To receive the recommendations of Cabinet held on 19 January 2012 to approve the draft financial strategy for 2012/13 to 2015/16 that includes the 2012/13 budget.

The Leader of the Council presented the Draft Financial Strategy and Budget 2012/13 to Council and made the following points:

·         Herefordshire is a unique county but it had to face the same challenges that all councils had with a limited budget.

·         Officers need to work closely with Cabinet to make savings and create income.

·         Need to continue to work with the Health Service partners and Health Commissioners to strength the partnership.

·         Essential to transform services to provide value for money in the way the authority worked with other service providers and to continue to deliver on key projects which would maintain financial stability.

·         Propose to accept one year additional tax freeze grant worth £2.2m to freeze Council tax for a second year.  Part of the additional grant funding to be used for a one off change and improvement programme. 

·         Cabinet agreed to an increase in the level of fees and charges.  This is currently being reviewed by the Overview and Scrutiny Committee.

·         In looking to make a saving of £200k from the waste contract a scheme to fund black refuse sacks through sponsorship and advertising is being considered and will be put before Members.

·         Capital programme – the broadband project is a significant project which will provide support to the infra structure of Herefordshire and help businesses that are struggling to have good communications.  The programme includes funding for a replacement archives facility, which will be met within a set budget and a link road, funding for which could be raised using the low interest rates currently available. 

·         Significant changes in the way local government is funded as a result of the Localism Act.  Electorate to have a greater say in the levels of Council tax increases.  2013 the Council will collect business rates in Herefordshire.  It is clear from the government proposals that the Council will be expected to retain and increase business rates in Herefordshire.

·         Engagement with the public is needed to help shape resources and a long term vision and plan is being prepared by the administration to shape the county’s future through to 2020.

The Leader referred to the recommendations of the report and moved acceptance of the recommendations as outlined on page 35 of the agenda.  The Cabinet Member Corporate Services and Education seconded the proposal.

The following points were made in discussion:

·         In response to a question on the sustainability of the borrowing in the capital programme the Cabinet Member Corporate Services and Education referred Council to pages 119 to 120 of the report where Members could see that the amount of potential borrowing was significantly higher than the actual borrowing undertaken.  Additionally in benchmarking against other unitary authorities Herefordshire is placed 24^th out of 35 unitaries and was well within the middle range and sustainable.  The Leader added that funding could also come through government grants or contributions in other ways, but it was essential to secure potential funding in case it was required and stated it was intended to borrow as little as possible.

·         Some Members were apprehensive over the freezing of Council tax and the potential higher Council tax having to be imposed in future years.  It was felt that a modest rise was a more realistic way ahead rather than a freeze on Council tax and possible large increase in following years.  It was also felt that residents already paid for the cost of black refuse sacks in their Council tax.

·         Councillors welcomed the proposal for a staff car parking charge but were disappointed it was not being instigated sooner and felt this gave the wrong message to the public.  It was suggested the charge should cover all staff and Councillors and should be graded so that those on lower incomes should pay less for car parking.

·         With reference to Adult Social Care Members were grateful for the additional information provided by the Director, but there was unease as the information only related to savings and did not take into account there had been year on year overspend of the budget.

·         In referring to the link road funding it was thought it was to be funded through Advantage West Midlands.  It was believed by some Members that a link road would not provide any advantage to residents.  In response the Cabinet Member stated that a link road would be essential for the building of affordable homes and to reduce traffic in Newmarket and Blue School streets and to create a pedestrianized area around Garrick House.

·         In referring to the consultation on the budget and the lack of engagement with the public at public meetings, it was noted that only 250 people had attended the meetings held across the county.  Members felt that too much reliance had been placed on the answers given at the meetings, as some of the choices in the questions were so worded that it was difficult for people to provide an accurate or informed answer. 

·         Unease was expressed over the lowering of the amount of reserves held for the Waste Disposal contract and future landfill charges, which was now down to £1.9m.  Additionally there was concern that the budget would increase the Council’s borrowing and reduce reserves. 

·         Members agreed that austerity measures were required but believed that cuts in the youth service would mean there would be little support for the youth of the county.

·         A question was asked about the Amey Wye Valley Hereford contract and whether the contract was still to be negotiated and what savings were being made.  The Cabinet Member informed Council that the current savings from the joint working with Amey amounted to approximately £23m and assured the Councillor that he would provide a more detailed breakdown to the Member direct.

·         Reference was made to the change programme now called the transformation programme and the difficulty in following the changes in the budget when the titles of projects were changed.  In referring to the Corporate directorate and the reduction in the management posts, it was felt that this was still taking some time in completing.

·         In referring to the budget report and the use of the terminology ‘quick win’ some Members felt it was inappropriate as any additional cost for parking, pre-application planning advice or transport to school would directly affect the budget of residents.

·         It was requested that assurances were provided that discussion would be held on the rents proposed for the new retail quarter on the Edgar Street Grid in order that the site rents did not jeopardise the shop rents for the centre of High Town.

·         In responding to a question on why Members had not been informed on how much had been spent on Hereford Futures over the last four years.  The Leader assured the Member the information he had requested would be provided.

·         Some Members expressed concern at the £3.2m grant funding allocated for the upgrading of Broad Street.

·         In referring to local government funding it was noted that Herefordshire was one of the lowest funded areas, however, a different mechanism for calculating funding would be brought in next year which would take into account the rurality of areas.

·         In response to a question on what the administration was doing to ensure fairer funding for the county, the Leader advised Members of the meetings that he and the Cabinet Member for Enterprise and Culture had had with the Prime Minister and Government Ministers and the lobbying that had been done as a whole by rural authorities joining together as a group to be more effective.

In rounding up the debate the Deputy Leader reminded Council of the savings that had been made through redundancies or the transfer of staff over to the new partner organisation Hoople Ltd and emphasised the need to deliver services within the proposed budget.

The recommendations were put to the vote and carried:

For:                  29

Against:           9

Abstentions:    14

RESOLVED

              THAT:

a)    The Medium Term Financial Strategy (MTFS) shown in Appendix A to the report, which includes the 2012/13 budget and Treasury Management Strategy and Policy Statement be approved;

b)    A freeze of Council Tax for 2012/13 at 2011/12 levels be approved;

c)    The Capital Programme outlined in paragraph 67 of the report be approved; and

d)    Officers be required to further assess those elements which are perceived as engaging the Council’s duties under the Equalities Act 2010 (including those at paragraphs 48/49, 55-58 and 69) and report further on any necessary amendments to this budgetary framework.