Agenda item - Medium Term Financial Strategy (General Fund Budget 2015/16 including Council Tax Setting), Housing Revenue Account (including Housing Rents), Capital Programme 2015/16-2019/20 and Treasury Management Strategy (Revised 2014/15 and 2015/16)

Cabinet RECOMMENDED to Council:

(a) Approval of the Capital Programme and the associated funding up to the year ending 31 March 2020 as set out in Appendix A1 of the report.

(b) Approval of the revenue estimates for 2015-16 in the General Fund summary as set out in Appendix B1 of the report.

(c) Approval of the precautionary items for the General Fund, as set out in Appendix B2 of the report.

(d) Approval of the Medium Term Financial Strategy for the General Fund, as set out in Appendix B3(A) of the report, based on the assumptions contained within the report.

(e) Approval of the fees and charges proposed for 2015-16 as set out in Appendix B4 , including those relating to the planning pre-application service.

(f) That the Executive Management Team be instructed to identify additional income or savings of £670,000 from 2015-16.

(g) That the Council Tax requirement for 2015-16 is £7,478,550.

(h) That the Council sets the amount of Council Tax for each of the relevant categories of dwelling in accordance with Section 30(2) of the Local Government Finance Act 1992 on the basis of a District Council Tax for general expenses on a Band D property of £125.31 plus the relevant amounts required by the precepts of Parish Councils, Cambridgeshire County Council, the Cambridgeshire Police and Crime Commissioner and the Cambridgeshire Fire Authority, details of those precepts and their effect to be circulated with the formal resolution required at the Council meeting.

(i) Approval of the Housing Revenue Account estimates and the rent increase for the financial year ending 31 March 2016, as set out in Appendices C and C1 of the report, with the rent increase being in accordance with rent restructuring guidance from the Department for Communities and Local Government.

(j) Approval of the service and other charges for housing services for the financial year ending 31 March 2016 as set out in Appendix C2 of the report.

(k) Approval of the Housing Revenue Account business plan summary for the next 30 years to 31 March 2045 as set out in Appendix C3 of the report.

(l) Approval of the Borrowing and Investment Strategy for the year to 31 March 2016 as set out in Appendix D1 of the report.

(m) Approval of the prudential indicators required by the Prudential Code for Capital Finance in Local Authorities for the year to 31 March 2016 as set out in Appendix D2 of the report.

(n) That the Executive Director (Corporate Services) be given delegated authority to issue the final version of the Estimates Book, incorporating the amendments required from the Council’s decisions.

Further to recommendation (g) above, Council is RECOMMENDED to agree the statutory resolution in respect of the Council Tax for 2015/16, attached at Appendix 1.

Council is RECOMMENDED to commit a proportion of New Homes Bonus receipts in each year to the Greater Cambridge City Deal, amounting to 40% in 2015/16 and 50% from 2016-17 onwards as set out in Appendix B5 of the report. This is further to the resolution of the Greater Cambridge City Deal Executive Board at its meeting on 28 January 2015, as follows:

“The Greater Cambridge City Deal Executive Boardagreed that the three local authorities be requested to make initial budgetary provisions within their respective Medium Term Financial Strategies in line with the contents of the report, subject to the on-going availability of New Homes Bonus to the levels set out in the report.”

The report considered by the Greater Cambridge City Deal Executive Board on 28 January 2015 can be viewed via the following link:

http://scambs.moderngov.co.uk/documents/s78839/Resource%20Pooling.pdf

NOTES AND SUPPORTING INFORMATION IN RESPECT OF SETTING THE COUNCIL TAX AND BUDGET FOR 2014/15:

(1) Members should be aware of the provisions of the Local Government Finance Act 1992 which states that any Member who at the time of a Council meeting considering matters relating to the Council’s finances is two months or more in arrears with their Council Tax, or any payment or instalment of it, must disclose that fact at the meeting and not vote on the subject. Failure to do so is a criminal offence. If you think this might apply to you, please contact the Chief Executive urgently.

(2) The book of draft Revenue Estimates for the year ending 31 March 2016 and Capital Estimates to the year ending 31 March 2020 are available to view on the Council’s website via the following link:

http://scambs.moderngov.co.uk/documents/s79118/Estimates%20Book%202015-16.pdf

Hard copies are available from Democratic Services if requested no later than 48 hours before the Council meeting via telephone (01954) 713030 or email democratic.services@scambs.gov.uk.

(3) Members are reminded that all votes on motions or amendments relating to the Council’s budget or the setting of Council Tax will be recorded votes, in accordance with the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 and Council Standing Order 16.6.

Council:

(a) APPROVED the Capital Programme and the associated funding up to the year ending 31 March 2020 as set out in Appendix A1 of the report included in the supplementary agenda, as circulated at the meeting.

(b) APPROVED the revenue estimates for 2015-16 in the General Fund summary as set out in Appendix B1 of the report.

(c) APPROVED the precautionary items for the General Fund, as set out in Appendix B2 of the report.

(d) APPROVED the Medium Term Financial Strategy for the General Fund, as set out in Appendix B3(A) of the report, based on the assumptions contained within the report.

(e) APPROVED the fees and charges proposed for 2015-16 as set out in Appendix B4 , including those relating to the planning pre-application service.

(f) RESOLVED that the Executive Management Team be instructed to identify additional income or savings of £670,000 from 2015-16.

(g) RESOLVED that the Council Tax requirement for 2015-16 is £7,478,550.

(h) RESOLVED that the Council sets the amount of Council Tax for each of the relevant categories of dwelling in accordance with Section 30(2) of the Local Government Finance Act 1992 on the basis of a District Council Tax for general expenses on a Band D property of £125.31 plus the relevant amounts required by the precepts of Parish Councils, Cambridgeshire County Council, the Cambridgeshire Police and Crime Commissioner and the Cambridgeshire Fire Authority, details of those precepts and their effect to be circulated with the formal resolution required at the Council meeting.

(i) APPROVED the Housing Revenue Account estimates and the rent increase for the financial year ending 31 March 2016, as set out in Appendices C and C1 of the report, with the rent increase being in accordance with rent restructuring guidance from the Department for Communities and Local Government.

(j) APPROVED the service and other charges for housing services for the financial year ending 31 March 2016 as set out in Appendix C2 of the report.

(k) APPROVED the Housing Revenue Account business plan summary for the next 30 years to 31 March 2045 as set out in Appendix C3 of the report.

(l) APPROVED the Borrowing and Investment Strategy for the year to 31 March 2016 as set out in Appendix D1 of the report.

(m) APPROVED the prudential indicators required by the Prudential Code for Capital Finance in Local Authorities for the year to 31 March 2016 as set out in Appendix D2 of the report.

(n) RESOLVED that the Executive Director (Corporate Services) be given delegated authority to issue the final version of the Estimates Book, incorporating the amendments required from the Council’s decisions.

(o) RESOLVED to commit a proportion of New Homes Bonus receipts in each year to the Greater Cambridge City Deal, amounting to 40% in 2015/16 and 50% from 2016-17 onwards as set out in Appendix B5 of the report.

In addition to resolution (g) above, Council AGREED the following statutory resolution in respect of the Council Tax for 2015/16:

That the following amounts be now calculated by the Council for the year 2015-16 in accordance with Sections 31 to 36 of the Local Government Finance Act 1992:

(a) £88,348,234 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A (2) (a) to (f) of the Act (gross expenditure including parish precepts, the Housing Revenue Account and additions to reserves)

(b) £76,315,960 being the aggregate of the amounts which the Council estimates for the items set out in Section 31A (3) (a) to (d) of the Act (gross income including the Housing Revenue Account and use of reserves)

(c) £12,032,274 being the amount by which the aggregate at (a) above exceeds the aggregate at (b) above, calculated by the Council, in accordance with Section 31A (4) of the Act, as its council tax requirement for the year (net expenditure to be met from council tax) being the district amount of £7,478,550 and the parish precepts of £4,553,724

(d) £201.61 being the amount calculated by the Council, in accordance with Section 31B of the Act, as the basic amount of its council tax for the year (average council tax for a band D property for the District including parishes)

(e) £4,553,724 being the aggregate amount of all special items referred to in Section 34(1) of the Act (parish precepts)

(f) £125.31 being the amount calculated by the Council, in accordance with Section 34(2) of the Act, as the basic amount of its council tax for the year for dwellings in those parts of its area to which no special item relates (average council tax for a Band D property for the District excluding parishes), the amounts being for each of the categories of dwellings shown below in Table 1

(h) In accordance with Section 34(3) of the Act, the basic amounts of council tax for the year for dwellings in those parts of its area to which a special item relates are shown by adding the amounts for band D for the District Council in Table 1 and Appendix A of the report.

(i) In accordance with Section 36(1) of the Act, the amounts to be taken into account for the year in respect of categories of dwellings listed in different valuation bands are shown by adding the amounts for each band in Table 1 and Appendix A of the report.

That it be noted that for the year 2015-16 Cambridgeshire County Council, Cambridgeshire Police and Crime Commissioner and Cambridgeshire and Peterborough Fire Authority have stated the following amounts in precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings as shown in Table 1:

	Band	Band	Band	Band	Band	Band	Band	Band
Table 1	A	B	C	D	E	F	G	H
	£	£	£	£	£	£	£	£
County Council	762.84	889.98	1017.12	1,144.26	1,398.54	1,652.82	1,907.10	2,288.52
Police & Crime Commissioner	120.90	141.05	161.20	181.35	221.65	261.95	302.25	362.70
District Council	83.54	97.46	111.39	125.31	153.16	181.00	208.85	250.62
Fire Authority	42.84	49.98	57.12	64.26	78.54	92.82	107.10	128.52

and

(j) That the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the amounts set out in Appendix B of the report as the amounts of council tax for the year 2015-16 for each of the categories of dwellings shown in Appendix B.

SUPPORTING INFORMATION IN RESPECT OF SETTING THE COUNCIL TAX

Including the precepts from the County Council, the Police and Crime Commissioner, Fire Authority and all of the parishes, the formal Council Resolution would produce a Council Tax for a band D property of:

£ p			%
District Council	General Expenses	125.31	+1.99%
	Special Expenses for Parish Precepts (average)	76.30	+0.87%
County Council		1,144.26	+1.99%
Police Authority		181.35	+0%
Fire Authority		64.26	+0%
Total		1,591.48	+1.62%

On these figures the Council Tax would range from £1,010.12 for Band A to £3,277.24 for Band H before any discounts or benefits.

Appendix C of the report shows the General Fund summary including Parish precepts and the final Formula Grant figure.

Councillor Simon Edwards, Deputy Leader and Finance and Staffing Portfolio Holder, proposed the Medium Term Financial Strategy and associated elements as set out in the agenda, subject to a revised version of Appendix A1 which corrected some typographical errors and was circulated at the meeting. Putting forward the proposal, Councillor Edwards made the following points:

· further reductions in government grant funding would mean the Council receiving £830,000 less in 2015/16 than it did in the previous year;

· the Medium Term Financial Strategy’s savings target had been reduced to £670,000, as £400,000 had already been saved as a result of the restructure of waste services and the introduction of new waste collection rounds. In addition, more modelling had taken place since November on business rates which had indicated a slightly more favourable position than originally anticipated;

· the Strategy included an increase in Council Tax of 1.99%, which equated to an annual increase of £2.45 per band D home. Councillor Edwards acknowledged that any increase in Council Tax was regrettable but stated that the proposed increase was modest, being below the inflation rate, and would still see South Cambridgeshire as having one of the lowest levels of Council Tax in the country;

· in terms of fees and charges, the Council had to breakeven in respect of the Local Land Charges service and was not allowed to make a profit, so the Strategy included a proposal to reduce fees and charges for the service to facilitate this. Building Control fees and charges would remain unchanged in view of the fact that work was ongoing with regard to a Building Control shared service. An increase fees for the Council’s planning pre-application service was proposed as part of the Strategy;

· other shared services proposals for ICT and Legal Services would seek to deliver further savings. Additional savings had also been identified through the waste services joint working with Cambridge City Council, as well as through improved procurement and license renewals. The Strategy also sought to make better use of South Cambridgeshire Hall to increase its income potential;

· the Housing Revenue Account remained unchanged and continued to provide £4.5 million every year for the new council house build programme for the next five years, with that amount due to increase thereafter;

· £5 million had been allocated in the Infrastructure Reserve Fund as a contribution to the A14 improvement scheme, funded via New Homes Bonus. The first £1.8 million of New Homes Bonus receipts in each year would be used to offset expenditure previously covered by the Housing and Planning Delivery Grant. It was also proposed that a proportion of New Homes Bonus receipts in each year would be contributed towards the Greater Cambridge City Deal;

· the Capital Programme included a proposal to invest £500,000 in solar panels for the car park at South Cambridgeshire Hall and at the Waterbeach Depot. The £500,000 should be recovered within seven years of their introduction, subject to the detailed business case currently being worked up.

(Councillor David Morgan attended the meeting at this stage of proceedings).

In conclusion, Councillor Edwards reflected on the next ten years and stated that the proposed Medium Term Financial Strategy worked on the assumption that Government grant funding would cease altogether by 2020. The Council’s housing company had been established to bridge that shortfall and he emphasised the importance of making South Cambridgeshire District Council truly sustainable and self-sufficient. He took this opportunity to thank Alex Colyer, Executive Director (Corporate Services), John Garnham, Head of Finance, Policy and Performance, and their teams for the work they had done throughout the year and in preparing this proposed budget.

Councillor Mark Howell, Portfolio Holder for Housing, seconded the proposal and explained that the 2.2% inflationary figure to be applied in this year’s rent was in line with revised government guidelines and also reflected the September 2014 Consumer Price Index, which now had to be used instead of the Retail Price Index. The average rent per week would therefore be £103.95.

The following points were made by Members in debating the proposed budget and Medium Term Financial Strategy:

· the proposed budget was being complacent with regard to the New Homes Bonus and the required increase in affordable housing. The Council’s affordable housing policy of 40% was not being adhered to by large scale developers, with Northstowe and the Wing development cited as two examples where the affordable housing element would be as low as 20%. It would therefore be very difficult to achieve the levels of New Homes Bonus stated within the proposed Strategy, which was already committing part of this funding stream to the A14 improvement scheme and the Greater Cambridge City Deal;

· more details should be provided regarding the savings targets and headline savings for 2015/16, together with additional income streams such as the renting of office space at South Cambridgeshire Hall;

· funding of the Council’s sheltered housing scheme should be monitored carefully in future years;

· the budget did not include any reference to conservation;

· clarification was sought on the level of New Homes Bonus that would be contributed to the Greater Cambridge City Deal, in terms of whether it was a residual amount or a specific amount;

· clarification was sought as to where the loan of £7 million to the Council’s housing company featured in the accounts;

· it was very important for the Council to become self-sufficient, which was what this proposed budget sought to achieve.

Councillor Edwards confirmed that it was proposed for the Council to contribute 40% of New Homes Bonus receipts in 2015/16 and 50% from 2016-17, which was in line with the County Council and City Council contributions. The details relating to anticipated New Homes Bonus receipts were set out in Appendix B5 of the report. He also referred Members to Appendix A1, which included an item for borrowing of £7 million for 2014/15. This was where the Council’s loan to its housing company appeared in the accounts.

Voting on the proposal, with 31 votes in favour, 1 against and 13 abstentions, Council: