Agenda item

To set out an innovative and long term sustainable approach to budgeting, which sets the direction of travel to maximise savings opportunities alongside delivering growth in underlying income to deliver a balanced budget over a ten year forecast.

That Cabinet:

(a)   Agrees the revised long term financial sustainability approach and associated ten year forecast that is set out in this report;

(b)   subject to (a) above, requests officers to continue their work in developing an associated delivery plan, in consultation with Portfolio Holders, to support the delivery of the ten year forecast and in particular the budget for 2018/19;

(c)   consults the Corporate Management Committee on the revised approach being taken as set out in this report;

(d)   that subject to (a) above, agrees that the Local Council Tax Support Scheme grant to Town and Parish Council’s be removed from the budget via the phased approach set out in the ten year forecast; and

(e)   agrees to make an additional one-off contribution of £1.200m to the Beach Recharge Reserve in 2017/18, funded by £0.202m from the Fit for Purpose budget and £0.998m from the New Homes Bonus Budget.

There was submitted a detailed report by the Portfolio Holder for Finance and Corporate Resources (A.3), which had set out an innovative and long term sustainable approach to budgeting, which would set the direction of travel to maximise savings opportunities alongside delivering growth in underlying income to deliver a balanced budget over a ten year forecast. It was reported that:

·        The report had been set out in two distinct parts. The first part had set out a new way of thinking about the forecast and budget setting process with the primary aim of setting out a long term sustainability plan and to protect services, as far as is reasonably possible, that the Council provided to its residents, businesses and visitors in the wake of the on-going and significant reductions in government funding. The second part had built on the proposed new approach and had covered the technical aspects of the financial forecasting process;

·        Over recent years, the reductions in Government funding had been so significant in comparison to Council’s net budget that it had been impossible to generate underlying growth in locally generated income to make up the shortfall at the same pace as the reductions in grant funding;

·        The Council had always made it clear that it was committed to ‘growing’ its own income via regeneration and economic development initiatives for example;

·        The pace of the reductions in Revenue Support Grant (RSG) from the Government had meant that local authorities had not had the space and time to become self-sufficient and that the report, therefore, had set out a longer term view of the forecast and proposes the use of one-off money to support the budget until such time as growth in income exceeded expenditure forecasts;

·        It had therefore been projected that the revised approach would create the time for income to outperform reductions in RSG and net expenditure pressures with the Council emerging from the current difficult financial environment in good shape with only minimal reductions in service provision compared with the alternative of making significant and short term cuts to services;

·        The longer term approach would enable various actions to be developed to deliver the underlying income growth required to offset changes in expenditure with the eventual aim of delivering budget surpluses in the future and recognised that savings could be identified over a longer period of time;

·        The approach had relied upon utilising one-off money set aside to support budget deficits in the short term. The one-off money set aside as part of the Outturn for 2016/17 totalled £1.434m, which would provide a strong foundation against which to build on going forward to support the budget;

·        The report had also highlighted the various risks associated with taking a longer term approach and had set out how the Council could effectively respond to them over the life of the forecast;

·        Appendix A had set out the initial long term forecast with the assumptions behind the various facts and figures set out in the second half of the report;

·        Within the forecast, changes were proposed to the Local Council Tax Support Scheme Grant to Town and Parish Council’s along with setting aside the full amount in one go to meet the estimated beach recharge costs along the new Clacton to Holland coast;

·        The forecast would need to be closely managed with periodic adjustments over time and that should it not be possible to deliver the revised approach, the Council could revert back to the more traditional shorter term strategy;

·        Within the proposed approach it was also worth highlighting that the Council may spend the same amount of money on a service as in previous years but the service may have to be redesigned to accommodate unavoidable cost pressures and that a good example of which could be the waste and recycling contract which was due to expire in 2019. The Council was committed to providing the same level of funding to deliver specific areas of the budget, but recognising that the same amount of money may not buy as much as it did in the past. Providing real term increases in alternative funding across the diverse range of services that the Council provided was unlikely to be possible given the reductions in Government funding; and

·        Although some elements of the forecast would occur through ‘natural’ growth, many of the lines included within the forecast would need to be actively managed. Input from Members and Officers would be crucial in developing the associated delivery plan and that it would always be worth reflecting on the fact that the alternative to taking a long term view was the more traditional approach of looking at the budget on an annual basis and making significant short term cuts, which the proposed approach sought to avoid / minimise as far as possible.

The Monitoring Officer was requested by Councillor I Henderson to give advice on the constitutional procedural matters relating to the approval of budgets and a revised approach and be recorded in the minutes.  The Monitoring Officer advised that this report was the start of the process, in that if Cabinet agreed the revised approach, Corporate Management Committee would be consulted and a further report would be brought back to Cabinet to recommend a budget to Council for approval in February.  The decision being sought today was not to approve a revised budget.

Having considered the report, it was moved by Councillor G V Guglielmi, seconded by Councillor M J D Skeels and RESOLVED that Cabinet:

(a)   agrees the revised long term financial sustainability approach and associated ten year forecast that is set out in this report;

(b)   subject to (a) above, requests officers to continue their work in developing an associated delivery plan, in consultation with Portfolio Holders, to support the delivery of the ten year forecast and in particular the budget for 2018/19;

(c)   consults the Corporate Management Committee on the revised approach being taken as set out in this report;

(d)   that subject to (a) above, agrees that the Local Council Tax Support Scheme grant to Town and Parish Council’s be removed from the budget via the phased approach set out in the ten year forecast; and

(e)   agrees to make an additional one-off contribution of £1.200m to the Beach Recharge Reserve in 2017/18, funded by £0.202m from the Fit for Purpose budget and £0.998m from the New Homes Bonus Budget.