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Declarations of Interest
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 the item on the Agenda.
This report updates the financial forecast and recommends financial targets for preparing the draft budget for 2018/19 and financial planning for 2019/20 & 2020/21.
The Panel received and considered a report which updated the financial forecast and recommended financial targets for preparing the draft budget for 2018/19 and financial planning for 2019/20 and 20/21.
As a result of the reduction in Government grant funding over recent years the Council had reduced actual spending in cash terms. The Council was no longer in receipt of Revenue Support Grant and faced a tariff adjustment in 2019/20 which was effectively negative Revenue Support Grant. It was not yet clear what would happen in 2020/21 in this regard. The Head of Financial Services stated that a report was due to go the next Strategy and Resources Committee meeting regarding the recently announced Localisation of Business Rates pilot scheme. Officers were clear that their position was that they would seek to ensure that any pilot scheme sought to redress the impact of negative Revenue Support Grant. The Panel again expressed its frustration with the Government’s approach to funding public sector services.
The Panel was pleased to note that the Auditors again intended to issue an unqualified audit opinion in respect of the Council’s financial statements. It was confirmed that £2.5m was the agreed minimum level of unspecified reserves. This approach was approved by the Auditors and the amount was consistent with that held by other authorities of this size. Whilst the current general fund balance was £834,000 above this, the Council still faced a number of financial uncertainties. It was unclear whether negative Revenue Support Grant would continue and escalate, for example, and the Council still needed to find £1.5m in savings over the next three financial years.
Cost reductions in the region of £90k still needed to be identified in 2018/19. This shortfall was based on a number of assumptions, in particular that the County Council would be reducing its financial contribution to services provided by this Council and the loss of transitional Business Rate Relief. Many authorities appeared to be banking on the localisation of Business Rates propping up services but Officers were sceptical and did not believe the Council should rely on this.
Provision of £100k had been made in 2018/19 and 2019/20 to mitigate the potential impact of benefit reforms on services such as homelessness or benefits – it was a contingency. However, the contingency for Service Changes and Pressures reduced to £100k by 2020/21. This was because certain items had been moved from capital and reclassified as revenue expenditure (IT and bin replacement).
In regard to the New Homes Bonus, the new eligibility criteria assumed a level of growth before it kicked in and the assumption had been made that it would be difficult for this Council to meet the threshold thereby leading to a significant reduction in this source of funding to only £196k in 2020/21.
It had been assumed that homelessness grant funding had been secured in 2018/19 of £131k per annum for three years but the Head of Financial Services was seeking confirmation of this as such funding had been an ... view the full minutes text for item 5.
The Panel is asked to confirm the Minutes of the Meeting of the Panel held on 25 May 2017 (attached) and to authorise the Chairman to sign them.
The Minutes of the Meeting of the Financial Policy Panel held on 25 May 2017 were agreed as a true record and signed by the Chairman.