Agenda item

To enable Cabinet to consider the updated financial forecast for 2018/19 for consultation with the Corporate Management Committee.

That Cabinet:-

(a)     agrees the updated Financial Forecast 2018/19, as set out in the report and the appendix thereto;

(b)     agrees that the residents’ free parking scheme be included within the base revenue budget on an on-going basis each year; and

(c)     requests the Corporate Management Committee’s comments on the Updated Financial Forecast 2018/19.

There was submitted a report by the Portfolio Holder for Finance and Corporate Services, which sought to enable Cabinet to consider the updated financial forecast for 2018/19.

Members were informed that an updated financial forecast for 2018/19 had been prepared which reflected changes since Cabinet had considered the initial forecast in September 2017.

Cabinet was aware that the approach to the forecast / setting of the budget was significantly different to previous years with estimates now being undertaken across a 10 year financial sustainability plan period. This new approach brought the opportunity to review how the budget was developed, including input from the Corporate Management Committee. The report had therefore focused on the 2018/19 budget and the changes required compared to the initial forecast along with the broad principles behind figures such as special expenses and fees and charges. Comments on each updated line of the forecast would be requested from the Corporate Management Committee, which would then form the basis of the 2018/19 budget.

Cabinet was informed that, at this stage of the budget process, there was a net surplus of £0.042mforecast in 2018/19, an overall change of £0.578m compared with the £0.536m deficit included in the initial forecast in September 2017.

It was drawn to Cabinet’s attention that the increased collection fund balance for 2018/19 accounted for £0.552mof the £0.578m change mentioned above. Although this was an on-going item in the budget it was reviewed each year based on in-year collection performance and could therefore only be deemed a one-off ‘saving’ in 2018/19. Although the amount was available to support the 2018/19 budget, if this was excluded from the forecast, there would be a budget deficit of £0.510m for 2018/19, which was broadly in-line with the initial forecast amount of£0.536m.     

Members were reminded that, as set out in the initial forecast, £1.434m has been set aside from the outturn position for 2016/17 to underwrite the risks associated with the 10 year approach to the forecast.  It was proposed to set this aside in a specific reserve named the Forecast Risk Fund. Although subject to potential changes to the forecast over the remaining budget setting period, the current forecasted surplus of £0.042m would be paid into the Forecast Risk Fund.

It was reported that any necessary changes emerging from the detailed Local Government Finance Settlement would be included in the figures that would be presented to Cabinet in January 2018 when it considered the final budget proposals after consultation with the Corporate Management Committee. In addition, once the final position for 2018/19 was determined, the remaining years of the 10 year forecast would be revised, set against the revised 2018/19 position and would be reported to Members later in the budget setting process.

Cabinet was made aware that the revised budget for 2017/18 was not included within this report but remained under review for reporting to Cabinet in January 2018 as part of the more detailed / technical budget setting processes.

Cabinet was informed that, given the on-going favourable position against parking income, there was now the opportunity to build the cost of this scheme into the base budget on an ongoing basis and therefore remove the need to fund it on a temporary basis from the associated reserve.

 The Finance and Corporate Services Portfolio Holder made the following statement    on the revised financial forecast –

“Although I appreciate things can still change, the revised forecast sets out a surplus of £42,000 compared with an expected deficit of £536,000 when the initial forecast was calculated earlier in the year. It is acknowledged that this is primarily due to the one-off favourable position relating to the collection fund which may not be the case in future years so delivering against the ten year forecast remains as challenging as previously set out.

As highlighted in the initial forecast, the budget is based on a £5 increase in Council Tax. The Government have allowed such increases within their ‘capping’ criteria as they recognise the importance of locally raised income in providing a self-financing future once the revenue support grant has been completely removed, which for us will be by 2019/20.

However, I am really pleased to say that given the favourable position against the parking income budgets over recent years, it is now possible to take the opportunity to build our successful residents parking into the base budget on an on-going basis rather than it being subject to decisions on a more short term basis as has previously been the case. This also frees up the associated reserve – we can now start to consider how to reallocate the £221,000 in this reserve.

The report also sets out the fact that given the new approach to the forecast, there is the opportunity to revise how we develop the budget each year. The importance of delivering against the forecast, especially in the early years, requires a focus on the 2018/19 budget at this stage of the process. Therefore no revised budget figures for 2017/18 have been included but these will form part of the information that is presented to Full Council in February.

Although still subject to further consideration, revised budget changes may form part of the corporate budget monitoring process in future, with changes made during the year to enable the most up-to-date budget to be available to Members rather than it being an annual process.

There may be further changes to the forecast as it develops which will be reflected in the report to Cabinet in January. However, the forecast set out in the report provides the most up-to-date position and I welcome the comments from the Corporate Management Committee.”

Having considered the revised financial forecast and in order to allow the Corporate Management Committee to be consulted in accordance with the requirements of the Constitution:

It was moved by Councillor G V Guglielmi, seconded by Councillor McWilliams and RESOLVED that Cabinet -

(a)    agrees the updated Financial Forecast 2018/19, as set out in the report and the appendix thereto;

(b)    agrees that the residents’ free parking scheme be included within the base revenue budget on an on-going basis each year; and

(c)      requests the Corporate Management Committee’s comments on the Updated Financial Forecast 2018/19.