Issue - meetings

Minute 213 refers

RESOLVED – that (A) the comments of Corporate Business Scrutiny Committee be received;

(B)      the proposed Financial Strategy, as now detailed, be adopted; and

(C)      the planning assumptions set out in the report submitted, be adopted as the basis for framing the 2016/17 budget and Medium Term Financial Plan to 2019/20.

(see also Minute 349)

The Executive Member of Finance and Support Services submitted a report proposing revisions to the Financial Strategy 2015/16 - 2019/20, which included the policy on reserves and the proposed planning assumptions to be used to update the Medium Term Financial Plan in preparation for annual budget setting.

The Executive Member outlined the underlying assumptions within the Medium Term Financial Plan (MTFP) and addressed the following key areas:

·                        Funding changes

·                        Financial Strategy

·                        Review of Reserves

·                        Underlying assumptions

·                        MTFP development; and

·                        Budget-setting Risk Management

The Corporate Business Scrutiny Committee, at its meeting held on 14 July 2015, had supported the revisions.

The Executive supported the recommendations as now detailed.

RECOMMENDED – that (A) the comments of Corporate Business Scrutiny Committee be received;

(B)      the proposed Financial Strategy, as now detailed, be adopted; and

(C)      the planning assumptions set out in the report submitted, be adopted as the basis for framing the 2016/17 budget and Medium Term Financial Plan to 2019/20.

The Executive Member for Finance and Support Services submitted a report that considered revisions to the Financial Strategy for the years 2015/16 to 2019/20.  This included the policy on reserves and the proposed planning assumptions to be used to update the Medium Term Financial Plan (MTFP) in preparation for annual budget setting.

Members were advised that this report set out the assumptions Officers had used when drafting the MTFP.  Members were reminded that the Financial Strategy was a statement on the Council’s approach to the management of the financial resources required to meet its corporate priorities.  The Strategy also considered the appropriate level of reserves that the Council might need to mitigate current and longer term risks.

The Committee was also advised that the MTFP outlined the anticipated funding and expenditure each year and where there was a shortfall the MTFP would highlight the amount of savings required that had not yet been identified.  Officers had also been mindful of the inflation assumptions from the Office of Budget Responsibility.

Councillor M Casey referred to the 2.25% pay settlement figures detailed on page 43 of the report submitted.  He commented that he thought this was 1% for the public sector.  The Director of Finance and Support Services advised that the 1% cap announced in the Chancellors budget did not include Local Government salaries.  Local Government salaries are negotiated at a national level and at this stage an estimate had to be used  Members were advised that the 2.25% also took account of pay banding and any changes in national insurance contributions levels.

In reply to a query from Councillor Casey, the Director confirmed that most, if not all, of the Council’s workforce earned more than the national living wage.  The Head of Strategic Finance advised that some contractors’ costs might increase to take account of staff whose salary might have been below the national living wage.

In response to a query from Councillor J Wyllie, the Director detailed the difference between earmarked and general reserves.  In reply to a question from Councillor R Henson, the Head of Strategic Finance advised that the Authority had no control over individual business rates as these were set by the Valuation Office.

The Chairman commented on whether the Authority was over reliant on the New Homes Bonus.  The Head of Strategic Finance advised that the Authority used only a proportion of New Homes Bonus against general expenditure.  He emphasised that Officers would not know the full picture until the Autumn Statement was issued.

The Director believed that the MTFP and the Financial Strategy were based on the best information Officers had at this point in time.  The Committee received the report.

RESOLVED – that the report be received.