Agenda item

Report of Deputy Chief Executive (Chief Finance Officer).

The committee considered the report of the Deputy Chief Executive which detailed General Fund budget proposals for 2017/2018 and the Capital Programme 2016/2021 due to be submitted to Cabinet on 8 February 2017.

Members were advised that the report set out the general fund revenue budget proposals for 2017/18 and a rolling three year capital programme 2016/21.

The budget proposals included:

·     An increase in the Council Tax in 2017/ 18 of 1.9%, the second increase in six years.

·     Dealing with reductions in Government funding of £1.5m

·     Overall savings/new income totalling £2m (13% of the net budget)

·     Efficiency savings of £0.5m (3% of the net budget)

·     Inflation and unavoidable costs of £0.4m (2.5% of the net budget)

·     Other recurring service growth of £0.3m

·     Non recurring service investments met from reserves of £0.5m

·     General Reserves averaging in excess of £4m (against a minimum recommended of £2m)

·     Capital resources of £0.5m invested in new capital schemes

The budget represented continued management of financial risks by:

·         Building on a balanced outturn position

·         Balancing the base budget requirement without needing to use reserves for recurring expenditure

·         Identifiable and deliverable savings with accountability and no general unidentified targets

·         Reserves above the minimum level

·         Providing the funding required for the Joint Transformation Programme to deliver the future savings required by the MTFS as well as capital investments in revenue generating assets

Members were reminded that the underlying methods of Local Government financing had changed significantly in recent years including the wrapping up of grants in the base “Standard Funding Assessment” notably the council tax freeze grants (2011-15), some new burdens grants and the Homelessness grant.

For Eastbourne the headline figures of the Government settlement were:

·         A further reduction in revenue support grant of £0.9m (50%) to £0.9m (reduced from £10.4m in 2010)

·         Reduction in new homes bonus of £0.2m from the 2016/17 level

·         Eastbourne would receive the second largest reduction nationally in “spending power” in the 4 year period to 2020

·         The Government headline figure was a reduction of 16.4%, however this took into account the ability to raise council tax, predicted growth in the tax base as well as increases in the new homes bonus

·         The real reduction was therefore over 40% over the period to 2020

The Government had announced that Eastbourne would receive £0.840m in total of new homes bonus (NHB) due to the growth in housing in the area (a reduction of £200k on the projection). 

The proposal was for an increase in council tax of 1.9% for 2017/18 which resulted in a Band D rate of £232.92 for Council services. This was the second increase in 6 years.

Queries were raised on the following points:

New investment income - The Deputy Chief Executive advised that income would be generated as part of the Estates function of the Council.  Further investment opportunities were being considered across Eastbourne, a strategy the Council had been pursuing for the last 18 months. An update was reported to Cabinet in December.

Contingency budget for Risk; specifically breaches of legislations such as Health and Safety and Human Rights - The Deputy Chief Executive advised that this historically related to discrepancies in benefits payments and subsequent fines imposed by the Department of Work and Pensions (DWP).   A great deal of work had been undertaken to resolve this matter and it was now considered that the allocated contingency was sufficient.

Business rate appeals – The Financial Services Manager advised that this had now been reduced to a total of approximately 150 appeals outstanding; however, the 1 April 2017 would see the introduction of a new rating system which would likely open a new raft of appeals.

Capital Programme; the differences between the committed and uncommitted sums and the expectations of Capital Receipts – the Deputy Chief Executive advised that committed spend referred to items where contracts were in place.  In addition Members were advised that the expectation of capital receipts was unchanged from the programme adopted by Full Council in 2016.

RESOLVED:  That the following be noted:

1) The General Fund budget for 2016/17 (Revised) and 2017/18 (original) as set out Appendix 1 of the report including growth and savings proposals for 2016/17 as set out in Appendix 2 of the report.

2) An increase in the Council Tax for Eastbourne Borough Council of 1.9% resulting in a Band D charge of £232.92 for 2017/18.

3) General Fund capital programme 2016/21 as set out in Appendix 3 of the report.

4) Section s151 Officers sign off as outlined in 1.6 of the report.