To receive the report and to consider any recommendations to Council arising from the meetings held on 8th and 22nd February, 2007.

Before calling on the Leader of the Council, to present the report of Cabinet, the Chairman advised that the Revenue Budget and Council Tax for 2007/08 would be debated at pages 27 and 28 of the agenda.  He asked any Members wishing to move an amendment to the proposed Council Tax and Budget, to do so once the Leader had proposed the recommendations. 

He advised that, once the Council had agreed the whole of the Cabinet report, it would move to item 9 of the agenda to set the Council Tax and Revenue Budget for 2006/07, formally, in accordance with the legislation.

The Leader of the Council, Councillor R.J. Phillips, presented the report of the meetings of Cabinet held on 8th and 22nd February, 2007.

In relation to Item 1.1 - Revenue Budget and Capital Programme 2007/08 - the Leader spoke of the many challenges facing the Council in terms of existing demands and future expectations in relation to service delivery and warned of the effect that the forthcoming report by Sir Michael Lyons would have on all local councils, but especially rural authorities such as Herefordshire.  He said that the Review of Comprehensive Spending would lead to further pressures on Council funding and Herefordshire would be particularly affected by rising costs in services such as social care and waste management.

He reminded Council that Herefordshire's funding from central government was 20% below the national average and that its schools were the third poorest funded in the Country.  He spoke of Herefordshire's need to maintain a three year medium term financial plan to deal with the funding pressures and that a draft plan, published in July and November 2006, had had the full backing of all the political groups on the Council and that the trade unions had been involved in the consultation.

He said that Herefordshire's situation was different to neighbouring authorities who were proposing significant cuts in front line services.  Instead, Herefordshire was planning to introduce its Herefordshire Connects programme which was expected to produce efficiency savings of £11.5 million over the next few years.  The project would be funded from reserves which had been built up over the past few years. 

He stated that the total budget for 2007/08 was approximately £122 million not including the schools budget which amounted to some £81 million.  He said that it was proposed to make £4 million in efficiency savings which would be used to fund social care for children, the elderly and those with learning disabilities.

The Capital Programme Budget, of approximately £64 million would be used for a range of projects from new schools and libraries to the upgrade of the crematorium as well as the current projects which included the Rotherwas Futures scheme, regeneration of the Edgar Street Grid and the Ross Flood scheme.

He said that the proposed Council Tax increase, at 3.8%, was the lowest in the Council's history.  He confirmed that the Fire Service and the Police had already agreed rises of 4.94%, and that the parish and town councils had  increased their precepts by an average of 2%.  He acknowledged that even such a low increase could mean financial difficulty for those on low and fixed incomes but said the Council needed to find a balance between maintaining services and affordability.

Councillor T.M. James, the Leader of the Liberal Democratic Group supported the proposed level of precept but had some concerns about whether the Herefordshire Connects Programme would deliver the anticipated savings within the anticipated timescale.  He said there were a number of major challenges ahead, including the Accommodation Strategy and recent developments in relation to Equal Pay elsewhere in the country which may have major implications for the Council.

Councillor A.C.R. Chappell, the Leader of the Labour Group, also supported the proposals.  He spoke of the difficulties that other Councils were facing including closure of care homes and said he would continue to lobby central government for better funding for Herefordshire.  He recognised the importance of the Herefordshire Connects programme and welcomed the involvement of the trades unions in the consultation exercise.

Councillor R.I. Matthews, Leader of the Herefordshire Group of Independent Members also supported the proposals.  He said that the Council had made considerable efficiency savings over the past year and thanked the Director of Resources and her team for their efforts in identifying such savings.  He said the Council must continue to look for more cost effectiveness without affecting services.  He was pleased that the works at Stretton Sugwas Closed Landfill Site was being recommended for inclusion in the Capital Programme and asked for clarification about the Hereford CCTV being "potentially" part funded by the police.  In response, Councillor B. Hunt said he would be encouraging the Police Authority to support this very effective crime reduction measure.

Councillor Mrs. J.P. French spoke of the importance of the Herefordshire Connects programme to the Council and advised that, based on experiences in other authorities, the expected financial benefits were both conservative and prudent.  

She also addressed Councillor James' concerns about equal pay claims.  She said that Herefordshire was one of just 32% of councils in the country that had reached a settlement on job evaluation and single status.  She acknowledged that, as a result of litigation elsewhere in the country, this may be an issue in the future but thought central government would be obliged to provide some help if this proved to be the case.  She said that the trades unions in Herefordshire had been very responsible in dealing with job evaluation and single status and went on to praise staff employed by the Council.  She said she was proud of the Info Shop which had recently opened in Hereford and hoped that, following the elections in May, Members and officers would continue to work together for the benefit of the citizens of Herefordshire.

Councillor W.J.S. Thomas, Chairman of the Health Scrutiny Committee, said that the most effective Councils nationally were those with the best scrutiny arrangements.  He thanked the Members of his scrutiny committee and those officers who supported the committee for all their work during the year.  He also stated that the Council needed to engage with the Voluntary Sector to ensure that services continued to be delivered in an effective and efficient manner.  He warned that the level of regulation and governance in the voluntary sector was discouraging many people from getting involved and that this would make it increasingly difficult for the Council to deliver its services in the future.

Councillor James said that, despite the  low level of Council Tax increase being proposed, the average increase over the past four years was between £250 and £300.  He said the Council Tax system was unfair, did not reflect people's ability to pay, and should be reviewed.

In response to a query on the revised Council Tax report and appendices which had been circulated in advance of the meeting, Councillor R.M. Wilson, Cabinet Member (Resources) advised that the changes were necessary because one parish council had intimated that it would set its precept at a certain level.  When it met, after the council agenda had been despatched, it actually set its precept at £1,000 less than had been anticipated.  This had a knock-on effect on the rest of the figures.

He said that this was a common sense budget which would provide a clear financial steer over the next few years.  He thanked Councillor Hunt for his comments and hoped the police would agree additional funding for CCTV.  He agreed with Councillor J.P. Thomas's comments on homelessness and the need to provide additional housing, but advised that this was also a national issue and any improvements would rely on investment from central government.

The Leader closed the debate by responding to a number of comments and queries.  He confirmed that the funding for the Rotherwas Futures project would be realised through a combination of projects and managing funding.  He shared Councillor W.J.S. Thomas's comments on the voluntary sector and said that central government would need to understand the need to reduce the regulatory burden on the voluntary sector to encourage more people to volunteer.  He spoke of the contribution Council employees make to society, making a difference to the lives of ordinary men and women, including the young and the elderly and the disadvantaged.

In relation to Item 1.2 - Proposed Corporate Plan 2007/10 - The Leader advised that approval of the Corporate Plan was integral to the approval of the Revenue Budget and Capital Programme 2007/08.

It was unanimously RESOLVED:  That the report from the meetings of Cabinet held on 8th and 22nd February be received and the recommendations set out below be adopted:

That    (a)        the Medium Term Financial Management Strategy (MTFMS) for 2007/08 to 2010/11 be approved;

(b)              in approving the MTFMS (referred to in (a) above), Council also approves the:

a.      Medium-Term Financial Resource Model for 2007/08 to 2010/11;

b.      Directorate revenue base budgets for 2007/08;

c.      Invest to Save / Invest to Mitigate proposals for 2007/08;

d.      Medium-Term Capital Plan for 2007/08 to 2010/11;

e.      Capital Programme for 2007/08, (subject to the deferral at paragraph 7.1(ii) in the Cabinet report);

f.        Efficiency Strategy for 2007/08 to 2010/2011

g.      Treasury Management Strategy for 2007/08 and the Prudential Indicators for 2007/08 to 2009/2010;

h.      Corporate Risk Register as at February 2007; and

i.        Financial Risk Assessment as at February 2007.

(c)               the revenue and capital budget proposals for 2007/08 outlined in the MTFMS be approved for Council Tax setting purposes;

(d)              a corporate strategy on fees and charges be developed as an integral part of the MTFMS when it is updated prior to the start of the next Performance Improvement Cycle;

(e)              the delivery of the benefits resulting from the Invest to Save /Invest to Mitigate proposals be managed using the benefits realisation process developed for Herefordshire Connects;

(f)                the Council’s responsibilities under Sections 25 – 29 of the Local Government and Finance Act 2003 be noted; and

(g)       subject to detailed final changes, the Corporate Plan 2007/10 be approved.