Issue - meetings

To receive a report from the Deputy Chief Executive (S151) to review the revised draft budget changes identified and to discuss any further changes required in order for the Council to move towards a balanced budget for 2019/20.

The Group had before it, and NOTED, a report * from the Deputy Chief Executive (S151) reviewing the revised draft General Fund budget for 2019/20.

In October there had been a predicted budget gap of £692k, however, the Council had now received the provisional grant settlement from central Government which had brought some good news. The Council had been fortunate to receive some recognition of its rurality through an increase to the Rural Services Delivery Grant. The settlement had also brought an unexpected bonus of £33k in relation to a redistribution of excess Business Rates levy. As part of the settlement the Council had also been given the freedom to raise its Council Tax by up to 3%. However, there was still a budget gap of £253k meaning that consideration needed to be given to using a temporary transfer from ear marked reserves to meet the difference needed to secure a balanced budget.

Discussion took place with regard to:

·         The Tiverton redevelopment project.

·         Public Works Loan Board (PWLB) borrowing and when it is prudent to borrow money from them and when it wasn’t.

·         Treasury decisions were made on a daily basis depending on relevant circumstances at that particular moment.

·         It was recognised that a lot of work had been undertaken to reduce the budget gap within the Council as well as receiving a better than expected settlement from Government.

·         When preparing the budget, accountants looked at every single cost centre and realigned the budget taking into consideration what had happened in the previous year. A prudent, balanced and pragmatic approach had been employed.

·         Recent funding in relation to a primary care facility in Crediton would be underwritten by the NHS. A secure contract would be drawn up to protect the Council against any loss. It was explained that institutions such as the NHS and other local authorities were amongst the most secure organisations to lend to.

·         Many local authorities carried a lot of ‘cash’ and arrangements were in place to secure the best return when lending this ‘cash’. Some investments were made in the very short term e.g. overnight whilst others were placed for a month or more. Investments were made with organisations within the Counterparty framework, whereby each had an appropriate credit rating and were considered very low risk.

Note: * Report previously circulated; copy attached to the signed minutes.