Agenda item

Report of the Head of Corporate Resources

The Committee considered the report of the Head of Corporate Resources that indicated that to comply with statute, the Chief Financial Officer was required to report to Council prior to the approval of the budget and the setting of the Council Tax and to give assurance that the budget was robust and that there were adequate reserves and balances. 

The report detailed that when preparing the budget for 2019/20 and the third year of the current Budget Plan, the Council’s Strategic Leadership Board had led and been fully engaged in the process and had been challenged to ensure that services could be delivered within available funding and that estimates of expenditure and income were realistic; that as a result the Strategic Leadership Board had confirmed that the proposals made within this budget package both from the Public Sector Reform projects and service options were deliverable; that the proposed budget, due to the scale of the funding gap faced by the Council, had been prepared with careful consideration and full acknowledgement of the risk and uncertainty around both the proposals made and existing pressures faced by the Council; and that as this risk could not be fully mitigated e.g. as a result of the demand pressure facing both Adults and Children’s Social Care budgets, it was important that these proposals were considered alongside the level of reserves held.

The following factors had been considered and were detailed in the report:

·       Financial Environment for Local Government and Sefton MBC

·       Impact of Previous Years’ Budget

·       Four-year settlement and Central Government funding

·       Maintaining Service Delivery

·       Resources to Deliver Change

·       Inflation and Annual Cost Increases

·       Anticipated New Demand Pressures

·       Financial Management

·       CIPFA Financial Resilience Index

·       Management of Risk

·       Capital Strategy and Strategic Investment

·       External Advice

Regarding the Reserves Strategy 2019/20 the report also provided information on:-

·       General Fund

·       National considerations associated with the impact of the economic climate on Council costs and the anticipated reductions in Government funding

·       Local considerations associated with planned changes in service delivery methods / contracts, the impact of rising demand for services and legal challenges   

·       The sensitivity of budget setting assumptions and the significant earmarked reserves

·       Management/Member actions associated with clear corporate/member messages and the three-year plan development 

The report concluded that as a result of considering the issues contained within the report, it was the view that the budget proposed was a robust budget package and the opinion provided was in accordance with Section 25 of the Local Government Act 2003. 

This report would also be considered by Cabinet and Council at their meetings to be held on 14 and 28 February 2019 respectively.

Members of the Committee asked questions/commented on the following issues:

·       Caveats placed on short term Government funding options that were one-off in nature and that failed to meet the level of resources required

·       The focus on early intervention and protection to combat the problems being experienced in Children’s Social Care

·       Regarding the CIPFA Financial Resilience Index, Sefton comparing favourably in relation to its budget flexibility and that it was relatively less reliant on grant income; but that it was at a higher risk of financial stress due to its level of reserves and balances at the end of 2017/18 being lower than other metropolitan councils. 

·       The Council’s current budget planning assumption that it may have to save a further £15m per year over the next three years (£45m in total); but however, until there was clarity on reforms and the government ‘promise’ that the austerity programme would come to an end was understood, it was noted that this planning assumption could and would vary considerably

·       The Business Rates pilot and New Homes Bonus and their impact on Council Tax 

RESOLVED: That it be noted that: