Agenda item

Report No:   CAB/SE/18/011

Portfolio Holder: Ian HoulderLead Officer: Rachael Mann

RECOMMENDED TO COUNCIL: (20 February 2018)

That:

(1)     the revenue and capital budget for 2018-2022 contained in Attachment A, and as detailed in Appendices 1-5  of Attachment D, Attachment E and F, as all attached to Report No: CAB/SE/18/011,  be approved;

(2)     having taken into account the conclusions of the Assistant Director (Resources and Performance) report on the adequacy of reserves and the robustness of budget estimates (Attachment C) and the Medium Term Financial Strategy (MTFS) (Attachment D), particularly the Scenario Planning and Sensitivity Analysis (Attachment D, Appendix 5) and all other information contained in Report No: CAB/SE/18/011, Cabinet recommends a 0% increase in council tax for 2018/2019, which is in line with the approved business case for the creation of a single council  for West Suffolk. The level of Band D council tax for 2018/2019 therefore be set at £182.16. (Note: the level of council tax beyond 2018/2019 will be set in accordance with the annual budget process for the relevant financial year);

(3)     the Assistant Director (Resources and Performance), in consultation with the Portfolio Holder for Resources and Performance, be authorised to transfer any surplus from the 2017/2018 revenue budget to the Invest to Save Reserve as detailed in paragraph 1.9.4, and to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the year;

(4)     acceptance of the offer for St Edmundsbury Borough Council to participate in the Business Rate Pilot for 2018/2019, as set out in paragraphs 1.2.7-1.2.9 of Report No: CAB/SE/18/011; and

(5)     approval is given to the Assistant Director (HR, Legal and Democratic Services), in consultation with the relevant service Assistant Director, to determine the establishment and the employment arrangements to deliver the West Suffolk Councils’ priorities within agreed budgets and the principles of the MTFS, as set out in paragraphs 1.7.1 to 1.7.7 of Report No: CAB/SE/18/011.

The Cabinet considered Report No: CAB/SE/18/011, which presented the proposals for Budget and Council Tax Setting in 2018/2019 and the Medium Term Financial Strategy 2018-2022. 

Councillor Ian Houlder, Portfolio Holder for Resources and Performance drew relevant issues to the attention of the Cabinet, including that Report No: CAB/SE/18/011 provided details of the Council’s proposed revenue and capital budgets for 2018/2019 and in the medium term, and the Cabinet was required to consider the 2018/2019 budget for the authority and recommend to Council the level of council tax required to help fund this budget.

In light of the significant transformation in the funding of local services, the Council continued to face considerable financial challenges in the short, medium and longer term.  Changes included reductions in Government grant funding, including the removal of the Revenue Support Grant; more business rates being retained locally (and the uncertainty around how that was going to work); plus the introduction, and then reduction of New Homes Bonus.  Further details and the implications of these particular matters were detailed in the report. 

Alongside these reductions, was the lowest bank base rate for years therefore the Council’s income from interest was significantly reduced, together with the Council experiencing an increased demand in some services, such as support and advice relating to housing options and homelessness.  Council tax increases had been capped at 3% (previously 2%) but this local tax raised only one fifth of the Council’s income for local services.  National policy encouraged councils to grow their local, and therefore UK, economy by supporting business, investment and housing to bring in income.  Bridging the gap between income and demand was the single biggest challenge facing local government across the country.

St Edmundsbury Borough Council had been working in partnership with Forest Heath District Council (the West Suffolk councils) since 2010 and had saved in excess of £4 million annually through sharing services. The Councils were continuing this savings and transformation theme through the creation of a new single Council from April 2019, with a further £800,000 of savings and efficiencies planned.

The West Suffolk Councils had recognised and taken a proactive investment  role, not only to meet the challenges brought by funding for councils, but also importantly to manage growth and ensure prosperity for the local communities.  It was therefore imperative that the income received now was maintained and that the strategic investment projects were delivered, particularly as moving into 2018/2019, further reliance was held upon their delivery to secure sustainable budgets in the medium and longer term. Section 1.1.5 and 1.1.6 provided further detail on this within the context of meeting the priorities of the West Suffolk Strategic Framework and the new Overarching West Suffolk Growth Investment Strategy (proposed to be adopted by Council on 20 February 2018).

Section 1.2 of the report provided details of the Council’s total formula grant for 2018/2019 (which included Revenue Support Grant (RSG) and Baseline Funding from retained business rates - before growth) which was £2.689m.  The reduction in RSG to zero in 2019/2020 had been confirmed.  This section also provided an explanation of the Business Rates Retention scheme, including  the offer for the Borough Council to participate in the Suffolk Business Rates pilot scheme for 100% business rates retention in 2018/2019.  Based on the proposal submitted, the West Suffolk Councils were looking to receive a one-off benefit in 2018/2019 of approximately £2.6m.

Further to the above regarding supporting the delivery of ambitious current and future projects, Section 1.7 of the report provided details of skills and capacity challenges faced by the West Suffolk Councils.  Recognition had been given to a requirement to increase capacity, primarily regarding delivery of the Councils’ growth agenda, and skills where needed to ensure the recognised income challenges were overcome.   A recommendation for the creation of capacity through making appropriate additions to the West Suffolk Councils’ staffing establishment in order to support their priorities was therefore considered.

Having acknowledged the issues highlighted above, the Cabinet noted the position summarised in Sections 1.4 to 1.13 of the report for securing a balanced budget for 2018/2019 and over the medium term to 2021/2022, which was based on an assumption of a 0% increase in council tax for 2018/2019.  This was in line with the approved business case for the creation of a new single Council for West Suffolk.  The level of Band D council tax for 2018/2019 would be set at £182.16; and it was noted that the level of council tax beyond 2019 would be set in accordance with the annual budget process for the relevant financial year.

Given the financial challenges facing the Council, as detailed above and together with the increased cost of inflation and changes required to some budget assumptions including pay inflation, the Cabinet commended staff and Members for showing dedication and commitment in making the Council more efficient in delivering the necessary savings and generating income whilst continuing to maintain the delivery of excellent services. 

RECOMMENDED TO COUNCIL:

That:

(1)    the revenue and capital budget for 2018-2022 contained in Attachment A, and as detailed in Appendices 1-5  of Attachment D, Attachment E and F, as all attached to Report No: CAB/SE/18/011,  be approved;

(2)    having taken into account the conclusions of the Assistant Director (Resources and Performance) report on the adequacy of reserves and the robustness of budget estimates (Attachment C) and the Medium Term Financial Strategy (MTFS) (Attachment D), particularly the Scenario Planning and Sensitivity Analysis (Attachment D, Appendix 5) and all other information contained in Report No: CAB/SE/18/011, Cabinet recommends a 0% increase in council tax for 2018/2019, which is in line with the approved business case for the creation of a single council  for West Suffolk. The level of Band D council tax for 2018/2019 therefore be set at £182.16. (Note: the level of council tax beyond 2018/2019 will be set in accordance with the annual budget process for the relevant financial year);

(3)    the Assistant Director (Resources and Performance), in consultation with the Portfolio Holder for Resources and Performance, be authorised to transfer any surplus from the 2017/2018 revenue budget to the Invest to Save Reserve as detailed in paragraph 1.9.4, and to vire funds between existing Earmarked Reserves (as set out at Attachment D, Appendix 3) as deemed appropriate throughout the year;

(4)    acceptance of the offer for St Edmundsbury Borough Council to participate in the Business Rate Pilot for 2018/2019, as set out in paragraphs 1.2.7-1.2.9 of Report No: CAB/SE/18/011; and

(5)    approval is given to the Assistant Director (HR, Legal and Democratic Services), in consultation with the relevant service Assistant Director, to determine the establishment and the employment arrangements to deliver the West Suffolk Councils’ priorities within agreed budgets and the principles of the MTFS, as set out in paragraphs 1.7.1 to 1.7.7 of Report No: CAB/SE/18/011.