Agenda item

The Executive Director of Finance and Corporate Resources presented the Budget Framework Report 2019.

During the presentation of the report the following points were highlighted for Members’ consideration:

·                The report outlined the overarching objectives for the Council’s budget moving forward.

·                The Council had been issued with a Section 24 notice in July 2019 by the authority’s external auditors.  This had raised concerns about the local authority’s financial sustainability.

·                During a meeting of the Audit, Governance and Standards Committee that was due to take place on 26^th September, Members would be invited to consider the contents of an action plan that would set out the Council’s strategy to address the issues that had been raised in the Section 24 notice.

·                In 2019/20 the Council was on track to achieve projected savings that had been built into the Medium Term Financial Plan.

·                There was a gap of £1.2 million in the Council’s budget for 2020/21 and the figure increased in subsequent years.

·                The Council needed to demonstrate to the authority’s external auditors that there was a realistic financial plan in place for 2020/21.  Officers were working hard to ensure that there was a clear savings plan in place for this year and the subsequent three years of the Medium Term Financial Plan.

·                As part of this work to produce a clear financial strategy Officers were aiming to ensure that all spend related to the Council’s strategic purposes.

·                Officers were aspiring to identify more investment opportunities for the Council and these would continue to be reported to Members.

·                The capital budget was also in the process of being reviewed to ensure that all projects included on the programme would be delivered on time.  The Council had to borrow to fund capital spending and this had implications for the authority’s revenue budget, particularly when expenditure did not take place according to deadline.

·                The recent Spending Round 2019 statement had indicated that limits might be placed on the level at which Council Tax could be increased.  It was possible that the maximum increase would be either 2 per cent or £5 per household.  It was also stated that there might not be a change to the New Homes Bonus but the Council would have to wait until the settlement to get the detail on this fund.

·                The Council’s funding settlement from the Government was expected in December 2019.  This would provide greater clarity in respect of the local authority’s financial position moving forward.

·                Whilst action was being taken in relation to the Council’s budget, a freeze had been placed on central spending costs and recruitment in business critical cases.  Staff would also not be able to allocate any expenditure involving costs outside of available budgets and all such cases would be referred to the relevant Head of Service for review.

Following the presentation of the report Members discussed the various reasons why the Council had been issued with a Section 24 notice.  Reference was made to decisions that had been taken both in 2018/19 and in previous years which had impacted on the Council’s budget position.

RESOLVED that

1)        the Section 24 notice be noted and the regular reporting of the action plan once approved by the Audit, and Governance and Standards Committee through to the Executive Committee be agreed; and

2)        the overarching financial objectives and framework, to be used in developing the detailed financial plan, to enable the Council to realise savings and additional income whilst delivering the strategic priorities of the Council, be noted.