Agenda item

Financial Strategy

To consider a report by the Director (NE) (reference 16/52) attached.

 

Minutes:

The Cabinet considered a report by the Director (NE) (Reference 16/52) in respect of the draft Financial Strategy 2016-2026.  In presenting the report, the Portfolio Holder for Finance, Procurement and Legal, Councillor Mallory acknowledged the contributions of officers, Cabinet Members, other Council Members, and the wider public towards completing the challenging task of setting a balanced budget for 2016/17.  Following the Health and Wellbeing Scrutiny Committee’s recommendation to the Cabinet to consider continue funding Create Arts Development Ltd in light of the cultural and economic benefits this organisation brought to the Borough, Councillor Mallory proposed that recommendation (iv) be amended to instruct that the Council enter into dialogue with Create and that a one-off budget within the 2016/17 budget be earmarked to support Create subject to confidence being gained that their long term financial sustainability can be achieved without ongoing direct financial support from the Council, and that authority to enter into terms with Create for 2016/17 be delegated to the Portfolio Holder for Finance, Procurement and Legal and the relevant Director.  Councillor Mallory also noted the recommendation in the report to increase Council Tax for a Band D property by £5 per year.  This equated to an additional 81 pence per year for a Band D Property compared to the original proposed increase of 1.99%, and would be the first time that the Council had raised Council Tax since 2010.  The increase would enable an extra £150k to be generated for the Borough.  Members were then given an overview of the key aspects of the strategy.   The Director, Mr Edwards apologised for the late publication of the report, whilst noting that the Council’s final settlement from Government had only been announced the previous week.  Members were reminded that when the draft budget was presented to the Cabinet the previous month as a basis for public consultation, there was still £169k to find to balance the budget.  Public feedback obtained through the consultation exercise was largely supportive of the proposals.  The savings shortfall had increased to £196k for the reasons given in paragraph 3.2.2.  However, a number of savings options were now proposed (outlined in paragraph 3.2.3) for inclusion in the final budget to bridge the funding gap.  Despite the increasingly difficult financial circumstances, Mr Edwards noted the many positives in the draft budget, including the creation of a one-off £630k ‘Investment Fund’ to invest in schemes that would drive forward future revenue budget savings, the additional one-off funding of £369k in key areas, and the substantial capital investment planned for 2016/17.  The budget reflected the Council’s approach of not only survival, but ensuring the Borough was the best it could be for residents and visitors.  Mr Edwards alluded to the unfairness of the final Local Government Finance Settlement for 2016/17 for this authority in terms of additional Transitional Grant and Rural Services Delivery Grant (£22k in total), when compared with Hambleton which received £470k and Ryedale which received £452k.  Councillor Mallory added that the day before she had made strong representations about the Council’s LGFS in a meeting with local MP, Mr Goodwill, who would be pursuing the matter.  The Chairman and other Cabinet Members thanked Mr Edwards and his team for their work in preparing the report and commended the budget proposals.  Councillor Cockerill queried whether there was scope to increase any of the Environment and Regulation service charges set out in Appendix C.  The Director, Mr Watson commented that many charges were dictated by statute, but undertook to review them with the Environment and Regulation Manager and the Portfolio Holder, Councillor Chatt, before the budget was finalised and approved at full Council.  The Chairman invited Councillor Jefferson to address the Cabinet.  Councillor Jefferson commented on the success of the recent Coastival festival and supported the Council’s continuing support for Create Arts Development Ltd.

RESOLVED that the Cabinet:

  i.            Note the outcome of the final Local Government Finance Settlement;

ii.            Note that following an increase in the referendum threshold announced in the final Local Government Finance Settlement the recommended level of Council Tax increase for a Band D equivalent property in 2016/17 is £5.00 (2.37%) for this Council, rather than the 1.99% increase previously reported;

iii.            Note the feedback from the budget consultation;

iv.            Instruct that the Council enter into dialogue with Create and that a one-off budget within the 2016/17 budget be earmarked to support Create subject to confidence being gained that their long term financial sustainability can be achieved without ongoing direct financial support from the Council, and that authority to enter into terms with Create for 2016/17 be delegated to the Portfolio Holder for Finance, Procurement and Legal and the relevant Director;

v.            Note the updated Treasury Management Strategy for 2016/17, with the principal amendments being:

·         Increased maximum investment limit per individual Local Authority from £5 million to £7 million;

·         Increased maximum investment limit for Nationwide Building Society from £5 million to £7 million;

·         Introduction of a third tier of building societies, with a credit rating of A- Long Term and F1 Short Term, with a maximum investment limit of £2.5 million;

·         Inclusion of Police and Fire Authorities on the Council’s lending list, with a maximum investment limit per individual Authority of £2 million;

·         Increased maximum Group lending limit from £7 million to £10 million;

·         Increased maximum Group investment limit for nationalised banking institutions from £7 million to £15 million;

·         Inclusion of the Municipal Bonds Agency as a source of borrowing.

 

That the Cabinet recommend to the Council:

 

   vi.        The approval of the Financial Strategy, specifically:

 

·         the Revenue Budget for 2016/17;

·         a Council Tax increase of £5 for a Band D property (2.37%);

·         the Capital Budget and proposed new schemes for 2016/17;

·         the optimum levels of reserves and use of reserves in 2016/17;

·         the Treasury Management Strategy and Prudential Indicators.

·         the Council’s Pay Policy Statement contained, as required under Section 38 (1) of the Localism Act 2011;

 

  vii.        The fees and charges administered by the Council’s Environment and Regulation service, as itemised in Appendix C, which will come into effect on 1 April 2016;

viii.        That responsibility for the acceptance of a four-year settlement be delegated to Cabinet.

 

Reasons

Full Council must approve the 2016/17 budget and associated Council Tax level and fees and charges, which are incorporated within the Financial Strategy, at its meeting on 26 February 2016.

 

Supporting documents: