Agenda item

To consider an update on the Medium Term Financial Plan.

Members considered a report which set out Officer recommendations for the General Fund revenue and Capital budget for 2017/18 to 2020/21. 

Officers provided additional explanations in relation to the financial implications of the budget in terms of the considerable pressures facing the Council over the coming 4 years due to reductions in Government funding.  Particular pressures were highlighted in terms of: reductions in the New Homes Bonus Grant and its impact; the impact of Negative Revenue Support Grant, the Localisation of the Business Rates Scheme; and the transfer from Housing Benefit to Universal Credit. 

Members were informed that, further to the provisional Settlement, announced in December, Officers had been advised that the final Settlement was not due to be discussed in Parliament until the 20th February, the day the Council was due to set its Council Tax.  It was noted that the Council Tax would, therefore, be set with estimates rather than final figures.  The ability to increase Council Tax by 2% or £5, whichever was the greater, without triggering a referendum was also highlighted with Officers advising the increase of 2% or £5 had been built into projections.  The formula grant provisional settlement, which represented a 60% decrease in comparison to the 2016/17 grant was also highlighted.  Members were further advised that the projected repayment of £331k to the Government had been built into both the 2019/20 and 2020/21 projections as Officers had projected the repayment would continue into 2020/21.  

Officers advised that clarity was still awaited from central Government on Business Rate Localisation and highlighted the £2.06m government assessment baseline for business rates in 2017/18.  It was noted that if there were to be business rate growth above the baseline, the Council would retain a proportion of the funding.    With some growth expected, Officers had built in an estimated income of £50k.   Further clarification was provided in relation to the New Homes Bonus (NHB) figures, as set out at 3.81 to 3.84 in the report, in relation to the reduction in NHB payments from six to four years and an unforeseen levy to be imposed which would result a loss of NHB funding for the first 126 additional homes built each year.

Proposals for increasing Band D Council Tax payments by £5 were highlighted as was the extension of the Capital Programme to a four year rolling plan.  Members were further updated in relation to the Efficiency Plan, approved in October 2016, with Officers advising that budgets included the delivery of the savings and income identified in the Plan for 2017/18.  It was noted, however, that moving forward changes to funding and service delivery from 2018/19 may require changes in the Efficiency Plan.

In addition to the unavoidable pressures previously identified and highlighted, Officers also reported on two revenue bids that had been proposed.  Members were informed that a report on the procurement process for a Leisure operator would be brought to Committee at the end of the Summer assuming an external procurement approach was taken.  Officers also highlighted the number of suggestions for savings that had been received from staff that had been included in the estimated budgets.  Members noted that Officers would continue to encourage staff suggestions though the year. 

The table of Budget Projections to 2020/21 (detailed at 3.16 in the report) was discussed.  Officers explained the various proposals for savings and additional income for each year with additional clarification being provided in terms of the rationale for the various proposals. 

The Chair thanked Officers for a very comprehensive report and extended his thanks to all Officers and staff who had contributed to the budget preparation process in what were unprecedented difficult financial times for the Council, particularly given reductions in grants and delays in receiving Government figures.  The Committee was informed that the Leader had written to the relevant Minister and the MP for Redditch to seek a meeting with the Minister to press home the position the Council is facing but had yet to receive a response.  

A substitute table of proposed savings and income (appended to the minutes for information) and revised recommendation 2.5 were circulated for consideration and subsequently moved and seconded.  The chair explained that the substitute table proposed a different level of balances to those set out at 3.16 in the main report.  The Administration’s proposals included retention of community events (including the Bonfire, Street Theatre and Morton Stanley Festival), free swimming to over 60’s and under 16’s and retaining Elections by thirds.  In conjunction with the proposal, and whilst recognising the difficult financial position the Council was in, Officers were requested to explore opportunities to reduce costs and generate revenue to enable the subsidy of the retained services to be reduced in the future. 

Officers responded to various queries, in particular in relation to the proposals for:  Leisure Services and the procurement of a Leisure provider; garden waste; staff turnover and vacant posts; revenue opportunities including car parking; and delivery of additional services.  The shortfall in the Market’s income was raised and Officers agreed to ask the Head of Planning and Regeneration to send Members an update on the work being undertaken in the Market.

Additional clarification was provided in relation to the proposals for Leisure Services which it was noted included the Abbey Stadium, Palace Theatre, Pitcheroak Golf Course, the Community Centres and Forge Mill.  Clarification was also provided in relation to the proposals for Kingsley and Arrow Vale Sports Centres, its impact on the schools’ capacities to absorb the sport provision currently provided and implications for staff.  

Members were advised that the Business Centres were a separate issue, in that whilst the service would sit within a Leisure Trust, they would be within the remit of the North Worcestershire Economic Development Unit.  In regard to the review of pre 9.30am concessionary bus travel and options for delivery, Officers advised that work would be done to explore other options, including the potential for other community transport schemes such as Dial-a-Ride to deliver the service. 

RECOMMENDED that

the following be approved: 

2.1           the savings and additional income that do not impact on service delivery for

·       2017/18   £1.032m

·       2018/19   £56k

2.2     the revenue bids for

·       2017/18   £80k

·       2018/19   £5k

2.3           the Capital bids of:

·       2017/18   £136k,

·       2018/19   £70k

·       2019/20   £1.508m

·       2020/21   £1.490m

2.4           the unavoidable pressures for

2017/18        £112k

2018/19        £27k

2019/20        £83k

2020/21        £25k

2.5           the release from balances (as amended) of:

                                   2017/18        £103k

                                   2018/19        £87k

                                   2019/20        £105k

                                   2020/21        £136k

2.6           the increase in Council Tax for 2017/18 of £5 per Band D equivalent;

2.7     that the budget savings and pressures for 2018/19 – 2020/21 be  subject to change due to the  potential impact of changes to service delivery and the localisation of Business Rates together with any changes to New Homes Bonus.

(Prior to consideration of this matter, Councillor Juliet Brunner declared an Other Disclosable Interest in Agenda Item 6 (Medium Term Financial Plan 2017/18 – 2020/21), in that she was a Governor of Arrow Vale Academy.  She advised that she would, therefore, withdraw from the meeting should the Committee  discuss any matters pertaining to the Arrow Vale Sports Centre.   Accordingly, she left the room for a brief period whilst discussions took place  on the Sports Centre.)