Assessment Update pdf icon PDF 65 KB

Additional documents:

Minutes:

The Committee considered the report of the Director of Finance and Business Improvement providing an update on the budget risks facing the Council.

 

It was noted that:

 

·  The core inflation assumption in the Medium Term Financial Strategy was 2% in line with the Bank of England target.  However, recent inflation figures had been significantly higher than this, and if this higher rate was sustained, then the assumptions would need to be revisited, for example with regard to pay awards.

 

·  In the short term, a measure of greater certainty had now been provided by the Government’s confirmation that the Council Tax referendum limit would be the higher of £5 or 2% in 2018/19.  However, in 2019/20, the Council still faced the likelihood that it would have to pay the Government “negative Revenue Support Grant” of £1.6m.  The position for 2020/21 onwards remained very unclear.

 

·  There had been indications in advance of the Chancellor’s budget statement on 22 November 2017 that restrictions might be introduced on local authority borrowing, and the Government had consulted on changes to the Prudential Framework.  The Medium Term Financial Strategy assumed that the Council would be able to borrow from the PWLB at competitive rates.  Depending on the nature of the restrictions, this might affect the Council’s capacity to fund its Capital Programme; an update would be provided at each meeting of the Committee.

 

·  Performance so far for the current financial year had been broadly in line with budget.  There were potential overspends in the areas of temporary accommodation and planning appeals, but it looked at this stage as though they could be offset by underspends elsewhere.  The implementation of projected increases in planning fees had been delayed due to the General Election, but the shortfall in income had been more than offset by better than budgeted income elsewhere.

 

In response to questions by Members, the Director of Finance and Business Improvement explained that:

 

·  The full budget risk register was attached to the report, but there was a need to remain alert to other potential risks that might materialise.

 

·  In terms of costs associated with planning appeals, an assumption had been made in the regular budget monitoring reports that there could be a risk of an additional £200k above what had been budgeted for.  This was a budget risk, but not of the magnitude that it needed to be included in the risk matrix.

 

RESOLVED:  That the updated risk assessment of the Budget Strategy, attached as Appendix A to the report of the Director of Finance and Business Improvement, be noted.