Agenda item

(a)  That the latest financial planning assumptions contained within the Medium Term Financial Strategy be noted.

(b)  That the creation of an efficiency statement be noted, with final sign off to approve delegated to the Section 151 Officer following consultation with the Commissioner for Finance & Strategy before the 14th October following a further cabinet update.

The Interim Assistant Director Finance & Audit introduced a report setting out the latest financial planning assumptions for future years as well as highlighting the risks associated with the 2016-17 budget proposals.

It was recognised that the Council continued to face significant financial challenges given in view of the continued major reductions in the Revenue Support Grant (RSG) and other Government funding over the period of the Medium Term Financial Strategy (MTFS).  The Cabinet noted the updated planning assumptions, including an assumed rise in Council Tax of 3.75% in the next financial year, however it was confirmed that this was an assumption for budgeting purposes and decisions would taken by Members through the normal budget setting process.  There was a savings requirement of £38m over the next four years, with £12m in 2017-18.  The financial plans may also need to be adjusted given the uncertain impact on the Council’s financial position of the significant macro-economic turbulence arising from the EU referendum.

Commissioners discussed the potential impacts of the Brexit vote, the Bellwin scheme, the progress being taken to increase income generation and the position regarding the Council’s reserves.  The current General Fund reserve was £8.1m, against a minimum of £7.3m, and it was considered this was reasonable but not excessive given the financial circumstances of the Council.  Speaking under Rule 30, Councillor Anderson asked about the current revenue position for the first quarter of 2016-17 and whether any departments were overspending.  The Officer agreed to circulate a briefing paper to all Members to update them on the in year position.  Councillor Swindlehurst queried the level of directorate pressures coming through and asked about the steps being taken to contain overspends.  It was responded that the MTFS included an assumption that directorate pressures would be contained at £2m each year which simply provided some tolerance in the model for planning purposes.

The Cabinet also considered the Government’s new financial offer to local authorities in the form a four year minimum RSG settlement.  A decision on whether to accept the offer set out in paragraph 5.5 of the report needed to be taken by October, and it was recommended that in view of the Chancellor’s decision to relax the requirement for a budget surplus by 2020 that the final decision be delegated and taken following a further report to Cabinet in September.

Resolved –

(a)  That the latest financial planning assumptions contained within the Medium Term Financial Strategy be noted.

(b)  That the creation of an efficiency statement be noted, with final sign off to approve delegated to the Section 151 Officer following consultation with the Commissioner for Finance & Strategy before the 14th October following a further cabinet update.