Agenda item

The DSP to make its final recommendations to Cabinet on the 2006/07 budget and onwards.

The notes from the meetings of the Budget Working Group on 2^nd February 2006 will be circulated at the meeting.

(Documents to Follow)

Members were given report CAB5 to Cabinet by the Finance Portfolio Holder. This gave details on:

·          Budget development

·          Local Government Settlement

·          Capping

·          Interest rates

·          Consultation

·          Budget requirement and use of reserves

·          Housing revenue account

·          Capital programme

·          Use of Resources assessment

·          Recommendations to Cabinet

Appended to the report were the statement by the Responsible Financial Officer, General Fund and Revenue Estimates, Housing Revenue Account, Capital Programme and details on reserves. Staff employment statistics and a summary of service delivery and support services were circulated as requested by the Panel.

The Portfolio Holder presented his report. He emphasised the improved member involvement in the budget preparation; all members had had the opportunity for unobstructed involvement throughout the process. In light of the Government’s Value for Money initiative, service plans had been used to form the base of the forthcoming budget, and a Windows ledger system installed to provide a better reporting mechanism and access to information for members.

He added that the gateway reviews had been good meetings and that these would be started earlier in the next financial year. The service plans would also provide a framework within which money could be spent; councillors and managers would be responsible for any variances. The Budget estimates had incorporated the prioritisation and large increases in priority services (revenue and capital) reflected this. General fund working balances would be maintained at the current level but the Portfolio Holder did reiterate the need to monitor the level of reserves given the ambitious capital programme for 2006/07. 

With regard to the Use of Resources inspection, the Portfolio Holder explained that the Council was striving to achieve the Level 3 standard. Because financial management was now underpinning every service, the Portfolio Holder explained that the financial staff needed further support to have the resources to assist other non-financial senior managers. 

The Portfolio Holder was then questioned on his report. He was asked about various details throughout the report but mainly, his recommendation number 6 on maximum subsidy per Council Taxpayer for the operation of the Arts Centres. The Director of Finance and Strategic Resources also provided clarification on a number of points raised by members.

Conclusion:

(1)  To invite the Portfolio Holder to a future meeting of the Resources DSP to explain further his recommendation on a maximum subsidy per Council Taxpayer for the operation of the Arts Centres.

The Panel, with the other budget working group members, had also recognised the need to look at the level of reserves, given the level of activity in the Capital Programme. It had been recommended by the budget working group that this be scrutinised. The Portfolio Holder did advise that it may be better to wait until the outcome of Large Scale Voluntary Transfer before any detailed scrutiny of funding the capital programme.

Conclusion:

(2)  That the Resources DSP scrutinises superfluous/miscellaneous assets and the financing of future capital projects, prior to consideration by Cabinet.

(3)  That the Resources DSP monitors the Capital Programme as it progresses throughout 2006/07.   

The Panel then considered the recommendation from the budget working group that the deficits for Special Expense Areas (SEAs) be reduced. The Portfolio Holder explained that all SEAs had been considered during the gateway review meetings and that in the next financial year, he would oversee a small review of the issue. The Panel, however, explained that SEAs had been a concern for a number of years and because capping would be enforced in the foreseeable future, further savings needed to be made to reduce the deficits.

Conclusion:

(4)  That the Resources DSP supports the Budgetary Proposals for Revenue 2006/2007 and Capital for 2006/2007 to 2008/2009 as presented in report CAB5 by the Finance Portfolio Holder. However, the DSP recommends that the deficit for each Special Expense Area for the 2006/07 budget be reduced by 25% per annum.

The staff employment statistics were then scrutinised. It was commented that the staff statistics in the budget did not match those in the Best Value Performance Indicators. The reason for this would be investigated. Given that the statistics were only draft, the Panel agreed to discount them. A member explained that the new ledger system would be able to provide better reporting information on this. Another member spoke about direct prime costs such as stationery. Although budget information had been changed from direct costs to service costs in response to members’ preferences, it was considered that this information was still required. Again, the new ledger system would provide members with access to this information. Councillor Craft added that he was intending to make a presentation to members on the new system.

Conclusion:

(5)  That when the new ledger system is fully operational, the Resources DSP to receive quarterly reports on staff employment statistics and reports on direct prime costs when requested.

The Resources DSP also reaffirmed its conclusions from the last meeting of the Budget Working Group in relation to Gershon efficiency targets and engaging members.

Conclusion:

(6)  To include on the agenda for a future Resources DSP meeting: engaging members in scrutiny of financial issues.

(7)  That the Resources DSP monitors achievement of the Gershon efficiency targets.