To agree the draft medium term financial strategy for 2015/16 to 2016/17 and the 2015/16 revenue budget for recommendation to Council on 6 February 2015.

The chief financial officer outlined the proposals to be recommended to council including the 2015/16 revenue budget, council tax increase, draft  medium term financial strategy, and treasury management strategy. It was noted that the council was predicted to spend within its budget in 2014/15.

The chairman of general overview & scrutiny committee noted that, in reviewing the proposals the committee had not made any recommendations for substantive change. Concern was expressed about the challenges faced in meeting the pension requirement and maintaining suitable school accommodation in light of a recent announcement of future planned reductions in central government capital funding for schools.

It was noted that repayment of the deficit over 21 years was budgeted for. It was also noted that a schools estate strategy was in development for consideration later in the year to inform planning and prioritisation of capital requirements for school buildings.

The chairman of health & social care overview & scrutiny committee welcomed the increased resourcing of social workers meeting the needs of children and young people. On behalf of the committee a plea was made that should any surplus be identified during the budget process consideration be given to supporting general advice services provided by the Herefordshire citizens’ advice bureau (HCAB).

In relation to any future grant funding of HCAB the cabinet member health & wellbeing explained that commissioning an information advice and signposting service to come into effect from 1 April was to meet the requirements of the Care Act. It was open to HCAB to bid for the new service. HCAB had been in receipt of a grant from Herefordshire Council of some £117k per year and had been advised a year ago that this would be ending in March 2015. The council was not the only funder of the service and no longer gave ‘grants’; rather it commissioned services.  The council would continue to provide approximately some £75k support in kind through accommodation and associated costs. In May 2014 HCAB received significant lottery funding in excess of £300k to help re-shape the organisation and increase collaborative working.

The leader of the Independents reported his group had some concerns focussing on the level of borrowing which may need addressing after the May 2015 elections, but were content to support the proposals as put forward.

In response to queries raised by the leader of It’s Our County, the following points were noted:

•           £1m of reserves had been set aside to support the costs of delivering savings where those savings were greater than the investment required; this included ICT investment and staff exit costs although the latter would be kept to a minimum through effective vacancy management.

•           Previously unallocated savings of some £3m identified in the draft proposals considered by the overview and scrutiny committees, and which related to the 2016/17 budget, had since been allocated across the directorates. The chief financial officer confirmed the projected savings were achievable; and advised they would continue to be refined and challenged through the year as the 2016/17 budget was further developed.

The leader of the Liberal Democrats concurred with the comments of the chairman of health & social care overview & scrutiny committee relating to HCAB; and cautioned against increases in borrowing.

RESOLVED:

That    (a)        the following be recommended to Council:

i.          approval of the revenue budget as set out in appendix 2;

ii.         approval of a council tax increase of 1.9% in 2015/16, therefore rejecting the 2015/16 council tax freeze grant, this will result in a band D council tax level of £1,275.10,

iii.        approval of the medium term financial strategy shown in appendix 4;

iv.        approval of the treasury management strategy for 2015/16 shown in appendix 5; and

            (b)        it be noted that the council is projected to spend within its budget for the 2014/15 financial year.