Minutes:
The Executive Director of Finance and Corporate Resources delivered a presentation which updated the Committee on the current position in respect of the Council’s budget (Appendix 3) and in so doing she highlighted the following matters:
· The Council was currently able to retain any additional growth over the baseline for growth of business rates. However, the baseline was due to be reset to the level at which business rates had already grown which would reduce the benefit of any growth to the Council in financial terms.
· The level at which the Council could increase Council Tax before triggering a referendum had been increased to three per cent. Within the Medium Term Financial Plan (MTFP) Officers would be working on the basis that there would be a 2.99 per cent increase in Council tax.
· Worcestershire Councils had been in contact with the Government to try to find out why the Worcestershire Business Rates Pilot bid had been unsuccessful. This might help to ensure the success of any future bids.
· As a consequence the Council was remaining in the Greater Birmingham and Solihull Local Enterprise Partnership’s (GBSLEP’s) business rates pool in 2018/19.
· Many local authorities had raised concerns about the need to pay the Government a negative grant from 2019/20 onwards and the government was therefore consulting on alternative funding models that could be introduced.
· Under the Local Government Funding Reform there would be a number of considerations that would be addressed by the government. However, the service specific cost drivers referred to in the Government’s consultation papers were more like to apply to social care providers than to district Councils.
· The Council had assumed that £196,000 would be recovered in New Homes Bonus (NHB) funding but unfortunately fewer planning applications had been approved in the period relating to Band D properties or higher than had been anticipated meaning that the Council could not receive this NHB funding.
· In original forecasts the budget had been designed to take into account a one per cent pay rise per annum but this had since increased to two per cent in line with the national pay agreement.
· The Senior Management Team (SMT) would shortly be meeting to discuss the budget in further detail which would involve a line-by-line review.
· The Council needed to achieve a balanced budget for 2018/19 in the MTFP. The subsequent three years covered in the plan did not necessarily have to balance.
· The Council’s proposed budget would be considered by the Executive Committee on 6th February. The Overview and Scrutiny Committee would have an opportunity to scrutinise these proposals and could report any recommendations on to Council on 19th February 2018.
Once the presentation had been delivered Members requested further information about the following matters:
· The Government’s consultation in respect of the negative grant. Officers advised that this would involve the Government reviewing the options available and consulting with local authorities about these.
· The number of Councils that would need to pay a negative grant under existing arrangements from 2019/20. Officers advised that the majority of local authorities were in this position, with Redditch Borough Council due to pay the Government a similar amount to the majority of other district Councils in Worcestershire.
· The housing development that had taken place in Redditch over the last year and the reasons why this had not been taken into account when reviewing NHB contributions. Officers advised that the majority of these houses had been Band A, B and C properties which were not covered by the NHB scheme.
· The potential for more Band D properties to be built subject to changes being made to the Council’s Local Plan.
· The availability of land within the Borough on which to build new properties.
· The development of lots of properties just outside the Borough’s borders which would mean that local authorities in those neighbouring areas would receive any associated NHB funding.
· The potential benefits of both residential and commercial development just over the border on the Borough, particularly in respect of economic development and employment opportunities.
RESOLVED that
the Medium Term Financial Plan Update Report 2018/19 to 2020/21 update report be noted.