Agenda item

Revenue And Capital Budget 2015/16 to 2019/20 and Treasury Management Strategy

Meeting of Cabinet, Tuesday, 3 February 2015 2.00 pm (Item 10/15)
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Decision:

That the following recommendations be made to the Full County Council on 10 February 2015:

On the revenue and capital budget:

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

2. Set the County Council precept for band D council tax at £1,219.68 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 Director of Finance to finalise detailed budget proposals following receipt of the Final Local Government Financial Settlement.

4. Transfer £4.6m from the surplus on the Council Tax Collection Fund to the Economic Downturn Reserve.

5. Approve the County Council budget for 2015/16.

6. Agree the capital programme proposals specifically to:

· fund essential schemes over the five year period (schools and non-schools) to the value of £695m including ring-fenced grants;

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

· enhance provision for Local Growth Deal and flood schemes, as set out in paragraph 114 of the submitted report, including making a £0.5m pa contribution to the River Thames Scheme.

7. Agree for Cabinet to refresh the Medium Term Financial Plan for the financial years 2015-20 (MTFP 2015?20) revenue and capital budgets in summer 2015.

8. Require the Chief Executive and Director of Finance to continue regularly to track and monitor progress on the further development and implementation of robust plans for achieving the efficiencies across the whole MTFP period.

9. Require Strategic Directors, Heads of Service and Senior Officers to maintain robust in year (i.e. 2015/16) 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.

10. Require a robust business case to be prepared (and taken to the Investment Panel for review) for each revenue ‘invest to save’ proposals and capital schemes before committing expenditure.

On treasury management and borrowing:

11. Approve the Treasury Management Strategy for 2015-20 and approve that their provisions have immediate effect. This strategy includes:

· the investment strategy for short term cash balances;

· increasing the number of AAA-rated money market funds from five to seven (with the individual amount to a single fund increased from £20m to £25m);

· the treasury management policy (Appendix 8 of the submitted report);

· the prudential indicators (Appendix 9 of the submitted report);

· the schedule of delegation (Appendix 11 of the submitted report);

· the minimum revenue provision policy (Appendix 14 of the submitted report).

12. That the Medium Term Financial Plan for the financial years 2015?20 be approved, which includes:

· approval of the Total Schools Budget of £560.7m (paragraphs 53 to 59 of the submitted report);

· supporting the 2015/16 budget by using £4.3m from earmarked reserves as set out in paragraph 99 of the submitted report;

13. That it be noted that the Cabinet will receive the final detailed Medium Term Financial Plan 2015?20 on 24 March 2015 for approval following scrutiny by Select Committees.

Reasons for Decisions:

The County Council will meet on 10 February 2015 to agree the summary budget and set the council tax precept for 2015/16. The Cabinet advises the County Council how best to meet the challenges it faces and these proposals will aim to ensure the Council continues to maintain its financial resilience and protect its long term financial position.

Minutes:

The Leader of the Council began by taking Members through the amendments that had been made to this report since the Cabinet agenda had been published. This amendment sheet, including a revised Appendix 5 to the Budget report, was tabled at the meeting and is attached as Appendix 2 to these minutes.

Recommendations from the Council Overview and Scrutiny Committee’s Performance and Finance sub-group were also tabled at the meeting and are attached as Appendix 3 to these minutes.

The Leader of the Council thanked this group for their recommendations and said that he had discussed them with the Chairman of the Council Overview and Scrutiny Committee (who had sent his apologies because he was unable to attend this meeting to present them).

He said that the Cabinet would normally have provided a written response. However, due to the details contained within the recommendations, there had been insufficient time to provide a written response and therefore, he would note them and ask officers to consider them, either as part of the report on the Medium Term Financial Plan (MTFP) 2015 – 20, due to be submitted to Cabinet on 24 March 2015 or as part of its refresh, which would be considered by Cabinet in July 2015.

Turning to the Revenue and Capital Budget report for 2015/16, which included the Treasury Management Strategy, he said that the only recommendations that Cabinet would be approving today were recommendations (12) and (13), the others would be recommendations from Cabinet to the full County Council meeting on 10 February 2015, for their decision.

He said that the Administration would be proposing a council tax increase of 1.99% so that the Council could continue to provide the services that residents expected. He stressed the importance of budget planning which had been on-going throughout the year, which had contributed to the significant savings that had been achieved on the overall budget.

He also urged some caution, due to the General Election in May 2015, the uncertainty of the outcome and that there had been no Comprehensive Spending Review beyond 2015/16.

He also acknowledged the work of the Director of Finance and her officers, in compiling this Budget report and also the level of scrutiny that had taken place to ensure it was the right Budget for Surrey.

Finally, he said that he considered that the key messages concerning the Budget were:

· The County Council was still facing huge challenges and responding to them well and was making significant savings each year

· The ability to keep investing in what matters to residents

· To provide full information about the Budget for the next five years in a transparent way

He asked the Cabinet Team to comment on these points. Their key points were:

· Adult Social Care – the problem of estimating the number of older, vulnerable people that would require help in the future, the increased number of high cost packages, the importance of safeguarding, the full impact of the Care Act from 2016, delivery of savings with these Budget pressures.

· Schools and Learning - the pressure of providing and funding an additional 13,000 school places over the next five years, lobbying Government to ensure that Surrey’s needs are understood, Special Education Needs – it was now the responsibility of the Local Authority to provide education and training upto 25 years old, budget pressures relating to these issues.

· Public Health – whether there would be sufficient funding for the additional responsibilities now required of the Local Authority, relating to health visiting for 0-5 year olds, public health prevention and how it would be resourced and carried out.

· Savings, pressures and funding from 2010/11 to 2015/16 – that the Council had reduced the annual value of expenditure by £329m since 2010 and had also driven down unit costs, with examples being set out in Appendix 1 of the submitted report.

· Highways – that the Council had continued to maintain and improve transport infrastructure to support Surrey businesses, that roads were gritted quickly during adverse weather and key routes remained open.

· Youth Service – the importance of providing support for young people to enable them to have a good start in life, that the re-provisioned model had achieved excellent outcomes, with a reduction in NEETS and young people entering the youth justice system, and significant savings had been achieved, continued investment in the apprentice scheme.

· School Improvement – Education Performance was the subject of a separate report which would be discussed later in the agenda, including Ofsted’s view that the support that the local authority provided to schools was strong and effective.

· Hubs – investment in the setting up of Information Hubs, in advance of the ne Care Act and also Wellbeing Centres with Boroughs and Districts plus the possibility of using libraries as information points.

· Fire and Rescue - £1m Fire Transformation Grant – to be used for developing the partnership working between Surrey Fire and Rescue and the Police and Ambulance Services.

· Fraud – the Council, in partnership with Boroughs and Districts, was making significant progress in reducing fraud and had recently be awarded a Government grant to assist in their area of work.

· Council Tax – Surrey was one of the most dependant of all Councils on council tax receipts and a detailed explanation of the Council’s strategy was provided.

The recommendations were then put to the vote and it was:

RESOLVED: