Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), which set out proposals for the Council’s final revenue and capital budget 2018/19.

The report followed on from the Pre-Budget Report approved by Cabinet on 28^th November 2017, which had been subject to a period of public consultation.  The proposals within the report now submitted formed the basis of the Council’s final revenue and capital budget for 2018/19 incorporating the following details:

·  Gross budgeted spend of £727m (£24m and 3% higher than 2017/18).

·  Net budgeted spend of £235m (£2m higher than 2017/18) funded from Council Tax and Business Rates less a tariff payment of £9.5, due to Government.

·  A Council Tax Requirement of £127.3m (£8.7m and 7% higher than 2017/18), reflecting a Council Tax increase of 4.9% detailed in the separate Council Tax Setting report on today’s agenda.

·  A number of expenditure pressures caused by the impact of demographic pressures on Council Services.

·  A Capital Programme of £262.5m (£141.5m and 117% more than the latest estimated 2017/18 programme) including expenditure funded by Prudential Borrowing of £93m.

·  An updated Treasury Management Strategy.

The Cabinet noted that the Council’s gross and net budget figures had increased compared with 2017/18 but this still represented a real-terms reduction in resources available to the Council after taking account of inflation.

The report indicated that the financial position in the report was based on the Final 2018/19 Government Finance Settlement and incorporated reductions in funding over the next 3 years.  This position was particularly uncertain for financial year 2020/21 which could be subject to the combination of a new national Spending Review, a revised allocation model within the Local Government sector and a new national 100% Business Rates model.  As a result, there was huge uncertainty around Local Government funding which made it impossible to provide a robust financial forecast at this stage.  Nevertheless, initial assumptions and existing trends are sufficiently firm to indicate that there will in all certainty be a substantial gap for that year.  The view of the Council’s Director of Finance and Corporate Services was that the Council should be planning for such a position.

Along with the other 6 West Midlands Councils, Coventry was taking part in a 100% Business Rates Pilot scheme. This enabled the Councils to retain 99% of Business Rates income including any growth against an historic baseline which would otherwise have been returned to Government.  The financial model and assumptions that support the Pilot had been incorporated within the position reported.

The Pre-Budget Report was based on flexibility to increase Council Tax by up to 2% without holding a local referendum on the matter and further flexibility, up to a maximum of 3%, recognising the increasing pressure on Adult Social Care (ASC) services across the country.  The Government had subsequently announced that the Council Tax Referendum limit had been raised to 3%.  However, the budget recommended in the report submitted and the associated Council Tax proposals in the report that accompanied it, did not incorporate  ...  view the full minutes text for item 128