To enable Strategic Monitoring Committee to feed into the consideration of the Revenue Budget 2004/05 which will be determined by Council at its budget meeting on 5 March 2004.

The Committee was invited to express a view on the Revenue Budget proposals for 2004/2005. 

The report summarised the information which had been presented to Cabinet on the recommendations of the Budget Panel regarding the parameters for preparation of the Revenue Budget for 2004/05.  It described Cabinet’s priorities for the Medium Term Financial Plan; the application of the Medium Term Financial process to Budget Policy and an assessment of risks faced by the Council both in terms of service delivery and the Council’s status and reputation.  It also set out emerging budget pressures and the composition of a standstill budget taking account of anticipated inflation and unavoidable commitments. 

Advice was set out in the report on statements by the Office of the Deputy Prime Minister (ODPM) on the prospect of expenditure by authorities being capped.

It was noted that the initial proposal from Cabinet as a basis for further consultation was for a revenue budget of £176.4 million implying a Council Tax at Band D of £972.50.  Supporting schedules detailing the budget for each programme area had been circulated separately subsequent to the despatch of the agenda papers.

The Chief Executive highlighted the need to balance what it was thought the Council could afford to spend with the management of the risks facing the Council.  He also advised the Committee of the duty placed on the Treasurer within the context of the budget to give a professional advice on what would constitute an appropriate level of reserves.  In giving this advice the Treasurer would have regard to the advice of the Authority’s auditors.  Whilst the Council could disagree with that advice it would have to provide a reasoned case for such a course.  He also remarked upon the uncertainty over the approach the ODPM would take to capping authorities’ expenditure.

The Committee raised a number of detailed questions.  They noted in particular the proposed investment of £7 million over the period of the Medium Term Financial Plan and the inability through the Plan to fund the assessed pressures which amounted to £13 million.  The Chairman of the Committee sought an indication of the priority to be given to the listed bids given the proposed Medium Term Financial Plan proposals.

The Leader of the Council responded by recognising the balance to be maintained between Council Tax levels and the much needed investment.  He referred to the priority given in the budget proposals to Social Care (Adults) (£1 million) and ICT (£700,000) against the totals over the period of (£5.3 million), and (£3.4 million) respectively.  Whilst it would be important to maintain modest support for pressures in other areas it was his belief that those areas would remain the major priorities over the plan period.

            There were a number of detailed questions on the reserves through which the need to concentrate on the usable reserve was stressed.  It was noted that it was proposed to reinstate the reserves, in accordance with the Council’s decision when setting the 2003/04 budget, over the period of the Medium Term Financial Plan by utilising the additional income raised from second homes (circa £300,000) per annum.  Some concern was expressed about the aniticipated income which would be generated in response to which the County Treasurer advised that he believed the estimate to be prudent.

RESOLVED: that Cabinet be asked to consider the following observations on the Revenue Budget 2004/2005 before making final recommendations to Council on 5th March, 2004:

(a)            the Committee’s concern registered over the levels of investment in Social Care (Adults), notwithstanding the proposed investment of £1 million and Cabinet be invited to reassess the risks of that approach;

(b)            the impact of levying Council Tax at the proposed Band D level of £972.50 and the hardship that could be created for some sections of the community;

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(c)            support offered for the concept of fulfilling the commitment to replenish reserves by accumulating the additional revenues raised from second homes as detailed in paragraph 14 of the report.