Agenda item

This report reviews the major financial issues facing the Council in this and the next three years. It also provides a framework for the more detailed preparation of the draft Revenue Budget for 2012/15. 

Discussion:

The Finance Managers introduced the report advising that it provided the framework for the detailed preparation of the budget for 2012/2013. The committee was informed that table four of the report summarised the position for the following three years. It showed that there was anticipated to be a reduction of £3.5 million in resources available to the council. Also, the requirements of the council would increase by £6 million and therefore there was currently a funding gap of £9.5 million to be addressed in the 2012/2013 budget setting process.

The committee asked questions and made comments about the plan, including:

·        why there was no consideration in the plan for the proposed change to the benefit system?

Officers responded that there remained too much uncertainty about the changes, so no meaningful assumptions could be made and included in the plan

·        the reference to the time-limited ward improvement fund (fourth bullet point on page 40 of the agenda), did that refer to year end 2011/2012 or 2012/2013? Also, if this fund was to be withdrawn, that Members were notified as soon as possible

Officers advised that it referred to the end of the financial year 2011/2012

·        the addition of 10% inflationary pressures to some contracts

·        where did the figures for YPLA come from in Table 1, as schools would not be able to supply accurate figures at this point in the year? Also, how were the pupil premium figures determined?

Officers responded that the figures in Table 1 were factual and what the council actually received. £17.7 million was correct, at this point in time, and each term were reviewed and refined. Members were reminded that the Dedicated Schools Grant (DSG) would not impact on the General Fund

Officers agreed to circulate the detailed calculations of the pupil premium figures to the committee

·        Members questioned the new homes bonus figures

Officers explained that this had a cumulative effect over a 6 year period which was why the figures doubled year on year

·        with reference to paragraph 6.2 (page 42) of the report, Members asked why the separate Better for Less Category management project was anticipated to deliver £5 - £10 million of savings? What information sat behind this prediction?

The Assistant Director, Housing and Corporate Services, responded that this was anticipated through better procurement and commissioning of services, for example facilities management of the many properties owned by the council being run by one contractor rather than by many. There were a number of areas that could be investigated but it was not a “quick fix” option

The committee requested that a report was submitted for consideration with early views from officers on the details of the options to be looked into and further information about out-sourcing of services

·        with reference to paragraph 3.4 (page 33) of the report, the committee asked where the assumption of a nil pay increase for council staff had come from? Members were aware of the discussions and consultation about a multi-year freeze on pay increments but believed that there should be a small budget for a negotiated outcome

The Assistant Director, Housing and Corporate Services, advised that there would be a nil pay rise offer to staff. Council staff were aware of the authority’s financial position and expected this position, so officers were not expecting problems with this

·        paragraph 4.6 (page 35) of the report, with reference to the government not increasing Council Tax Freeze Grant over its four year time frame, despite more houses being built in Medway during that period. Members asked if representations had been made to government about the unfairness of this position, which would cause big problems in the future

Officers advised that they were unaware of any representations made to central government by the council on this matter

·        Members asked why there was no reference to the Member’s Priority Fund within the plan?

Officers advised that the fund remained in the capital programme which was not covered by this plan

·        paragraph 5.2 (page 38) of the report, third bullet point, budget pressures of £0.2 million could be offset by increased fees resulting from tariff increases. Members asked if officers could look at the level of recovery rates of PCN’s (Parking Charge Notices) and benchmark this against comparison authorities to see if it was possible to recover the monies by this route, rather than to increase tariffs

Decision:

The committee agreed to:

(a)   note the Medium Term Financial Plan 2012 – 2015;

(b)   request officers to provide a Briefing Note clarifying the details behind the pupil premium figures;

(c)   request the Chief Finance Officer or Deputy Leader of the Council to write to the government about the four year Council Tax grant freeze and low Council Tax base.