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 for Resources, Councillor Peter Wilson, presented the report which set out the budget position for 2020/21 including the forecast for the following two years to 2022/23 and also presented proposals in respect of the use of forecast resources identified in 2020/21 as well as consultation on the budget.

The budget forecasts over the next 3 years had been updated to take account of the following;

·         Due to the investments made by the Council and the efficiencies achieved, there was no proposed increase in council tax in 2020/21

·         There was no proposed increase in council tax in 2021/2022 or 2022/23, this would be revisited every year and would be dependent on upon the outcome of the Government announcements regarding the Fair Funding Review and Business Rates Retention.

·         Continued investment of approximately £1million that would deliver corporate strategy priorities

·         Strategies to reduce the budget deficit in the medium term.

The Committee were advised that 2019-20 was due to be the final year of the Government’s four-year Settlement, however following the Spending Round 2019, councils would receive a further one-year Settlement as the planned changes from the Fair Funding Review and 75% Business Rates retention had been delayed by at least one year until April 2021 at the earliest.

Chorley Council benefitted in 2019/20 from being a member of the Lancashire 75% business rates pilot. The spending round 2019 announced that all 75% pilots would be disbanded. The budget assumed that in 2020/21 the council would revert to member of the Lancashire business rates pool as per the guidance from Government. The spending review also announced a gradual reduction and ultimate removal of New Homes Bonus.

With regards to Council Tax, the Provisional Local Government Finance Settlement announced a council tax referendum principle of up to 2% in 2020/21. The council expects a gradual slowdown in house building over the coming three years, however there were still sites coming forward. An average 1.5% expansion of the base was forecast in the draft budget for 2021/22 onwards.

Following discussion on the slowdown in house building, the committee were advised that this was in relation to previous years where the borough had experienced an increase in house building e.g. the development of Buckshaw. The Executive Member undertook to find out the specific house building numbers.

As part of the triennial pension review the Lancashire County Pension Fund announced an increase in employer pension contributions for 2020/21 to 2022/23 to meet the future costs of the scheme. The contributions had increased from 14.4% to 16.4% resulting in an increase in the council’s contribution. This was lower than the 17.7% assumed in the previous year’s budget.

Members welcomed the reduction in the contributions to the pension deficit and that the Lancashire County Pension Fund had outperformed most local authority pension funds over the past 3 years. Looking forward the pension fund provided figures that forecast Chorley Council’s contribution to the prior year deficit which would reduce by approximately £500k, reducing the council’s budgeted contributions by over £1.5m over the next three years.

Funding to Chorley Council had fallen from over £17m in 2016/17 to a forecast figure of under £12m by 2022/2023. During this period the council will continue to experience inflationary increases in staff and non-staff budgets. However, the council had been ambitious in its approach to meeting the budget deficit through generating efficiency savings and additional income.

The council had been successful in keeping costs down whilst continuing to provide the high-quality services expected from its residents. The council would continue to invest within Chorley borough to generate income and therefore make the council less reliant on the increasingly uncertain funding from Government.

The Committee discussed how the Flower Show could be made more profitable and suggested that more advertising could be done, including greater use of parish council noticeboards. Members also discussed the options available for the council in maintaining the bus station, regenerating the traditional markets and in-house procurement for the leisure contract.

Despite the identified budget savings there remained large forecast budget deficits of £1.206m in 2021/22 and £2.093m in 2022/23. To achieve a sufficient reduction in net expenditure the Council’s strategy would be:

1.    To realise savings through the procurement of its contracts

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

3.    To make the Council more financially self-sufficient with specific emphasis on creating investment that generates income.

Through these strategies the council will balance its budget in the medium term

Consultation on the proposed budget for 2020/21 would commence following approval of the proposals by Executive Cabinet. The consultation would invite responses from residents, partners, parish groups and other stakeholders through a variety of methods including a short survey (available both in hard copy and online). Results would be analysed and published in February for consideration as part of the budget finalisation.

The Chair thanked Cllr Peter Wilson and James Thomson for attending the meeting and presenting the report.

Decision: that the report be noted.