To receive details of the draft budget due to be presented to Cabinet on 13th February 2020.
Minutes:
The Group had before it the *draft budget report from the Deputy Chief Executive S151 presented by the Group Manager for Financial Services.
She explained that the budget gap was currently calculated at £234k and that it had risen due to the changes to the car parking charges proposals made by the Cabinet which would see a £57k reduction in projected income.
Members discussed the implications of the proposed revision of the General Reserves (General Fund) limit to £2m. The Group Manager for Financial Services explained that it was proposed that £500k was moved from the General Reserves (unallocated reserves) to Earmarked Reserves (allocated reserves).
She explained to the Group that by law the Council had to produce a balanced budget and that with a projected budget gap for 2020/2021 of £234k the default position was that the budget gap would need to found from the reserves (either the General Fund reserve or earmarked reserves) unless significant savings could be found.
Members questioned how budget gaps had been dealt with in previous years and she explained that previously the gaps had been plugged by New Homes Bonus and underspend on the agreed budgets. She explained that the New Homes Bonus revenues had significantly reduced due to changes in Government funding with further reductions proposed which would see the Grant disappear completely. It was therefore no longer the “go to” reserve to close the budget gap
The Group Manager for Finance gave further detail on the following:
· Budget proposals for 2020/2021 and the Capital Programme
· Advance payment of the next 3 years pension deficit
· The revised Medium Term Plan
· The proposed revision of the minimum General Reserves (General Fund) limit to £2m
The Group gave consideration to the following:
· The process for agreeing the budget through the Cabinet and Full Council
· The SWEEG annual subscription of £5k
· The proposed saving to remove the budget for the weed team. It was felt that the parishes in particular made use of this service and the appearance of the district was important to a great many people. The Chairman informed the Group that some parishes paid for their own weed team. The removal of this saving would add c£53k to the budget gap.
· The proposed arrangement for emptying bins on the Canal and the change of funding to DCC
· Committed expenditure due from the Tiverton Town Centre regeneration plan being postponed. The Group Manager for Financial Services confirmed that this would be an in-year cost rather than something which would be a pressure in the 2020/21 Budget.
The Group then considered the recommendations of the report individually:
1) The Group considered the updated budget proposal for 2020/2021 and discussed the removal of the weed team and it was explained that the Homes PDG had made a recommendation to the Cabinet that the proposed savings identified in relation to the weed team be removed and that the budget in this area be retained. The Group AGREED to endorse the recommendation of the Homes PDG.
(Proposed by the Cllr R L Stanley and seconded by Cllr W Burke)
2) The Group considered the proposal to make a payment in advance of the next 3 years pension deficit and AGREED to the proposal.
(Proposed by the Chairman)
3) The Group NOTED the Medium Term Financial Plan.
(Proposed by the Chairman)
4) The Group considered the proposed revision of the minimum General Reserves (General Fund Limit) to £2m and AGREED to the proposal.
(Proposed by the Chairman)
Note:
i) Councillors R L Stanley and E J Berry requested that their abstention from voting for the proposed revision of the minimum General Reserves (General Fund Limit) to £2m be recorded.
ii) *draft budget previously circulated; copy attached to the minutes.
Supporting documents: