Agenda item

Emma Foy, Acting Head of Finance, outlined a report and presentation, setting out the latest projections of the Council’s revenue and capital budget for the period 2012/13 to 2015/16, which would be considered by Cabinet at its meeting on 17^th October, 2011.  The report set out a proposed strategy for securing savings requirements whilst maintaining the focus on protection for front line services wherever possible.

The Committee was remindedthat  following the change of government in May 2010, significant cuts to public sector spending had been implemented and these were in addition to the efficiency requirements the council already had in place.  Any new investment in Slough’s communities would have to be contained within the constraints of this severely restricted cash envelope. The Officer discussed the cumulative effect of the impact of the financial pressures affecting the council  and the resulting reduction in spending cuts. The Committee was referred to the detail within table 1 of the report; the SBC Medium Term Financial Model 2010/11 to 2015/16. The projected overall shortfall across the medium term period was £15 .629m and initial proposals would present savings opportunities of £8.842m, leaving a current deficit across the period of £6.787m.

For the medium to longer-term, given the scale of the expected funding reductions, it was likely that radical reform of the Council’s structure and service provision would be required. The Officer advised that the desired savings would involve the transformation of some services and different delivery methods for others but Members remained committed to protecting the interest of both existing and future staff.  It was hoped that compulsory redundancies would only be considered as a last resort and that a combination of voluntary severances or early retirement arrangements would be considered whilst securing redeployment opportunities where possible.   

The Committee noted the detail of  a number of pressures anticipated in future years, including a reduction in Council Tax Benefit funding, and other proposals which could affect future financial stability such as the transfer of responsibilities for Public Health and a single universal credit benefit system.  Members noted the detail of the £8.845m of savings required across the next 2 financial years. 

The Committee noted the latest  Revenue Budget projections arising from SBC’s current Medium Term Financial Plan for 2011/12 to 2014/15 and a number of key assumptions. It was highlighted that inflation was expected to continue to rise above  government expectations and an adjustment has been made to reflect this.  Only essential growth would be entertained and would likely be funded by finding compensatory savings. Members had agreed to further explore the potential benefits of  a LABV and this would be built into the capital financing assumptions and could  provide a short-term financial gain.  The overall HRA capital programme was £25.357m for the period 2012/13 to 2016/17 and the programmed spend for 2011/12 was £7.882m.

The Officer concluded that the main foreseen risk was that the proposed savings would not be delivered and the budget would therefore be closely monitored via the monthly financial management reports. Updated budget information, including savings achieved, would be reported to Cabinet throughout the financial year.

In the ensuing debate the Committee discussed a number if issues including the recurring under spend, the use of zero based budgets and the risk in relying too heavily on the Voluntary Sector.  The Officer was asked whether in the current economic climate it was likely that there would be  a positive take up by staff in terms of requests for Voluntary Redundancy or Early Retirement and was advised that it was likely a number of staff in their later years may wish to benefit from current pension provisions. It was confirmed that it was unlikely there would be any forced redundancies at this stage.

In response to a question regarding the Council’s debt position, the Officer advised that a lot of social care debt had accrued over the years which had been difficult to collect but tools would now be put in place to collect this.

Resolved- That the Committee note the recommendations that will be considered by  Cabinet at its meeting on 17^th October, 2011.