Agenda item

Purpose of the report: This report updates Members on the latest financial prospects for the period of the Medium Term Financial Plan, ahead of development of the formal budget for 2016/17 in February 2016.

Declarations of interest:

None

Witnesses:

Kevin Kilburn, Deputy Chief Finance Officer

Service representative attending at 11am:

John Stebbings, representing Orbis

Ann Charlton, representing legal and Democratic Services

Louise Footner, representing Communications

Andy Tink, Finance representative for Policy and Performance and Chief Executive’s Office

Key points raised in the discussion:

1.  The Deputy Chief Finance Officer introduced the report. He explained that the Chancellor’s Autumn Statement had been produced the day previous. The Autumn Statement looked at the Public Sector as a whole, and more specific information relating to services was expected before Christmas 2015. One Member questioned if there was any indication of Surrey County Council’s share of the £300million future infrastructure pot hole fund announced in the Autumn Statement. It was noted that it had usually been 1% for the Highways Service in previous years; however, High Speed Rail and Cross Rail were factors this year.

2.  Board Members stressed the importance of scrutinising budgets and savings within the Council.  One way this could be achieved would be for Members to give officers a steer on views and ideas about spending, by closely looking at first drafts of the budgets. It was noted that individual Scrutiny Boards would begin to speak with services to find out what they were currently doing to achieve savings and plan for future savings.

 Denise Saliagopoulos out 10.25am.

3. It was noted that Council Tax could be raised by an additional i 2% to deal with the growing increase demand in Adult Social Care services. It was noted that the Leader of the Council had lobbied the government regarding increased demand for services, against the backdrop of reducing funding from government.  An increase in Council Tax was considered by many Members to be the only feasible way to fund the increasing demand in order to keep running statutory services.

4. Clarification was sought over revenue savings still to be identified, that totalled £28.5million. Some Members agreed that funding should be shared to help deal with the continued pressure on Adult Social Care, as well as Public Health. The Board understood and stressed the continued pressure for integration between health services and social care.

5. There was a discussion regarding Surrey Roads and what has already been done to illustrate to Central Government the deterioration of Surrey roads. It was stated that Surrey had some of the highest volume of traffic on roads, however the Board were informed that Central Government base their funding on the length of roads rather than volume of traffic. The funding by road length in Surrey was higher than the national average. A Member requested a briefing paper that showed the estimation of the funding from government, against the actual funding granted.

Keith Witham left the meeting at 10.56am and returned 11.06

6. The Chairman of the Board asked specific questions to the Deputy Chief Finance Officer on behalf of the Member Cllr Bill Chapman who had sent his apologies. It was stated that Surrey County Council would always try to get best value when searching for favourable terms for block purchases from operators of Care and Nursing Homes, however sustainability was a priority.

7. Members noted that small business rates would continue to be compensated to local government for another year.  Another issue stated was the longer term, 100% retention of business rates by local government.  Central government were looking for ideas from Local Government about how this could work.

8. Services had been instructed to find 1.5% reduction in the next financial year and Members were concerned aboutthe enormous pressure on services.  A Member questioned whether it was possible to reduce reserves to help reach those 1.5% targets to avoid impact on statutory or front line services. 

The Board were informed by that Surrey County Council was currently below the normal amount for reserves. Reserves were said to be held for a range of different reasons such as street lighting (PFI) and the Eco Park. Members questioned the need for reserves and the specific risks of them. It was stated that Surrey County Council has a very low premium for insurance policies. It was explained that Cabinet had put money aside to support future year’s budgets (known as the “budget equalisation reserve”). It was highlighted to the Board that reserves could only be used once.

9. Before moving into the Part 2 section of the meeting, Members discussed the importance of not only maintaining statutory requirements, but also meeting the expectations of residents.