Decision details

To agree the budget strategy and timetable for 2019/20, the net savings requirements, by year for the next 10 years, and revised General Fund revenue, funding and reserves projections.

Matter for Decision

The report presented and recommended the budget strategy for the 2019/20 budget cycle and specific implications, as outlined in the Medium-Term Financial Strategy (MTFS) October 2018 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.

 

Decision of the Executive Councillor for Finance and Resources

Recommend Council to:

i.             Agree the budget strategy and timetable as outlined in Section 1 [pages 1 to 3 refer] of the MTFS document.

ii.            Agree the incorporation of changed assumptions and indicative net unavoidable budget pressures identified in Section 4 [pages 15 to 18 refer]. This provides 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 [pages 19 to 20 refer] of the MTFS document.

iii.           Note the changes to the Capital Plan as set out in Section 6 [pages 21 to 27 refer] and Appendix A [pages 35 to 40 refer] of the MTFS document and agree the new proposals:

 

 

iv.          Agree the remit of the Cambridge Live Development Fund (1.4.18 to 31.3.20) to support the transformation and ongoing development of Cambridge Live over the next two years subject to a maximum spend of £500,000 with full delegation for management of the Fund assigned to the Chief Executive

v.           Agree changes to General Fund Reserve levels, with the Prudent Minimum Balance being set at £5.504m and the target level at £6.605m as detailed in Section 7 [pages 28 to 31 refer] and Appendix B [pages 41 to 42 refer] of the Officer’s report.

 

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.

 

The Committee made the following comments in response to the report:

     i.        Referred to the budget pressures table on p92 of the agenda and the description ‘Allowance for risk to income streams due to reductions in economic activity’ and asked for clarification on the judgements the figures were based on as there was a £250,000 per year consecutive loss for the next 5 years. 

    ii.        Also queried what the revenue pressures were for the ‘Indicative unavoidable net revenue pressures identified by Heads of Service’ in the same table on p92 of the agenda.

   iii.        Expressed concerns regarding the contributions to reserves if this was driving the council to cuts.

  iv.        Queried section 6 of the report on p99 of the agenda and asked whether the council was trying to run the finances of the crematorium as a business to compete with private organisations.

   v.        Asked whether the decision regarding Cambridge Live on p105 of the agenda was delegated solely to the Chief Executive or if there was any consultation requirements.

 

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

     i.        The budget pressure item falling on p92 of the agenda under the description ‘Allowance for risk to income streams due to reductions in economic activity’ acknowledged risks the city council had around income and how they can impact on the council’s savings target.

    ii.        The ‘Indicative unavoidable net revenue pressures identified by Heads of Service’ consisted of statutory responsibilities and policy choices. To be able to provide a reasonable view when the budget was considered in February, it needed to highlight choices that were unavoidable against those which were opportunistic savings. There was a £1 million quantum of net pressure which she expected to see, it was not an unreasonable indication of the challenge the council may face looking to the February budget. 

   iii.        The high level of reserves was driven by the capital programme and the roll-over of capital programmes when projects slipped from one year to the next.

  iv.        Commented that the crematorium was funded from its trading account, ie: it was surplus funding and not borrowing.

 

Executive Councillor for Finance and Resources responded:

         i.        Referring to the table containing the ‘Indicative unavoidable net revenue pressures identified by Heads of Service’ this was advance warning of the challenges faced by the council, further details would be included within the budget setting report in February 2019.

       ii.        He also commented that austerity was not dead, it needed to be recognised that the Central Government grant was being cut and therefore the city council had challenges because of this.

 

The Chief Executive said the following in response to Members’ questions:

          i.       The delegation regarding Cambridge Live operated within certain criteria; there was also a promise to report back to the Environment and Community Services Scrutiny Committee. This was a financial mechanism to identify funds.  

 

The Committee considered and approved the following recommendations:

- 2.1 by 4 votes to 0.

- 2.2 by 4 votes to 0.

- 2.3 unanimously.

- 2.4 unanimously.

- 2.5 by 4 votes to 0.

 

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.