Issue - meetings

Report number FIN210 by the Director of Finance & Strategic Resources.

[A presentation will be made to the Council by the Leader and the Director of Finance & Strategic Resources.]

DECISION: That the 2005/06 Budget be developed on:

(1) A 6% rise in Council Tax;

(2) Special Expense Areas to breakeven over an 3 year period; and

(3) A target budget requirement of £13,030,000 for 2005/06.

The Director of Finance & Strategic Resources referred to his report number FIN210 which had been previously circulated with the agenda. The purpose of the report was to update the Council on the budget development process for 2005/06 and pooled capital receipts.  The Director had appended a copy of his report FIN208, previously submitted to the Cabinet, which outlined the major issues to be taken into account through the budget process.

Due to time constraints the Director of Finance & Strategic Resources advised he would make his presentation on the Council’s medium term financial strategy at a later date.  He then outlined the salient points in relation to the progress made in 2004/05 and the issues facing the Council for its 2005/06 budget.  These related to:  the limited expectation of revenue support grant increase; the pressure of capping; the use of reserves; interest receipts; and Gershon efficiency savings (so named after the person appointed to find efficiency savings in Whitehall).

As part of the preparation process the Capacity & Resources DSP had made a number of recommendations with regard to the development of the 2005/06 budget which had been taken on board by the Cabinet.  These recommendations were so moved and seconded.

In accordance with Council Procedure rule 9, as the meeting was nearing being in progress for three hours, the majority of members present voted for the meeting to continue for a further one hour.

Report number FIN208 by the Director of Finance & Strategic Resources.    

                                                                                                 (attached)

[Decision taken by the Cabinet collectively]

DECISION: 

(1)    To endorse the Medium Term Financial Strategy and to build in a 6% Council Tax increase and to re-coup Special Expense Area expenditure over three years into the budget preparation process;

(2)     The Director of Finance & Strategic Resources to request the County Treasurer considers holding the joint budget consultation meeting at a venue outside Grantham this year.

Considerations/Reasons for Decision:

(1)      Report number FIN208 by the Director of Finance & Strategic Resources which considers the updated medium term financial strategy (MTFS) for the period 2005/06 to 2009/10 and examines the main influences on the budget preparation for 2005/06;

(2)      The main issues facing the Council in terms of preparing the current MTFS.  Progress was made in all these areas within a 6.2% rise in Council Tax which did not attract capping from the Government;

(3)      An assessment of the Council’s position relative to its current financial strategies;

(4)      The complexities of assessing future levels of government grant; the Director’s recommendation that an annual figure of 2% increase on a like for like basis is a prudent assumption for financial planning;

(5)      Estimated budget requirements for 2005/06 to 2009/2010, including Special Expense Area expenditure;

(6)      The following assumptions:  Government grant increase – 2% per year; Tax base  – 1% increase per year; Council Tax  - 3% increase per year;

(7)      The need for estimated budget requirements to deliver the resources for stepped improvements in the Council’s identified priorities.  The assumption is that the identified costs associated with the non-prioritisation of services will be realised.  If not, the budget requirement will remain higher than desired;

(8)      Expected use of reserves for future years to help fund stepped changes in service improvement;

(9)      The comments of the Capacity & Resources DSP concerning a 6% Council Tax increase and to re-coup the SEA expenditure over a three year period;

(10)  As the budget affects all residents of South Kesteven, the joint consultation meeting with the Lincolnshire County Council, the Police Authority and this Council should be held at an alternative venue this year.