Agenda item

This report presents the revenue and capital budgets for 2018/19 together with proposals for Council Tax and Adult Social Care Precept for 2018/19.

Councillor Dine Romero made an ad-hoc statement where she expressed concerns from the Liberal Democrat group that the Cabinet did not recognise what was important when setting the Budget proposals.  Councillor Romero felt that services around improving chances for children and young people, helping vulnerable and keeping people healthy and safe would be lost because the Cabinet had spent money on other projects such as Park and Ride, Bath Library and the Metro Mayor.  Councillor Romero concluded that the Council should not cut from children and library services.

Councillor Paul Crossley made an ad-hoc statement where he suggested that decision to cut from Grand Parade and Undercroft funding was a bad decision and also that £4.273m allocated funding for West of England Combined Authority should be scrapped.

Councillor Joe Rayment made an ad-hoc statement where he welcomed proposed amendment in wording for recommendation 2.1.c. However, Councillor Rayment felt that Members of the Council could not see the complex formulae used to calculate the lease and felt that the Council would get better return in short term but not in the long term.  Councillor Rayment also felt that it was not democratic that some of the recommendations were delegated to the Chief Executive and not to the Cabinet or Single Members.

Councillor Robin Moss made a statement where he said that Labour group would give their comments and ask questions at the Full Council meeting on 13th February 2018.  Nevertheless, Councillor Moss said that he was concerned with only 4.95% increase in Council Tax when the Council could set an increase to 6%.  Councillor Moss asked if the discussion between the Council and Government would be available for inspection, why the Council would not consider in-house provision of Adult Social care and how cuts in essential services to most vulnerable would have detrimental impact on services users in long term.

Councillor Eleanor Jackson made an ad-hoc statement by expressing her concerns on youth programme provision.  Councillor Jackson also said that according to a survey from few years ago 75%of young people wanted to stay in the area, though the latest survey had suggested that the same percentage now want to leave the area down to a lack of affordable housing.  Councillor Jackson asked the Cabinet if they could use their powers to increase affordable housing in the area.

Councillor Charles Gerrish responded to Budget issues raised by Councillors.  Councillor Gerrish said that Grand Parade matter went to Scrutiny before the Cabinet made its final decision and unfortunately the business case for this project did not stack up.  The Council had to balance an increase in Council Tax rates and 4.95% increase had been seen as the most appropriate.  In terms of the social care – the voluntary sector had shown readiness to work with the Council to provide services for those in greatest need.  The Council would be working with the YMCA in terms of provision of affordable housing for young people.  Some issues that had been raised at the Resources PDS Panel meeting would be looked at and considered by the Group Leaders.

Councillor Charles Gerrish introduced the report by thanking officers, Cabinet Members and Scrutiny for their hard work and by saying that the paper was in a new format which should be more understandable and approachable.  The next year would be a very difficult year due to significant pressures and savings required.  The Budget would seek to respond to these challenges. 

The Medium Term Financial Strategy (MTFS) that had been approved in October 2017 outlined how the budget would be delivered over the medium to long-term. The MTFS for B&NES spans two years with a further three added to show the likely longer-term picture.

The Council would need to deliver a balanced budget over the term of the plan. A balanced budget means that balances or reserves were not used to meet on-going expenditure commitments. The MTFS had shown a projected budget gap for 2019/20 and beyond. The figures included all estimates for pay awards, pension costs, Council Tax, business rates, Government grant, and inflation.

The Budget would focus on protecting frontline services at a time when the authority was facing cuts in funding whilst facing unprecedented increases in demand in Adults and Children’s Services. An increase of 3% in the Adult Social Care Precept had been included in this budget to help meet the pressures in Adult Social Care.

Significant savings and income generation plans totalling £26.83m were included within budget proposals. Of these savings 61% were considered high risk and reflects the same position as many local authorities in that savings plans were becoming more complex and difficult to deliver.  The plans included a reduction of approximately 15% in staffing over the next two years that would need to be delivered while protecting front line services to our residents and businesses together with other business critical activities.

To help protect front line services and meet additional pressures in Children’s Services the budget includes a recommendation that Council Tax would be increased by 1.95% in 2018/19 (an increase of £25.04 per Band D). The proposed Band D Council Tax for Bath and North East Somerset Council next year including the Adult Social Care Precept was £1,347.89 (£1,284.33 in 2017/18) an increase of £63.56 per Band D (£5.30 per month).

At the end of 2016/17 the Council had reported a £2m over budget position – this occurred too late in the financial year to rebase within the 2017/18 budget process. The expected 2017/18 year end position at the end of December 2017 was an over budget position of £3.4m mainly due to additional demand in Adult Social Care, Children’s Services, and Special Educational Needs and Disability (including the impact of the previous year). The year-end estimate was after the use of £1.3m in Adult Social Care Reserves.

There had been a number of measures put in place to mitigate some of the pressures including:-

·  Reviewing all vacancies to hold or remove;

·  Introducing a three month turnover saving before a vacancy can be filled;

·  Buying leave option for staff;

·  Bringing forward planned savings;

·  Regular monthly updates to the Transformation Group;

·  Reviewing all income streams;

·  Reviewing all spend above £10k.

·   

In addition specific measures have been agreed within Adult Social Care:-

·  Additional capacity for project management, transformation, and contract management;

·  Improvements to the IT system in processing and reporting;

·  Approval panels set up for care packages;

·  Support planning and brokerage of placements.

In terms of the savings and income generation - revised estimates for savings and income generation show that £28.7m would be required over the next two years.  This was based on the assumption that the savings already approved and proposed savings of £26.8m could be delivered. This would leave remaining savings gap of £1.9m in 2019/20 for which savings plans would need to be developed by February 2019.  The proposals for savings and income generation, which were outlined in the report, had been included in the Operational Plan for 2018/19 and were reviewed by each of the PDS Panels before Council on 13^th February 2018. The report had been updated to reflect any amendments to savings plans and income generation.

A review of the capital programme was carried out as part of preparing next year’s budget with the following objectives:-

·  To ease staffing capacity issues;

·  Ease financial pressures;

·  Review financial and delivery risks.

The Capital Programme reflected the amendments as per the report.  The review outlined further recommendations for the current and future capital programme with the following principles requiring consideration:-

·   All existing schemes to be reviewed and simplified, reduced, paused or stopped as necessary;

·   Minimise new schemes except those that meet corporate priorities; and;

·   Create additional income or savings;

·   Address a statutory or health and safety imperative;

·   Replace obsolete or inefficient assets/equipment;

·  Part of a high priority government funded programme or WoE programme.

Councillor Charles Gerrish moved the recommendations subject to amended recommendation 2.1.c [attached to the Minutes as Appendix and on the Council's website] and an additional recommendation 2.1.q [attached to the Minutes as Appendix and on the Council's website] with updated Annex 1 2018/19 Revenue Budget Cash Limits [attached to the Minutes as Appendix and on the Council's website].

Councillor Vic Prichard seconded the motion by saying that Budget proposals and Council Tax changes had been set in order to protect front-line services, increase investment in social care and support local economy.  This Budget was in line with our Putting Residents First manifesto and its three core aims of the Council:

• Efficient and well run
• Investment in the future of the area
• Putting residents first

The Budget would focus on the Council’s key priorities and the Council had made good progress towards achieving its vision by being guided by these priorities.  The Budget would enable the Council to invest in the things that matter the most to local people.

RESOLVED (unanimously) the Cabinet agreed to:

a)  The General Fund net revenue budget for 2018/19 of £113.271m and the individual service cash limits for 2018/19 as outlined in Annex 1.

b)  The savings and income generation plans outlined in Annex 2 in conjunction with the Equalities Impact Assessment Report in Annex 3 and thereby agrees to implement the Council’s draft Operational Plan which has been presented to each of the relevant PDS Panels.

c)  That the agreement of a revised TDC Profit share arrangement is delegated to the CEO in consultation with the S151 officer and Leader, with appropriate independent legal advice obtained, and on the basis this will generate a simpler approach and better return for the Council, but that any associated extension of the lease is subject to a separate executive decision.

d)  To help protect front line services and meet additional pressures in Children’s Services the budget includes a recommendation that Council Tax is increased by 1.95% in 2018/19 (an increase of £25.04 per Band D).

e)  An increase of 3% to Council Tax for the Adult Social Care Precept is approved in recognition of the current demands and financial pressures on this service. This is equivalent to an increase of £38.52 on a Band D property.

f)  That the release of reserves, including the Invest to Save Reserve is delegated to the Council’s S151 Officer in consultation with the Portfolio Holder for Finance and Efficiency and the Chief Executive.

g)  The transfers between reserves outlined in 5.5.1 and the adequacy of Un-earmarked Reserves at £12.2m within a risk assessed range requirement of £11.9m-£13.1m.

h)  The Efficiency Strategy attached at Annex 4 and delegation of the Leading Together Change Programme funding of £2.0m to the Chief Executive in consultation with the Leader of the Council.

i)  The Capital Programme for 2018/19 of £83.111m including the capital review outlined in 5.7.2, new and emerging capital bids outlined in Annex 5, planned sources of funding in 5.7.3, and notes the programme for 2019/20 to 2022/23 and that any wholly funded projects coming forward during the year will be added to the Capital Programme in line with the Budget Management Scheme.

j)  The delegation of implementation, subject to consultation where appropriate, of the capital programmes set out in Annex 5(ii) to Annex 5(iv) to the relevant Strategic Director or Divisional Director in Consultation with the appropriate Portfolio Holder.

k)  Approve the amended process for Provisional Capital Schemes to become Fully Approved Schemes as outlined in 5.7.3 and all other delegations as set out in the report. 

l)  The Community Infrastructure Levy (CIL) allocations outlined in Annex 5(v).

m)  The MRP Policy attached at Annex 6.

n)  The Capital Prudential Indicators outlined in 5.7.5

o)  The Annual Pay Policy Statement at Annex 8.

p)  The Council Tax Support Scheme for 2018/19 shown in the following link  http://www.bathnes.gov.uk/CouncilTaxSupportScheme2017-18  and referred to in 5.3.4.

q)  The additional one-off Adult Social Care Support Grant of £456k for 2018/19 announced in the final local government settlement is held within the Adult Social Care budget as contingency for any Social Care local provider market pressures that emerge during the year. Specific allocations of this funding are to be delegated to the Strategic Director – People & Communities in consultation with the S151 Officer and Cabinet Members for Finance & Efficiency & Adult Care, Health & Wellbeing.

2.2  That the Council include in its Council Tax setting, the precepts set and approved by other bodies including the local precepts of Town Councils, Parish Councils, and Charter Trustees of the City of Bath, and those of the Fire and Police Authorities.

2.3  That Cabinet note the S151 Officer’s report on the robustness of the proposed budget and the adequacy of the Council’s reserves outlined in 5.6.

2.4  Authorise the Council’s S151 Officer, in consultation with the Portfolio Holder for Finance and Efficiency, to make any necessary changes to the draft budget proposal for submission to Council.