To seek the committee’s views on the budget proposals for 2017-18 and updated medium term financial strategy (MTFS).

(This meeting followed on from the Health and Social Care Overview and Scrutiny Committee, to which members of the General Overview and Scrutiny Committee had been invited. The presentation made to that Committee on the draft 2017/18 budget and medium term financial strategy had also been circulated to members of the General Overview and Scrutiny Committee as a supplement to the agenda.)

The interim director of resources reiterated that a further report would be made to the Committee in December updated in the light of the Autumn Statement.

The Chairman invited further questions and comments from committee members.

In discussion the following principal points were made:

·        The budget proposals and savings plans indicated that there would be increasing pressure on local communities to take on responsibility for delivering services if they wished them to continue in their locality.  It was suggested that the Council should promote discussions with Parish and Town Councils about funding services in a co-ordinated way.  It was also noted that in response to question 4 in the budget consultation that a number of respondents thought that their parish council should charge extra to carry out certain activities.  A further suggestion was made that there might be different discussions to be had with the Town Councils and larger Parish Councils compared with the smaller more rural councils.

·        It was questioned whether houses were being built at a sufficient pace to meet the council’s targets.  Only some 10% of development for which planning permission had been granted appeared to be being progressed.  The largest housebuilding companies seemed to be more interested in maintaining land banks.  Infrastructure issues were also holding back development in the county.

The interim director of resources (IDR) commented that the updated version of the budget report would comment on the robustness of the budget assumptions about housing delivery.

The IDR acknowledged the uncertainty over the implications of the government’s proposals for business rate retention and that the position would need to be monitored.

·        In response to a question about the Council’s legal proceedings against Amey as its former contractor the Director of Economy, Communities and Corporate (DECC) commented that Amey was seeking leave to appeal the recent decision of the Court to award a sum to the Council.  The Council was proceeding on the basis that it might take some 18 months to resolve all the matters under dispute and it would not be prudent to allocate any of the funds secured until the process had been finalised.

·        With reference to paragraph 47 of the report the weight that could be given to the response to the budget consultation was discussed.  A view was expressed that it was clear from the responses that the consultation had reached a wide demographic.  The respondents also included a number of Parish Councils and other groups which represented the views of many residents.  The suggestion in the report that the respondents may not represent the views of the general population was therefore challenged.  The consultation response that 53% of responses supported the Council in making a further increase in council tax above 3.9% was highlighted. It was asked how the consultation findings had influenced the budget proposals.

The IDR commented that matters arising from the consultation would be discussed with the executive and any changes reflected in the next, updated version of the report..

·        The presentation of the new homes bonus and the rural service delivery grant (RSDG) as part of the pooled funding supporting expenditure was questioned.  It was suggested that proposals for the use of the RSDG should have formed part of the budget consultation.  Officers commented that clarification could be provided.  However, neither grant was ring-fenced.  The DECC commented that the RSDG had been allocated as a “smoothing” grant recognising the higher costs of delivering services in rural areas.  Under the MTFS the most challenging year was yet to come and some of the grant was being held in reserve mindful of the risks that lay ahead including the government’s proposals for business rates. In response a Member suggested that the sum should therefore be shown as part of the reserves.

·        In response to a question about car parking income the DECC commented that the targeted income for the year had not been achieved and any further increase in charges would need to be carefully considered.  A member requested that as the shortfall had arisen as a result of a reduction in income from the City that Market Towns were not penalised to offset the shortfall.

·        It was requested that any new homes fund income generated as a result of development not included in the Core Strategy should be the subject of a consultation exercise as to how it was spent.

·        A member expressed regret that savings in the ECC directorate appeared disproportionate and would have an impact on services that most residents experienced.

·        Short term savings could lead to unintended consequences.  For example the increased car parking costs could lead to more traffic regulation orders to control unwelcome parking.

·        It was suggested that the responses to the budget consultation contained a number of incorrect assumptions and it would be helpful if these could be corrected in a covering note.

A number of requests were made for amendments to be reflected in the next iteration of the budget report.  These included:

·        With reference to paragraphs 22-24 of the report it would be helpful if the report provided a summary of the position on reserves and balances up until 2020.

·        It was proposed that the executive be asked to take full account of the consultation on the budget and reflect the views expressed in their budget proposals, indicating in the next report back to the committee the extent to which the consultation findings had influenced budget proposals, and, if the findings hadbeen discounted, the rationale for taking that course.

·        Clarification of what was included in the budget line: central corporate costs.

·        Inclusion of information on gross income and expenditure figures

·        Information on the uplift in council tax revenue and the trend over recent years to establish if the income expectations were being met.

·        It was requested that there should be consistency of terminology and additional information to show changes, including virements, between one budget report and another to ensure transparency.  It was observed that the external auditors in reporting to Audit and Governance Committee had commented on difficulties users of financial reports faced in this regard.

RESOLVED:

That      (a)     the executive be recommended to work with Parish and Town Councils to explore options for service delivery;

              (b)     the executive be recommended to make representations to local MPs and others to ensure that the voice of the County is being heard in relation to the government’s business rate proposals and the views of local MPs reported;

(c)             the clarity of the budget report should be reviewed and officers requested that the report should be amended to include detail of gross income and expenditure, consistency of terminology, virements over the year to identify actual expenditure, analysis of the use of the Rural Services Delivery Grant, clarity over income; and

(d)            the executive be asked to take full account of the consultation on the budget and reflect the views expressed in their budget proposals, indicating in the next report back to the overview and scrutiny committees the extent to which the consultation findings had influenced budget proposals, and, if the findings had been discounted, the rationale for taking that course.