Decision - 2010/11 In-Year Government grant reductions

To seek authority to agree the approach in dealing with the grant reductions.

(1)         That Cabinet notes the comments made by Council on 15^th July and how they have been considered in the preparation of this report.

(2)         That Cabinet agrees the expenditure reductions set out in paragraphs 3.14 – 3.21 required by the in-year grant reductions announced by the government.

(3)         That Cabinet agrees the use of alternative sources of funding as set out in Appendix 1.

(4)         That Cabinet agrees the Children and Young People Cabinet Member Meeting make decisions as required on changes to the Education capital programme as a result of the End Year Flexibility reductions.

(5)         That Cabinet agrees the Environment Cabinet Member Meeting make decisions as required on changes to the Environment capital programme as a result of the End Year Flexibility reductions for the Playbuilder programme.

In-year reductions in spending need to be made quickly to match the reduction in government grants in order to protect the council’s overall financial position. The scale of the reductions would increase as the year progresses and there are fewer months left in which to make the savings.

When any decisions are taken on reducing expenditure or seeking alternative sources of funding there are always a multitude of options available. The proposals in this report start from the premise that if funding has stopped or reduced then the service will be stopped or reduced accordingly. Alternatives to this could include proposing savings in unrelated service areas or to consider the use of any available reserves. The former option would restrict the availability of such savings to offset the council’s budget shortfalls on its mainstream budget areas both in the current financial year and in the future. The scale of these shortfalls is set out in the reports elsewhere on this agenda in relation to TBM Month 2 forecast for 2010/11 and the 2011/12 budget setting process. The use of any available reserves could only provide a short term solution to an underlying reduction in available funding and would simply defer the need to make difficult choices about the sustainability of the services funded by specific grants. Given the serious financial challenges faced by the Council it is recommended that decisions be taken now wherever possible to reduce expenditure in line with the grant funding reductions.