To receive a presentation outlining the process and key issues affecting the 2013/14 budget.

The Deputy Leader and Executive Member for Corporate Resources introduced this item, which was supplemented by a presentation from the Chief Finance Officer. The presentation specifically covered:-

·        The background and context to this year’s budget setting process, including the delayed Autumn statement by the Chancellor of the Exchequer (now scheduled for 5 December), which would have an impact on consideration of the draft budget;

·        The major funding changes being introduced by central government, including the replacement of Council Tax Benefit with a locally designed Council Tax Support Scheme, the retention of Business Rates locally and the inclusion of standalone grants within the Formula Grant, which brought additional uncertainty to the budget setting process this year;

·        A new approach to budgeting consisting of a programme of reviews with every Head of Service;

·        The lessons learned from this new approach and emerging themes;

·        A resource summary including receipt of Council Tax Freeze Grant;

·        An expenditure summary covering inflation, pressures, efficiencies and savings yet to be identified;

·        Efficiencies by directorate and financial year; and

·        Next steps for the Budget and Medium Term Financial Plan (MTFP), including scrutiny of draft budgets at the January cycle of Overview and Scrutiny Committee meetings (rather than December as previously advised).

Members of the Committee raised a number of queries during the presentation regarding the following issues, which were addressed by the Executive Member and Officers in attendance:-

·        The spread of pressures within the organisation. The Chief Finance Officer confirmed that the greatest pressures revolved around children’s and adults social care, although pressures were being experienced across all directorates. He further explained that all pressures (and efficiencies) would be the subject of further and thorough review to ensure a balanced budget going forward;

·        The confusion surrounding the Council’s ability to amend the single persons discount, as part of a locally designed Council Tax Support Scheme, which could address the funding pressure of £2.5M caused as a result of the introduction of the new Council Tax Support Scheme. The Executive Member confirmed that representations had been made to the Secretary of State for Communities and Local Government regarding this issue but that a further ministerial announcement was required to clarify the situation; and

·        Concerns regarding the potential gap between available funding and demand for services in the future, which could have a detrimental impact on the long term provision of discretionary services. The Chief Finance Officer confirmed that he was aware of a variety of modelling work, which had been undertaken to forecast national demands (and costs) on local government as a result of, specifically, an aging population but these were long term forecasts, and scenarios would differ according to local circumstances. The MTFP was designed however to address these pressures over a 4 year period.

The Committee thanked the Chief Finance Officer for an informative presentation and noted the delay in the consideration of the draft budget caused by the revised date of the Chancellor of the Exchequer’s autumn statement. Notwithstanding this delay, the Committee requested a further update regarding the budget process at its 18 December meeting (as part of the Executive Member’s standard verbal update).

As part of this item, the Deputy Leader and Executive Member for Corporate Resources also delivered another presentation, which outlined the details of a recent Capital Programme Review. The presentation specifically covered:-

·        The capital programme review process and the proposal for prudential borrowing to fund specific schemes (the BEaR project and Woodside Link);

·        Notification that a related report would be presented to the Executive’s 8 November 2012 meeting;

·        The funding details behind the BEaR project;

·        The funding details behind the Woodside Link Road; and

·        Funding risks and risk mitigation.

Members of the Committee raised a number of queries during the presentation regarding the following issues, which were addressed by the Executive Member and Officers in attendance:-

·        Confirmation that the continuing primary objective of the BEaR project was to deliver savings (when set against the alternative of increasing landfill tax without delivery of such a project). The Executive Member was content to provide such confirmation;

·        The inclusion of the prudential borrowing option within the original contract specification of the BEaR project. The Executive Member confirmed that such an option had always existed; and

·        Whilst recognising the imperative of the Woodside Link project, Members sought assurance from the Executive Member that the Council would endeavour to identify external funding for this project prior to calling upon the use of S106 contributions. The Executive Member was content to provide such assurance.

RECOMMENDATION:

That the presentations be noted.