Agenda item

Report of the Executive Director of Resources

The Cabinet considered a report of the Strategic Management Board, which set outlined the Councils proposed revenue and capital budget for 2016/17 following a period of public consultation.

The allocation of Government funding for 2016/17 was confirmed in the Local Government Finance Settlement announced on 8^th February 2016.  The Settlement signalled a continued reduction in local government funding over the next 4 years with a planned reduction of £40m in Coventry’s Settlement Funding Assessment – the sum of Revenue Support Grant, Top-Up Funding and an estimate of Coventry’s local share of Business Rates.

The Cabinet noted that in previous years, the Council had the flexibility to increase Council Tax by up to 2% without holding a local referendum on the matter.  The Pre-Budget Report was approved on the basis of consulting on a Council Tax rise of 1.9%.  However, in recognition of the increasing pressure on Adult Social Care services across the country, the Government had increased this flexibility by a further 2%, up to a maximum of 4%.  The recommended budget assumed the taking up of this additional 2% flexibility  in order to increase the resources available to fund Adult Social Care services in the City.  As a result, the budget was being proposed on the basis of increasing the Council Tax by 3.9%.  This proposed increase would be the equivalent of between 70p and 80p per week for a typical Coventry Household.

The overall budget reflected reductions in Government funding that had already been anticipated and savings programmes that were approved as part of the 2015/16 budgeting setting.  Going into the 2016/17 budget setting, the Council faced a financial gap of £13m and a new financial pressure of £10m had emerged since, in particular in relation to Adult Social Care.  These have been balanced by higher than planned resources available to the Council, as well as a series of savings options to balance the budget.  Overall the report incorporated a package of changes that allowed the Council to continue to deliver its key policies, as set out in the Council Plan.

Despite the financial pressure it faced, the Council was maintaining an ambitious approach to investing in the City.  The proposed capital progamme amounted to £117m in 2016/17 and included major schemes such as the Friargate and the City Centre Leisure facility developments and the Coventry Station Master Plan.

The annual Treasury Management Strategy, incorporating a revised Minimum Revenue Provision Policy, was also proposed, covering the management of the Council’s investments, cash balances and borrowing requirements.

RESOLVED that the Cabinet recommend that Council:

(1)  Approve the spending and savings proposals in Appendix 2 of the report submitted.

(2)  Approve the total 2016/17 revenue budget of £693m in Table 1 and Appendix 3 of the report submitted, established in line with a 3.9% City Council Tax increase and the Council Tax Requirement recommended in the Council Tax Setting Report.

(3)  Note the Executive Director or Resources’ comments confirming the robustness of the budget and adequacy of reserves in Sections 5.1.3 and 5.1.2 of the report.

(4)  Approve the Capital Programme of £117m for 2016/17 and the future years’ commitments arising from this programme of £170m between 2017/18 to 2019/20, as detailed in Section 2.3 and Appendix 4 of the report.

(5)  Approve the proposed Treasury Management Strategy for 2016/17 in Section 2.4 of the report, incorporating the revised Minimum Revenue Provision Policy, the revised Investment and Strategy and Policy at Appendix 5 for immediate implementation and the prudential indicator and limits described in Section 2.4.11 and summarised in Appendix 6 of the report.