Agenda item

Resolved: that the report be noted. That further information should be provided when there was more certainty about spending by government.

6.1    David Austin (Acting Chief Finance Officer) introduced the report, the following key points were noted:

·         The assumption had been made that the Council’s grant would continue to be reduced by the government (in line with the trajectory that funding had been on for the past seven years).

·         It was also assumed that business rates growth would continue to grow – although at less than inflation due to pressures in the sector.

·         It was assumed that the Council would continue to increase Council tax. Projections for housing growth had been taken from the planning numbers.

·         It was anticipated that funding would need to be made available over a number of years to manage pressures in the children and young people’s directorate budget.

·         The assumptions enabled officers to project the cuts required in the coming years. For 2020-21 the projection was £12m. This figure was expected to increase in the following year – before reducing thereafter. Over the four years from 2021-22 the potential requirement for cuts could be £50m. The initial focus was on delivering the £12m for 2020-21.

·         There was still a high level of uncertainty about the position central government would take on future funding for local authorities.

·         There were a number of decisions due to be made by the current Government (including the comprehensive spending review) that would have a significant impact on the Council’s medium term finances.

·         The Better Care Fund had alleviated some of the problems in adult social care – it was anticipated that action would be taken to manage pressures in children’s social care.

·         If the current trajectory of spending for local government continued – a significant number of local authorities would be unable to balance their budgets.

·         The Council would be in a strong position (with a good level of reserves) to make future decisions – as long as it delivered the cuts it had already agreed and tackled the £12m required for the coming year.

·         The cuts programme was currently being developed. Service managers were being asked to demonstrate how their service compared with other local authorities in terms of cost.

·         Questions were also being asked about which services required investment to enable improvement.

6.2    David Austin responded to questions from the Committee, the following key points were noted:

·         Work could be done to develop projections of future volumes of activity and spending in service areas. However, it would be difficult to match this to additional allocation of reserves because this could create the sense that current spending and practice had no need to improve.

·         Good social work practice was more cost effective because it enabled early intervention and reduced escalation.

·         Schools were having a real terms cash reduction in their budgets. A number were trying to work their way through deficit plans. There remained a risk to the Council from a breakdown in a school’s budgeting processes.

·         The Council had £60m of usable reserves. Additional information would be provided for members.

6.3    In Committee discussions, the following key point was also noted:

·         Members were concerned about the future challenges facing the Council. There was a request that members of the Council’s Executive should make more public statements about the future financial position of the Council.

6.4    Resolved: that the report be noted. That further information should be provided when there was more certainty about spending by government.