Agenda and minutes

An apology for absence was received on behalf of Councillor Gareth Prosser and it was confirmed that Councillor David Thain was attending as his substitute.

To invite Councillors to declare any Disclosable Pecuniary Interests or Other Disclosable Interests they may have in items on the agenda, and to confirm the nature of those interests, and any Party Whip.

There were no declarations of interest nor of any party whip.

To consider the latest update on the Council’s Medium Term Financial Plan 2016/17 to 2018/19.

(Additional information attached)

Officers presented a report on the subject of the Medium Term Financial Plan 2016/17 to 2018/19.  During the delivery of this presentation the following matters were highlighted for Members’ consideration:

·                The Revenue Support Grant (RSG) settlement had been decreasing in size in recent years and officers had been anticipating that the grant would be withdrawn altogether by 2020.

·                However, the RSG settlement for the Council, announced in December 2015, had been worse than anticipated requiring action to achieve a balanced budget in both 2016/17 and in subsequent years.

·                Many Councils were in a similarly difficult position having not anticipated the level of reduction and the speed at which it would come into effect.

·                The Government had changed the way it calculated the RSG, and it now took into account anticipated growth in Council Tax revenue as part of the calculation.

·                Business rates were another key source of funding for local authorities.  The Government would allow local authorities to keep 100 per cent of business rate growth in due course, but this would not come into effect until 2020/21 at the earliest.

·                The Government was working on the basis that business rate growth would be increasing nationally.  Modest growth was anticipated in Redditch and this had been taken into account in figures for the following three year period in which the Council would only be able to keep 50 per cent of business rate growth.

·                Councils would also continue to receive the business rate baseline, which was calculated by the Government.  In Redditch this was approximately £2 million per annum.

·                In line with the new process for calculating RSG contributions the Government was assessing the core spending power of Councils.  Where this was less than the amount a Council received in business rates the local authority would need to pay back funding to the Government.  It was anticipated that in Redditch this would come into effect in 2019/20.

·                The New Homes Bonus (NHB), another core source of funding for the Council, was also likely to change in due course.  The Government was in the process of consulting on potential changes which could impact on the Council’s funding in the long-term.

·                As part of changes to the NHB it was likely that a specific budget, of potentially £1.4 billion, would be allocated to NHB across the country.  Under this arrangement funding would need to be divided between Councils rather than be allocated on the basis of the number of new homes built in a given area.

·                For the first time Councils were being offered the option to seek a four year funding deal from the Government.  However, this deal related to the RSG only.

·                Local authorities had been advised that in future there would be greater flexibility over use of capital receipts from sales of surplus assets.  However, further detail remained to be provided on how this would operate and Councils would need to produce robust efficiency plans in order to qualify.

·                When calculating costs over the next three years Officers had  ...  view the full minutes text for item 72.