Agenda item

The Executive Director of Finance and Resources provided Memberswith an update on the proposed budget in the Medium Term Financial Plan 2019/20 – 2022/23 and stated that the budget would be considered by the Executive Committee on 25^th February, 2019. 

Members were informed that this was a four year plan whichcontained a number of assumptions to update it in line with the revised calculations and information from officers and Government.

At the beginning of the year it had been assumed that there would be a £475,000 gap in 2019/20.  The report set out how this gap had been addressed and how the budget had been balanced. 

The Executive Director of Finance and Resources highlighted the key features as follows:

·                Efficiency savings and unidentified pressures.

·                There was a statutory requirement that the budgets must balance in the final year.

·                Negative Revenue Support Grant – the projections included the removal of the £331k negative grant payment to Government, however, there was uncertainty about whether the Council would have to pay this in future years;

·                There was an assumption that the New Homes Bonus Scheme might change. This would have a significant impact on the budget moving forward.

Members were further advised that there was a level of uncertainty around the funding available from Government from 2020/21 onwards.  Members were referred to the table within the report which outlined the position should the New Homes Bonus not be available and with no reallocation of central funding to offset the shortfall of £1.1 million.  Members noted that this would place the Council’s finances in a very precarious position over the next four years.

Members also noted the pay policy statement.  The revised pay model had been approved pending consultation with the unions. With regards to the Council Tax, Members were proposing to increase it by 2.2 per cent rather than the 2.9 per cent maximum available to the Council without triggering a referendum.

Members subsequently discussed the following points:

·         Heads of Services, together with the Portfolio Holders, were reviewing the needs of service customers and ongoing conversations with Members were being undertaken to address the Council’s budget challenges.  There was a major concern in respect of balancing the budget for the Council.  Members were advised that the Council review the services delivered and the vision for future years.

·         Clarity was sought whether Seven Trent Water contributed towards the Council’s budget for the North Worcestershire Water Management service. 

·         Members raised concerns in respect of the increase to Members remuneration and questions were raised as to whether Members should support this due to the financial challenges facing the Council.  Members were advised that the changes had been proposed by the Independent Remuneration Panel, which had conducted a thorough investigation.

Members referred to the funding of £20k which was requested to support the Christmas lights. Concerns were raised that this was a lot of money to pay for the Christmas lights, however, there was uncertainty about whether this was for the running costs of maintaining the lights during the festive period or for the event of the switching on the lights.  Members expressed the view that businesses should be asked to contribute to the funding of the lights and that the Council should look at how to generate additional income. Members were advised that similar questions had been raised during the Executive Committee meeting on 5^th February 2019.  Officers had subsequently advised the Executive committee Members that there had been a saving made by members two years previously for £20k to be taken out of the Christmas Lights budgets for 2019/20 in the hope that external funding could be found to cover the costs. Unfortunately no funds had been forthcoming and no other budgets were available to support the lights for 2019, therefore the £20k bid had been made to support the switch on event this year.  The £20k bid that had been placed for 2019 was a one year only bid with a view to revisit options for both external funding and alternative light delivery in future years. 

Members acknowledged in order for the Council to address the challenges ahead, the Council needed to look at long-term planning in order to lessen the budget pressures.  As part of this the council had to explore  options for generating additional income, and Members suggested that this could potentially be derived from introducing charges or a voluntary contribution model for the events delivered by the Council such as the Bonfire night.

The Executive Director of Finance and Resources stated the Council was encouraging the Government to provide more funding to local government.  Responses to the Government’s consultation on Fair Funding Arrangement was being submitted by the  Council in partnership with a number of other local authorities. The result of this would be reported to Members in due course.

Members also raised concerns about the Redditch Community Lottery Scheme.  In particular, concerns were raised around the process and the extent to which the chosen insurance company would continue to work with the Council to reimburse successful participants, should a number of customers win the maximum £25,000 jackpot.  Officers agreed to obtain further information about the financial risks of the scheme to the Council.

The chair noted some concerns about the Council’s preparation in respect of addressing the budget pressures over the next four years.  Members concluded that the Executive Committee should be asked to note the concerns raised by the Overview and Scrutiny Committee. 

RECOMMENDED that  

1)        the Council should investigate the potential to introduce charges for Council events;

2)        the Council should review the local authority’s assets and look at alternative uses of these assets to generate extra income; and

3)        the Executive Committee should note the Overview and Scrutiny Committee’s concerns that there are aspects of the budget that haven’t been thought out properly, for example the increase in Members’ allowances and the long-term financial implications to the Council of the Redditch community lottery.