Agenda item - Budget and Council Tax Setting: 2016/2017 and Medium Term Financial Strategy

Report No: CAB/SE/16/005

Portfolio Holder: Ian HoulderLead Officer: Joanne Howlett

RECOMMENDED TO COUNCIL (23 February 2016):

That:

(1) the revenue and capital budget for 2016/2017 attached at Attachment A and as detailed in Attachment D, Appendices 1-5 and Attachment E of Report No: CAB/SE/16/005, as amended, be approved;

(2) having taken into account the conclusions of the Head of Resources and Performance’s report on the adequacy of reserves and the robustness of budget estimates (Attachment C) and the Medium Term Financial Strategy (MTFS) (Attachment D, as amended), particularly the Scenario Planning and Sensitivity Analysis (Attachment D, Appendix 5) and all other information contained in this report, Cabinetrecommends a 1.952% (£3.42 for an average Band D property) increase in council tax for 2016/2017;

(3) the Head of Resources and Performance, in consultation with the Portfolio Holder for Resources and Performance, be authorised to transfer any surplus from the 2015/2016 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 amended) as deemed appropriate throughout the year;

(4) the revised Minimum Revenue Provision (MRP) policy, as set out in section 1.8 and Attachment D Appendix 4, be adopted; and

(5) where the Council has usable capital receipts that are not needed for other purposes, delegated authority be given for the Section 151 Officer to apply, where prudent to do so, some or all of it to meet capital expenditure incurred in the current year or previous years under paragraph 23 of the 2003 Regulations to reduce or eliminate any MRP that might need to be set aside, as detailed in Attachment D, Appendix 4.

The Cabinet considered Report No: CAB/SE/16/005 (AMENDED), which presented the proposals for Budget and Council Tax Setting in 2016/2017 and the Medium Term Financial Strategy.

Councillor Ian Houlder, Portfolio Holder for Resources and Performance drew relevant issues to the attention of the Cabinet, including that Report No: CAB/SE/16/005 (AMENDED) set out details of the Council’s proposed revenue and capital budgets for 2016/2017 and the Cabinet was required to consider the 2016/2017 budget for the authority and recommend to Council the level of council tax required to help fund this budget.

In the provisional Local Government Finance Settlement for 2016/2017, it was proposed to offer a guaranteed four year Revenue Support Grant (RSG) to cover the period up to 2019/2020 to those councils that could demonstrate ongoing efficiency savings for 2016 to 2020. The Council had seen a 67% cumulative cut in revenue support grant funding over the three years from 2013/2014 to 2016/2017. Further cuts to the Revenue Support Grant element was highlighted within the provisional four year settlement, with an expectation that there would be no Revenue Support Grant available to the borough by 2019/2020. In addition, the Council Tax Freeze Grant, which incentivised councils to freeze their council tax levels had not been included in the settlement for 2016/2017 onwards. The Government had also maintained the previous years’ 2% threshold for council tax increases for 2016/2017, however the Government had widened the membership of those authorities, which now included St Edmundsbury, that could increase its proportion of council tax up to £5. This would equate to an approximate increase of 2.8% for St Edmundsbury. Therefore any council tax rise above £5 or 2.8% (whichever was the greater) would trigger a local referendum.

The Council continued to face considerable financial challenges as a result of uncertainty in the wider economy and constraints on public sector spending. In this context, and like many other councils, difficult financial decisions were needed to be made. The Council had however, an excellent track record of achieving substantial year-on-year budget savings and generating new income.

The Cabinet acknowledged the budget gap faced at the beginning of the year of £1.9 million for 2016/2017, which was in addition to the savings delivered locally by the Borough over the years and the in excess of £4 million annual shared service savings already delivered across West Suffolk with Forest Heath District Council; and that by 2019/2020, the projected budget gap amounted to £1.545 million, as contained in the Medium Term Financial Strategy (MTFS).

The Finance Team was commended for delivering a sustainable budget for 2016/2017. The figures contained in the report assumed a 1.99% increase in council tax for 2016/2017; however Councillor Houlder explained that as a result of investigations following the publication of the report, it was established that the council tax figure must be divisible by 9 (to 2 decimal places), therefore it was necessary to adjust the proposed council tax increase to 1.952%, which equated to an increase in £3.42 for an average Band D property. The council tax precept for SEBC in 2016/2017 would therefore be £178.65 for an average Band D property.

Given the financial challenges facing the Council, the Cabinet supported the proposed modest increase which would help support the closure of the budget gap in 2016/2017.

All staff and Members were then recognised for showingdedication and commitment in making the Council more efficient in delivering the necessary savings and generating income whilst maintaining the delivery of services.

RECOMMENDED TO COUNCIL: