Agenda item

The Chief Finance Officer introduced a report which provided an update on progress towards setting the Council’s draft capital and revenue budgets for 2016/17.

A Member asked whether officers had carried out a sensitivity analysis of the impact on business rate income of a downturn in the economy. The possibility of looking at the effects of the 2007 economic downturn on business rates to gauge the likely impact was referred to.

The Chief Finance Officer replied that an extensive analysis as suggested had not been carried out but the Council was aware of the risks and also who the large business rate payers were. He felt that a bigger risk to the Council was an influx of business rate appeals and this was an issue which would be referred to in the budget report to Cabinet in February. 

Another Member referred to the fact that the current £1,500 discount for all retail, pubs, cafes (excluding banks and betting establishments) with rateable values below £50,000 would end on 31 March 2016 and asked what the Council was doing to prepare businesses for this. Reference was made to the possibility that further businesses could be lost from Chatham high street although another Member felt there were grounds for optimism given a number of new businesses were looking to locate in Chatham

The Chief Finance Officer agreed to provide a briefing note for Members on how many businesses in Medway would be affected by this change, the Council’s strategy to help them prepare for it and discussions that had taken place with the Federation of Small Businesses.

Reference was made to ongoing work to explore opportunities to generate revenue through commercial charging. Whilst it was accepted that in the current financial situation it was appropriate to look at all potential areas for income generation, some Members felt that Cabinet should balance the advantages of increased income against the risks of social exclusion as a result of increased charges.   The Chief Finance Officer responded that officers were looking at all possibilities to bridge the budget gap. He added that any budget proposals involving significant charge would include a diversity impact assessment.

In response to a query about the £6.3m public health commissioning draft budget, the Chief Finance Officer agreed to provide a briefing note on what services this was spent on.

A Member asked if a possible decrease in council tax collection rates as a result of the likely reduction in the maximum council tax discount available from 75% to 65% had been taken into account when producing the draft budget. The Chief Finance Officer responded that the Council collected a high proportion of Council Tax and that the proposed changes to the council tax reduction scheme had assumed a 1% reduction in council tax collection overall.

A Member referred to the £543,000 income included in the 2016/17 draft budget in respect of the registration and bereavement service and asked for more detail about the assumptions being made behind this figure given the market could change with the new crematoria commissioned by Gravesham Council which could impact in income to the Council’s crematoria service. The Chief Finance Officer undertook to provide this detail.

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 affect this Committee

b)     note that a briefing note on changes to business rates and the public health commissioning draft budget will be provided to the Committee

c)     ask Cabinet, when considering proposals for income generation through commercial charging, to take into account the social impact of such proposals and balance the advantages of increased income against the risks of social exclusion to Council services and facilities.