To provide an updated budget position for 2013/14 and confirm the current financial planning assumptions as well as the approach being taken around the Root and Branch process for budget setting.

The Cabinet Member Financial Management presented the report of the Chief Officer Finance and Commercial to Cabinet, which outlined the current budget position and the assumption for the next three years.  The following points were made in discussion:

·         Government funding figure should be announced on 19 December and it is expected there will be a considerable funding decrease.

·         Autumn statement indicated there would be further reductions and it was estimated that there would be a reduction of £3.5m a year for the next two/three years.

·         Due to previous government grants there had been a council tax freeze, which had been in place for two years.  The latest grant was for 2012/13 only and was not in future years’ government grant funding.

·         As a result of Cabinet budget planning it is proposed that there should be a council tax increase of 1.9% to ensure public services are maintained.

The Chief Officer Finance and Commercial made the following points to Cabinet:

·         Cabinet’s attention was drawn to page 9 of the report referring to council tax referendums, and informed Cabinet that under new government legislation in the Localism Act of 2011, a council tax referendum could be triggered should the council exceed an increase in council tax level set by central government.

·         The threshold for a council tax increase above which a referendum is required has been set at 2% for 2013/14.  The referendum requirement replaces the government’s former council tax capping regime.  It was noted that a referendum could be held at any time.

·         Page 10 of the report sets out the overall approach and financial principles for setting the 2013/14 budget.  In referring to paragraph 10.7 (f) of the report Cabinet noted the additional £2m contribution to reserves for the 2013/14 budget.

·         In referring to the Local Government settlement announcement expected on 19 December Cabinet was reminded that it was still only provisional until it was put before parliament in January 2013.  However, latest planning assumption was that funding would reduce by in excess of £5m in 2013/14 which is on top of a reduction of £3.576m in 2012/13 and a further estimated reduction of £4.654m in 2014/15.

·         The Root and Branch process was seeking a 20% saving across all areas of the authority, looking for savings of £10m in 2013/14 with more in future years. 

·         The public engagement seminars Your Community Your Say would help in the shaping of the budget.

The Chairman of the General Overview and Scrutiny Committee addressed Cabinet and stated that based on the report Scrutiny had received it had been assumed that Cabinet was committed to a 1.9% council tax rise, which scrutiny did not believe was advisable and which could have a considerable effect on families.  In response the Leader of the Council stressed that the 1.9% was merely a guide for officers to work to and referred Cabinet to the revised recommendation before them.  The Leader added that any increase could only be agreed by a meeting of the full Council. 

In response to a question on possible problems with partner organisations impacting on the Council, the Leader stated that there was significant pressure on the Council and national health budgets.  In response to comments on the engagement carried out with residents and councillors, the Leader agreed that further discussion was needed with all groups as we go through the process.  Cabinet agreed the revised recommendations.

RESOLVED

                        THAT:

a)    The current position be noted;

b)    It be confirmed that a council tax increase of 1.9% could be assumed for budget planning purposes, which would be ring fenced for Adult Social Care and Children’s Services as part of bridging the budget gap; and

c)    The scrutiny committees be requested to look at the People’s Services directorate budget plans to ensure it is robust and deliverable.