Agenda item

Discussion:

The Chief Finance Officer advised that it was still not possible to refine funding assumptions following the Chancellor’s Autumn Statement on 25 November 2015. He did not think the position would be any better or worse than the overall situation set out in the Medium Term Financial Plan.

A Member asked for clarification about the change whereby Councils would be allowed to keep 100% of business rates. The Chief Finance Officer replied that at face value an assumption could be made on what this would mean based on current business rate income. However, it was probable that other grant streams included in the Medium Term Financial Plan would be lost and more responsibilities given to local government.

A Member asked if the announcement in the Autumn statement that councils could increase council tax by up to 2 per cent, which must be spent on adult social care, would be presented as an option to Members when considering the draft budget. The Chief Finance Officer confirmed it would be but there was a significant lack of clarity still about this important announcement.

Some Members criticised the information presented as being inadequate to allow the Committee to scrutinise the draft budgets as it was required to do. Even if the information was up to date the uncertainties surrounding the Autumn Statement and the lack of a provisional finance settlement meant the process was fundamentally flawed. It was suggested that representations should be made to the Department of Communities and Local Government (DCLG) about these issues and in particular how it affected the ability of overview and scrutiny committee to scrutinise draft budgets. Following a discussion about whether representations should be sent to DCLG it was proposed and agreed that a letter be sent asking for the provisional local government finance settlement to be brought forward to allow councils to properly plan and prepare budgets, particularly given the significant budget reductions faced by councils each year.

It was argued by some Members that Cabinet repeatedly proposed draft budgets based on unrealistic assumptions. An example was given of the Looked After Children and proceedings budget which was forecast to be £27.4m in 2015/2016 in the revenue monitoring report whilst a draft budget of £24m was proposed for 2016/2017. In response to the latter point the Chief Finance Officer advised that in addition to excluding approximately £1m of support service recharges, the Medium Term Financial Plan figures were based upon known activity at the beginning of the financial year and assumptions about management action at that time and so did not reflect the continued escalation in the number of looked after children now reflected in the latest revenue monitoring.

Decision:

The Committee agreed to:

(a)       note the draft capital and revenue budget for 2016/17, proposed by Cabinet on 24 November 2015, insofar as they affected this committee

(b)       write to the Department for Communities and Local Government regarding the difficulties facing the Council as a result of the lateness of the provisional finance settlement.