Issue - meetings

That the following be noted:-

i)          the Medium Term Financial Plan as at 30 September 2013 

ii)         The Organisational Change and Re-Design Plan & Budget Strategy

iii)        The approach to sharing the budget strategy and proposals with Members over the coming three months. 

The Leader of the Council introduced the report to provide Members with an update on the Medium Term Financial Plan (MTFP) 2014/15 – 2018/19.  He explained that the report had been submitted to Cabinet in October 2013 and included an updated MTFP as at 30 September 2013.  Member workshops on the 2014/15 budget were due to be held on 16 and 18 December 2013 with the scrutiny budget meetings taking place in January 2014.  The MTFP covered a five year period but the focus was on the budget for 2014/15 and the financial challenges that lay ahead.  This was an opportunity for Members to have a clear understanding of the principles that underpinned the MTFP and the workshops would allow Members to see how the principles had been applied. 

The Head of Finance detailed the background to the report and explained that the budget gap as projected at 30^th September was £16.5m for 2014/15 and £47m over the five year period of the MTFP.  This had been affected by the level of funding available to the Council, which was 80% from Welsh Government with the remaining 20% being from Council Tax.  The final settlement figure had been received the previous day which indicated that the budget gap was now £15.1m. 

The Corporate Finance Manager explained that prior to the settlement being received the funding forecasts had been revised to assume a cash reduction of 4% in both 2014/15 and 2015/16 and an assumed ‘cash flat’ position for the following years.  However the MTFP had subsequently been updated to reflect the settlement figures and also a change to the collection rate for Council Tax to 99% in line with the recent decision of Cabinet.  It was reported that the MTFP currently assumed grant levels remain the same as 2013/14 (£34.761m) as no details of any significant changes had been received at this stage.

Within the grants figure was £1.4m which was linked to the achievement of outcomes under the Outcome Agreement which the Council had with Welsh Government.  The Corporate Finance Manager advised that the MTFP assumed that all outcomes would be achieved and that the Council would receive the full grant settlement.  Each year an assessment is needed to be made on the inflationary increase required for service areas.  A detailed exercise had been carried out since May to target price inflationary increases to where there was a business need only, rather than a flat increase across all service areas.  The effect of this was to reduce the inflation provision requirement for 2014/15 from that previously assumed to £2.909m, a reduction of £1.118m.  The Corporate Finance Manager advised that no adjustment had been made at this stage for future years and the table in the report detailed the assumptions currently made. 

The full year effect of previous year budget decisions was required to be adjusted to the base budget in order to ‘follow through’ the decisions made in budgetary terms.  For 2014/15 the impact for all Service Areas  ...  view the full minutes text for item 53