Issue - meetings

This report sets out the final proposals for the approval of the capital and revenue budgets, rent increases and council tax for 2013/2014 as proposed by Cabinet.

Discussion: 

This report presented proposals for the capital and revenue budgets and the housing revenue account (HRA) for 2013/2014. The Cabinet had considered initial budget proposals on 27 November 2012, which had been developed in accordance with the principles set out in the Medium Term Financial Plan (MTFP) 2013/2016.

Announcements subsequent to the MTFP amended several of the key assumptions underpinning the MTFP, particularly for council tax, Local Authority Central Spend Equivalent Grant (LACSEG), Early Intervention Grant (EIG) and the baseline figures for the re-distribution of business rates (NNDR). These resulted in a marked deterioration of the position and the draft budget considered by Cabinet on 27 November 2012 showed an £11.950 million gap. The report detailed how the draft budget had been constructed, in light of the final financial settlement which had been announced on 4 February 2013. 

The report set out the requirements under equality legislation and a diversity impact assessment, that aggregated the impact of reductions in funding to services, was attached at Appendix 9 to the report.

Appendix 2 to the report had been circulated to Members in Supplementary Agenda No.1. An addendum report had been tabled at the meeting in Supplementary Agenda No.2 which provided details of the outcome of discussions at the Employment Matters Committee on 19 February 2013 regarding pay negotiations, further advice on the schedule of precept dates and clarification on the title of Kent Police.

Councillor Jarrett, Portfolio Holder for Finance and Deputy Leader, stated that the unspecified savings in table 10 of the report (£589,000) would be met from areas of service supported by the Early Intervention Grant (EIG) (£400,000) and overheads charged to Public Health (£303,000), which would leave headroom of £114,000, to which £16,000 would be added from a surplus on the levies budget.

Councillor Jarrett, Portfolio Holder for Finance and Deputy Leader, during his budget speech, set out a number of additional initiatives and sources of funding:

SEN Provision (Disposal of Inspiration Centre)

South Medway Development Fund (Reserves)

Disabled Facilities Grants (Public Health reserve)         

Strood Regeneration (Reserves)

Children’s Social Care (Reserves)

Sporting Legacy (Public Health reserve)

Highways and pavements (Treasury Management)

Staff payment (Severance reserve)

Tourism bus (headroom of £130,000 set out above)

Music festival (headroom of £130,000 set out above)

River festival (headroom of £130,000 set out above)

Armed forces day (headroom of £130,000 set out above)

Transitional payment to Medway Youth Trust (Reserves)

Sport and health initiatives (Public Health Grant).

Councillor Jarrett, Portfolio Holder for Finance and Deputy Leader, supported by Councillor Rodney Chambers, Leader, proposed the recommendations in the main report, with the exception of recommendations 22.2, 22.5, 22.12 and 22.13 which were set out in the addendum report and the following written additions to the capital and revenue budgets:

Background:

This report presented proposals for the capital and revenue budgets for 2013/2014. The Cabinet had considered initial budget proposals on 27 November 2012, which had been developed in accordance with the principles set out in the Medium Term Financial Plan 2013/2016, and table 10 of the report summarised the budget changes since then.

The implications of the Local Government Finance Settlement were set out in the report. This highlighted that Medway’s Start-up Funding Assessment, which now replaced the Formula Grant, was calculated as £105.430 million and represented a decrease of £3.65% over the equivalent adjusted sum for 2012/2013 with a further decrease of 8.6% for 2014/2015.

The proposed revenue budget of £348.511 million was based on a Council Tax increase of 1.99%. It was noted that considerable effort had been made to achieve a balanced budget without seriously impacting on direct services to the public.

It was reported that proposals to leave national conditions for staff pay and allowances were ongoing and the result of these negotiations would be reported to the Employment Matters Committee on 19 February 2013 and be reported to Council on 21 February 2013.

The proposed capital programme for 2013/2014, incorporating existing schemes and new funding announcements to date, was £48.224 million. An overall summary and a summary by directorate of the proposed capital programme were attached at Appendix 2 to the report.

The report explained that the Council Plan had been developed alongside the budget setting process to ensure the link between resource and business planning was maintained. The Council Plan was considered as a separate item on the agenda.

It was noted that budget proposals had been referred to all the Overview and Scrutiny Committees for consideration. The Overview and Scrutiny Committees’ views were detailed in the report, with the recommendations of the Business Support Overview and Scrutiny Committee set out for Cabinet consideration.

The summarised Housing Revenue Account was set out in Appendix 4 to the report with the capital component in Appendix 2 to the report. A report setting out details of proposed rents for 2013/2014 was considered as a separate item on the agenda. The schedule of fees and charges was attached at Appendix 5 to the report.

The report set out the requirements under equality legislation and a Diversity Impact Assessment, that aggregated the impact of reductions in funding to services, was attached at Appendix 6 to the report.

The Cabinet agreed to consider this report as an urgent item to enable its recommendations to be forwarded to the Budget Council meeting on 21 February 2013.

This report presents the Council’s draft revenue budget for 2013/2014.  In accordance with the constitution, Cabinet is required to develop ‘initial budget proposals’ approximately three months before finalising the budget and setting council tax levels at the end of February 2013.

The draft budget is based on the principles contained in the Medium Term Financial Plan (MTFP) 2013/2016 approved by Cabinet in October and reflects the formula grant assumptions for 2013/2014 announced as part of the consultation on the Resource Review this year. 

Discussion:

The Finance Manager for Children and Adult Services introduced the capital and revenue budget and responded to Members’ questions.

The Director of Children and Adults responded to a question about how the necessary savings could be achieved over the longer term, bearing in mind the forecast budget gap was predicted to rise to £24m by 2015/2016.  She stated that work was ongoing looking at ways of working more effectively and taking difficult decisions about what services were the most important and protecting those vital services for vulnerable children and adults.  Some of these discussions were with the Medway Clinical Commissioning Group to investigate areas where joint commissioning or integrated working could bring about savings.

Decision:

The report was noted.