Agenda item

Purpose of the report:  This report presents the revised Corporate Strategy for 2014 to 2019 and the proposed revenue and capital budgets for the Council for the period 2014/2015 to 2018/19.

Declarations of interest: None.

Witnesses:

Liz Lawrence, Head of Policy and Performance

Kevin Kilburn, Deputy Chief Finance Officer

Julie Fisher, Strategic Director for Business Services

Denise Le Gal, Cabinet Member for Business Services

Key points raised during the discussion:

1.    The Committee was informed that there had not been significant changes to the Corporate Strategy, as there had been a substantial refresh the previous year to look over the life of the Council. The Committee’s attention was drawn to the proposed priorities for 2014/15. Some had been carried forward from the previous year but there were also new priorities on the Family Support Programme, working with health partners on the Better Care Fund and the Council’s response to flooding.

2.    Officers commented that the Medium Term Financial Plan (MTFP) 2014-19 reflected the fact that there was a greater certainty about levels of local government funding for the next two financial years, after which the comprehensive spending review undertaken by the current central government would have reached its conclusion.

3.    The Committee was informed that the announcement regarding the council tax referendum threshold was still pending. The Cabinet Member praised finance officers for the work they had undertaken with the Treasury around this matter. The Committee was informed that officers were exploring the possible options in the event of a funding shortfall, but that no proposals had been brought for the Cabinet’s consideration at the present stage.

4.    The Committee recognised the Council's achievements in making savings in recent years to deal with increased demands on services and was pleased to note that £25m of Better Care Funding was being negotiated from 2015/2016.  However the Committee was concerned about several uncertainties in the Council’s budgetary planning:

·      A significant amount of the available reserves amounting to £26m were being used to balance the 2014/2015 budget, leaving considerably reduced reserves for the following years.

·      There was a reduction in the contingency for 2014/2015 from £13m to £5m and then another reduction to a nil contingency in 2015/2016, despite many savings programmes being uncertain. Officers explained that the contingency had not been used in previous years and was now adding to the budget pressure of services. If the contingency continued then further equivalent savings would have to be made

·      Whilst noting that the Council will receive £18m of Whole Systems funding in 2014/2015, it was still being negotiated with CCGs on the level from 2015/2016.

5.    The Committee held a discussion of recommendation 6 of the Budget Report, which proposed the establishment of a mechanism to track and monitor progress on the development and implementation of plans for achieving efficiencies.  The Committee acknowledged that this was an enhancement to reflect the increasingly complex financial environment facing the Council, rather than a response to a failure of existing monitoring mechanisms, and noted that the detailed objectives and procedures were still being determined.  The Committee stressed the importance of the role of Select Committees in reviewing and advising on areas of concern at an early stage, and wished to ensure that this was built into the process developed. 

Recommendations:

(a)   That the Cabinet address the following questions in relation to the proposed budget:

(i)    How will the Cabinet bridge the gap in 2014/2015 given that the 2014/2015 proposals rely on some savings which we have been informed will not be met and other savings which are difficult?

(ii)   How will the Cabinet deal with future budgets if the strategy of lobbying government and the NHS for better funding is not as successful as is hoped, given that there will be no contingency or reserves to cushion slippages?

(b)   That the Council Overview & Scrutiny Committee be consulted on the proposals for a  mechanism to track and monitor progress on the development and implementation of robust plans for achieving efficiencies in the MTFP, and that the mechanism makes provision for the early involvement of Select Committees in addressing any concerns identified by the process.

Actions/further information to be provided:

It was requested by the Committee that responses to these recommendations, be received from the Cabinet, prior to the budget setting meeting of the County Council on 11 February 2014.

Committee Next Steps:

None.