REVENUE BUDGET STRATEGY AND COUNCIL TAX 2012/13
- Meeting of Finance and Performance Overview and Scrutiny Committee, Thursday, 9 February 2012 7:00 pm (Item 42a)
This report gives details of the budget strategy and recommends that the Richmond upon Thames element of the Council Tax remain unchanged at £1,287.39.
Report of the Deputy Leader and Cabinet Member for Finance and Resources attached.
The Deputy Leader and Cabinet Member for Finance and Resources and the Director for Finance and Corporate Services were present for this item.
The Director introduced the items A,B, C and D together and, referring to the Capital report, said that the main difference between this report and the one received at the November meeting was the underlying financing assumptions made primarily leading to less borrowing being required It was reported that there was a minor error on the figure given for a band C property; the amount for this band was one pence higher than was recorded in the report.
Following questions, the committee was advised that:
· The projected underspend of £3.4m was currently believed to be accurate.
· The projection made in the report was the best that could be estimated at this time; figures sometimes had to be amended as a result of changes in areas such as income projections from the Environment Directorate and health funding.
· Projected budget figures were analysed each year. It was currently more difficult to give more certain figures as efficiencies programmes were starting to deliver savings.
· The Director could not predict underspend figures in advance of the beginning of the following financial year with a certainty that would allow for inclusion in the budget.
· The projected underspend was within expected levels for a budget of this size.
· The 79 full-time equivalent post reduction was accurate. It was as a result of some shared service programmes and staffing reductions across the Council.
· There was a £200k increase in the budget for homelessness in response to expected demand increase following housing benefits changes.
· The Council would seek to provide support to families affected by homelessness if it was needed.
· Richmond upon Thames received one of the lowest government grants.
· The Director had made various financial projections, some of which accounted for a worse than expected set of grants, some better.
· Some councils were declining the grant to hold council tax at current levels as their calculations predicted that the reduction in income from a lower tax base in future years would leave them worse off.
· More money was being spent on preventative services in social care.
· The aim was to provide a 0% increase in council tax for this year and to keep future potential increases in council tax to a minimum.
· The national economic projections had been used when considering the longer term position.
· The All-in-One survey identified highways as a priority for residents, so £1m had been set aside for “potholes and pavements”.
· Highways and Transport had a sophisticated system in place to prioritise road works.
· The Deputy Leader expected around 40% of the £1m sum would be made available for residents’ priorities.
· The Deputy Leader intended to provide £1m for highways in the coming year’s budget, with additional money expected for works in the coming three years.
· There was no intention to extend additional funding for social services beyond the next year.
· The revenue budget was being used to fund highways improvements works which reduced the need to borrow money.
· Two of the borough’s academies had successfully applied to the Secretary of State to introduce sixth forms.
· The Deputy Leader felt that Richmond upon Thames’ children risked being left behind if the Council did not seek to provide sixth forms and although sixth forms may be uneconomic in the first few years, he believed this would not be the case permanently.
· The figures for the most recent consultation which was undertaken for the budget strategy should have been available on the web site and would be made available to the committee.
· The general insurance reserve was unchanged.
· There was a contingency retained in respect of an ongoing dispute over the winding up of the jointly funded Connexions service.
· Youth centre reserves were not considered the Council’s money and the youth development fund was awaiting a report containing specific proposals.
· There was a greater risk of needing to borrow at an uneconomic time should the Council’s reserves be eroded too much.
· This committee recently endorsed a decision to maintain at least £45m in reserves.
· The Director felt that the Council would be at a significantly greater risk of borrowing if the level of cashflow fell below £30m.
· The borrowing assumed by the capital programme was now expected to add 1.1% to Council Tax in the future.
· The Council was borrowing money to pay for mainly long-term assets.
· Pension costs were recorded in two parts – future potential costs and the current deficit.
· A reduction in the staffing headcount did not affect the pensions deficit.
· There was a national drive to reduce the cost of pensions and the Council needed to await the outcome of this.
· Amongst the biggest risks to this budget were the local government finance review and pensions.
· The biggest opportunity was also the local government finance review as it may afford opportunities to councils to benefit from a higher share of monies raised locally.
· The Director felt there were many opportunities for scrutiny including the local government finance review and council tax benefit.
· The majority of the projects outlined on page 42 of the reports pack were finalised, although Achieving for Children still needed to be formulated in its entirety.
- 201213 Budget and CTAX Report CABINET FINAL, item 42a PDF 134 KB
- Amended Appendix A, item 42a PDF 38 KB
- Appendix B, item 42a PDF 16 KB
- Appendix C, item 42a PDF 200 KB