Agenda and minutes

Members are asked to declare the existence and nature of any Disclosable Pecuniary Interests in respect of any item of business to be considered at the meeting

No declarations of interest were made by councillors regarding items on the Agenda.

This report provides an update on the preparation of the budget for 2017/18, following the announcement of the provisional local government finance settlement.  The report seeks any final guidance from the Panel prior to the preparation of the 2017/18 Budget and Council Tax report for the Council meeting on 14 February 2017.

The Panel received and considered a report which provided an update on the preparation of the budget for 2017/18 following the announcement of the provisional local government finance settlement.  The report sought any final guidance from the Panel prior to the preparation of the 2017/18 Budget and Council Tax report for the Council meeting on 14 February 2017.

The report set out the overall budget targets for 2017/18, agreed at Strategy and Resources Committee on 27 September 2016.  It was highlighted that, whilst provision had been made for a 1% increase in pay at that time, the estimates had been prepared on the basis of a 1.5% pay award, subject to the agreement of the Strategy and Resources Committee on 7 February 2017.

There were still certain external financing income levels that needed to be finalised, such as the actual local government finance settlement.  However, the Head of Financial Services confirmed that it was unlikely that the final local government settlement for 2017/18, including revenue support grant, would be different to the provisional settlement.  The Council had signed up to a fixed four year settlement but this still meant a 22.3% reduction in funding in 2017/18 and a tariff adjustment of £624,000 in 2019/20.  However, there was no evidence to suggest that those authorities that had not accepted a four year settlement were in any better position.  The Council had voiced its concerns to its MP regarding the tariff adjustment and the Panel expressed its frustration at the fact that the Council was effectively being penalised for its ability to raise income from Council Tax with its core spending power being reduced by 7.4% in 2017/18.

The Council would continue to benefit from additional funding from the New Homes Bonus scheme but this source of funding was expected to reduce dramatically over the next couple of years with the introduction of a revised scheme.  For 2017/18, approximately £1,054,000 of New Homes Bonus would be transferred to the Corporate Projects Reserve for funding capital or corporate projects with £500,000 allocated to help fund services.  Whilst the Council had been prudent in not relying too heavily on this grant to help fund services, the revised four year forecast nevertheless anticipated this source of funding to fall below the £500,000 annual planned use of NHB originally built into the Medium Term Financial Strategy, to around £200,000, by 2020/21.

No use of working balances was currently anticipated.  However there were a number of risks to this assumption arising from unsettled budget items, including the pay settlement, currently included at 1.5% but which was yet to be decided by the Strategy and Resources Committee and the Council Tax had yet to be set.  For financial planning purposes, the Medium Term Financial Strategy included an annual council tax increase of £4.95 for a Band D equivalent – the maximum permitted under current capping limits.  This equated to a 2.72% rise or 10 pence per week and would support service delivery.

The Medium Term Financial Strategy anticipated  ...  view the full minutes text for item 18.

The Panel is asked to confirm the Minutes of the Meeting of the Panel held on 6 December 2016 (attached) and to authorise the Chairman to sign them.

The Minutes of the meeting of the Financial Policy Panel held on 6 December 2016 were agreed as a true record and signed by the Chairman.