Issue - meetings

The Chairman advised that impending new legislation would require all Councils to take a recorded vote on budget matters.  Although not yet implemented, the Government had encouraged Councils to do so for this year’s budget.  Therefore, a recorded vote was taken on this matter, the results being:

FOR:

Councillors D Abbott, D Andrews, W Ashley, P Ballam, E Bedford, R Beeching, S Bull, M Carver, Mrs R Cheswright, H Crofton,

A Dearman, L Haysey, Mrs D Hollebon, A Jackson, G Jones,

J Jones, G Lawrence, J Mayes, G McAndrew, M McMullen,

M Newman, P Phillips, M Pope, P Ruffles, S Rutland-Barsby,

R Sharma, N Symonds, J Taylor, J Thornton, M Tindale,

A Warman, K Warnell, G Williamson, C Woodward, B Wrangles,

J Wyllie.

AGAINST:

Councillors J Wing, M Wood.

For: 36

Against: 2

Abstentions: 0

The Executive’s recommendations in respect of Minute 511 – Consolidated Budget Report 2014/15 and Medium Term Financial Plan were declared CARRIED.

RESOLVED – that (A) the probable outturn for 2013/14 be approved and it be agreed that any variation at outturn showing an improved position against the underspending now submitted, be put to the cost of the priority spend reserve;

(B)   the revenue budget for 2014/15 be approved and, in support of the 2014/15 budget, a one-off payment be made from the reserves of £1.008m to fund a one-off payment to the Pension fund to cap the increased deficit repayments to £600k pa for future years;

(C)   the medium term financial plan to 2017/18 be approved, subject to the amendment of the projected council tax increase for 2016/17 and 2017/18 being reduced from 2% to 1%; and

(D)   there be no increase in Council Tax for 2014/15 and 2015/16.

(see also Minute 550)

The Executive Member for Finance submitted a report recommending the revenue budget for 2014/15.  The joint meeting of Scrutiny Committees, at their meeting held on 14 January 2014, had supported the proposals now detailed.

The Executive Member highlighted the uncertain future of the New Homes Bonus on which a Government announcement was expected later this year.  He referred to the stress testing of the Medium Term Financial Plan (MTFP) undertaken, as detailed at Essential Reference Paper ‘C’.  This illustrated the resilience of the MTFP given different hypothetical scenarios.

The Executive Member highlighted the outcome of the pension fund triennial valuation review and consequent impact on employer contributions.  He also referred to the unidentified efficiency savings figures in the MTFP and the continuing efforts of Officers to reduce these further.

The Executive Member reminded Members of the continuing freeze on council tax and the projections within the MTFP that the freeze continue for the next two years 2014/15 and 2015/16.  He proposed an amendment to the MTFP by suggesting the projected council tax increase for 2016/17 and 2017/18 be reduced from 2% to 1%.  If approved, this amendment would increase the figures shown for unidentified efficiency savings by approximately £700k over the two years.  The Executive supported this amendment.

The Executive Member for Strategic Planning and Transport referred to the Authority’s previous experience on pensions and hoped that advantages could be obtained in the timing of the payment.

In response to a question from Councillor J Wing, the Director of Finance and Support Services clarified how retained NNDR was allocated and the assumptions built into the MTFP.

The Executive supported the recommendations as now detailed.

RECOMMENDED – that (A) the probable outturn for 2013/14 be approved and it be agreed that any variation at outturn showing an improved position against the underspending now submitted, be put to the cost of the priority spend reserve;

(B)      the revenue budget for 2014/15 be approved and, in support of the 2014/15 budget, a one-off payment be made from the reserves of £1.008m to fund a one-off payment to the Pension fund to cap the increased deficit repayments to £600k pa for future years;

(C)      the medium term financial plan to 2017/18 be approved, subject to the amendment of the projected council tax increase for 2016/17 and 2017/18 being reduced from 2% to 1%; and

(D)      there be no increase in Council Tax for 2014/15 and 2015/16.

The Executive Member for Finance submitted a report recommending the consolidated budget for 2014/15 and the 2017/18 Medium Term Financial Plan.  The Director of Finance and Support Services apologised that it had not been possible to publish the report earlier as the key information had not arrived from central government until very close to Christmas. 

Members were reminded that this information was central to the Council’s budget setting process for 2014/15 and for future years.  Members were also advised that all of the implications of the previous three reports on the Agenda were included in this report.

Members were further advised of a number of significant changes for local government finance in 2014/15, namely the cessation of Council Tax Benefit which had been replaced with a locally determined and managed Council Tax support scheme.  The localisation of Business Rates had transferred the risks and rewards for increases and decreases in Business Rate yield to the Authority.  

Members were also provided with a summary of the arrangements associated with the 2013 pension fund triennial valuation.  The Director of Finance and Support Services concluded that details of the treasury management strategy would be considered by the Audit Committee on 22 January 2014.

In response to query from Councillor M Pope regarding the new homes bonus, Members were advised that the known figures were considered secure until at least the next comprehensive spending review, although Brandon Lewis MP had advised that a review of new homes bonus would be undertaken in April.  The Director of Finance and Support Services stressed that East Herts Council was not as reliant on the new homes bonus as some other Local Authorities.

Councillor N Symonds commented on what East Herts Council was doing in terms of bringing empty homes back in to use.  Members were advised that there was an ongoing piece of work involving Officers in housing and revenues and benefits.  Members were reminded that the Authority had a housing strategy for East Herts that covered empty homes.

In response to comments from Councillor J Wing regarding whether more resources needed to put into the pension fund, the Director of Finance and Support Services commented that the pension fund had performed somewhat better than originally expected.

Members were advised that Officers had sought advice in terms of what would be a sensible amount to put into the fund at the present time.  Officers had been advised that, although the current position might change, as performance had been better than expected, the Authority might not have to invest in the fund in the near future.

In response to comments from Members relating to Reserves, the Director of Finance and Support Services advised that it was for the Authority to judge when it was prudent to allocate its Reserves and it was for Members to make suggestions to Officers.

The Executive Member for Finance commented that consultant advice had been sought as part of an appraisal into property investment.  He stated that Members  ...  view the full minutes text for item 468