Decision details

Discussion:

The Chief Finance Officer advised that the council had expected the financial settlement for the 2011/2012 budget to be published on 2 December 2010 but it had been deferred and was announced on 13 December. Officers were currently working through the financial settlement document to identify whether existing grants remained, had been deleted or subsumed into the Formula Grant.

The committee was advised that the agenda report identified the budget requirement for each service for the next financial year. There had been no pay rises factored into this draft budget but annual increments were included even though there was an on-going consultation about these being frozen for the next financial year, as this had not yet been determined. The budget, as set out in the papers, did also not include any increase in inflation, except for a few areas where the council was obliged to do so, such as the waste contract.

The formula grant from the government had been predicted to be £90 million for the general fund but this had since been announced as £86 million, so the council would receive £4 million less than indicated in the report. Other than this figure, officers continued to unravel the financial settlement figures, as they were extremely complicated.

Members asked if this meant that the predicted gap in funding of £21 million would change. Officers responded that it was unknown at this stage but that on a ‘like for like’ basis of last year’s budget and the new financial settlement, there would be a cut in funding for next year of 11.9%. The following year would bring a further 8% cut and then there would be another two year settlement in 2013 based on a ‘revised distribution formula’.

The committee was also informed that capital funding had been halved from £30 million to £15 million with the devolved capital for schools, which was used for minor upkeep works on buildings, being cut from £4.8 million to £800,000.  The Local Transport Plan funding had also reduced from £6m to £3.8m with the major impact being on Integrated transport projects whereas the budget for the upkeep of highways had been held at present levels.

Some Members asked officers to consider the removal of the Member’s discretionary funds (£156,000) used for ward improvements, as this could help to retain several jobs, during next year’s budget setting process.

Decision:

The committee:

(a)               noted the draft capital and revenue budget for 2011/2012;

(b)               agreed to forward the programme to individual Overview and Scrutiny Committees;

(c)               agreed that the Members Discretionary Fund of £156,000 would be considered by this committee when it considered the draft budget within its remit on 27 January 2011.