To receive the report and to consider any recommendations to Council arising from the meeting held on 19 February 2009. 

The Leader of the Council, Councillor RJ Phillips, presented the report of the meeting of Cabinet held on 19 February 2009, which set this year’s Financial Strategy and Revenue Budget.  He stated that due to the international financial situation the draft Financial Strategy of last year had had to be revised.  He added that the speed of the turnaround due to the international financial situation had been remarkable and that the Council were living in challenging and interesting times.  In referring to the Government’s three year settlement for local authorities he stated that it gave the authority the opportunity to plan the budget for services and was to be welcomed.

The Leader referred to:

• The Council’s targets for efficiency savings which he believed were achievable. 
• The need for financial discipline and thanked the Director of Resources for the seminar he had provided for Members explaining the budget in the current financial situation. 
• In referring to reductions in interest rates on savings, and the effect this had had on families with family members in residential care, he anticipated that there would be a reduction in care fees obtained for those in residential care; and it was anticipated there would be an increase in the number of those in residential care falling into the category that would be paid for from the Council tax.
• The environmental landfill tax and refuse collection contract, adding that the administration was keen to see weekly collections continue along with kerbside collection of recyclables for 90% of the County. 
• National focus on safe guarding children and vulnerable adults along with the Criminal Records Bureau (CRB) checks to be carried out. 
• Recognising the impact the economic downturn was having on the number of families being made homeless and how the capital budget had been used to address some of the issues by providing a mortgage rescue scheme to assist families in being able to stay in their own homes.
• The Local Government Association looking nationally to see what could be done to support shops and that Rotherwas Futures, backed by Advantage West Midlands, was encouraging and assisting businesses to move to the area. 
• Additional support for smallholdings with funding of £500k per year for the next three years to spend on the smallholdings estate. 
• £1m to be taken from reserves to support projects such as the Merchant House at Ledbury and the Market House at Ross-on-Wye and the impact these and other projects would have on the budget. 

The Leader advised that he had met with the Education Minister to discuss poorly funded educational services in the County, highlighting the high quality education provided and the extra cost on services due to the county covering a large rural area.  He recommended the report to Council and believed the budget was practical and met some of the risks, also recognising the strategy for the next three years needed to be one of caution whilst looking after the vulnerable members of the community.  The Cabinet Member Corporate and Customer Services and Acting Cabinet Member for Resources seconded the recommendations outlined in the report.

Councillor RI Matthews stated he appreciated the difficult situation the country was in and the impact this had on residents in the county.  He referred to Risk Management and services that were currently supported through specific grants and the impact there could be should those grants no longer be available if there were to be a change in priorities.  He also referred to the capital receipts and the additional funding from the smallholdings sale.  Councillor Matthews supported the recommendation for a 3.9% increase in Council tax.

Councillor PJ Edwards added that he felt now was the right time to borrow and fund projects, but referred again to the rise in cost to a Band D Council tax rate.  He hoped that any future new development of the livestock market would be kept within £5m.

Councillor TM James reminded Council of his reasons for abstaining on the budget strategy five years previously, which related to the Social Care budget and the Connects Project with the proposed savings of £12m.  He felt the 3.9% Council tax rise was not sustainable and could not continue year on year.  He felt the Council could be putting itself in the position of making cuts in services next year and therefore, did not support the proposed budget. 

Councillor ACR Chappell stated he felt the government had failed to recognise the needs of rural counties.  He supported the Council tax rise but reminded Council of the need for the authority to protect the most vulnerable and those either on low wages or unemployed.

Councillor AM Toon spoke on Local Area Agreements and the government funding received, requesting that a report be provided on the amount received and where funds had been allocated.  The Councillor referred to the Hereford Academy costs, the efficiency savings all councils were making and the Herefordshire Connects project with regard to its scrutiny. Councillor Toon added that she did not support the budget proposals.

Councillor MD Lloyd-Hayes asked a question on the future lease of the offices at Plough Lane and referred to the number of young people in Hereford City compared to Leominster and the lack of youth services provided for young in the north of the City.

Councillor AT Oliver asked a question on the preferred bidder for the building of the new Hereford Academy, who was also the preferred bidder for the building of the livestock market, and questioned whether it was acceptable to have one company dealing with both projects.  He asked what the estimated rental would be for the new stalls for the Hereford Open Market and what the expected revenue would be.  It was stated that it was inappropriate to give any details on the open market at present.

Councillor JD Woodward also referred to the provision of a youth centre in Leominster and although supported it, felt that the same needed to be provided in the city and was disappointed that no provision had been made in the budget.  Councillor Woodward referred to the homeless and the rent deposit scheme and whether that had ceased. 

Councillor JP French, Acting Cabinet Member Resources, paid tribute to the Director of Resources and his management team for their work on the budget.  Regarding efficiency savings in relation to the Hereford Connects project, she advised that the figures were correct.  In referring to the point made on the merging of the PCT and the Council, she advised that this was incorrect and that it was a deep partnership, adding that efficiency savings would be achieved, but the budget was still challenging.

Councillor DB Wilcox, Cabinet Member Highways and Transportation, referred to subsidies for bus services and advised the Council currently spends £2.3m of which one and a quarter came from external sources with concessionary fares receiving £543k grant, leaving a significant sum for the Council to provide and putting substantial pressure on the budget.  The Cabinet Member reminded Council of the forthcoming seminar on the future of bus services on 21 March.  With regard to youth services for north of the river Wye the Cabinet Member advised that discussions were taking place with the relevant Cabinet Member and officers.

Councillors: A Seldon and RH Smith both supported the budget proposals.

Councillor SJ Robertson spoke of the impact of the downturn in the national economy on local businesses and whether a reduction in business rates could be made to provide relief for businesses.

In response to a question on homelessness and the possibility of a rise in the number of families homeless, the Cabinet Member Social Care Adults advised Council that as at 24 February there were no families in bed and breakfast accommodation, adding that she supported the budget.

The Leader stated the importance of safe stewardship of the budget in difficult times, adding that future potential capacity had been built into the budget.  With regard to the question on business rates he stated there needed to be a national initiative from central government.  With reference to the lease on the Plough Lane offices he stated there were continuing talks with the owner and referring to the issue of CRB checks he stated the matter was being investigated.  The Leader also paid tribute to staff in the Resources Directorate for their work on the budget proposals.

RESOLVED:  That the report from the meeting of Cabinet held on 19 February 2009 be received.