Issue - meetings

This report was considered by the Cabinet at their 12th September 2019 meeting. It presents the future years Medium Term Financial Strategy and emerging Corporate Plan.

Councillor Richard Samuel introduced this report to the Panel. He said that one of the main tasks in the coming months was shaping our manifesto commitments into a new corporate plan for the Council and that work is underway to cost these commitments.

He stated that any help the Panel can provide as part of this process will be welcome.

He said that in terms of capital we need to ensure that the Council can afford to run the same level of capital programme as in the past. He explained that capital projects are funded either by use of external grant, receipts from asset sales, or by borrowing and that the latter has a direct implication for revenue spending.

He informed the Panel that a review of all current capital schemes will be carried out to assess their desirability and affordability, and prioritise those that meet our stated corporate priorities.

He stated that the 100% business rate retention scheme was set to continue instead of a proposed 75% retention scheme and that this would benefit the Council by £3.6m.

The Head of Management Accounts said that prudent projections have been made within the MTFS and that the majority of grant funding is only applicable to one year

Councillor Winston Duguid said that he could see that an emphasis had been made within the documents on savings, but said that he would like to see more detail on possible income streams. He asked if any thoughts had been given on a possible ‘Tourist Tax’, regulations relating to AirBnB or the Council’s relationship with the universities.

Councillor Samuel replied that national legislation is required to introduce a ‘Tourism Levy’ and was aware that other Local Authorities across the country were considering this, in particular Edinburgh City Council. He added that the Government has currently ruled out such measures being introduced.

He said that the universities do contribute towards an annual clear up across the City, but of course there is the fact that the Council has an exemption scheme for students in relation to paying Council Tax.

Councillor Andrew Furse commented that it was important for the Council to have enough incoming funds to pay off capital. He said that the Council must be careful in terms of borrowing despite the current low interest rates. He added that he queried the re-phasing decision in relation to Bath Quays.

Councillor Samuel replied that the intention is to take a measured approach between borrowing in the current market climate and the utilisation of internal cash flow wherever possible. He acknowledged that income to the Council was not always sufficient.

The Chair stated that all members of the Council were accountable through the budget setting process and that public services need maintaining as well as providing residents and visitors with experiences across the authority.

Councillor Furse stated it was important for the Council to communicate its proposals and decisions with the public. He asked what impact the Joint Spatial Strategy will have on the  ...  view the full minutes text for item 20

The Corporate Strategy and Medium Term Financial Strategy (MTFS) sets out the strategic direction and priorities for the Council as well outlining the financial context and challenges the Council faces over the next five years and the strategy that will be used to inform its annual budget process.

Councillor Richard Samuel introduced this item by saying that the Corporate Strategy and MTFS set out the aims this Administration  wished to achieve for communities, and sets out how the Council intends to finance these.

Councillor Samuel read out the following statement:

‘Our starting points are the budget position we inherited from the previous administration, our clearly stated manifesto commitments on which we were elected to run the council, and the prospects for income both from government and sources of revenue that we can raise ourselves.

Our manifesto commitments are being shaped into a new corporate plan for the council and work is underway to cost these commitments. This work will conclude with the setting of the 2020/21 budget in February.

Members will be aware that the full details of central government allocations are rarely available until December and so the projections before the cabinet today are the best available at the time of writing. Recent spending review announcements have already changed working assumptions and these are currently being update. For example the government have announced a reduction in the council tax referendum cap from 2.99 to 2% which reduces the maximum tax raising possibility by 900k. So members can expect further adjustments as time proceeds. Fuller details have been issued in the recently circulated briefing note.

The MTFS confirms the continuing funding challenges facing the council in areas of children’s and adult social services together with the continuing need to achieve economies. Whatever scenario is considered there will still be a need to generate economies through efficiencies or direct savings. I am proposing a change to previous practice. Previous savings have tended to be routed within departmental economies. In the future this is unlikely to be adequate to produce the levels of savings required. I am therefore intending to drive these programmes from the centre and reduce the number of savings plans accordingly. A new corporate transformation board will be established to oversee these programmes which I will chair.

The guiding principles behind the MTFS will remain largely unchanged:

Balancing the budget

Making provision for demographic and inflation and only adding new priorities where headroom is created.

Maximising every available source of income

Our manifesto means the competition for new resources is very crowded so we will be examining how we can create the headroom to deliver our programme as part of the 20/21 budget preparation and will report this at the time.

The high level estimates are set out in the report and I do not intend to repeat these but I need to emphasise that the assumed figures for council tax increases are only indicative and no decisions have been taken.

Turning to capital we need to ensure that the council can afford to run the same level of capital programme as in the past. Capital projects are funded either by use of external grant, receipts from asset sales, or by borrowing. The latter has a direct implication for revenue spending. We will therefore review all current  ...  view the full minutes text for item 27