Agenda item

(To receive a report and presentation from Michelle Grady, Head of Finance - Communities, which describes the budget proposals for the next two financial years based on the four year funding deal announced by Government as part of the 2018/19 Local Government Finance Settlement.  This report specifically looks at the budget implications for highways and transport activities within the commissioning strategy 'Sustaining and Developing Prosperity through Infrastructure')

Consideration was given to a report which described the budget proposals for the next two financial years based on the four year funding deal announced by Government as part of the 2018/19 Local Government Finance Settlement.  This report specifically focused the budget implications for the Highways and Transport activities within the commissioning strategy 'Sustaining and Developing Prosperity through Infrastructure'.

The report was introduced by Michelle Grady, Head of Finance (Communities), who, in guiding members through the report, highlighted the following points:

·         Lincolnshire had been successful in its bid to be part of the Business Rates pilot for 2018/19.  This would mean that Lincolnshire would keep 100% of any growth in business rates, as part of the move towards localisation.

·         There had been an increase in the council tax limit before a referendum was required.  It was noted that was currently a proposal to increase by 1.95% alongside the adult social care precept of 2%.  The Government had increased the referendum limit by 1%.  This would give the authority the option to increase council tax by 2.95% (not including the Adult Social Care precept).

·         In terms of service changes, it was noted that 1% pay inflation increase had been built in to all budgets.  Members were advised that there had been a recent offer of 2% made to staff but this had not yet been accepted.  If it is, the service budgets would need to be updated to reflect this change.

·         In terms of the bus subsidy, there were no further savings being proposed for this year by the Executive.

·         One of the main changes would be the savings from the winter maintenance vehicles, as the lease on the gritters was coming to an end, and the cheaper option was to purchase new ones.  This would be funded through the capital budget, and would therefore create savings in the revenue budget.

·         In relation to the revenue programme, it was noted that proposals which had put forward by this Committee around weed control had been discussed with the leader, and had been recognised as a pressure and would be funded through the contingency budget.  It would be picked up as an ongoing cost pressure in the next round of budget setting.

·         In the capital programme the majority of funding was allocated to major road schemes.  Grants which had been received from DfT had also been included.

Members were provided with the opportunity to ask questions to the officers present in relation to the information contained within the report and some of the points raised during discussion included the following:

·         In relation to the award of £2.000m for the A46 Lincoln Road, Welton Scheme, it was clarified that the total cost of the scheme was £4.000m, but the grant was £2.000m.

·         It was reported that the government had recently launched a campaign on fairer funding.

·         In relation, to the recent collapse of Carillion, who had been awarded the contract for the Lincoln Eastern Bypass, it was queried whether if the remainder of the contract had to be re-tendered, was it expected that the government would make up any shortfall in terms of additional costs.  Members were advised that it was too early to comment on that level of detail in a public meeting.  There were processes in place which the Council needed to follow.

·         It was clarified that PTE referred to the Passenger Transport Executive.  The report referred to strong growth in passenger numbers and it was queried whether the committee could have sight of that evidence.

·         Members were advised that the need to look at the public transport agenda at a future meeting of the committee had previously been discussed.

·         There would be new franchises for East Midlands Trains going forward.  the County Council had been asked to pump prime the improved Lincoln to Nottingham train service, but from 2018 onwards the additional trains were part of the time tabled service.

·         In relation to the option to raise council tax by a further 1%, it was commented that this was something the Council should consider, particularly as there were a number of additional cost pressures.

·         In relation to the pay increase for staff, all budgets had made an allocation to cover this 1%.  There may be a need to use the volatility reserves, if the 2% is accepted.

·         The budget as presented, would need to be balanced by the volatility reserves for the next two financial years.

·         One member commented that they had always opposed council tax freezes, as it often meant a big rise when the freeze ended.

·         In relation to the Fairer Funding campaign, the authority had managed to provide a lot of evidence and statistics showing that Lincolnshire was not funded as well as it could be.

·         In terms of Adult Social Care, there was a separate levy of 2% for three years.  It was also expected that there would be changes around the better care fund and that a paper would be released by government.

·         There was further support for an increase in council tax by an extra 1%.  It was not considered to be a large amount of money and was likely to mean an increase of between £12 and £28 per year per household.  This additional funding could then be built into the budgets.

RESOLVED

            That the comments made in relation to the budget proposals be noted and reported to the Executive.