To approve the 2018/19 budget and updated medium term financial strategy (MTFS).

Council considered a report by the Cabinet Member Finance, Housing and Corporate Services; Setting the 2018/19 Budget and Updating the Medium Term Financial Strategy. The cabinet member introduced the report and moved the budget as set out in the papers. He made the following points:

·           The budget had taken account of the social care precept of 2%;

·           The savings proposed in the budget ensured that a balanced budget would be achieved;

·           The budget included arrangements for an increase in the level of reserves;

·           The concerns of the auditors were raised and the opinion that small authorities were at greater risk from poor local economic performance;

·           It was confirmed that the final effect of the Business Rates Retention Scheme on the county was not yet know;

·           An additional £2million had been allocated to the budget of the Children’s Wellbeing Directorate which would help support looked after children;

·           Road improvements in Herefordshire were a priority in the budget;

·           The supplement published after the despatch of full Council papers was raised which provided a corrected version of the graph concerning the base budget position in the Medium Term Financial Strategy;

·           The budget had been considered through the General Scrutiny Committee and at Cabinet; and

·           The final detail concerning the settlement from government was awaited. The Section 151 Officer had a proposed delegation in the budget to make changes in accordance with the final settlement. 

The Leader seconded the budget as set out in the papers and explained that deliberations over the precept had been prolonged. It was felt that the proposed precept was correct to meet the pressures of social care on the county. It was acknowledged that 76% of the budget would be spent on care costs.

The leader of the Its Our County (IOC) Group made the following observations:

·         Herefordshire was suffering as a consequence of austerity and city-focused government policies;

·         The difficulties faced by the county were outlined in a recent report from the County Council Network; and

·         Health and social care integration; support for small and medium sized enterprises (SMEs); recognition of creativity; and 21^st century transport solutions and sustainability were raised as priorities for the IOC group.

The leader of the Independent Group made the following observations:

·         The budget proposed contained significant risk: borrowing was becoming unmanageable and there were few assets to rely upon in future. Significant savings had been achieved but mismanagement of contracts had been wasteful and costly;

·         Increases in council tax and car parking charges were significant burdens for people at a time when wages were virtually frozen; and

·         The investment in the enterprise zone needed to realise well-paid jobs in the county but there was no evidence this was happening.

The leader of the Green Group made the following observations:

·         Withdrawal of central government funding and the ideology of the current administration at the Council had compounded problems in the county;

·         The budgets that were set by Council would balance on paper but in reality often became overspent;

·         Increasing parish precepts to  ...  view the full minutes text for item 48

To agree the draft 2018/19 budget and medium term financial strategy (MTFS) for recommendation to Council on 26 January 2018.

The cabinet member for finance, housing and corporate services presented the report and highlighted:  

·         The report seeks to put forward a balanced budget for recommendation for full council on 26 January 2018.     

·         There had been a provisional settlement announced in the middle of December 2017 which has provided certain options to be considered, in particular the government had changed the basis on which a referendum was required by increasing council tax from 2% to 3% due to the effect of inflation and other clarifications in the settlement.    

·         The 20% increase in planning fees had been approved.  

Due to the provisional settlement announcement, the cabinet member for finance, housing and corporate services was now proposing an amendment to the recommendation ii and iii so that the core council tax was increased to 2.9% (instead of the 1.9% stated in recommendation ii of the report) and the adult social care costs be reduced to 2% (instead of 3% as stated in recommendation iii of the report).   This would provide the council the same amount of revenue but would allow greater flexibility in how the money could be spent.   The adult social care precept was one off funding which may not be available the following financial year and the increase in the core council tax would be added to the base budget and therefore available the following year.    

It was proposed that an additional recommendation as set out in vii below was required to make technical, grammatical and typographical amendments to appendices 1 and 5.   Following a query from the group leader for the Green party, it was confirmed that these amendments were not material and would not need to go back to General Scrutiny Committee.   The S151 officer agreed to circulate to scrutiny committee members’ details of the changes which would be made to the documentation.  

Following a query from the cabinet member for infrastructure, the S151 officer confirmed a base budget review had taken place and where necessary adjustments to base budgets had taken place.    Details of the changes in the directorate base budgets were contained within the table at paragraph 17 of the report. 

The S151 officer confirmed that there would be no impact on the budget if the changes proposed were agreed as there would still be a 4.9% increase in council tax.  

It was noted that Local Government Association had reported that the majority of other local authorities were adding increases to the core council tax rather than the precept for adult social care due to the uncertainty over whether the adult social care funding would still be available the next year. 

The group leader for It’s Our County indicated that it would be a good idea to raise the base budget provided it did not impact on the adult social care budget.   The cabinet member for health and wellbeing confirmed that it would have no impact on his portfolio area.  

Following a question from the group leader for It’s Our County, it was confirmed that the option  ...  view the full minutes text for item 79

To seek the views of the general scrutiny committee on the budget proposals for 2018-19 and updated medium term financial strategy (MTFS).

The Committee’s views were invited on the budget proposals for 2018-19 and the updated medium term financial strategy.

Members of the Adults and Wellbeing Scrutiny Committee and the Children and Young People Scrutiny Committee had been invited to attend the meeting.  The procedure for the meeting provided for each directorate budget to be considered in turn before the General Scrutiny Committee formulated its recommendations.

The Chief Finance Officer (CFO) gave a presentation, a copy of which had been published with the agenda papers.

Adults and Wellbeing Budget

The Director for Adults and Wellbeing (DAW) commented that the budget was heavily dependent on income from people receiving services and grants.  In common with other authorities the service faced pressure from increasing costs, including an increase in the minimum wage, and demographic changes as a result of increasing numbers of people with a learning disability of working age and older people.  A range of savings had been identified but these were challenging.

The following principal points were made on the adults and wellbeing directorate budget:

Councillor J Stone as Vice-Chairman of the Adults Wellbeing Scrutiny Committee supported the comments made by the Director noting the pressures faced and the measures being put in place to address them.

Comments had also been submitted in advance by the Chairman and Vice-Chairman of the Adults and Wellbeing Scrutiny Committee.  Councillor Bowen read these to the meeting.  In summary the principal points were:

·        Confirmation was sought that the rapidly growing no of the very elderly (over 85s) been factored in to any proposals?

The DAW commented that account was taken of this point.  However, there was not a simple correlation between age and care need.

·        It was asked whether account had been taken of the rise in the number of people with learning disabilities and the additional numbers that might be expected to be generated through population growth given the proposed increase in housing in the county.

The DAW commented that the directorate was mindful of this point.  The increasing number of people with a learning disability living longer into older age had a very significant impact on the budget with the net spend now equating to the net spend on older people.  Account would be taken in the updated housing needs forecast, which was due to be complete in the new year. 

·        Public Health and other sources were seeking to encourage people to take better care of themselves and allow them to remain within their communities.  The Public Health budget should therefore be protected.  However, this was a long term project and account had to be taken of the fact that many residents aged 85+ had complex and multiple long term health needs which may require social care support.

The DAW commented that the public health budget was currently ring-fenced. The aim was to ensure that funding was spent in areas where it would have the greatest impact on public health. This was not necessarily on what would traditionally be considered “public health” issues.

·        Account  ...  view the full minutes text for item 53

To seek the views of the general scrutiny committee on the budget proposals for 2018-19 and updated medium term financial strategy (MTFS).