Issue - meetings

Report of the Chief Finance Officer.

The Executive Member for Resources will be present at the meeting to answer any questions the committee may have.

Councillor Peter Wilson, Executive Member (Resources) presented the report of the Chief Finance Officer which set out the budget position for 2018/19 including the forecast for the following two years to 2020/21 and also presented the relevant proposals in respect of the use of forecast resources identified in 2018/19 and budget consultation. 

Chorley Council has experienced, and will continue to experience in the coming three years, large reductions in its major funding sources, including Revenue Support Grant, Retained Business Rates, New Homes Bonus and income from LCC.  The forecast budget deficit for 2019/20 is £1.6m and £2.2 in 2020/21. 

Councillor Wilson explained that, in addition to a balanced budget, there are proposals for investment to support the Corporate Strategy.  This includes the delivery of the Digital Office Park, Primrose Gardens extra care facility and the delivery of the Market Walk extension.  The Council is working with partners to deliver some of these projects.

It is proposed that council tax be increased by 2.99%.  There are areas for investment and one off spends within the proposed budget.  There are a range of methods by which the financial challenge will be met, including a review of contracts, implementation of shared services, productivity reviews, income generation, the development of employment land and options relating to creating a housing company. 

The proposed budget is out for consultation and Councillor Wilson encouraged the submission of feedback by Councillors and residents of Chorley.  Consultation received is reviewed and changes can be made, and the feedback will be used to inform the priorities for the budget in future years. 

Members clarified that the Chorley Council claims only a portion of the council tax bill, with the rest being claimed by Lancashire County Council (LCC), the Police and Lancashire Combined Fire Authority.  LCC have indicated that their portion will increase by up to 6%. 

Councillor Wilson clarified that a large risk associated with business rates income relates to two applications for mandatory charitable relief received from Lancashire Teaching Hospitals NHS Foundation Trust.  If successful the application would be back dated to 2010 and therefore have a significant impact on the Council’s revenue budget.  The LGA is representing affected councils nationwide and retain the view that NHS trusts and foundation trusts are not charities and therefore not eligible for mandatory non domestic rate reliefs.

Councillor Wilson advised that a figure is within the budget to address crime and disorder within the borough and that it could be used to fund PCSO's, but this can be reviewed if a more effective means of reducing crime is proposed.

Members suggested that a representative from Lancashire Constabulary be invited to attend a meeting in the new municipal year to discuss the reduction of crime. 

Decision: That the report be noted.

Report of the Chief Finance Officer

Approval granted to start the budget consultation process on the proposals contained within the report and noted in particular:

·         That Council Tax be increased by 2.99% in 2018/19, equivalent of a £5 increase per year for an average band D property or about 10p per week. In addition that the Council will bring into its budget forecasts a 2.99% increase in 2019/20 and 2% increase in 201/21

·         The resourcing of corporate priorities for 2018/19

·         The forecasted budget for 2018/19

·         The forecast budget position in 2019/20 and 2020/21

At the request of the Chair this item was considered first. 

The Executive Member (Resources) presented the report of the Chief Finance Officer which set out the budget position for 2018/19 including the forecast for the following two years to 2020/21, the relevant proposals in respect of the use of forecast resources identified in 2018/19 and budget consultation. 

The budget forecasts over the next three years have been updated to take account of council tax to be increased by 2.99% in 2018/19, this is the equivalent of a £5 increase per year for an average band D property or about 10p per week.  In addition, the council will bring into its budget forecasts a 2.99% increase in 2019/20 and 2% increase in 2020/21. The final decisions on Council Tax increases will be made as part of the annual budget setting process. Additional investment of £673k will deliver corporate strategy priorities. Progress against the current Medium Term Financial Strategy (MTFS) budget efficiency objectives including staffing reviews, contract savings and base budget reviews.  Budget forecasts also take account of policy decisions taken to reduce the budget deficit and the movement to specific reserves to help the council manage change and invest in future income generation and strategies to reduce the budget deficit in the medium term. 

The report set out the budget pressures and funding cuts that the council face in bridging the budget gap over the next 3 years, including the reduction in Revenue Support Grant from the Government and income from the New Homes Bonus and Lancashire County Council.  The council has experienced expansion of the council tax base, but the additional income is insufficient to meet the inflationary pressures placed on the council’s budget.  In addition, the expansion of the council tax base has resulted in a faster reduction in the council’s grant funding.  Unfortunately, there is no further clarity on how the reforms to the business rates regime will affect Chorley Council in 18/19 to 20/21.

A key influencing factor on the forthcoming budget is the effective management of the budget in the preceding financial year.  The council recognised that reductions in funding and ongoing expenditure budget pressures have resulted in a budget gap of £0.870m in 2018/19.  To bridge this immediate budget gap the Executive Cabinet has achieved and identified proposals for immediate budget savings in preparation for 2018/19.  This is in addition to a total of £3.229m savings already achieved in previous years, and includes productivity savings, a review of contracts and the base budget.  A review of income streams and financing and Lancashire Business Rates Retention Pooling have also been undertaken. 

The report set out that through savings achieved to date, additional income identified, a review of net financing, the use of unutilised reserves and increases in council tax the council is able to set a balanced budget in 2018/19 with some resources available to invest. 

Consideration was given to the estimated Medium Term Financial Strategy cumulative budget deficit and cumulative savings, which included the  ...  view the full minutes text for item 4