Meeting documents

1 THE ISSUE

1.1 This report presents the Cabinet's draft medium term financial plan, and revenue and capital budgets for the 2010/11 financial year together with a proposal for a Council Tax level for 2010/11.

2 RECOMMENDATION

The Cabinet is asked to recommend:

2.1 That the Council approve:

a) The General Fund net revenue budget for 2010/11 of £130.704m and the associated Council Tax increase of 2.50%, as set out in Appendix 2, including the service cash limits.

b) That the specific arrangements for the governance and release of corporate headroom and one-off funding provided within the Budget, be delegated to the Council's Section 151 Officer in consultation with the Cabinet Member for Resources and the Chief Executive.

2.2 That the Council include the Local Precepts of Town Councils, Parish Councils and the Charter Trustees of the City of Bath, and those of the Fire and Police Authorities in its Council Tax setting.

2.3 That the Council acknowledges the Section 151 officer's report on the robustness of the proposed budget and the adequacy of the Council's reserves (Appendix 2, Annex 2).

2.4 That in relation to the capital budget the Council:

a) approves a capital programme of £47.541m for 2010/11 and notes indicative items shown in italics for 2010/11 and the programme for 2011/12 to 2014/15 as shown at Appendix 2, Annex 3 including the planned sources of funding .

b) approves the Minimum Revenue Provision Policy as shown at Appendix 2, Annex 4

c) approves the Capital Prudential Indicators as set out in Appendix 2.

2.5 That the Council notes the O&S review of Medium Term Service and Resource Plans and 2010/11 Service Action Plans and instructs the relevant officers to finalise and publish their Medium Term Service and Resource Plans and Service Action Plans by end of March 2010, in consultation with the relevant Cabinet Member and in light of feedback from the O&S review, and in line with the approved cash limits.

That the Cabinet agrees:

2.6 To authorise the Divisional Director - Finance, in consultation with the Cabinet Member (Resources), to make any necessary presentational improvements to the draft Budget Proposal prior to submission to Council.

3 FINANCIAL IMPLICATIONS

3.1 The financial implications are contained within the body of the report.

4 COMMUNITY STRATEGY OUTCOMES

4.1 The framework for service and resource planning aims to ensure that scarce resources are aligned to corporate priorities as set out in the Council's updated Corporate Plan, which in turn reflect the Bath & NE Somerset Community Strategy.

5 CORPORATE IMPROVEMENT PRIORITIES

5.1 The framework for Service and Resource planning aims to ensure scarce resources are aligned to corporate priorities and improving the delivery of services and cross-Council priorities, linking performance with resources and value for money.

6 THE REPORT

6.1 In this document the Cabinet sets out the following:-

•  Its medium term service and resource planning and corporate financial assumptions (Appendix 1) which set the context and framework for the draft budget proposal for 2010/11.
•  Its draft budget proposal for 2010/11 (Appendix 2). This provides the detail of the first year of the Medium Term Service and Resource Plans and recommends revenue and capital budgets for 2010/11, together with capital commitments for future years, and recommends a level of Council Tax for 2010/11.

6.2 Whilst the overall outlook for reducing future Government public sector funding within the context of this Budget proposal and medium term service and resource planning period will present the Council with a significant future financial challenge, the Council continues to maintain services, within a balanced budget. Indeed the Council has increased its reserves and was not exposed to any losses as a result of the turmoil in the financial markets. This prudent financial management means the Budget proposal includes the release of one-off money in order to assist with specific issues for our community and better prepare us for the financial challenges ahead.

6.3 The budget proposals include:

•  A £7.1m or 3.3% increase in the total revenue budget including Dedicated Schools Grant (after removing the £3.8m transfer of Supporting People grant to Area Based Grant).
•  A £3.7m or 3.0% increase in the non-schools budget (after removing the £3.8m transfer of Supporting People grant to Area Based Grant).
•  A £3.6m or 3.7% increase in the schools budget in line with the increase in Dedicated Schools Grant (Government Grant).
•  A 2.50% Council Tax rise that continues the Council policy of sustainable council tax increases and reducing the burden on the community.

6.4 These budget proposals are set within a context of:

•  B&NES being the fifth lowest funded unitary authority per head of population (net budget requirement excluding Dedicated Schools Grant); with the Council receiving £2.5m less grant than the government calculates we need.
•  The Council Tax having been continually reduced in recent years from being above the average of other unitary councils to now being below the average level. This proposal represents the lowest level of council tax increase since the creation of the Council.
•  A significant financial challenge in respect of reducing public sector funding.
•  Services facing increasing demand pressures and rising public expectations.
•  Significant financial pressures on services, many of which are already being experienced and additional duties from government which are not always fully funded; e.g. concessionary fares, landfill tax.
•  Recognising the need to deliver savings proposals whilst continuing with effective management of inherent risks.

6.5 The report assumes no changes to existing financial delegations or financial management arrangements except as specifically highlighted for approval in section 2 of this report.

6.6 It is important to be clear on the process to be followed in setting the 2010/11 Budget. The Monitoring Officer has given specific guidance which is set out at Appendix 3, and in particular the need for the Council to approve a balanced budget.

6.7 The Monitoring Officer has also highlighted the implications arising if it does not prove possible for the Council to set a budget at its meeting on 16^th February and any decision having to be deferred until the reserve date on 25^th February. This includes potential delays to the Council Tax billing process.

7 RISK MANAGEMENT

7.1 The report author and the Council's Section 151 Officer have fully reviewed the risk assessment related to this report and recommendations and consulted with the Lead Cabinet member.

7.2 In addition Appendix 2 to this report includes (at Annex 2) the Section 151 Officer's assessment of the Robustness of Estimates and Adequacy of Reserves. One of the considerations taken into account is the Directors' Review of Robustness of Estimates and Budget Risks/Sensitivities and the Corporate Risk Register. This is completed by all Directors in respect of their own services.

8 RATIONALE

8.1 The rationale for the recommendations is contained in the supporting paper to this report.

8.2 The Council's Section 151 Officer is the Director of Resources and Support Services. This report reflects information already presented to Overview and Scrutiny by the Director. As Section 151 Officer his duties include ensuring a prudent and balanced budget is set on time which properly takes into account the financial constraints and risks facing the Council.

9 OTHER OPTIONS CONSIDERED

9.1 The supporting paper and appendices also contain the other options that can be considered in making any recommendations.

10 CONSULTATION

10.1 Meetings have been and will continue to be held with trades unions and with stakeholders during the development of service and resource plans which have fed into this budget. This has again included a Budget Fair, enabling cross service consideration of the range of proposals by a range of stakeholders.

10.2 The proposals have been issued to representatives of the business community for consultation.

10.3 Comments received from consultation, including Overview and Scrutiny and Trade Unions will be provided for consideration by the Cabinet.

ISSUES TO CONSIDER IN REACHING THE DECISION

10.4 These include Social Inclusion; Customer Focus; Sustainability; Young People; Equality; Corporate; Impact on Staff and Other Legal Considerations such as the requirement to set a budget and Council Tax.

11 ADVICE SOUGHT

11.1 The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer have had the opportunity to input to this report and have cleared it for publication.