Agenda and minutes

There were no disclosable pecuniary interests.

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), which calculated the Council Tax level for 2018/19 and made appropriate recommendations, consistent with the Budget Report 2018/19.

The report indicated that some of the figures and information set out within the report were identified as provisional as the Police and Crime Commissioner and the Fire and Rescue Authority precepts had not been confirmed at the time of publication.  The Police and Crime Commissioner met on 9^th February 2018 and the Fire and Rescue Authority met on 19^th February 2018 and the figures within the report were now confirmed.

The report incorporated the impact of the Council’s gross expenditure and the level of income it would receive through grants, fees and charges.  This resulted in a Council Tax requirement, as the amount that its expenditure exceeded all other sources of income.

The report included a calculation of the Band D Council Tax that would be needed to generate this Council Tax requirement, based on the City’s approved Council Tax base.  The 2018/19 Band D Council Tax that was calculated through this process had increased by £74.18 from the 2017/18 level.

As part of the Chancellor’s Autumn Statement (November 2015) it was announced that councils which provided social care to adults would be allowed to increase their share of Council Tax by up to an extra 2%, provided that the additional resources were all used to fund the increasing costs of adult social care.  This additional Council Tax charge was known as the ‘Adult Social Care (ASC) precept’.  The Government indicated that authorities could include this additional 2% precept in each year of the four year period: 2016/17 to 2019/20.

In December 2016 the Government announced that Councils could opt to bring forward some, or all, of the potential 2% ASC precept available in 2019/20 to earlier years.  However the maximum increase in any one year was limited to 3%, and the total over the three year period 2017/18 to 2019/20 was limited to the original total increase of 6%.

Coventry City Council made use of this additional flexibility in 2017/18 and increased its Council Tax by a total of 4.9%.  This was made up of a basic 1.9% increase plus a further 3% ASC precept.  In keeping with this approach, and in order to maximise the resources available to fund ASC services in the City, the recommendations within the Budget Report 2018 were passed on a proposed increase in Council Tax of 4.9%.  As in 2017/18, this was again made up of a basic 1.9% increase plus a further 3% ASC precept.

It was noted that the recommendations followed the structure of resolutions drawn up by the Chartered Institute of Public Finance and Accountancy, to ensure that legal requirements were fully adhered to in setting the tax.  As a consequence, the wording of the proposed resolutions was necessarily complex.

RESOLVED that the Cabinet recommend that Council:-

1.  Note the following Council Tax base amounts for the year  ...  view the full minutes text for item 127.

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.

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), which set out a proposed consultation response to the Fair Funding Review.

The Government issued a consultation document on 19^th December 2017 entitled “Fair Funding Review: a review of relative needs and resources.  Responses were required by 12^th March 2018.

The fair funding review would set new baseline funding allocations for local authorities by delivering an up-to-date assessment of their relative needs and resources.  The new funding allocations were expected to take effect form financial year 2020/21, at the same time as a new 75% Business Rates retention model.

Given the significance of the outcome of such a consultation it was important for the Council to add its own response, which was set out at Appendix 1 of the report submitted.  The expectation should be that such review results in a system that is evidence based and fair and the proposed responses to the consultation questions are intended to be technical in nature and/or framed is such a way that they were directed at achieving a rational and fair outcome.

The response incorporated the following broad elements:-

·  Simplicity and fairness were both appropriate principles for establishing a needs assessment but fairness was the paramount objective.

·  Agreeing the principle of using population projections in the distribution methodology including flexibility to adjust for annual shifts in population.

·  Proposing that the relative needs assessment should be refreshed annually with the results applied the year after the forthcoming year.

·  Agreeing that rurality and deprivation should be included in cost drivers in the needs assessment to the degree that the evidence demonstrates a significant link between these factors and expenditure pressure.  Rurality should not be double counted in the Area Cost Adjustment.

·  The weight of different funding formulas should be evidence based, supported by statistical analysis of actual spend levels not the judgement of central Government.

·  A preference for techniques that minimise the roles of judgement and opposition to models such as outcome based regression in which authorities are funded according to the success in delivering outcomes.

·  Outliers identified during the statistical analysis may warrant a separate approach, which could include the allocation of specific grants.

·  Agreement that the service specific cost drivers set out in the consultation appeared to be broadly appropriate.

RESOLVED that the Cabinet recommend that Council approve the attached consultation response to be sent to the Ministry of Housing, Communities and Local Government.

There were no other items of public business.