Agenda item

(To receive a report by David Forbes (County Finance Officer), which sets out the Council Budget proposals for 2017/18.  Comments from the Committee will be considered by the Executive at its meeting on 7 February 2017)

A report by David Forbes (County Finance Officer) was considered, which set out the Council Budget Proposals for 2017/18.  Michelle Grady (Head of Finance – Communities); Steve Houchin (Head of Finance – Adult Care); Claire Machej (Head of Finance – Corporate); and Mark Popplewell (Head of Finance – Children's) were also in attendance.

The report described the Council's Budget Proposals based on the four year funding deal which had been announced by Government, as part of the 2016/17 Local Government Financial Settlement.  Details of the Provisional Local Government Finance Settlement for 2017/18 were attached at Appendix A to the Committee's report. 

In addition to the review of budget proposals by the Committee, it was noted that further scrutiny and consultation included:

·       All other Council Scrutiny Committees had received the opportunity to scrutinise budget proposals in detail during January 2017;

·       Budget proposals had been publicised on the Council's website together with the opportunity for the public to comment; and

·       A consultation meeting with local business representatives, trade unions and other partners was scheduled to take place on 27 January 2017.

Members of the Committee were provided with an opportunity to ask questions, where the following points were noted: -

·         With regards to the loss of £1m from the New Homes Bonus Grant for 2017/18 due to a reduction in the number of payment years from six years to five, concerns were raised about how this would affect future plans and budgets, as these would have been based on the original figures.  It was noted that the New Homes Grant was top sliced from the Revenue Support Grant and the amount received would be based on the number of houses built;

·         Clarification was sought as to why it was proposed to increase council tax by 3.95% rather than 3.99%.  It was confirmed that it was proposed to increase the council tax by 3.95%, rather than 3.99%, as the Environment Agency and Eastern Inshore Fisheries and Conservation Authority precept the Council so there was a need to allow for a 'safety net' for these precepts to ensure that the council tax rate was not pushed over 4%, thus triggering a referendum inadvertently;

·         In relation to the reserves, it was clarified that there was approximately £15m in the general reserves which were used as an emergency fund, and circa £50m in the Financial Volatility Reserve, which was used to balance the Council's budget.  It was proposed to use approximately £26m of the Financial Volatility Reserve to balance the budget in 2017/18.  The remaining balance in the Financial Volatility Reserve would be used to assist in balancing future budgets.  It was noted that if the council tax was not increased by 3.95% each year, then there would be a loss of circa £9.8m from the reserves each year, leading to a cumulative loss of over £27m by the end of year three;

·         Concerns were raised about the impact of reducing grass cutting and whether there was a risk that road traffic accidents could increase. It was also queried how many parish councils were picking up the costs of grass cutting.  It was confirmed that the grass safety cut would still continue twice a year but that it was the amenity grass cutting which would stop.  It was noted that a letter had been sent to parish councils on 18 January 2017, which had set out the County Council's offer to pay 20% of the costs if parish councils took on the amenity cuts and the two safety cuts;

·         Concerns were raised about the rising costs of adult care and whether the approximate £2.6m increase in the budget to address cost pressures would be adequate, given that other councils across the country were overspending on adult care.  Further to this, it was noted that Lincolnshire was one of the most cost effective adult care authorities in the country which meant that the Council was currently managing the increasing pressures.  However, it was highlighted that meeting the costs of adult care would become increasingly difficult in future years and as a result, other services may need to be reduced to help cover the costs;

·         With regards to the National Infrastructure Delivery Plan, it was confirmed that any bids for funding would need to be through the Midlands Engine, and would need to be for a large scale infrastructure project for a bid to be successful.  One potential project that was being looked into was the Newark rail/road interchange;

·         It was confirmed that the County Council was working with the Lincolnshire Care Association to promote the career of a carer;

·         Concerns were raised in relation to the impact on the Council's finances if power stations and NHS organisations received charitable status and were exempt from paying business rates. It was confirmed that national legal advice was being sought on this issue.

The Chairman thanked those officers present for their detailed report.

RESOLVED

(1)  That the recommendations, as detailed in the Executive's report, be supported.

(2)  That the comments of the Committee be passed onto the Executive for its consideration.