Agenda item
Budget Update
- Meeting of Overview & Scrutiny Committee, Tuesday, 3rd December, 2013 7.00 p.m. (Item 7.3)
- View the background to item 7.3
· To consider a verbal report on the 2014/15 Budget scrutiny process and note the presentation made.
Minutes:
Chris Holme (Acting Corporate Director Resources) and Paul Thorogood (Interim Service Head Finance & Human Resource Development)gave a detailed presentation (PowerPoint slides Tabled, a copy of which would be interleaved with the minutes) which focused on:-
· The current financial context for Budget proposals being developed by the Executive, to be published on 24 December 2013 and considered by the Mayor in Cabinet on 8th January.
· The proposed public consultation process and process for OSC Budget Scrutiny in January. The following points were highlighted:-
- Recap of Government Spending Round 2013 and impact on LBTH
- The current proposed Medium Term Financial Plan 2013/14 to 2016/17
- Forecast savings targets for 2014 to 2017
- Identifying the scale of the funding gap
- Other Factors contributing to budgetary pressures
- Approach to managing the funding gap
- Budget consultation process
- Anticipated outline content of January and February Cabinet reports on Budget
- Proposed approach for OSC Budget scrutiny in January.
A discussion followed, which focused on the following points:
· Assurance sought and given that the proposed approach for OSC Budget scrutiny in January, as with previous years, would allow for OSC consideration of current savings targets and related performance, together with the validity of assumptions underpinning financial planning and in particular future savings targets. The report on the Budget presented to January OSC should include a table of savings and identify those not met.
· Clarification sought and given as to whether the level of savings identified as required in 2015/16 (£28.5 million) might change; and whether this might provide scope to allocate additional resources for Council priorities. The planned level of savings was absolute as it represented 5 to 7 percent of the net General Fund, a parameter which the Acting Corporate Director Resources was required to keep within. Similarly with the level of savings identified as required in 2016/17 (£42.5 million). It might be possible to review this in 2017/18 as the scale of the Council reduced.
· Clarification sought and given as to whether there was any intention to identify further savings with a view to reducing the £7.5 million to be used from Reserves in 2014/15 to manage the Council’s funding gap. Discussions with the Executive and directorates were ongoing and the sooner savings were agreed the sooner planning for 2015/16 could commence. Provided there were no surprises in the Government Settlement announcement in December no further savings would be needed in 2014/15.
· Consideration that the proposed approach of using reserves to meet any Budget gap was not prudent and the rationale for this was unclear. Would It not be a better approach to identify savings that could be made in the near future thereby reducing the pressure to find savings of a larger scale later. The financial strategy agreed by the Council in March 2013 was being adhered to.
· Clarification sought and given as to whether there were areas where agreed savings had not been achieved. Approximately £91 million of savings had been identified for delivery since 2010 and of this only £0.5 million was thought to be at risk of non-delivery, a proportionately small amount. The impact of the Government’s Welfare Benefit Cap also posed a risk to the currently balanced Budget, however there were sufficient contingencies in addition to reserves to mitigate this.
· Clarification sought and given as to when the Council’s funding to help families impacted by the Welfare Benefit Cap would be exhausted. The one off funding of £2.2 million to assist with temporary accommodation would be exhausted at current rates of usage by October 2014.
The Chair Moved and it was:-
Resolved
1. The position update in relation to development of the Executive’s Budget proposals contained in the oral report/ presentation be noted;
2. That the proposed 2014/15 OSC Budget scrutiny process, summarised in the oral report/ powerpoint presentation, be formally agreed.
Action by:
Chris Holme (Acting Corporate Director Resources)
Paul Thorogood (Interim Service Head Finance & Human Resource Development, Resources)
Louise Russell (Service Head Corporate Strategy and Equalities)
Mark Cairns (Senior Policy and Performance Officer, Corporate Strategy & Equality Service, CE’s)
Angus Taylor (Principal Committee Officer, Democratic Services, CE’s)