Agenda and minutes

There were none.

Members are asked to declare any interests in matters for consideration at this meeting.

There were none.

To approve the minutes of the meeting held on 15 January 2009.

The Minutes of the meeting held on 15 January 2009 were received and approved and the Chair be authorised to sign them.

This report describes the budget setting process and sets out the detailed revenue estimates for the Finance and Corporate Services directorate and central Items for the financial year 2009/10, highlighting significant changes from the previous year.

Report of the Director of Finance and Corporate Services attached.

As there was significant overlap between this and the next agenda item, the Commission agreed to consider both items together. (see Minute 35 below).

RESOLVED -   That the proposed budget be noted.

The report provides details of the proposed revenue budget and Council Tax for 2009/10.

Report by Deputy Leader and Cabinet Member for Resources attached.

The Deputy Leader and Cabinet Member for Resources reported that the banking crisis and recession resulting in a fall in Council income and interest rates and increased demand for services was the background to the most difficult budget setting in recent years.  The Administration was seeking to keep the Council tax increase to the minimum whilst protecting front line services.

The Director of Finance and Corporate Services reported that the figures in the report for the London Pension Fund Local Authority levy, the West London Waste Authority levy and Greater London Authority precept were all subject to confirmation.

In response to Members’ questions, the Committee was informed that:

• The Council, both individually and in conjunction with other local authorities, makes representations to Government about various elements of the funding formula.  However, because of Richmond’s current position so far below the “floor” level of grant, any changes in the formula would not be sufficient to bring the Council’s grant above the minimum “floor” amount. 
• There had been no significant reduction in the Council’s business rate collection although the situation might change if the economic climate worsened.
• There had been no indication yet of the likely local government pay award for 2009/10. The allowance within the budget was for a 2% increase.
• Inflation on energy contracts has been particularly high over recent years.  A number of the major contracts were for periods in excess of one year and the cost of these was therefore known.  The street lighting contract was due to be renewed during 2009/10.
• The level of balances had been reduced significantly over the last two years and this trend was likely to continue into the future.
• The Council’s proposed Council tax increase was one of the highest in London but the increase was broadly in line with the expected national average.
• The Medium and Long Term Financial Strategy assumed that the “floor” increase in grant would be frozen and that the estimated level of reserves in future years would be sufficient. 
• Long term borrowing rates were still relatively stable but short term rates were low.
• In the current economic climate it was anticipated that there would be income reductions in some services.  Further action would need to be taken if the recession lasted longer than expected.  There might also be budget pressures arising from an increase in the number of pupils moving from the independent to the state sector.
• The Council was generally doing well in meeting its Corporate Plan targets. Quarterly performance reports were circulated to Members.
• Although there was a current overspend, it was anticipated that expenditure would be within budget by year end.
• Consideration had been given to more energy efficient street lighting but there would be significant capital costs.
• Consultation had resulted in support for local businesses, the green business scheme and increased funding for youth services.  Consultation exercises had confirmed general support for the Council’s priorities.
• If the Council failed to meet its 3% cashable efficiencies target there was no direct penalty  ...  view the full minutes text for item 35.

The Treasury Management Strategy is required to be reviewed annually and approved by Council prior to the start of the financial year.  This Strategy includes the Council’s risk controls and balances the requirement to protect investments against the aim of maximising the Council’s income from investments.

The full Strategy is presented to Cabinet in February, for referral to Council for approval.  This report gives a summary of the key points and decisions taken in setting this Strategy.

Report of the Director of Finance and Corporate Services attached.

The Deputy Leader and Cabinet Member for Resources informed the Commission that the he would be consulting the Leader of the Opposition in order to develop a cross-party strategy. The full Strategy would be presented to Cabinet for referral to Council for approval.

The Director of Finance and Corporate Services outlined the processes by which investment decisions were taken and risks managed.

In response to Members’ questions, the Committee was informed that:

• All Council deposits were held in sterling and only a very small number were currently held in foreign banks.
• The current ratings of creditworthiness worked in favour of banks over 40% owned by the Government and against building societies.  The Council was looking at ways it could judge building societies so they could be used in a limited way, in order to spread the risk and maximise returns.
• In the current economic climate any investment bore an element of risk. The policy was about balancing that risk.

RESOLVED - That the measures used to control risk and the proposed Treasury Management Strategy for 2009/10 be noted.

The draft work programme has been drawn up, in consultation with the Chair and Vice-Chair, from items in the forward plan and from action arising from previous meetings of the Committee.    

The Committee is requested to consider the items within the proposed work programme, set out at Appendix 1 to this report, and suggest any amendments or additional topics to be included in the future.

Information items are included in a Briefing information/General Information Pack, which has been sent to Members of the Committee separately to this agenda. A list of reports included in the Pack is attached as Appendix 2 to this report. The pack can be accessed via the following link: http://www.richmond.gov.uk/co-ordination_finance_and_performance_commission_reports_for_information.htm

Items included in the pack will not be discussed at the meeting. If members of the public wish to discuss any issue arising from the reports included in the pack, please contact the Committee Manager, whose details are given on the front sheet of the agenda. Members of the Council may wish to raise their concerns directly with the Chair of the Commission, the Cabinet Member or an appropriate officer.

Report of the Principal Democratic Services Manager attached.

RESOLVED:

1) That the item on Twickenham Riverside be considered at the meeting on 10 March 2009.

2) That the report of the Consultation Task Group and the Executive Response to the Performance Management Task Group be considered at the meeting on 8 April.

3) That the revenue outturn 2008/9 be considered at the June meeting.