Issue - meetings

Minute 281 refers

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

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

(C)   the planning assumptions, as now submitted, be adopted as the basis for framing the 2013/14 budget and Medium Term Financial Plan to 2016/17.

(see also Minute 333 above)

The Executive Member for Finance submitted a report which considered revisions to the Financial Strategy including the policy on Reserves and the proposed planning assumptions to be used in updating the Medium Term Financial Plan (MTFP).

The Corporate Business Scrutiny Committee, at its meeting held on 21 August 2012, considered the report and made a number of comments as now submitted.

The Executive Member for Finance outlined the funding changes regarding Council Tax Support and Business Rates.  He referred to the Financial Strategy as detailed at Essential Reference Paper ‘C’.  He also detailed Government funding forecasts and other assumptions built into the MTFP model as detailed at Essential Reference Paper ‘F’ of the report submitted.  Here, he reminded Members of the intention for a nil council tax increase in the remaining term of the current Council through to 2015.

The Executive Member for Finance also referred to the application of the New Homes Bonus and his proposal to cap this at 2012/13 levels until such time as specific initiatives had been identified.  The Leader suggested that this could be reviewed as business cases for expenditure came forward.

Councillor J Ranger referred to the recommendation that Officers be asked to extend the financial model until 2019/20 and expressed his view that it would be a waste of time to look beyond the current five year period.  The Executive agreed to delete this recommendation, but asked the Executive Member for Finance to revisit the potential merit of this proposal when the new Director of Finance and Support Services was in post.

The Executive supported the proposals as now detailed.

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

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

(C)      the planning assumptions, as now submitted, be adopted as the basis for framing the 2013/14 budget and Medium Term Financial Plan to 2016/17.

The Executive Member for Finance submitted a report inviting Members of the Corporate Business Scrutiny Committee to consider revisions to the Financial Strategy including policy on reserves and the proposed planning assumptions to be used to update the Medium Term Financial Plan and to make recommendations to the Executive.

The Director of Internal Services referred to this report being the prelude to the annual budget round.  Members were advised that, due to the added level of complexity of this report, it had been broken up into 4 parts.

Introducing Part 1, The Director of Internal Services reminded Members that the number of benefit claimants was increasing although the rate of increase was falling. He also stated that the risk of increasing entitlement to council tax discount would be shared by East Herts, the County Council and the Police Authority pro rata to each Authority’s rate of council tax.

Members were advised that the cost of benefits to be awarded by East Herts in 2012/13 was estimated at £7m, which would reduce to an estimated £6.65m on implementation of the new scheme of council tax discounts.  Members were reminded that an allowance would need to be made for some growth in numbers becoming entitled to the new discount.

The Director of Internal Services advised that, for 2013/14, the latest estimate was that the discount scheme would reduce council tax income to East Herts by £733k, which would be offset by a government grant of £675k.  Members were advised that each 1% increase in the cost of discounts above the estimate would cost £7.3k and would not be offset by a grant increase.

The Director of Internal Services further advised that although the business rate retention scheme was starting from 1 April 2013, this did not mean that East Herts Council would be setting business rates.  The portion of the rate collected by the Government would be returned to the Authority and there was no risk to East Herts Council in respect of this scheme.

Councillor J Ranger commented on whether the Government’s estimate in respect of business rate income was in line with East Herts Council’s estimate.  The Director advised that until the 2013/14 accounts were closed in June 2014, the Authority would not know whether actual business rate income and the amount retained matched the estimate, although in-year monitoring would alert Officers to significant variations.

Under Part 2, Members were advised that the Financial Strategy and the Medium Term Financial Plan (MTFP) had a 5 year focus and Officers had made reasonable assumptions in terms of expected income and costs.

The Director of Internal Servicesstressed that it might be appropriate to put the next 5 years into the context of longer term trends given suggestions that austerity might last until 2020.  Members were referred to paragraph 3.4 of the report for the most significant service drivers and cost pressures in the period up to 2019/20.  Members urged caution when considering  ...  view the full minutes text for item 262