Minutes:
The Committee had before it and NOTED a report * of the Head of Finance requesting that Members consider options available in order for the Council to set a balanced budget for 2015/16.
The Officer explained that since 2010/11 the Council had seen its Formula Grant reduced by circa £2.6m or 42% from £6.2m to the provisional figure of £3.6m announced for 2015/16. Going forward the current Government had maintained its pledge to continue the austerity programme, with most public sector commentators estimating further cuts of at least 10% per annum for the next 3 – 4 years. Once this was factored in to the Council’s Medium Term Financial Plan it was predicted that there would be a funding deficit of circa £2.1m by 2018/19. This highlighted the need to takes steps to plan for further reductions to ongoing expenditure levels.
The Head of Finance explained that at this stage the budget for 2015-16 was draft due to a number of unknowns. The Formula Grant would not be known until late in December, along with the referendum limit and the Council Tax Freeze Grant.
Senior Officers had looked at where savings could be made and these had been factored into the budget. He further explained that Leisure Services were not achieving predicted savings and that he had not yet estimated savings for the new Waste and Recycling scheme.
Reconciliation of 2015/16 budget variances
VarVVariances |
Amount £000 |
Savings identified in savings exercise |
(983) |
Cost pressures identified in savings exercise |
659 |
Formula grant cut |
656 |
Leisure savings not realised |
218 |
Waste and recycling currently at 14/15 budget and known service pressures |
97 |
Pay and price inflation – incl. pensions & NI |
160 |
Interest adjustment from HRA |
41 |
Council Tax property growth + 1.5% and reduction in Council Tax reduction grant |
(136) |
Transfer from New Homes Bonus to fund 2 new officers |
(99) |
Other costs |
37 |
Draft budget gap for 2015/16 |
650 |
General Fund Summary
|
2014/15 £’000 |
2015/16 £’000 |
2016/17 £’000 |
2017/18 £’000 |
2018/19£’000 |
Total Gross Expenditure |
36,710 |
37,012 |
37,623 |
38,037 |
38,520 |
Total Income |
(27,618) |
(28,130) |
(28,591) |
(28,307) |
(28,551) |
Net Cost of Services |
9,092 |
8,882 |
9,032 |
9,730 |
9,969 |
Investment Interest/MRP |
(44) |
45 |
(12) |
(43) |
(75) |
Cont. to/(from) Reserves |
|
(99) |
(99) |
|
|
Contribution to Capital |
125 |
125 |
125 |
125 |
125 |
Total Budget Requirement |
9,173 |
8,953 |
9,046 |
9,812 |
10,019 |
Funded by: |
|
|
|
|
|
Collection Fund Surplus |
(75) |
(50) |
(50) |
(50) |
(50) |
Formula Grant (1) |
(4,181) |
(3,525) |
(3,128) |
(2,816) |
(2,534) |
Council Tax |
(4,917) |
(5,114) |
(5,168) |
(5,253) |
(5,339) |
Total Funding |
(9,173) |
(8,689) |
(8,346) |
(8,119) |
(7,923) |
Cumulative (Surplus)/Deficit |
Nil |
264 |
700 |
1,693 |
2,096 |
Discussion took place regarding:
· A Town Centre Manager post would be funded, using the New Homes Bonus;
· Feedback from the public confirmed that the area’s most important to them had not changed;
· Updated costs for waste and recycling would be brought to the January meeting of this Group;
· The Grants budget had been reduced by £20k;
· Areas under this PDG showed an improvement of £80K on last year;
· In the summer budget meetings the Leisure Service had been targeted with achieving savings of £300K. The current savings figure shown in the report totalled £82K. This position had not been helped by changes to pension legislation which added circa £33K to salary costs.
· Universal Credit would not be implemented in Devon until 2017/18. There were ongoing problems in the pilot areas.
An update on the budget would be provided at the next meeting of this Committee.
Note: - Report previously circulated, copy attached to signed minutes.