Decision details

To recommend to Council to agree:
(i) The budget strategy, process and timetable for the 2015/16 budget cycle.
(ii) Revised General Fund net revenue and capital spending, funding and reserves projections.

Matter for Decision: The report recommended the budget strategy for the 2015/16 budget cycle and specific implications, as outlined in the Mid-year Financial Review (MFR) October 2014 document. The report also recommended the approval of one new capital item and changes to phasing and funding proposals of the Council’s Capital Plan which would be included in the updated version published separately on the Council’s web site.

 

Decision of the Executive Councillor for Finance and Resources 

 

The Executive Councillor resolved to recommend to Council:

 

General Fund Revenue

 

i.                 To agree the budget strategy, process and timetable for the 2015/16 budget cycle as outlined in Section 1 [pages 6 to 7 refer] and Appendix A of the MFR document.

 

ii.               To agree incorporation of the budget savings and pressures identified in Section 4 [pages 16 to 18 refer]. This provided an indication of the net savings requirements, by year for the next 5 years, and revised General Fund revenue, funding and reserves projections as shown in Section 5 [page 19 refers] of the MFR document.

 

Capital

 

To agree:

 

iii.             inclusion of a new scheme in the Capital Plan relating to the replacement of an air cooling system, at a cost of £166,950 (£70,000 from existing repairs and renewals funding, the remainder from available capital funding), subject to a detailed project appraisal.

 

iv.             other changes to the Capital Plan, predominantly re-phasing as set out in Section 6 [pages 20 to 23 refer] of the MFR document.

 

Note the proposal for a focused review of the processes and procedures underlying capital planning and delivery in advance of setting the 2015/16 budget in February 2015, with a view to delivering improved, fit for purpose processes and a sustainable capital plan, as set out in Section 6 [page 23 of MFR document refers]

 

Reserves

 

v.              To agree changes to General Fund Reserve levels, with the Prudent Minimum Balance being set at £4.40m and the target level at £5.28m as detailed in Section 7 [pages 24 to 25 of the MFR document refer].

 

Reasons for the Decision: As set out in the officer’s report

 

Any alternative options considered and rejected: As set out in the officer’s report

 

Scrutiny Considerations:

 

The committee received a report from the Head of Finance.

 

At the request of Councillor Bick, the Executive Councillor for Finance and Resources highlighted the following summary of changes:

 

       i.          Substantial review of earmarked reserves: A report to the October meeting of the Strategy and Resources Scrutiny Committee would scrutinise the current high level of reserves (£24m).

     ii.          Capital Plan: A review aiming to make it more realistic, sustainable and deliverable.

   iii.          Commercial property: Ongoing review and further investment in the Council’s commercial property portfolio.

   iv.          Working with local residents: Including work on the digital inclusivity agenda and community engagement.

 

In response to member’s questions the Head of Finance said the following:

 

       i.          The level of general and specific risks identified in Appendix B (of the MFR document) is based on the judgement of officers and takes many factors into account.

     ii.          ‘Unforeseen events’ (Appendix B of the MFR document) were by their very nature unexpected, but could include things such as legal actions against the Council. Last year’s changes to Business Rates would have been an example of an ‘Unforeseen event’.

   iii.          ‘Other incomes’ (Appendix B of the MFR document) would include things outside of the Council’s control i.e. the level of income generated through car parks. A judgement would therefore be required by officers on the proposed target levels.

   iv.          The Council reviewed its budget twice a year therefore the level of reserves could be amended accordingly. It was however important not to build in too high a level of reserves.

    v.          Possible changes to the Revenue Core Grants and the New Homes Bonus (NHB) had been factored into the calculations and risk assessments.

   vi.          Whilst ongoing work on earmarked funds and the Capital Programme would have an impact on reserves, the full figures would be available as part of the final Budget Setting Report (BSR).

 

The Chair agreed to take each section of the MFR separately. 

 

Section 1:

 

No questions were raised.

 

Section 2:

 

In response to member’s questions the Executive Councillor said the following:

 

       i.          The City Council’s contribution to the City Deal would be agreed as part of the BSR.

 

The Chief Executive added the following:

 

       i.          Whilst discussions were ongoing with City Deal partners the principles had been agreed.

 

Section 3:

 

 

No questions were raised.

 

Section 4:

 

In response to member’s questions the Executive Councillor said the following:

 

       i.          The revised rental income projections for commercial property were related to two very specific issues (management issues at Lion Yard and a reduction in turnover at Jamie’s Italian). The economy was recovering and these issues were being addressed by officers.

     ii.          Whilst not an overnight process, the aim was to consolidate the Council’s portfolio of properties.

   iii.          Where there is uncertainty and/or officers are undertaking additional work on 2013/14 underspends and on-going savings (i.e. building cleaning) these figures had not yet been included in the MFR.

 

Section 5:

 

No questions were raised.

 

Section 6:

 

In response to member’s questions the Executive Councillor said the following:

 

       i.          The overall Capital Plan would be looked at as part of the BSR.

     ii.          The MFR did not simply look at delivery of the Capital Plan, but also the correct phasing of it.

 

Section 7:

 

In response to member’s questions the Head of Finance said the following:

 

       i.          A range of incomes was beneficial and the Council should seek to maximise these in a business like way.

     ii.          The City Council was currently in a good position to be independent from Government funding. 

 

In response to member’s questions the Executive Councillor said the following:

 

       i.          Acknowledged that the Council had a social element to its commercial portfolio and therefore had to manage it accordingly. It was essential to strike a balance between maximising revenue and maintaining the social dynamic. 

     ii.          Would be happy to look at setting up a property tour for new Councillors.

 

Councillor Bick proposed a separate vote on the ‘Foreword by the Leader if the Council and the Executive Councillor for Finance and Resources’ as included at pages 2-4 of the MFR.

 

The Scrutiny Committee considered the ‘Foreword’ and endorsed it by 5 votes to 3.

 

It was agreed that the recommendations would be voted on separately.

 

The Scrutiny Committee considered recommendation 2.1 and endorsed it unanimously.

 

The Scrutiny Committee considered recommendation 2.2 and endorsed it by 5 votes to 0.

 

The Scrutiny Committee considered recommendation 2.3 and endorsed it unanimously.

 

The Scrutiny Committee considered recommendation 2.4 and endorsed it unanimously.

 

The Executive Councillor approved the recommendations.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted):

 

Not applicable.