Issue - meetings

·          That recommendations be made to the Full County Council on 11 February 2014 as follows:

       On the revenue and capital budget:

1.       Note the Chief Finance Officer’s statutory report on the robustness and sustainability of the budget and the adequacy of the proposed financial reserves (Annex 1 of the report submitted).

2.       Set the County Council precept for band D council tax at £1,195.83, which represents a 1.99% up-lift.

3.       Agree to maintain the council tax rate set above and delegate powers to the Leader and the Chief Finance Officer to finalise detailed budget proposals following receipt of the Final Local Government Financial Settlement.

4.       Approve the County Council budget for 2014/15 as £1,644.2m.

5.       Agree the capital programme proposals specifically to:

·     fund essential schemes over the five year period (schools and non-schools) to the value of £760m including ring-fenced grants; and

·     make adequate provision in the revenue budget to fund the revenue costs of the capital programme.

6.       Require the Chief Executive and Chief Finance Officer to establish a mechanism to regularly track and monitor progress on the further development and implementation of robust plans for achieving the efficiencies across the whole MTFP period.

7.       Require Strategic Directors and Senior Officers to maintain robust in year (i.e. 2014/15) budget monitoring procedures that enable Cabinet to monitor the achievement of efficiencies and service reductions through the monthly budget monitoring Cabinet reports, the quarterly Cabinet Member accountability meetings and the monthly scrutiny at the Council’s Overview & Scrutiny Committee.

8.       Require a robust business case to be prepared for all revenue invest to save proposals and capital schemes before committing expenditure.

On treasury management and borrowing:

9.       Approve the Treasury Management Strategy for 2014/15 and approve that their provisions have immediate effect. This strategy includes:

·     the investment strategy for short term cash balances;

·     the treasury management policy (Appendix B1);

·     the prudential indicators (Appendix B2)

·     the schedule of delegation (Appendix B4);

·     the minimum revenue provision policy (Appendix B7).

·          That the medium term financial plan (MTFP) for the financial years 2014?19, be approved including:

·     approval of the Total Schools Budget of £563.1m;

·     reduction of the revenue budget risk contingency for 2014/15 to £5m to mitigate against the risk of non-delivery of service reductions & efficiencies;

·     applying £20.1m from the Budget Equalisation Reserve (including £13.0m contributed by the unused risk contingency from 2013/14) and £5.8m from other reserves to support the 2014/15 budget;

·     provision of £0.75m to support the apprenticeship programme;

·     setting aside £1.25m in a reserve for Business Rates Appeals as mitigation against potential business rates valuation appeals.

·          That it be noted that the Cabinet will receive the final detailed MTFP (2014-19) on 25 March 2014 for approval following scrutiny by Select Committees.

Reason for Decisions

Full County Council will meet on 11 February 2014 to agree the summary budget and set the council tax precept for 2014/15. The Cabinet advises the Full County Council how best to meet the challenges the Council faces. The reasons underpinning the recommendations agreed by Cabinet include:

·        to  ...  view the full decision text for item 8

The Cabinet considered the draft revenue and capital budget for the five years 2014-19 and the level of the council tax precept for 2014/15 with a view to recommending them for consideration at the budget meeting of the County Council. This included consideration of the revised treasury management strategy, including the borrowing and operation limits (prudential indicators) for 2014-19, the policy for the provision of the repayment of debt (minimum revenue provision (MRP)), and the treasury management policy.

The Chairman of the Council Overview and Scrutiny Committee, Mr Nick Skellett, addressed the Cabinet on the budget proposals and the Chairman’s response to the Committee’s recommendations. Mr Skellett advised that the Council Overview and Scrutiny Committee recognised the position with regards to the ongoing need to make savings and the pressures placed in terms of funding. Committee Members had wanted to bring concerns and uncertainties to the attention of Cabinet to ensure that the budget works. These concerns included a belief that more comprehensive, deeper processes for savings and efficiencies needed to be embedded in order prevent any potential for drastic changes in year.

The Chairman addressed the points raised and agreed that efficiencies would get harder and harder to achieve. Robust systems were in place to regularly monitor and check efficiencies across the whole of the Medium Term Financial Plan. The Better Care Fund presented a unique opportunity for the County Council and the Clinical Commissioning Groups to look at their services and address any potential for waste. The work that had been taking place with partners had proved to be very helpful and would benefit the residents of Surrey. The Audit Commission did not wish local authorities to hold high balances in reserves and the Council’s budgeting reflected this by maintaining them at an appropriate level.

The recommendation to Council would be for an increase in the council tax precept of 1.99%. It was noted that a proposed increase of 2.49% had initially been planned to enable further investment in roads and other resident priorities. The Chairman advised that the cost of £2m for a referendum to ask residents about this level of rise would be a waste of money and so the level had instead been recommended at 1.99%. He noted that the right decision had been made not to accept the government offer of a freeze for the coming financial year and that no guarantee had been provided that this funding would remain in the base after 2015/16. The decision to reject the freeze in the current year had proven to be correct and had enabled the Council to do the right thing for Surrey residents.

Members of the Cabinet noted the success of the public service reviews and processes for driving efficiency programmes against a backdrop of increasing levels of demand and continuing reductions in the government contribution to services locally. The decisions taken by the Council to reject the Government’s freeze proposal and drive efficiencies locally had enabled investment in schools and highways, addressed  ...  view the full minutes text for item 8