Agenda item

Cabinet:

(a)  NOTED the General Fund forecasts attached at Appendices A1 and A2 to the report.

(b)  APPROVED the assumptions underpinning the Medium Term Financial Strategy set out in Appendices B1 and B2 attached to the report.

(c)  AUTHORISED the Chief Executive, as Head of Paid Service, to implement the required staffing changes necessary to complete the restructurings of the growth area teams.

(d)  INSTRUCTED the Head of Finance, Policy and Performance to bring forward detailed draft estimates 2014-15 based on the assumptions and issues contained in thE report for consideration by Cabinet in the New Year.

Cabinet considered a report which provided Members with an update on the General Fund forecasts and underpinning assumptions and their impact on the Council’s Medium Term Financial Strategy.  The Council’s General Fund forecasts were appended to the report and summarised the financial issues arising over the medium term and, together with the assumptions also included in the report as an appendix, set the parameters for drawing up detailed budgets for 2014-15. 

The report was presented by Councillor Simon Edwards, Portfolio Holder for Finance and Staffing, who reminded Cabinet that this was a very early opportunity to review the Medium Term Financial Strategy that would deliver the Council’s Corporate Plan. 

Councillor Edwards reflected on the 10% reduction in local government funding from 2015 as one of the key messages from the Comprehensive Spending Review and estimated that, should education and health services be protected, this would equate to a 20% reduction.  He also reported that the Government had announcement it would be top-slicing the New Homes Bonus, although the exact amount to be top-sliced in percentage terms had not yet been confirmed, and emphasised the importance of the Council’s budgetary decision in February 2013 not to rely on the New Homes Bonus in view of this announcement.  Further points raised as part of Councillor Edward’s presentation were noted as follows:

·         the Council was obliged to pay additional national insurance costs in 2015/16 arising from changes to the state pension scheme.  Employees and employers had to pay an additional 1.2% and 3.4% respectfully, equating to an approximate £300,000 for the Council;

·         the savings target for the Council was now approximately £1.3m, although £920,000 of savings had already been identified through activities such as the:

-       grants review;

-       restructuring in Health and Environmental Services;

-       Internal Audit partnership with Peterborough City Council;

-       removal of some posts from the establishment;

-       withdrawal of the Parish Council Tax Support Grant;

-       Conservation and Urban Design restructure;

-       Business Improvement and Efficiency Programme.

·         two options had been identified as part of the forecasting assumptions for Council Tax, which were to increase Council Tax by 3.5% or freeze it for 2014/15.  The Government’s capping criteria was currently unknown, but a Council Tax freeze for 2014/15 would result in a further £275,000 having to be identified within the Council’s budget;

·         the projected overspend relating to refunds on bills issued to non-domestic ratepayers resulting from revaluations agreed by the Valuation Office Agency had been identified as a risk in the Medium Term Financial Strategy.  New rules meant that the Council now had to reimburse such refunds, even if an original appeal pre-dated the new arrangements.  The Agency had supplied a list of outstanding appeals, but this contained no indication of whether an appeal would be upheld and, if so, the impact on the rateable value or the effective date of the change.  It was therefore very difficult to predict the amount of rates collectible and the impact on the Council’s finances, but the Portfolio Holder and officers were discussing ways of mitigating this risk in the future.

In discussing the content of the report, Members took an opportunity to express their congratulations to officers for prudent accounting over the past few years which had left the Council in significantly better financial shape than other local authorities.

In closing it was noted that the forecast update in January 2014 would reflect the outcome of the Autumn Statement and the local government finance settlement figures.

Cabinet:

(a)  NOTED the General Fund forecasts attached at Appendices A1 and A2 to the report.

(b)  APPROVED the assumptions underpinning the Medium Term Financial Strategy set out in Appendices B1 and B2 attached to the report.

(c)  AUTHORISED the Chief Executive, as Head of Paid Service, to implement the required staffing changes necessary to complete the restructurings of the growth area teams.

(d)  INSTRUCTED the Head of Finance, Policy and Performance to bring forward detailed draft estimates 2014-15 based on the assumptions and issues contained in the report for consideration by Cabinet in the New Year.