To review the draft budget changes identified and discuss any further changes required in order for the Council to move towards a balanced budget for 2019/2020
The Group received and NOTED a *report of the Deputy Chief Executive (S151) presented by the Group Manager for Financial Services outlining the draft budget for 2019/2020.
She explained that the forecasted budget shortfall of £662K had been reduced to £253K. She stated that officers had gone into a great deal of detail and had been pragmatic in order to produce a robust budget. She confirmed that the Government settlement had come through in December and that the figures rarely changed.
She explained to the Group that a budget shortfall of £253K was not a great place to be in and if more savings could be found they would be but it would be unlikely. She stated that the budget gap would be plugged with the council’s reserves and New Homes Bonus for 2019-2020 but this would mean that the 2020-2021 budget already had a gap of £253K and this could rise to as much as £1m.
In response to a question from the Chairman she confirmed that the overall budget was £10m and that the £253k shortfall represented about 2.5% which was favourable compared to other local authorities.
She explained to the Group that the Council were lobbying the Government hard to acknowledge that rural areas could be as or more deprived that urban ones and deserved the same level of funding.
She confirmed to the Group that the provisional Capital Programme was currently being completed and would be forwarded to all Members.
In relation to the questions asked by Cllr Mrs J M Binks at public question time she reminded the Group what had been agreed by them in March 2017:
1. The Citizens Advice was granted an additional £3k per annum over the agreed £12.5K Service Level Agreement taking their annual amount to £15.5K
2. The Tiverton Market Drop in Centre was granted £3k over the next 2 years to transition from a guaranteed yearly grant to Service Level Agreements
She explained that in March 2017 there was a forecasted £18K underspend in grants funding which was to be earmarked to assist struggling agencies transition to Service Level Agreements. However this had been used, in part, to grant the additional funding to the Citizens Advice and the Tiverton Market Centre agreed by the PDG at the March meeting.
She further explained that in 2017/2018 the council had ended the year with an overspend of £72k on the budget and that the remaining reserves for grant funded agencies had been used to plug the council’s budget funding gap. She confirmed that there were now no funds left in the councils reserves specifically earmarked for grant funded agencies and that if the Group were minded to grant additional funding to the Citizens Advice this would need to be added to the forecasted £253K budget gap facing the council in 2019/2020 and be taken directly from the council’s reserves.
The Chairman explained to the Group that although they had the best intentions in March 2017 to create and make available a reserve fund for grant funded agencies that because of budget pressures the council were no longer able to offer this fund.
There was a general discussion regarding the pressures on all grant funded agencies due to reduced funding from County, District and Town Council’s and that the Service Level Agreements brought in by MDDC gave agencies some clarity about how much funding they would receive over a three year period.
The Cabinet Member for Community Wellbeing explained that the Service Level Agreements were confirmed for the remainder of the year and work would begin again in the autumn for agencies to apply for ongoing funding through new agreements due to commence in 2020.
He explained that he had attended the open sessions recently run by the Citizens Advice and had been able to confirm that all the grant funded agencies supported by MDDC worked together to refer clients. He stated that the Citizens Advice had recently been awarded the contract by the Department of Work and Pensions to give Universal Credit advice and this would be a substantial revenue stream for them moving forward.
Note: *Report previously circulated and attached to the minutes.