Decision details

To provide an update on the financial challenges the Council is facing and the strategies required to meet these.

RESOLVED (as amended):

1.         That the context and background to the County Council’s financial prospects over the medium term, as set out in paragraphs 15 to 22 of the submitted report, be noted.

2.         The achievement of £329m efficiency savings over the last five years and the further planned savings of £361m over the next five years be noted.

3.         The impact of additional funding on the Council’s financial sustainability, as set out in paragraph 35 of the submitted report, be noted.

4.            The revised cash limit budgets for each service in the absence of additional funding from government grants, council tax, or business rates; or further savings, as detailed in paragraph 33 and annex 1of the submitted report be approved.

5.            That Cabinet Members and officers develop proposals on delivering services within the revised cash limits for a future Cabinet meeting, as set out in paragraph 33 of the submitted report.

6.            The development of proposals to the Government for additional funding through the adult social care precept, business rates retention and for school places, as set out in paragraph 35 of the submitted report, be approved.

7.            That Cabinet would welcome a County Council view before a decision is taken on the Government’s four year settlement offer, and that an item seeking that view be included (in accordance with Article 8.2(c) of the Constitution) in Cabinet’s report to Council on 11 October 2016.

8.            That the executive decision to accept or decline the Government’s four year settlement offer, as set out in paragraph 41 of the submitted report, be delegated to the Leader of the Council, for decision as soon as possible after the full Council meeting of 11 October 2016.

9.            Subject to further minor adjustments agreed by the Chief Executive in consultation with the Leader of the Council, the Council’s own response to the 100% Business Rates Retention consultation be approved, and the joint response from the 3SC local authorities, as detailed in paragraph 48 of the submitted report, be endorsed.

10.       That Scrutiny Boards examine the key budget proposals and report back to Cabinet, as detailed in paragraph 34 of the submitted report.

Reasons for Decisions:

The Council is required to produce a balanced budget each year. Surrey County Council also prepares a Medium Term Financial Plan (MTFP) that sets out its financial plans over a rolling five year period. The efficiency savings the Council has had to achieve over the last five years and the efficiency plans it has had to make for the coming five years illustrate the unprecedented and continuing length of the Government’s austerity programme, the simultaneous rise in service demand and the impact of additional spending pressures on the Council’s financial sustainability. Given the confluence of these challenges, Cabinet’s decisions need to ensure the Council plans and implements coherent and robust measures to achieve a balanced financial plan in MTFP 2017?22.

A key step in achieving a balanced and sustainable MTFP 2017?22 is for Cabinet to approve a suitable framework for developing proposals to deliver the Council’s Corporate Strategy within the available budget envelope. A critical element of this is a set of revised cash limits for each service that officers will use to develop proposals for Cabinet to approve at a future meeting.

The Government has not announced detailed changes to its spending plans, austerity is set to continue and the Council needs to maintain a prudent approach. However, the recent changes in the Government’s policy developments and economic forecasts mean there is increased continuing uncertainty over the level of future fundraising.

In March 2016, the Secretary of State for Communities and Local Government wrote to all Councils offering a four year settlement. The offer guarantees (subject to unforeseen significant economic events) each Council its Revenue Support Grant (RSG), Rural Services Delivery Grant and Transitional Grant over the period 2016/17 to 2019/20 as set out in the Final Local Government Settlement. To accept the offer, a Council must prepare and submit an efficiency plan to the Department for Communities and Local Government (DCLG) by 14 October 2016. A significant feature of the Council’s proposed four year settlement is that it is set to receive -£17.3m negative RSG in 2019/20 (the Government will deduct £17.3m from the Council’s other grants). To maximise the time available to consider this issue Cabinet is asked to delegate this decision to the Leader, which will be reported to Full County Council.

The Government is consulting on 100% Business Rates retention by local government and a fairer funding review. These will have a fundamental and strategic impact on the Council’s financial sustainability. The Council’s consultation responses, in conjunction with partner organisations’, seeks to safeguard and advance Surrey residents’ wellbeing and experience and Surrey businesses’ prosperity.

[The decisions on this item can be called in by the Council Overview Board]