Agenda item

Report of the Executive Director of Resources

The Cabinet considered a report of the Executive Director of Resources, which presented a set of budget spending pressures and saving proposals for 2016/17 and beyond as a basis for consultation.  This was in the context of very large funding cuts across the public sector since 2010 that have affected local government disproportionately badly.

The Government’s July 2015 Summer Budget signalled a further period of public sector spending reductions and the proposals within the report included some prudent estimates about what this meant for the Council in terms of expected funding cuts.  However, the details of this would only be known both when the Government Spending Review was published on 25^th November and the Local Government Finance Settlement was announced, probably on either the 18^th or 21^st December.  These details could be significantly different to the estimates that have been built in.

The Cabinet noted that, at the start of 2016/17 budget setting, the Council faced a budget gap of £13m rising to £28m over the following three years.  The proposals in the report reduced the 2015/17 gap to £2m and maintained the medium term position at £28m.  Further details were provided on a line by line basis in Section 2 and Appendix 1 of the report submitted.

Sitting behind the overall financial approach was the Council’s commitment to protect its most vulnerable citizens and to deliver a range of core services to everyone in the City.  There were three elements in the Council’s approach that were fundamental to achieving this.  These included maintaining an absolute commitment to the growth and regeneration of the City to enable the Council to take greater control of its own financial destiny; overhauling and modernising Council services and implementing savings plans already built into the existing budget; and challenging current budget provision and technical assumptions across the Council to ensure that they could best support the medium term financial plans.

The Cabinet further noted that a large majority of the new proposals within the report submitted were technical in nature and would not affect services to the public.  The on-going process of implementing savings across a 3 year period agreed as part of the 2015/16 budget would, however, continue in the short to medium term and delivery of these savings remained crucial to maintaining a balanced budget position.

The report indicated that the most significant new savings proposals for 2016/17 included increased Council Tax revenue reflecting the growth of the City and strong collection performance and a reduction in the amount that the Council would need to set aside to repay its debt if it approved a new Minimum Revenue Provision Policy, which would form part of the final budget report in February 2016.

It was proposed that a period of consultation be undertaken on the budget proposals on the basis that the Council would increase Council Tax levels by the maximum amount allowable by Government without triggering a referendum.  The assumption was that this level would be at 2%, although it was acknowledged that this could be set lower and the threshold was unlikely to be announced before the end of January 2016.

RESOLVED that the Cabinet approve:

1.  The content of the report, the revenue spending and savings options detailed in Section 2 and Appendix 1 of the report and the broad Capital Programme proposals in Sections 2.7 and 2.8 as the basis of the Council’s budget consultation process.

2.  The proposed approach on Council Tax as set out in Section 2.9 of the report.