Agenda item

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.  The consultation seeks residents’ views on whether the Council should continue to fund PSCO’s or if the budget should be allocated to something else such as supporting individuals with complex needs by working with partners to provide help sooner or alternatively investing further in our streetscene service to improve street cleansing.

Members raised queries on the Medium Term Financial Strategy (MTFS) and the investment in infrastructure and ICT.  The investment enables customers to undertake more transactions electronically, but also increase the security of the Council’s infrastructure. 

Members discussed the report and noted the following:

·         Shared services will be taken forwards following the elections in May.  South Ribble have all out elections this time. 

·         It is anticipated that the outcome of the Business Rates review and impact on the Council will be known before the Council meeting in February. 

·         The figures setting out the income generated from Market Walk are contained within the base budget. 

·         The figures relating to the income generation targets for the extension of Market Walk shopping centre are £125k net income in 2019/20 and £300k net income from 2020/21 onwards. 

·         Customers will be inconvenienced as little as possible during the works to Customer Services at Union Street. 

·         The Housing Company is a medium to long-term project.  It is not anticipated that the Housing Revenue Account will be reopened. 

·         The Council is resisting pressure from central Government to continue to build houses at recent rates.  This will have an impact on the amount of New Homes Bonus received by the Council. 

·         The Council has been able to borrow less than anticipated, due to the lower rates the Council is able to access.

·         A bid has been made to the Football Foundation to fund the new sports facility at West Way playing fields.

·         The acoustics of the Lancastrian will be considered during the proposed capital works to the Town Hall. 

Councillor Walker thanked Councillor Wilson for his attendance. 

Decision: That the report be noted.