Meeting documents

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1 THE ISSUE

2 RECOMMENDATIONS

The Council Executive is asked to recommend:

a) The General Fund revenue budget for 2007/08 of £191.637M and the associated Council Tax increase of 4.95%.

b) That no Special Expenses be charged other than Town and Parish Council precepts for 2007/08.

c) The working balances statement at Appendix 1 annex 4 with un-earmarked revenue balances set at £5.5m, with a programme of additions to bring the level to £9m by the end of 2009/10 as shown in Table 7 of Appendix 1.

d) That no further use be made of non-earmarked revenue reserves in 2007/08 to finance General Fund revenue expenditure.

e) The individual service cash limits for 2007/08 contained in Annex 1 to the budget proposal.

a) conditionally approves a capital payments budget of £53.500m for 2007/08 (excluding further slippage from 2006/07) as shown in Appendix 1, Annex 3, including the additions to the programme proposed in Table 3a) of Appendix 1. The approval is conditional for the items marked with an asterisk in Appendix 1 Annex 3 in that it is subject to the need for further clarification of the financial implications for the council (as referred to in Appendix 1), and that pending such clarification (which will need to be agreed by the S151 officer in consultation with the Executive Member for Resources), no further commitments should be made against these budgets.

b) notes the indicative capital payments budgets of £49.270m in 2008/09 and £55.238m in 2009/10 £64.440m in 2010/11 and £19.933m in 2011/12 in as shown in Appendix 1 Annex 3, 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.

3 FINANCIAL IMPLICATIONS

4 COMMUNITY STRATEGY OUTCOMES

5 CORPORATE IMPROVEMENT PRIORITIES

6 CPA KEY LINES OF ENQUIRY

7 BACKGROUND

7.1 In the attached document (Appendix 1) the Council Executive puts forward its budget proposal to Council. It has been prepared alongside, and is consistent with, the draft Corporate Plan Review which is attached as Appendix 2.

8 THE REPORT

8.1 The Council Executive draft budget proposal for 2007/08 fills in the detail of the third year of the financial plan proposal contained within the Corporate Plan, recommends revenue and capital budgets for 2007/08 and recommends a level of Council Tax for that year.

8.2 Our budget proposals include:

> A £9.7m or 5.3% increase in the total revenue budget.

> A £5.1m or 5.2% increase in the non-schools budget.

> A £4.6m or 5.4% increase in the schools budget.

> A 4.95% Council Tax rise that continues the policy of meeting Government guidance.

8.3 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 A32.7m 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 2006/07 and additional duties from government which are not always fully funded

> Significant exceptional risk items, e.g. the introduction of single status

8.4 It is important to be clear on the process to be followed in setting the 2007/08 Budget. The Solicitor to the Council has given the following guidance:

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

8.6 The Council Executive can receive from any political group that so wishes, an alternative budget proposal to that published in the Council Executive 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.

8.7 Therefore all proposals notified to the Council Executive 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 5.7 and 5.8 for the relevance of whether a proposal is, or is not, "significant").

8.8 The Council Executive will formulate a budget proposal and council tax recommendation to the council meeting on 20th February 2007 which may include agreed core proposals and options for allocating parts of the budget.

8.9 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 Executive to reconsider its proposals. The Council is required to give the Executive the reason(s) why it considers those proposal(s) should be changed and it is then for the Executive 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.

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

8.11 However if a significant proposal is accepted on a vote at Council, from those notified at the Council Executive meeting, this stands as a formal objection within the terms of the Regulations and will be referred to the Leader for him to secure consideration by the Council Executive and report back to the Council meeting on 1st March 2007.

8.12 When the Executive 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 Executive 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.

8.13 .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 2007/08. That budget will include within it the overall proposed council cash limits for 2007/08 including the provision for inflation, the proposed use of balances in the 2007/08 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 2007/08 and prudential indicators.

8.14 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 (1st March), 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 1st March 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.

8.15 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).

9 RISK MANAGEMENT

9.1 A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance.

9.2 In addition Appendix 1 to this report includes (at Annex 5) the Resources Director'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.

10 RATIONALE

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

11 OTHER OPTIONS CONSIDERED

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

12 CONSULTATION

12.1 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.

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