Agenda item

To consider the report and make any appropriate recommendations to Cabinet.

Budget book attached as a supplementary document.

The Chairman offered thanks to the Assistant Director for the amount of work she and her team had put into presenting the budget in what was a difficult period.

The Assistant Director presented, with the aid of a power-point presentation, the Financial Plan for 2015-2020 which was produced as part of the council tax setting process to take account of any changes in financial settlements, inflation on service costs and revised priorities of the Administration.  The presentation provided Members with background information and highlighted the key issues of the Financial Plan for 2015-2020.

A copy of the presentation is attached to the minutes.

The Assistant Director advised Members that the Financial Plan 2015/2020 included significantly more downside risks around funding than in previous years.  The estimated business rates growth presented a significant level of risk.  If the anticipated projects did not progress as planned or were cancelled the growth would not be achieved.

The Chairman invited questions and comments from the Panel, as summarised below.

Councillor Crofts referred to the Internal Drainage Board Levy and the Chief Executive explained that the Council was concerned regarding the Internal Drainage Boards levies which were paid by the Council to the various Boards.  The levies counted as spending of the Council, but a contribution was made by Government as part of the financial settlement.  Any substantial increase in the levies had an impact on the council tax payer who would pick up the residual costs.  The Chief Executive highlighted that with the significant reduction in the RSG, any increase in IDB levies in the future would have to be met from council tax or cost savings.  The Leader of the Council, Councillor Daubney informed those present that he had asked Members of the Council who were representatives on Internal Drainage Boards to ensure that they were kept up to date with the Internal Drainage Board’s finances and any forward planning to ensure that information relating to potential increase in levies was communicated to the Council.

Councillor Mrs Watson referred to an article she had seen in the media relating to increased Council Tax to be paid in areas liable to flooding to pay for flood defences.  The Chief Executive explained that no announcement had been made officially to the Council and it was unlikely that proposals would be introduced for the forthcoming financial year.  The Leader of the Council, Councillor Daubney explained that some Authorities had met with the Department for Communities and Local Government where defences were inadequate.

In response to a question from Councillor Kunes, the Assistant Director explained that Bellwin was a holding fund for disasters.  Costs incurred could then be claimed back from the fund.  She informed those present that the fund had been utilised during the tidal surge a few years ago.

In response to a question from Councillor Moriarty, the Assistant Director explained that a NNDR return had to be submitted to Government which was based on an estimation of Business Rates collected.  It took into account potential appeals using information from the Valuation Office.  This was then factored into the budget.  It was highlighted that there was a risk if proposed development did not come forward and this would have a financial impact.

In response to a further question from Councillor Moriarty, the Assistant Director confirmed that Special Expenses had been frozen as this was a condition of the freeze grant.  Now that there was no freeze grant, the amount of Special Expenses charged had been revisited and would be recharged to the relevant Parish Council.  She reminded those present that the Environment and Community Panel had recently considered a review of grounds maintenance, which was a Special Expense.  The Assistant Director explained that special expenses were functions carried out by Parish Councils, but which the Borough Council undertook on their behalf.  Special Expenses would appear as a separate line on Council Tax Bills.

In response to a question from Councillor Moriarty, the Chief Executive explained that the Council had looked at various ways to generate income.  He referred to the seriousness of the budget and the downside risks, which included lack of investment from Businesses, resulting in reduced Business Rates.  He highlighted that if the national deficit was not met, the Government could look at reducing aid to Councils even further.  He commented that a combination of measures and discretionary services would need to be looked.  He referred to joint working and providing services to other Local Authorities, and commented that all Local Authorities were in the same position and therefore unlikely to be able to pay to outsource services.  The Chief Executive commented that a wide range of opportunities would be explored and it was important to try and make savings as quickly as possible.

The Chief Executive informed those present that from 2020 onwards it would be unlikely that any RSG would be provided and the Council would have to be self-sufficient.

The Vice Chairman, Councillor Mrs Wright referred to the New Homes Bonus and the Assistant Director explained that the Government had taken approximately half the funding allocated for New Homes Bonus and diverted the funding to enhance social care.  This would have a financial impact on all Shire District Authorities.  The Chief Executive explained that the Council was still required to work towards meeting the five year housing supply, but there would now be less of a financial incentive for doing so.

Councillor Hipperson referred to Parish Precepts and explained that he was aware that advice had been provided to Parish Councils that they should increase the amount held in reserves.  He asked if there was any guidance available on required levels etc.  The Assistant Director advised him to contact the Norfolk Association of Local Councils who may be able to provide guidance.

The Leader, Councillor Daubney acknowledged the huge amount of work required to achieve the required savings.  He explained that Management Team and the Cabinet had looked at savings plans and Members would be required to make difficult decisions.  He explained that the Council would be required to draw on their balances; therefore it was important that as much budget was saved as possible as other factors could have an impact on the budget available such as a decrease in Business Rates.

Councillor Moriarty referred to the New Homes Bonus.  The Chief Executive explained that the Government had issued a consultation document on New Homes Bonus:  ‘Sharpening the Incentive’.  The plan assumed that the Government’s ‘preferred options’ would be adopted and that the outcome of the proposals contained in the consultation would be a reduction in New Homes Bonus in 2017/2018 from the current arrangement.  A link to the website could be found on the page 38 of the Financial Plan.  The deadline for responses to the consultation document was 10 March 2016.

RESOLVED:  That the Regeneration and Development & Environment and Community Panel supported the recommendations to Cabinet as set out below:

Recommendation 1

It is recommended that Council approve the revision to the Budget for 2015/2016 as set out in the report.

Recommendation 2

Council is recommended to reaffirm the Policy on Earmarked Reserves and General Fund Working Balance and the maximum balances set for reserves as noted in the report.

Recommendation 3

It is recommended that Council:

1)            Approves the budget of £17,970,200 for 2016/2017 and notes the projections for 2017/2018, 2018/2019 and 2019/2020.

2)            Approves the level of Special Expenses for the Town/Parish Councils as detailed in the report.

3)            Approves the Fees and Charges 2016/2017 detailed in Appendix 4.

4)            Approves a Band D Council tax of £112.87 for 2016/2017.

5)            Instructs Management Team to present the Council’s Efficiency Plan to Cabinet as soon as the Government guidance is published and that the Council takes up the option to ‘fix’ the four year settlement referred to in paragraph 1.3 above.

Recommendation 4

Council is recommended to approve a minimum requirement of the General Fund balance for 2016/2017 of £932,756.

Recommendation 5

Instructs Management Team to present the Council’s Efficiency Plan to Cabinet as soon as the Government guidance is published and that the Council takes up the option to ‘fix’ the four year settlement referred to in paragraph 1.3 above.