Agenda item

Report of the Chief Finance Officer

The Cabinet considered the report of the Chief Finance Officer which provided details of the Council’s current financial position for 2016/17 after taking into account the Local Government Finance Provisional Settlement announced on 17 December 2015; the financial position in the context of the Council’s priorities; the budget gap remaining for 2016/17 and proposed savings options that would contribute to the delivery of a balanced budget for 2016/17; the forecast budget gap for 2017/18 to 2019/20; and proposed changes in accounting policy which would support the Council over the short and medium term in setting of a medium term financial plan.

The Chief Finance Officer reported that the report had been produced on the best information; some funding allocations had not been notified to the Council at this stage and best estimates had been used. She also referred to the paper on the proposed responses to the Government consultation paper on the Local Government Financial Settlement 2016/17 which had been circulated as a supplementary paper.

The Chief Executive indicated that there were three key risks associated with the financial plan which related to the level of the Public Health Grant; the resourcing of social care activities through the Better Care Fund which were still the subject of negotiation with the Clinical Commissioning Groups and the impact of the National Living Wage on commissioned services.

Decision Made: That

(1)     the update of the Local Government Finance Provisional Settlement for 2016/17 be noted;

(2)     the Council be recommended to approve the funding and budget options for 2016/17 as set out in paragraph 4.5 of the report, including the use of Social Care Council tax precept, use of the Better Care Fund and the revised use of one- off reserves;

(3)     it be noted that the use of one-off resources is not sustainable in future years and savings will need to be found from 2017/18 to replace the use of one- off resources in 2016/17;

(4)     it be noted that the Council will be required to consider the coherence of the proposals when taken as a whole at the Budget Council meeting on 3 March 2016 in setting the 2016/17 budget;

(5)     the Chief Finance Officer be requested to present a formal amendment to the methodology for the Minimum Revenue Provision calculation to the next Cabinet for approval, as outlined in paragraph 4.4.2 of the report;

(6)     the forecasted additional budget saving requirement for 2017/18 – 2019/20 as outlined in paragraph 5.1 of the report be noted;

(7)     approval be given to the preparation of a new four year financial plan to cover the period of the Government Comprehensive Spending review, as set out in paragraph 5.8 of the report; and

(8)     approval be given to the submission of the responses to the to the Government consultation paper on the Local Government Financial Settlement 2016/17, as set out in the supplementary paper.

Reasons for Decision:

To ensure that the Council is fully aware of the latest Medium Term Financial Plan position and the identified saving requirements in each of the next four financial years; and to agree the approach of identifying saving options in three distinct phases, which would include:

i)             Funding and budget changes to arrive at a balanced budget for 2016/17 to be agreed before the statutory date of 10 March 2016; and

ii)            To commence the preparation of a sustainable and robust balanced financial plan to 2020.

Alternative Options Considered and Rejected:

Additional budget savings and options would need to be identified by the Budget Council meeting on 3 March 2016 to ensure that the 2016/17 financial year’s budget can be balanced. It is a legal requirement to set a balanced budget and to ensure the medium term financial position is robust. The 2017/18 Budget would need to be balanced in March 2017. Considerations would also need to be given to the 2018/19 and 2019/20 budget position, as a result of the indicative grant reductions announced by the Government.