Issue - meetings

This report updates the financial forecast and recommends financial targets for preparing the draft budget for 2016/17 and financial planning for 2017/18, 2018/19 and 2019/20 as recommended by the Financial Policy Panel.

Note: Councillor Omer KouKou-Tchri left the meeting/Chamber and took no part in the debate or decision on this matter.

The Committee received a report which updated the financial forecast and recommended financial targets for preparing the draft budget for 2016/17 and financial planning for 2017/18, 2018/19 and 2019/20 as recommended by the Financial Policy Panel.

The report highlighted that the most significant financial risk to the Council over the next four years continued to be increased homelessness expenditure coupled with the impact of further benefit reforms being proposed by government and continuing reductions in government grant funding.

Action required to manage these risks was set out in a report to the Financial Policy Panel on 8 September 2015.  That report set out a detailed financial analysis, including a review of revenue and capital reserves, comparative data regarding Council Tax levels in other Surrey District/Boroughs and forecasts on the budgetary position.  Actions included the need to deliver costs reductions in the region of £850,000 in 2016/17 (based on the assumption when reported to the Panel that fees and charges would increase by 3%) and £2.5million over the next four financial years.

Having received the Minutes of the meeting of the Financial Policy Panel held on 8 September 2015, the Committee agreed:

(1)       The following overall budget targets for 2016/17:

(a)     Estimates prepared including options to reduce organisational costs by £650,000, subject to the government grant announcement, to minimise the use of working balances and maintain a minimum working balance of £2.5million in accordance with the Medium Term Financial Strategy;

(b)     That at least £400,000 additional revenue is generated from an increase in discretionary fees and charges, based on an overall increase in yield of 6%;

(c)     That a provision for a pay award is made of £230,000 that represents a 1.5% increase;

(2)       That further savings are identified for inclusion within the Medium Term Financial Strategy that will reduce the Council’s net operating costs by a minimum of £1,644,000 over the period 2017/18 to 2019/20;

(3)       That the Capital Member Group seek to limit schemes included within the capital expenditure programme that enable the retention of the agreed minimum level of capital reserves.