To receive a report from the Head of Finance requesting that Members consider options available in order for the Council to move towards a balanced budget for 2017/18.
Minutes:
The Committee had before it and NOTED a report * from the Director of Finance, Assets and Resources requesting that Members consider options available in order for the Council to move towards a balanced budget for 2017/18.
The Director explained that Members had before them a compilation of reports that had been before the four Policy Development Groups and the Cabinet along with his most recent report to Cabinet. The Director explained that the budget was an evolving process, which involved a number of meetings, including one scheduled for the following week with the local business community, and that it was a statutory responsibility for Scrutiny to check and challenge the budget before it was set.
The Director outlined the contents of the report, in particular the following table which highlighted reconciliation of major budget variances.
Variances |
Amount £k |
External items outside of our control |
|
Reduced formula grant settlement |
609 |
Decrease in Housing Benefit Grant |
25 |
Pay award |
100 |
Pension provision |
35 |
Price inflation |
50 |
New Apprenticeship Levy |
40 |
Subtotal |
859 |
Other changes |
|
New apprentices |
20 |
DCC sharing of waste |
(200) |
Market Walk income |
(20) |
Increased income from CCLA investments |
(38) |
Increase in Collection Fund surplus |
(45) |
Contributions from town and parish councils |
(8) |
Increase Council tax income (£5 rise + new 200 properties) |
(176) |
Department of Work and Pensions rent |
(45) |
Additional election monies |
(29) |
Various additional fee income |
(60) |
Other net cost pressures (including reflection on 16/17 budget pressures |
161 |
Draft budget gap for 2017/18 |
419 |
The Director explained that there had been some unknowns at the time of the initial report, such as detail regarding the Revenue Support Grant.
Officers had worked hard to mitigate some of the costs identified, including waste savings sharing with Devon County Council, Market Walk at almost full occupancy, investments and calculations included an increase to Council Tax at £5 for a band D property.
The capital programme was balanced, but proposed changes to the New Homes Bonus could result in a rationalisation of plans moving forward.
The Housing Revenue Account was balanced, despite a 1% reduction in rents which was as a result of legislation.
The Director informed Members that since his initial report the Formula Grant Settlement amount had been confirmed and the New Homes Bonus had been reduced. Changes made now stipulated that Councils must build a baseline number of properties before they would become eligible to receive the bonus. In Mid Devon this was likely to mean that a claim could only be made after the completion of 130 – 140 new homes. New Homes Bonus was currently paid as a dowry for 6 years but this was reducing to 5 years and then to 4 years. Lobbying was taking place against this and the authority had written to the Minister.
The budget gap had improved to being £231k from a balanced position and further savings were identified within the report. Since issuing the report the Director had held further meetings with service managers and the gap had subsequently been reduced to just under £100k. These savings had been generated by Devon-wide Business Rate revenues, better prices and increased tonnages for recycling, investment income, rental for Station Yard and some staffing reductions among others.
The Director explained to Members that in future years he would look to find an alternative method of delivery for the budget.
Discussion took place regarding:
· The benefit of having a four year grant settlement moving forward;
· Community Engagement and reviewed methods that would provide savings;
· Garden waste income;
· The training budget;
· The Pannier Market and the business case for a canopy roof;
· Amenity car parks;
· Electric car charging points.
The Chairman thanked the Director of Finance, Assets and Resources for his comprehensive report.
Note: - Report * previously circulated and attached to Minutes.
Supporting documents: