Decision details

To agree the budget strategy and timetable for 2018/19, the net savings requirements, by year for the next 5 years, and revised General Fund revenue, funding and reserves projections.

Matter for Decision

The report presented and recommended the budget strategy for the 2018/19 budget cycle and specific implications, as outlined in the Medium-Term Financial Strategy (MTFS) October 2017 document.

 

The report also recommended the approval of new capital items and funding proposals for the Council’s Capital Plan, the results of which are shown in the MTFS.

 

The recommended budget strategy was based on the outcome of the review undertaken together with financial modelling and projections of the Council’s expenditure and resources, in the light of local policies and priorities, national policy and economic context. Service managers identified financial and budget issues and pressures and this information had been used to inform the MTFS.

 

The Committee were advised of an update to page 94:

 

2017/18 pre-planning development costs for Silver Street toilets: £70,000 £48,000.

 

Decision of Executive Councillor for Finance and Resources recommended to Council:

 

General Fund Revenue

       i.          Agreed the budget strategy and timetable as outlined in Section 1 [pages 1 to 2 refer] of the MTFS document.

 

     ii.          Agreed the incorporation of the budget savings and pressures identified in Section 4 [pages 13 to 16 refer] including an additional £100k contribution to Sharing Prosperity Fund. 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 17 refers] of the MTFS document.

 

Capital

       i.          Noted the changes to the Capital Plan as set out in Section 6 [pages18 to 23 refer] and Appendix A [pages 32 to 40 refer] of the MTFS document and agreed the new proposals:

 

Reserves

       i.          Agreed changes to General Fund Reserve levels, with the Prudent Minimum Balance being set at £5.35m and the target level at £6.42m as detailed in Section 7 [pages 24 to 27 refer] and Appendix B [pages 41 to 42 refer].

 

Reason for the Decision

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

Not applicable.

 

Scrutiny Considerations

The Committee received a report from the Head of Finance.

 

Opposition Councillors made the following comments in response to the report:

       i.          Asked what guidance had been received on the 1% cap on pay inflation?

     ii.          Queried the savings recorded as related to employee turnover, this had not been explained in the report but there had been a £400,000 saving recorded?

   iii.          Sought clarification on investment interest rate of 1%?

   iv.          Referred to the additional spending, projection and contribution to the Sharing Prosperity Fund. Queried the effectiveness of this fund and the lack of supporting evidence available. Asked if the level of delegation could be changed to allow more scrutiny of its spending.

    v.          Queried the use of resources during a time of significant change from factors such as Universal Credit. Asked why long term funding had been moved into a short term pot and to what extent was this amount was incremental?

   vi.          Referenced the £4.8million material increase put into reserves, asked why this was so large and whether the Council had missed capital expenditure in previous years?

 vii.          Referred to the £8 million Invest for Income reserve, asked how it had been built up and whether a project was in place for this to be spent on?

viii.          Asked whether the Council would consider changing the percentage of return from 5% of the £8million?

 

The Head of Finance said the following in response to Members’ questions:

       i.          There was no guidance for the rate of inflation being capped at 1% just an awareness of the trend. The Council thought it prudent to increase the allowance but this was still an assumption.

     ii.          Referred to employee turnover, over the last 2 to 3 years there had been considerable underspending on staffing costs and the budget assumptions had been changed to bring them closer to the expected outturn. Many staff had undergone incremental progression which impacted the underlying data; more staff were now at the top end which made less allowance for progression. The other assumption of underspending was due to posts being vacant between appointments of staff had not been applied consistently across departments but this was now being done.

   iii.          Outlined that a substantial amount of the £4.8million figure came from the capital carry forward and re-phasing, it balanced the capital from previous years and reflected the contribution of reserves.

   iv.          The Invest for Income fund had built up to £8 million over 5 years; nothing had come forward for appraisal yet.

 

Executive Councillor for Finance and Resources responded:

           i.          Agreed that some of the Sharing Prosperity Fund initiatives had not been effective but most had. Community Service Scrutiny Committee had reviewed it in full and felt content with the current process.

         ii.          Referred to the Invest for Income fund and highlighted that one option for its use was to use it so that the General Fund could invest in housing.

       iii.          Highlighted that the Council had a target of a 5% return on investment which ensured a surplus, there were no plans to change this policy presently.

 

Councillor Sinnott highlighted the value of the work being undertaken by the Sharing Prosperity Fund, asserting that the success and subjective outcomes of many of initiatives were not quantifiable.

 

The Committee resolved by 4 votes to 0 to endorse the recommendations.

 

The Executive Councillor approved the recommendations.

 

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

No conflicts of interest were declared by the Executive Councillor.