Agenda item

[To approve matters relating to the draft budget for 2018/19 and beyond as the basis of consultation with stakeholders.]

1. That it be approved that the budget reduction proposals amounting to £12.5 million in 2018-2019 be further developed, including the necessary equalities analyses, for inclusion in the Draft Budget and Medium Term Financial Strategy 2018-2019 – 2019-2020, to be reported to Cabinet in October 2017 for approval to proceed to the formal consultation and scrutiny stages of the budget process.

2. That it be approved that work continues between July and October 2017 to further develop and identify additional budget reduction and income generation proposals totalling £2.3 million, in order to ensure that a balanced budget can be set in 2018-2019.

3. That it be approved that work continues to identify additional recurring budget reduction opportunities that will work towards the remaining budget challenge to be delivered by 2019-2020. An update on progress will be incorporated into the October report to Cabinet.

4. That it be noted that, of the total £12.5 million budget reduction proposals identified at this stage for 2018- 2019, £5.0 million are ongoing budget reduction proposals, as detailed in Appendix A to the report, whilst £7.5 million are one-off budget reduction proposals, as detailed in Appendix B to the report. Therefore, a significant element of the budget reduction proposals relate to one-off opportunities that can be achieved in 2018-2019. Taking this into account, the remaining cumulative budget challenge to be identified by 2019-20 stands at £15.5 million.

5. That it be noted that the updated projected deficit assumes the achievement of budget reduction proposals amounting to £33.8 million over the three year period to 2019-2020. Over the last seven financial years the Council has identified budget reductions in excess of £200.0 million. This continues to be the most significant financial challenge that the Council has ever faced.

6. That it be noted that, due to external factors, budget assumptions remain subject to change. This could therefore result in alterations to the financial position faced by the Council.

7. That it be noted that, while significant progress is being made towards identifying the projected budget deficit for 2018-2019; work continues to identify possibilities to deliver the remaining £2.3 million of budget reduction and income generation targets for 2018-2019.

8. That it be noted that the General Fund revenue outturn position for 2016-2017 was a net underspend of £266,000 (-0.12%) against the net budget requirement of £217.4 million, after meeting the net cost of redundancy after the use of capital receipt flexibility and contributions to essential specific reserves, as reported to Cabinet at this meeting in the Revenue Budget Outturn 2016-2017 report.

9. That it be noted that the positive General Fund outturn position for 2016-2017 will help to support the Council’s short term financial position, enabling one-off investment to support transformation of the Council, however, it is important to note that it does not address the challenging financial position that the Council finds itself in over the medium term; as detailed in this report.

10. That it be noted that an element of the underspend arising within the 2016-2017 General Fund outturn is already factored into the Council’s Medium Term Financial Strategy (MTFS), including the early achievement of approved budget reductions.

11. That it be noted that the Council’s General Fund Balance remains at £10.0 million; the minimum balance as determined in the Council’s approved Reserves and Balances Policy. Emphasis therefore continues to be placed on identifying budget reductions and income generation proposals to meet the projected budget deficit over the medium term.

12.That it be noted that the 2018-2019 budget timetable will, as in previous years, include an updated report presented to Cabinet in October 2017 detailing budget reduction and income generation proposals that will be subject to formal budget consultation and scrutiny during October – December 2017. Further to this, an update on all budget assumptions and the Provisional Local Government Settlement will be presented to Cabinet by January 2018, with the final budget report due to be approved by Full Council in March 2018.

Councillor Andrew Johnson presented the Draft Budget and Medium Term Financial Strategy 2018-19 to 2019-20 for approval. The report provided an update on the progress made towards identifying additional budget reductions proposals in order to address the projected budget deficit for 2018-19. The report was also the first of the financial year on the budget and Medium Term Financial Strategy, providing an update on key factors, the timetable for the budget process and the risks in relation to them.

Resolved:

1.   That it be approved that the budget reduction proposals amounting to £12.5 million in 2018-19 be further developed, including the necessary equalities analyses, for inclusion in the Draft Budget and Medium Term Financial Strategy 2018-19 – 2019-20, to be reported to Cabinet in October 2017 for approval to proceed to the formal consultation and scrutiny stages of the budget process.

2.   That it be approved that work continues between July and October 2017 to further develop and identify additional budget reduction and income generation proposals totalling £2.3 million, in order to ensure that a balanced budget can be set in 2018-19.

3.   That it be approved that work continues to identify additional recurring budget reduction opportunities that will work towards the remaining budget challenge to be delivered by 2019-20. An update on progress will be incorporated into the October report to Cabinet.

4.   That it be noted that, of the total £12.5 million budget reduction proposals identified at this stage for 2018-19, £5.0 million are ongoing budget reduction proposals, as detailed in Appendix A to the report, whilst £7.5 million are one-off budget reduction proposals, as detailed in Appendix B to the report. Therefore, a significant element of the budget reduction proposals relate to one-off opportunities that can be achieved in 2018-19. Taking this into account, the remaining cumulative budget challenge to be identified by 2019-20 stands at £15.5 million.

5.   That it be noted that the updated projected deficit assumes the achievement of budget reduction proposals amounting to £33.8 million over the three year period to 2019-20. Over the last seven financial years the Council has identified budget reductions in excess of £200.0 million. This continues to be the most significant financial challenge that the Council has ever faced.

6.   That it be noted that, due to external factors, budget assumptions remain subject to change. This could therefore result in alterations to the financial position faced by the Council.

7.   That it be noted that, while significant progress is being made towards identifying the projected budget deficit for 2018-19; work continues to identify possibilities to deliver the remaining £2.3 million of budget reduction and income generation targets for 2018-19.

8.   That it be noted that the General Fund revenue outturn position for 2016-17 was a net underspend of £266,000 (-0.12%) against the net budget requirement of £217.4 million, after meeting the net cost of redundancy after the use of capital receipt flexibility and contributions to essential specific reserves, as reported to Cabinet at this meeting in the Revenue Budget Outturn 2016-17 report.

9.   That it be noted that the positive General Fund outturn position for 2016-17 will help to support the Council’s short term financial position, enabling one-off investment to support transformation of the Council, however, it is important to note that it does not address the challenging financial position that the Council finds itself in over the medium term; as detailed in this report.

10. That it be noted that an element of the underspend arising within the 2016-17 General Fund outturn is already factored into the Council’s Medium Term Financial Strategy (MTFS), including the early achievement of approved budget reductions.

11. That it be noted that the Council’s General Fund Balance remains at £10.0 million; the minimum balance as determined in the Council’s approved Reserves and Balances Policy. Emphasis therefore continues to be placed on identifying budget reductions and income generation proposals to meet the projected budget deficit over the medium term.

12.That it be noted that the 2018-19 budget timetable will, as in previous years, include an updated report presented to Cabinet in October 2017 detailing budget reduction and income generation proposals that will be subject to formal budget consultation and scrutiny during October – December 2017. Further to this, an update on all budget assumptions and the Provisional Local Government Settlement will be presented to Cabinet by January 2018, with the final budget report due to be approved by Full Council in March 2018.