Agenda item

Report of the Head of Corporate Resources

The Cabinet considered the joint report of the Chief Executive and the Head of Corporate Resources that provided information on the following issues in connection with Council’s forthcoming consideration and approval, on 1 March 2018, of the Revenue Budget for the period 2018/19 – 2019/20, and also the level of Council Tax for 2018/19:- 

·       An assessment of the Council’s current financial position and approach to the 2018/19 to 2019/20 Budget Plan;

·       Progress that has been made during the last year within the Council’s Framework for Change programme;

·       An update on the Government’s announcement of resources that are available to the Council for 2018/19 (subject to final confirmation by the Government);

·       The Council’s current financial position and the assumptions built into the Medium Term Financial Plan;

·       The options available for the Council’s Budget;

·       The proposed Capital Programme for 2018/19 and 2019/20; andThe first budget estimate of the funding gap that the Council will face in 2020/21.

As such, the report set out the approach to the financial strategy of the Council and the national and local financial context within which it was operating; indicated that the Council had a statutory requirement to remain financially sustainable; that the Council’s Framework for Change Programme was a comprehensive and ambitious programme that sought to support the delivery of the Council’s core purpose; that as would be expected with a programme of this size and complexity that spanned a number of financial years, the detailed proposals had been and would continue to be the subject of change as they were developed and ultimately implemented; and that within this context, work had been undertaken to confirm that change proposals for 2018/19 were viable and would help deliver financial sustainability.

In respect of the overall financial context for the Council and its approach to the 2017/18 to 2019/20 Budget Plan the report indicated that In 2010, Central Government imposed, what were thought at the time, to be significant reductions in local government financial support; that rather than this being a short term restriction in spending, the austerity programme had extended into a ten-year long period of severe budget reductions; that for Sefton this had resulted in a funding gap of £233m being required to be met by the end of 2019/20, with a direct loss of 51% of government funding which equated to £722 per Sefton household; that due to the scale of this financial challenge (and taking into account the significant savings that had already been made since 2010) the Council undertook a comprehensive review of its role within the Borough, via the Imagine Sefton 2030 consultation and as a result, updated its core purpose; and that it was subsequently determined that the delivery vehicle for the Council’s core purpose and to ensure financial sustainability would be the “Framework for Change” programme, the key pillars of which were detailed in the following diagram in paragraph 2.4 of the report.

The report also detailed the progress to date made on the “Framework for Change” programme and that the Council remained focused on: -

·       Creating more and better jobs for local people – Economic Growth

·       Working with partners to deliver affordable services which achieve the best possible outcomes – Public Sector Reform

·       Making every pound count in everything we do – Service Delivery Options

·       Investing wisely and creatively to make and save money, grow faster and enable our communities to thrive – Strategic Investment

The report also provided information on the Medium Term Financial Plan (MTFP) 2018/19 – 2019/20 and in particular on the following issues:-

·       Additional budget pressures associated with Adult Social Care and Children’s Social Care

·       Key MTFP assumption revisions relating to the Local Government Pay Offer, the Transport Levy, Business Rates and Council Tax Base, the Waste Levy, VAT Shelter Income, Leisure Income – VAT Liability Change, and the New Homes Bonus reduced funding 

·       Impact of the Local Government Financial Settlement

·       Review of Budget proposals and planning assumptions

Regarding the Two-Year Budget Plan 2018/19 to 2019/20 the report indicated that, based upon the revisions to the MTFP and the savings that were forecast from the Public Sector Reform programme, it was now estimated that the funding shortfall in the following two years would be £11.227m and £2.542m respectively, before any Council Tax decisions were made and any additional service delivery options were considered; and that in order to support this two year package and the revised funding gap, a number of Service Delivery Options were now proposed relating to: -

·       Supplies and Services Saving

·       Sefton New Directions Contract Saving

·       The annual income stream arising from the acquisition of the Strand Shopping Centre

·       PSR2 – Re-phasing of Saving Achievement

·       Transforming Sefton Reserve

·       Risk Management, Financial Monitoring and Sustainability

In conclusion, the Budget Plan 2018/19 to 2019/20 had proved to be a very positive first year of the financial plan period; and indicated that the Council would continue to play its part and show strong and visible leadership in delivering the Vision 2030; and that the Council had adopted the 2030 Sefton Vision of ‘A confident and connected Sefton’ and would continue to strive to deliver key priorities, ensuring everything it did had a contributory focus to the future of the Borough.

The report then set out specific Budget 2018/19 issues relating to charges relating to external / levying bodies and the proposed overall Council Tax increase; provided information on schools’ related grants; other Government grant notifications in 2018/19; a summary of budget proposals for 2018/19; and precepts to the Police and Crime Commissioner and Fire and Rescue Service.

The following appendices were attached to the report:-

DECISION MADE:   That the Cabinet

Reasons for the Decisions:

In March 2017 Council approved a three year budget plan to 2020.  As the Council enters the second year of this budget plan it remains confident, that its continued strategic approach to budget planning alongside good financial management and extensive community engagement, means that the plan continues to develop on solid foundations, remains flexible and will secure the future sustainability to 2020 and beyond. 

The recommendations in this report provide the basis on which the budget plan would be balanced for the financial year 2018/19 and will ensure that the Council’s statutory obligations are met.

Alternative Options Considered and Rejected:

The Council is legally required to set a balanced budget each year and this report has taken due consideration of all financial issues in its development.  No additional options were available for inclusion.