Agenda item

(a)  That the updated medium term financial position, the revised financial planning assumptions and the Outcomes Based Budgeting approach be noted.

(b)  That following adopted procurement rules, officers seek to tender a stock condition survey of the HRA owned Council homes expeditiously in order to inform the major contracts reprocurement exercise.

The Assistant Director Finance & Audit introduced a report which updated Commissioners on the latest medium term financial position of the Council and the steps in place to use the financial planning process to address an increase in the savings requirement.

The likely impacts on the Council savings requirement arising from the Chancellor’s Budget delivered on 8^th July were noted, including a slightly shallower trajectory of spending reductions in the next two years than had been forecast since the report had been published.  However, very large scale savings would still be required with £19m of the £35m savings programme to find over the next four years.  The MTFS model assumed a 25% year on year reduction in Government grants to 2019-20 and the position would become clearer in the Spending Review due in the autumn.  Other key risks included increased Business Rates volatility, with 67% of the business rate base being appealed, and pressures arising from welfare reforms, particularly in terms of housing.  Future financial planning processes would be based around the Five Year Plan and an outcomes based budgeting exercise was underway.

Commissioners asked a number of further questions about the likely impact of the recent Budget in terms of the profile of savings.  It was stated that the overall level of savings expected would be the same, but the profile would be less steep in 2016-17.  The Revenue Support Grant was projected to fall to less than £10m by 2019-20, which was down from circa £40m a few years ago.  Members welcomed the success of the invest to save project that had identified significant further Business Rates payable and asked that the approach be sustained to maximise revenues.  At the conclusion of the discussion, the medium term financial update was noted.

The Cabinet also considered an addendum to the report which sought approval to proceed with tender process for a stock condition survey of HRA properties.  The cost of the survey would be in excess of £250k, and it was important in supporting future decisions around the major contract recommissioning of maintenance and repairs services for housing properties.  It was therefore considered an essential project to safeguard longer term investment.  The Cabinet recognised the importance of this survey in supporting the recommissioning process which had the potential to make a significant contribution to future savings requirements, along with other major contracts.

Resolved –

(a)  That the updated medium term financial position, the revised financial planning assumptions and the Outcomes Based Budgeting approach be noted.

(b)  That following adopted procurement rules, officers seek to tender a stock condition survey of the HRA owned Council homes expeditiously in order to inform the major contracts reprocurement exercise.