Agenda item

(To consider a report from the Executive Director of Finance and Public Protection, which invites the Executive to consider its final proposals for the Council's budget and council tax in light of the provisional local government settlement and consultation comments on its initial proposals)

(1)  That the effect of the updated funding available and revenue expenditure as noted in paragraphs 1.3 to 1.20, and as detailed at Appendices A and B to the report, be noted.

(2)  That the Equality Impact Analysis, as detailed at Appendix C to the report, and the consultation comments as shown in Appendix I to the report and presented at the meeting be noted.

(3)  That, subject to recommendation 4 below, the following be recommended to the County Council for approval:

(a)  The revenue budget, as detailed at Appendix D to the report;

(b)  The capital programme, as detailed at Table A and Appendix E to the report;

(c)  The levels of council tax proposed in Table B of the report, including the increasing of council tax in 2018/19 by 4.95%;

(d)  The prudential indicators, as detailed at Appendix G to the report;

(e)  The flexible Use of Capital Receipts Strategy, as detailed at Appendix H to the report.

(4)  That the Leader of the Council be given delegated authority to review and amend the Executive's budget recommendations to the County Council, as appropriate, in light of the final Local Government Settlement, council tax and business rates information from the Lincolnshire District Councils if received between the Executive meeting and the County Council on 23 February 2018.

Consideration was given to a report from the Executive Director of Finance and Public Protection, which invited the Executive to consider its final proposals for the Council's budget and council tax in light of the provisional local government settlement and consultation comments on its initial proposals.  The Executive was also asked to consider prudential targets in relation to capital financing and other treasury management matters and to recommend to full Council the Flexible Use of Capital Receipts Strategy for 2018/19.

The County Finance Officer introduced the report to the Executive and guided them through those updates to the Council Budget 2018/19, tabled at the meeting, which had taken place since the meeting on 19 December 2017.  Some of the changes included the following: -

• The Government had confirmed that it would compensate local authorities in full for the continuation of the business rates cap, small business rate relief and rural rate relief would continue through a Section 31 grant, as in previous years.  It was also advised that information on the Section 31 grant had not been received from all seven district councils.  The grant for the County Council had been calculated to be £10.827m (£2.753m in 2017/18);
• The Council had been notified of two grants from government which had been incorporated into the Council's budget: Extended Rights to Free Travel (£0.639m), £0.007m, more than originally assumed; and Special Educational Needs and Disability (SEND) implementation grant for January 2018 to March 2019 (£0.323m), of which £0.259m had been budgeted for in 2018/19.  It was noted that the SEND grant did not impact on the overall Council budget, as matching expenditure was created in Children's Services budgets;
• The current net increase in income from the changes to Business Rates income and grants, as detailed in the tabled updates, had increased the Council's income for 2018/19 by £21.487m (previously £13.023m);

• The government grant allocations assumed in the budget proposals were those announced in the Provisional Local Government Finance Settlement and therefore may be subject to change.  The Final Settlement was expected during the afternoon of 6 February 2018;
• Consultation comments on the budget proposals and the ways in which they were reflected in the final proposals, were detailed at Appendix I to the report.

The Executive was asked to consider the potential use of the net additional income of £21.487m.  The following three options were put to the Executive: -

·         To reduce the amount of funding required from the Financial Volatility Reserve to set a balanced budget in 2018/19;

·         To fund additional spending by the Council or reduce the savings required to be made; or

·         To reduce the planned increase in Council Tax of 4.95%.

The Executive supported the recommendation that the net additional funding was used to reduce the contribution required from the Council's Financial Volatility Reserve to meet the 2018/19 budget shortfall. 

The Chairman of the Overview and Scrutiny Management Board advised that comments from the overview and scrutiny committees and the Board on the Council Budget 2018/19 were detailed at Appendix I.  In response to a question, it was confirmed that the Overview and Scrutiny Management Board would receive a report on the proposal within the budget to invest £3m on Information Technology, as referred to in the Executive's report.

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

• Overall levels of funding to local government were reducing and would continue to reduce in future years.  The use of any additional funding to smooth the effect of the budget reductions would allow the Council more time to develop robust new service models;
• It was confirmed that an item on the Membership of the Local Government Association would be considered by the Overview and Scrutiny Management Board at its meeting on 1 March 2018;
• It was also confirmed that funding for the Citizens Advice Bureaux had been re-added to the Council's base budget;
• It was suggested that delegated authority should be given to the Leader to review and amend the Executive's budget recommendations to the County Council, as appropriate, in light of the final Local Government Settlement once it had been received between the Executive meeting and the County Council on 23 February 2018;
• It was recognised that further difficult decisions would have to be made to balance the County Council's budget in future years.  It was agreed that it was due to prudent accounting, including the management of reserves, that the County Council could balance its budget;

·       The level of usable reserves would be significantly diminished by the end of the decade and the Council would face further challenges to set a balanced budget beyond this date, as there was significant uncertainty over levels of funding beyond the four-year deal. It therefore remained prudent to retain resources in the financial volatility reserve to deal with future financial uncertainties and challenges;

·       It was reiterated that the Fair Funding Review for Local Government consultation document had been launched on 21 December 2017, with the consultation running until 12 March 2018.  It was anticipated that the implementation of any potential changes to the funding formula would be from April 2020.

RESOLVED

(1)  That the effect of the updated funding available and revenue expenditure as noted in paragraphs 1.3 to 1.20, and as detailed at Appendices A and B to the report, be noted.

(2)  That the Equality Impact Analysis, as detailed at Appendix C to the report, and the consultation comments as shown in Appendix I to the report and presented at the meeting be noted.

(3)  That, subject to recommendation 4 below, the following be recommended to the County Council for approval:

(a)  The revenue budget, as detailed at Appendix D to the report;

(b)  The capital programme, as detailed at Table A and Appendix E to the report;

(c)  The levels of council tax proposed in Table B of the report, including the increasing of council tax in 2018/19 by 4.95%;

(d)  The prudential indicators, as detailed at Appendix G to the report;

(e)  The flexible Use of Capital Receipts Strategy, as detailed at Appendix H to the report.

(4)  That the Leader of the Council be given delegated authority to review and amend the Executive's budget recommendations to the County Council, as appropriate, in light of the final Local Government Settlement, council tax and business rates information from the Lincolnshire District Councils if received between the Executive meeting and the County Council on 23 February 2018.