Agenda item

• Revenue Estimates 2008/09 and indicative budget 2009/10 to 2010/11
• Capital estimates 2008/09 to 2010/2011
• Fees and charges
• Treasury Management Strategy
• Priority plans

Report number CHFR88 by the Corporate Head, Finance & Resources.

                                                                                      (Attached)

BUDGET DECISIONS:

          General Fund Revenue Estimate

          The Cabinet recommends parts a to k to the Council:

a.     to set a General Fund budget requirement of £15.783m for 2008/9 and an indicative target of £16.247m for 2009/10 and £16.766m for 2010/11 (inclusive of special expenses).;

b.    to set a Council Tax increase of 4.95% for 2008/9

c.     to approve the revised revenue base estimate for 2007/08; original base estimate for 2008/09: and indicative base estimates for 2009/10 and 2010/11 as detailed in the summary at Appendix A page 1 of report CHFR88;

d.    to approve the Treasury Management Strategy and the recommendations contained therein provided at Appendix B to report CHFR88;

e.     to approve increases in Fees and Charges for 2008/09 (in accordance with the Council’s Fees and Charges Strategy) and as set out in Appendix C to report CHFR88;

f.       to approve a revised joining fee of £20 for the Green Waste Collection Scheme  applicable to new entrants with effect from 1^st April 2008

g.    to agree that the earlier decision to give notice to Lincolnshire County Council to withdraw District Council support from the Dial A Ride project is not rescinded.

h.    to take into account in future years Special Expense Areas (SEAs) under/overspending balances when setting the level of the Council Tax for SEAs using a de-minimus level of 10% with effect from the Closure of Accounts for 2007/8.

i.      to create specific reserves for each of the SEAs to enable contributions to be made to the reserve at outturn and as part of the future council tax setting process to provide for asset renewal in future years.

j.       to approve the forecast balances of Revenue and Capital Reserves contained at Appendix A page 2 of report CHFR88;

k.     delegate to the Section 151 Officer, in agreement with the Portfolio Holder for Finance and Assets, agreement of the final Pension Pool contribution rate following attendance at a seminar to present the Actuary’s valuation report.

            The Cabinet:

l.       requires the Service Manager for Building Control, in consultation with the Corporate Heads of Finance and Resources and Sustainable Communities, to undertake necessary actions to restore the breakeven position, over a rolling three year cycle, within the new financial year (2008/9).

m.   notes that preliminary written and on-line feedback from the budget consultation shows broad representation across all the options; following formal briefing to all six Local Forums resulted in five out of the six supporting the 4.95% increase on the SKDC element of the council tax.

Capital Programme

The Cabinet recommends parts n. to p. to Council:

n.    to approve the revised Capital Programme for 2007/08 and Programme for 2008/09 to 2010/11 detailed at Appendix A page 10-13 of report CHFR88.

o.     to authorise the funding proposals subject to an annual review of the financing options by the Corporate Head of Finance and Resources, in consultation with the Portfolio Holder, during the preparation of the Statement of Accounts to optimise the use of Council resources.

p.    to review the policy on the use of Housing Capital Receipts to enable them to be applied to finance the Council’s overall capital programme in the most financially advantageous way for the Council as a whole and as recommended by the Corporate Head of Finance and Resources in consultation with the Portfolio Holder for Finance and Assets, subject to the view that in the longer term the capital resources made available to the Council as a housing authority are used for housing purposes.

Housing Revenue Account (HRA)

q.    The Cabinet notes the outcome of consultation of Tenants on the rent increase proposals.

The Cabinet recommends parts r to t to Council:

r.      to set dwelling rent increases in accordance with Government guideline rent, but with a cap on individual rent increases, with no rent being increased by more than “Rent + RPI @ 3.91%+ 0.5% + £2” and no rent being reduced resulting in an average increase of 7.79%, providing an average rent of £59.06.

s.     to set an increase in Garage rents of 4.1%.

t.      to increase service charges by 3.9% (RPI Sept 2007)

u.    to commission a review of the cost base and charging mechanism  for service charges during 2008/9.

Priority Plans

v.     The Cabinet accepts the Strategic Management team’s recommendation that the Priority Plans attached at appendix D to report CHFR88 are recommended for approval by Council as part of the approval of the Budget proposals.

ADDITIONAL DECISIONS:

(1)           That the Corporate Head, Finance & Resources write to the Audit Commission to seek clarification on why district councils are facing an increase of 14% in Audit Commission fees when the Government has stated it is reducing the number of inspections and this council in particular will not see any increase activity in 2008/09 for this increased fee;

(2)           In relation to the bids for growth, the Economic portfolio holder wishes to examine and approve the business case for the dedicated team to assess major planning applications which has been costed at £140,000 per annum with 2% associated pay inflation in future years.

Considerations/Reasons for budget related decisions:

(1)  Report number CHFR88 by the Corporate Head, Finance & Resources which contained detailed budget proposals on:

·         Revenue and Capital Expenditure together with the potential use of reserves

·         Proposals regarding the setting of the Council Tax

·         The Treasury Management Strategy for the Council

·         The level of fees and charges,

·         and provided advice to Councillors on the robustness of the Budget proposals and adequacy of balances and reserves as required by the Local Government Act 2003;

(2) The budget proposals had been prepared on the basis of principle 4 of the Council’s medium term financial strategy “to maintain a sustainable revenue budget”;

(3) The budget has continued to redirect resources to priority areas and has provided for new statutory functions, in particular the introduction of the national bus concessionary fares scheme;

(4) The proposals have regard to accounting requirements and external factors affecting the budget together with incontrollable inflationary factors.  Service Managers were asked to find 4.5% efficiencies on their controllable costs to enable the Council to meet the governments overall efficiency target of 3%;

(5) Noting the 2008/09 bids for growth and service investment identified within the Priority Plans attached at appendix D to the report;

(6) In relation to special expense areas, the budget has been prepared on the basis of full recovery of costs;

(7) The balanced budget has been achieved at a time when current and future resources are tight.  The Council faces further budgetary pressures from pay, pensions and the government’s efficiency agenda;

(8) Subject to the delivery of the projected capital programme in the current financial year, the Council is planning to fully utilize its capital reserves.  This will mean that overall the total general fund and HRA reserves are projected to reduce by 54.5% over the three year period of the Local Government Settlement.  This will not be repeatable in future years and will also have an impact on the Council’s interest earning capacity in the future;

(9) The outcome of the Local Government Settlement provided for just a 1.9%, 1.5% and 1.2% increase in Formula Grant for each of the three years of the settlement respectively and will need to be reflected in a revision of the medium term financial strategy to enable the continued application and redirection of resources as required to provide a sustainable budget;

(10) Noting the comments of the Resources PDG and acknowledgement of work undertaken by the PDG on fees and charges;

(11) The speech commending the budget proposals by the Resources & Assets Portfolio Holder.

Considerations/Reasons for additional decisions:

(1)            The Audit Commission has been told by the Government to reduce its costs by 30%; the Government has advised local government that the number and depth of inspections will be reduced but district councils are now facing significant increased charges for inspection activity;

(2)            The Cabinet has yet to see a business case for the proposed dedicated development control team to deal with major applications.  In view of the additional funds sought, the Cabinet wish to examine the business case before approval is given.