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.

The Executive Member (Resources), Councillor Peter Wilson, presented the report which sets out the budget position for 2019/20 including the forecast for the following two years to 2021/22 and also presents proposals for the use of forecast resources identified in 2019/20 and consultation on the Budget. 

Chorley Council has experienced and may continue to experience in the coming three years, large reductions in its major funding sources, in particular the Revenue Support Grant and income from Lancashire County Council.

The Council’s gross budget deficit is based upon the reductions in funding and some key budget assumptions, including growth in the Council Tax Base, and relating to Business Rates Retention and the New Homes Bonus.  It should be noted that some of the assumptions are still potentially subject to change that may impact positively or negatively on the budget.  The Chief Finance Officer is comfortable with the assumptions made. 

A key influencing factor on the forthcoming budget is the effective management of the budget in the preceding financial year.  Reductions in funding and ongoing expenditure budget pressures have resulted in a budget gap of £1.716m in 2019/20.

To bridge this immediate budget gap the Executive Cabinet has achieved and identified proposals for immediate permanent budget savings of £1.484m in preparation for 2019/20.  This is in addition to a total of £3.574m savings already achieved in prior years, including efficiency savings, reviews of contracts, base budgets and income streams.  

Through freezing or reducing council tax in previous years, Chorley Council has one of the lowest precepts (excluding Parish precepts) in Lancashire. 

Councillor Paul Clark left the meeting at 6.50pm.

Through savings achieved to date, additional income identified, a review of net financing and increases in council tax the Council is able to set a balanced budget in 2019/20 whilst still investing in corporate strategy priorities.

Despite the budget savings identified there remain large forecast budget deficits of £1.196m in 2020/21 and £1.672m in 2021/22.  To achieve a sufficient reduction in net expenditure the Council’s strategy will be:

1.    To realise savings through the procurement of its contracts.

2.    To identify the efficiencies through investment in infrastructure, ICT and through exploring alternative delivery models that will enable the Council to balance the budget whilst seeking to minimise the impact on front line service users.

3.    To make the Council more financially self-sufficient with specific emphasis on creating investment that generates income. This includes identifying future resources to support income generating schemes.

The latest three year Capital Programme can be found in the Revenue and Capital Budget Monitoring Report 2018/19 Report 2 approved at November Executive Cabinet 2018. Further changes to the capital programme include £1.3m for investment in council offices, at Union Street and the Town Hall, £1.750m investment in Astley Hall and Park and £2.7m investment in a new sports facility at West Way playing fields.  Balances remain at £4m. 

The proposals are currently out for public consultation and feedback received will be fed into the report considered by Council in February.  ...  view the full minutes text for item 8

To consider and receive the 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:

·         Council tax to be increased by 2.99% in 2019/20 and that it is forecast to increase by 2.00% in 2020/21 & 2.00% in 2021/22;

·         The resourcing of corporate priorities for 2019/20 including additional capital investment;

·         The forecast balanced budget for 2019/20;

·         The forecast budget position in 2020/21 and 2021/22;

·         The consultation regarding the use of £110k budget currently allocated to the provision of PCSOs within the borough.

Councillor Peter Wilson, Executive Member (Resources) presented the report of the Chief Finance Officer which sets out the budget position for 2019/20, including the forecast for the following 2 years to 2021/22, and also presents the relevant proposals in respect of the use of forecast resources identified in 2019/20 and budget consultation.

Councillor Wilson highlighted the cumulative gross budget deficit of £1.716m in 2019/20, based upon the reductions in funding and key budget assumptions described in the report, and outlined how this was to be addressed including:

·         An increase of Council Tax by 2.99% in 2019/20 and forecast to increase by 2.00% in 2020/21 & 2.00% in 2021/22;

·         Continued investment of approximately £1m to 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;

·         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.

Members noted general balances were remaining at £4m, and that this stable position enabled further investment through the Capital Programme including improvements to Council offices, Astley Hall and Park (including the creation of Adventure Golf), and Westway Playing Fields. It was also noted that, as part of the budget consultation, views on the Council’s contribution to Lancashire Constabulary for Police Community Support Officers (PSCO’s) would be invited.

In response to Members’ questions it was noted that the Executive Director (Resources) was attending the Overview and Scrutiny Committee meeting next week to discuss and answer questions on the draft budget. With regard to the commercialisation of Council-owned assets mentioned in the report, it was advised that this relates to the creation of flexible office space in vacant unit in the upstairs of Market Walk. In response to a further question about the Council establishing a housing company, the Chief Executive informed Members that technical details regarding VAT and tax were being considered and that informal consultation with staff was about to begin.

Decision:

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

·         Council tax to be increased by 2.99% in 2019/20 and that it is forecast to increase by 2.00% in 2020/21 & 2.00% in 2021/22;

·         The resourcing of corporate priorities for 2019/20 including additional capital investment;

·         The forecast balanced budget for 2019/20;

·         The forecast budget position in 2020/21 and 2021/22;

·         The consultation regarding the use of £110k budget currently allocated to the provision of PCSOs within the borough.

Reasons for Recommendation(s):

To progress the Council’s 2019/20 budget setting process to achieve an approved and balanced budget.

Alternative options considered and rejected:

None, setting the budget is a statutory responsibility.