Meeting documents

1 THE ISSUE

1.1 This report presents the Cabinet's draft financial plan, revenue and capital budgets for the 2008/09 financial year together with a proposal for a Council Tax level for 2008/09.

2 RECOMMENDATION

The Cabinet is asked to recommend:

2.1 That the Council approve:

a) The General Fund net revenue budget for 2008/09 of £110.720M and the associated Council Tax increase of 3.95%.

b) That no Special Expenses be charged other than Town and Parish Council precepts for 2008/09.

c) The working balances statement at Appendix 2 Annex 3 with un-earmarked revenue balances set at £8.6m, with a programme of additions to bring the level to £11.5m by the end of 2010/11 as shown in Table 4 of Appendix 2.

d) That no further use be made of non-earmarked revenue reserves in 2008/09 to finance General Fund revenue expenditure.

e) The individual service cash limits for 2008/09 contained in Annex 1 to the budget proposal.

2.2 That the Council include the Local Precepts of Town and Parish Councils 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 4) and approves the conditions upon which the recommendations are made as set out throughout Appendix 2.

2.4 That in relation to the capital budget the Council:

a) approves a capital payments budget of £61.631m for 2008/09 (excluding further slippage from 2007/08) as shown in Appendix 3, Annex 5, including the additions to the programme proposed in Table 2 of Appendix 2

b) notes the indicative capital payments budgets of £56.268m in 2009/10 and £65.492m in 2010/11 £17.684m in 2011/12 and £17.654m in 2012/13 in as shown in Appendix 3 Annex 5, and planned funding, and agrees that any further additions to the programme are subject to additional capital resources (government or third party funding and/or capital receipts) and an evaluation of the balance of benefits from additional capital investment and further reducing unsupported borrowing in the light of future years' revenue budget pressures.

2.5 That the Council instruct Cabinet Members to finalise their revenue and capital budgets for 2008/09 within the cash limits and amounts set by Council for inclusion on the weekly decision list no later than mid April 2008 (as part of the approval of Service and Resource Plans).

2.6 That the Council authorise the Assistant Director of Support Services (Finance), in consultation with the Cabinet Member (Resources) to amend the cash limits set out in Annex 1 of Appendix 2 to take account of the final re-allocation of budgets in respect of the actual pay award, when this is known.

2.7 That the Council instruct the Strategic Directors Group to work on ideas for reducing the overall cost base of the Council's services in order to protect essential service delivery into 2009/10 and beyond, with an initial report back to the Cabinet in July 2008, recommending actions to pursue in this and future years.

2.8 Authorise the Council's s151 Officer in consultation with the Cabinet Member (Resources), to drawn down on the exceptional risk reserve, if required, consistent with the purposes originally set out in Section Annex 2 of Appendix 1 of the February 2007 Budget Report as amended in Section 3 of Appendix 2 to this report.

2.9 That the programme of regeneration expenditure (both revenue and capital) be subject to scrutiny by the Bath & NE Somerset Development Board, taking into account potential funding that might be available from the growth points and/or CIVITAS initiatives, and that authorisation of such expenditure be subject to the joint agreement of the Cabinet Member (Resources) and the Cabinet Member (Development and Major Projects).

2.10 That the costs of the Bath Package and the Waste Relocation Capital Projects and the financial implications of the council's position in relation to the emerging sub-regional waste strategy, and elements thereof, be subject to review by the Cabinet Member (Resources) and the Cabinet Member (Customer Services) taking into account the potential funding that may be available from the growth points and/or CIVITAS initiatives and the council's capital contingency.

2.11 That £350k of the Council's General Reserves be earmarked for the purpose of responding rapidly to regional and sub-regional issues that directly help progress and/or deliver the Council's objectives. Use of the Reserve will be authorised by the Council's Section 151 officer in consultation with the Chief Executive and Cabinet Member for Resources.

2.12Authorise the Assistant Director of Support Services (Finance), in consultation with the Cabinet Member (Resources), to make any necessary presentational improvements to the draft Budget Proposal prior to submission to Council.

FINANCIAL IMPLICATIONS

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

3 COMMUNITY STRATEGY OUTCOMES

3.1 The proposed framework for service and financial planning aims to ensure that scarce resources are aligned to corporate priorities and improving the delivery of services and cross-Council priorities. Many of the cross-Council priorities are reflected in the Community Strategy.

4 CORPORATE IMPROVEMENT PRIORITIES

4.1 The service and financial planning process 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.

5 CPA KEY LINES OF ENQUIRY

5.1 The proposed process contributes towards the "Prioritisation of ambitions" KLOE by ensuring that all objectives and targets are an appropriate reflection of priorities as set out in the corporate plan.

6 THE REPORT

6.1 The Cabinet draft budget proposal for 2008/09 provides the detail of the first year of the financial plan proposal contained within the new Corporate Plan, recommends revenue and capital budgets for 2008/09 and recommends a level of Council Tax for that year.

6.2 Our budget proposals include:

• A £8.7m or 4.6% increase in the total revenue budget including Dedicated Schools Grant after allowing for transfers into formula grant.

• A £5.4m or 5.3% increase in the non-schools budget after allowing for transfers into formula grant.

• A £3.3m or 3.7% increase in the schools budget in line with the increase in Dedicated Schools Grant (Government Grant).

• A 3.95% Council Tax rise that continues the policy of meeting Government guidance.

6.3 These budget proposals are set within a context of:

• B&NES being the third lowest funded unitary authority per head of population (net budget requirement excluding Dedicated Schools Grant); with the council receiving £2.0m less grant than the government calculates we need

• The Council Tax having been reduced in recent years from being above the average of other unitary councils to now being at the average level

• B&NES already being assessed as providing `Good' Value for Money by the Audit Commission as part of the CPA Use of Resources annual Assessment

• Significant financial pressures on services, many of which are already being experienced in 2007/08 and additional duties from government which are not always fully funded

• Significant remaining exceptional risk items

6.4 It is important to be clear on the process to be followed in setting the 2008/09 Budget. The Solicitor to the Council has given the following guidance:

6.5 The Cabinet has the responsibility to prepare and propose a draft Budget to Council for its approval.

6.6 The Cabinet can receive from any political group that so wishes, an alternative budget proposal to that published in the Cabinet agenda papers and will satisfy itself that any such proposals have been discussed with the Council's statutory officers and that an impact statement from Officers about such proposals is available. Any alternative proposal will be formulated so it is prefaced by a standard form of words.

6.7 Therefore all proposals notified to the Cabinet meeting will be cleared with the Section 151 Officer and the Monitoring Officer beforehand. Those Officers will offer advice to Members on the "significance" of any proposals. (See paragraphs 6.11 and 6.12 for the relevance of whether a proposal is, or is not, "significant").

6.8 The Cabinet will formulate a budget proposal and council tax recommendation to the Council meeting on 19th February 2008 which may include agreed core proposals and options for allocating parts of the budget.

6.9 The Council has available to it at the budget setting meeting two options. It can object to specific parts of the proposals and if it does so must require the Cabinet to reconsider its proposals. The Council is required to give the Cabinet the reason(s) why it considers those proposal(s) should be changed and it is then for the Cabinet to consider those proposed changes and the reasons put forward. Alternatively it is, of course, open to the Council to accept the budget in its proposed form at the meeting, in which case no further action is necessary.

6.10 Council may then determine the budget on the basis of the Cabinet's recommendation plus any insignificant changes adopted as amendments from any proposals notified at the Cabinet meeting.

6.11 However if a significant proposal is accepted on a vote at Council, from those notified at the Cabinet meeting, this stands as a formal objection within the terms of the Regulations and will be referred to the Leader for her to secure consideration by the Cabinet and report back to the Council meeting on 28th February 2008.

6.12 When the Cabinet has considered the objections, it is required to put its proposals (which may or may not be revised) back to the Council Meeting. If the Cabinet does not agree with Council's views on a proposed change, it is required to state why and the Council can then take those reasons into account, along with its original thoughts as to why the change was desirable.

6.13 In setting the budget the Council is required to approval a full budget resolution including the police, fire and parish precepts and the proposed council revenue and capital budgets for 2008/09. That budget will include within it the overall proposed council cash limits for 2008/09 including the provision for inflation, the proposed use of balances in the 2008/09 budget (if any) and the resulting budget requirement and Council Tax for Bath and North East Somerset including any recommendations for special expenses. At the same meeting the Council will also approve the borrowing limits for 2008/09 and prudential indicators.

6.14 Legally, the council must set a balanced budget for the forthcoming year and determine the council tax. If a budget is not set by the date of the reserve budget-setting meeting (28th February), this will lead to a delay in billing and a loss in council tax cash flow. It is highly likely that this will also translate into a higher level of un-collectable debt and debt collection costs and in addition this will significantly impact on council tax performance indicators. A delay until 28th February will also compromise the Council's ability to meet current billing deadlines, and there is a serious risk billing will be delayed also with negative cash flow impacts.

6.15 The final Council Tax set will encompass all parish and police and fire precepts (that is the money we collect on behalf of the parishes, fire and police and pay to them).

7 RISK MANAGEMENT

7.1 The report author and Lead Cabinet member have fully reviewed the risk assessment related to the issue and recommendations, in compliance with the Council's decision making risk management guidance.

7.2 In addition Appendix 2 to this report includes (at Annex 4) 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.

8 RATIONALE

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

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 or will be held with trades unions and with stakeholders during the development of service and resource plans which have fed into this budget. This has included, for the first time, a Budget Fair, enabling cross service consideration of the range of proposals by a range of stakeholders, for the first time.

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

11 ISSUES TO CONSIDER IN REACHING THE DECISION

11.1 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.

12 ADVICE SOUGHT

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