Agenda item

As detailed in the recommendations.

The Leader and Cabinet Member for Finance thanked all Cabinet Members and senior officers for their work on the Council Fund Revenue Budget 2015/16 which was being considered at County Council later in the day.

He explained the total funding gap for 2015/16 was £18.265m which was a consequence of a number of impacts which were outlined in the report.  At Cabinet in December 2014, corporate and service portfolio efficiencies totalling £12.640m were reported, with a budget gap of £3.625m remaining. 

He highlighted the work undertaken to close the remaining gap since an update report was received at Cabinet in January 2015, and also the proposed changes as a consequence of the challenges and suggestions made by the Overview and Scrutiny Committees during the budget consultation process. 

The Chief Executive said the budget strategy for 2015/16 had been a major challenge for the organisation with diminishing options being available year on year to secure organisational efficiencies.  The budget for 2015/16 relied on a combination of the continued implementation of the organisational change programme and the service-level efficiencies derived from the new Chief Officer portfolio service business plans.  There was a sufficient level of confidence that the efficiency targets were achievable provided that the organisation improved its systems for programmes to co-ordinate, track and review the implementation of budget plans in each portfolio.

The Corporate Finance Manager explained that, following the update report to Cabinet in January, a further review of Non Standard Inflation (NSI), the Council Tax precepting level and drawing on reserves and balances had taken place to help achieve a balanced budget.

On NSI, there was market intelligence on fuel, energy and food prices, full details of which were in the report. 

Following a review of Council Tax levels, it was proposed that the level for 2015/16 be increased by 3.75% which equated to £37.06 on the Band D rate.  

The use of reserves and balances had previously been avoided to help balance the annual budget as, whilst it was lawful, it did pose risks.  Reserves could only be used once with the annual efficiency to be funded by them recurring year on year.  However, a modest use of reserves and balances could be used to close part of the remaining budget gap noting that the Council had only limited uncommitted reserves and balances with other demands upon them.  Those demands included the ongoing need to meet the redundancy and other exit costs of employees leaving the organisation as part of the ongoing programme to reduce workforce numbers.  Taking into account the adjustments proposed to NSI and Council Tax levels, there was still a remaining gap of £0.270m and it was proposed that it be met from transitional funding by way of the utilisation of reserves.

RESOLVED:

That the following recommendations be made to Council on 17 February 2015 for approval:

1. That the 2015/16 Council Fund Revenue Budget Requirement to be set at £249.979m (which is £1.827m below its calculated Standard Spending Assessment (5.02 of the report)
2. That there be a 3.75% increase in Council Tax at Band D and an assumed 99% collection rate (5.02 of the report)
3. Inclusion of the Outcome Agreement Grant of £1.479m in the budget (5.03 of the report)
4. Acceptance of the levels of inflation assumed in the budget (5.04- 5.06 of the report)
5. Acceptance of the amounts for transfers in and out of the settlement (5.07 of the report)
6. Inclusion of £2.853m of recurring pressures in the budget (5.08 of the report)
7. Inclusion of £0.730m of one-off costs to be funded from Reserves (5.09 of the report)
8. Inclusion of efficiencies of £12.874m in the budget (5.10 of the report)
9. The use of reserves to fund transitional funding of £0.270m pending the identification of additional efficiencies (5.11 of the report)

The contingency reserve be maintained and its use considered in the context of the overall medium term financial plan for 2015/16 and future years (6.03 of the report)