Issue - meetings

This report updates the financial forecast and recommends financial targets for preparing the draft budget for 2019/20 as recommended by the Financial Policy Panel.

The Committee:

(1)            Received the Minutes of the meeting of the Financial Policy Panel held on 11 September 2018.

(2)            Agreed the following overall revenue budget target for 2019/20:

a)              Estimates to be prepared including options to reduce organisational costs by £406,000, subject to government grant announcement, in order to minimise the use of working balances and maintain a minimum working balance of £2.5 million in accordance with the medium term financial strategy;

b)              That at least £200,000 additional revenue is generated from an increase in discretionary fees and charges;

c)               That a provision for pay award is made of £280,000 that represents an increase to the staffing budget of 2.5%, 1% for cost of living and 1.5% for progression.

d)              That further savings and efficiencies be identified to address the budget shortfall of £113,000 in 2019/20;

e)              That £200,000 from the financial gain of being part of the Pilot for Business Rates is used to mitigate the potential payment of £625,000 to government for ‘negative RSG’.

The Committee received an update on the financial forecast and recommendations for preparing the draft budget for 2019/20 which were based on the Financial Policy Panel recommendations (held on 11 September).

It was noted that the Business Rates Pilot was expected to generate £500,000 of which £200,000 was to be used to mitigate the potential payment of £625,000 to the government for negative Revenue Supports Grant (RSG).  The remainder of the income generated would be used to offset expected reductions in funding over the next 3 years as a result of the ‘Fair Funding Review planned for 2020/21. 

It was recognised that public sector spending cuts imposed by the government and Surrey County Council posed a considerable risk to the Council.  There was an ongoing government consultation on negative RSG and a fair funding review the outcomes from which could affect the Council’s financial forecasts.  In addition there was uncertainty around the New Homes Bonus Grant in relation to the potential legacy payments being honoured by the Government.  In light of the uncertainty it was emphasized the importance of budgeting to use income over the entire plan period to counteract as far as possible the forecasted deficit which currently stood at £1.613 million over four years.

Having considered the budget targets and as set out in the Financial Policy Panel Minutes 11 September (published in a supplementary annex) the Committee:

(1)            Received the Minutes of the meeting of the Financial Policy Panel held on 11 September 2018.

(2)            Agreed the following overall revenue budget target for 2019/20:

a)              Estimates to be prepared including options to reduce organisational costs by £406,000, subject to government grant announcement, in order to minimise the use of working balances and maintain a minimum working balance of £2.5 million in accordance with the medium term financial strategy;

b)              That at least £200,000 additional revenue is generated from an increase in discretionary fees and charges;

c)               That a provision for pay award is made of £280,000 that represents an increase to the staffing budget of 2.5%, 1% for cost of living and 1.5% for progression.

d)              That further savings and efficiencies be identified to address the budget shortfall of £113,000 in 2019/20;

e)              That £200,000 from the financial gain of being part of the Pilot for Business Rates is used to mitigate the potential payment of £625,000 to government for ‘negative RSG’.