To agree the draft 2017/18 budget and medium term financial strategy (MTFS) for recommendation to Council on 3 February.

Please note a revised version of Appendix 2 was issued as a supplementary paper.

The leader introduced the item. He thanked all those who had contributed to the proposed budget and noted that it had been considered by both the general overview and scrutiny committee and the health and social care overview and scrutiny committee. He stated that the 2016/17 financial year was expected to be completed in budget and highlighted some of the challenges in continuing to meet the council's duties. The council was balancing the need to raise tax revenues with the fact that average incomes were lower in Herefordshire than elsewhere.

The interim director of resources clarified that the figures in recommendation (d) should read £145.025m and £350.438m in place of £145,025 and £350,438 respectively. Attention was also drawn to a minor typographical error in Appendix 1 resulting in an arithmetic error of £4k in Business rates. These figures would be amended in the report to Council.

The interim director of resources commented that:

·         the response rate to the budget consultation was lower than previous years;

·         a cumulative equality impact assessment had been carried out on the budget proposals and individual assessments would be prepared prior to consultation and delivery of each specific saving initiative;

·         the medium term financial strategy (MTFS) ran to the end of 2019/20 financial year and major changes were expected over that period e.g. the retention of business rates by the council;

·         the proposed increase in council tax of 3.9% was comprised of a 1.9% core increase and a 2% adult social care precept; and

·         the assumptions used in setting the budget had been subject to robust challenge and were considered realistic.

The interim director of resources thanked the scrutiny committees for their work and feedback. He noted that their comments had been taken on board and were reflected in the report presented to the meeting.

The chairman of the general overview and scrutiny committee thanked the members of the scrutiny committees for their work on the budget proposals. He reported that the debates held and questions raised had led to improvements to and clarifications of the budget proposals. Points of particular concern were the future retention of business rates, the transport network and the role of parish councils.

A group leader asked what proportion of the projected income from locally retained business rates was from the enterprise zone and whether recent trends in business rate income had been taken into account. The Marches LEP had reported that rates received from the zone were 36% less than had been anticipated. The interim director of resources responded that he did not have figures to hand on the proportion of business rates income coming from the enterprise zone but he was comfortable that the figures used in setting the budget were based on sound assumptions. The director for economy, communities and corporate confirmed that the previous estimates of the business rate income provided by the original consultants had been shown to be too high. The figures in the MTFS reflected recent trends in business rate income.

A group leader  ...  view the full minutes text for item 70