Agenda item

To receive and consider the report of the Chief Executive (enclosed). 

Recommendation approved.

The Executive Member for Resources, Policy and Performance presented the report which set out the budget position for 2014/15 including the forecast for the following two years.  The reported presented the proposals in respect of potential investment in the Council’s Corporate Strategy priorities in 2014/15, increasing budget resilience in the longer term and consultation on the budget.

Members noted that Council Tax would be frozen and not increase in 2014/15. This would be the second consecutive year that the current administration had achieved a balanced budget position for the forthcoming financial year without increasing Council Tax. 

The publication of the Local Government Finance Settlement completed the CSR 2010 four year period.  It had resulted in large scale reductions in Central Government grant placing significant pressure on the Councils budget. 

Moving forward there would be challenges as the provisional figures published for 2015/16 indicated that a further £0.874m would be reduced from Central Government Grant in 2015/16.  Announcements had been issued stating austerity measures would continue after 2015/16 and beyond, therefore, a reduction in the region of £0.350m had been assumed in 2016/17 although this would be subject to change as part of the CSR 2014.  This resulted in a forecasted budget deficit totalling £2.709m. 

Early planning and preparation had enabled the Council to address the forecasted budget deficit in advance of 2014/15.  Consistent with last year’s budget setting process, a balanced budget position had been achieved with no further permanent use of NHB to fund the financial commitments within the base budget.

This presented an opportunity to invest in the Council’s Corporate Strategy for a further year despite the significant reductions in grant funding.  The investment projects link to the Corporate Strategy and the priorities contained within it.  The New Investment Programme, now in its second year, supported the delivery of the Corporate Strategy priorities.  The potential new programme of investments was set out in Appendix Two with more detailed individual mandates for each proposal in Appendix Three.

The Council would address the significant budget deficit in the longer term to 2016/17 brought about in the main by cuts to core funding and Central Government’s austerity measures.  Despite a balanced budget being achieved for 2014/15 further action would be required to achieve the same budget status in future years.

Options that would be considered over the next three year MTFS period included the re- engineering of services to fundamentally review service provision to reduce net expenditure and improve efficiency.  Also, a programme of reducing the Council’s debt position which had an impact on the revenue account including a possible accelerated rate at which the Pension Fund deficit was clawed back and income generation schemes as a continuation of the projects implemented to date.  Finally, increases in Council Tax.

Members noted that the project “Town Centre Masterplan” included the development of a prospectus for the civic quarter.  This was dependant on the site and other factors.  The prospectus would be developed internally and shared with partners as appropriate. 

Decision made

Approval granted to the contents of the report in order to start the Budget Consultation process and noted the following proposed budget items in particular:

· Council Tax to be frozen in 2014/15.

· The proposed New Investments for 2014/15 and 2015/16.

· The balanced budget position for 2014/15.

· The forecasted budget position to 2016/17.

Reason(s) for decision

To progress the Council’s 2014/15 Budget Setting process to achieve an approved and balanced budget.

Alternative option(s) considered and rejected

Setting the budget is a statutory responsibility.