Issue - items at meetings - Budget and Corporate Plan Preparation

Report of the Executive Director for Finance & Resources (copy attached).

1)            Note the resource and expenditure projections for 2015/16 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and appendices 1 to 5.

2)            Instruct the Executive Leadership Team (ELT) to develop budget proposals for 2015/16, for submission to Policy & Resources Committee for consideration, comprising:

·                a 5.9% increase in the Brighton & Hove element of the council tax which would trigger a referendum in accordance with Chapter IVZA of the Local Government Finance Act 1992 and associated regulations; and

·                a substitute budget assuming a 2% threshold council tax increase  that would come into effect if a referendum rejected a proposed 5.9% increase in council tax.

3)            Require budget proposals to be developed by ELT alongside the creation of a new Corporate Plan for 2015-19, ensuring strong links between the Medium Term Financial Strategy and service and business planning. 

4)            Agree the approach to consultation, engagement and scrutiny as set out in section 5 of this report, which will be designed to shape the new Corporate Plan and Medium Term Financial Strategy as well as the 2015/16 Budget.

5)            Agree the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.15 to 3.20.

6)            Note the resource projections for the capital investment programme as shown in appendix 5.

32.1    The Committee considered a report of the Executive Director for Finance & Resources in relation to the Budget and Corporate Plan Preparation. The report began the planning process for the 2015/16 budget alongside the longer term development of the Council’s next Corporate Plan which would run until 2019. The report set out closer integration the Council’s long term service and financial planning with a clearer focus on commissioning for outcomes for residents. Central Government deficit reduction measures were in the region of 50% complete both in terms of timescales and the value of expenditure reductions. Any changes to Central Government as a result of the May 2015 parliamentary election and any improvement in the national economic forecast were expected to make only a very marginal difference to the scale of funding facing local government. The budget gap was projected to be between £21.2m and £25.4m for 2015/16 and a further £67.2m over the following four years.

32.2    Councillor Sykes thanked Officers for the report and welcomed the consultation process outlined in the report. He stated the position of the Administration would constitute a less than inflation increase in Council Tax over the life of the administration. A referendum on a 5.9% Council Tax rise was considered to be the right option for the city, and he refuted the positions put forward by both opposition parties.

32.3    Councillor A. Norman noted her view that it would not be a good use of Officers time preparing the detail of a budget with a 5.9% Council Tax increase on the basis that the proposal would be defeated at Budget Council. She noted the proposed amendment put forward by her group, which she was seconding, in relation to a Council Tax freeze and added that there would no significant change to the funding situation from Central Government regardless of the outcome of the 2015 General Election. In response to Councillor A. Norman’s specific question about New Homes Bonus the Executive Director for Finance & Resources noted she would respond outside of the meeting.

32.4    Councillor Morgan noted that he had agreed to work with the Administration constructively in relation to the difficult financial situation, but he had wanted any discussions to take place before the matter became highly politicised. He went on to add that many of the poorest individuals and families would not feel the benefits of the level of increase to Council Tax proposed by the Administration, and that a policy of addressing the Central Government reduction in the grant fund to local authorities through increased Council Tax was not sustainable. The position of the Labour & Co-Operative Group would be to launch a ‘fairness commission’ for 12 months through the existing policy and scrutiny teams in the Council. Councillor Morgan stated that a Labour Central Government would make a difference locally with measures such as increased devolution of funding, and finally added that the Labour amendment he proposed called for a threshold increase to Council Tax.

32.5    The Chair stated that the intention had been to allow all parties as much time as possible to openly discuss budget proposals, and the position of the Administration sought to protect the poorest family that would be the hardest hit by the reduction in Central Government Funding. A freeze in the rate of Council Tax would permanently weaken the Council Tax base and reduce the worth of any future increases. Both the Conservative and Labour parties had committed themselves to further funding reductions post-2015, and this would create greater pressure on services. The Chair also stated that the public would welcome the debate, and hoped the Committee could also consider the consultation elements outlined in the report.

32.6    Councillor Sykes noted that it was positive the Council would be discussing the 2015/16 budget this early, and noted he had already met with the finance spokespersons from both the Conservative and Labour Groups.

32.7    Councillor Davey noted the use of the LEP as the most significant source for funding for major projects, and noted that the Council needed to present itself as a credible partner in this environment.

32.8    Councillor G. Theobald noted the Shadow Secretary of State for the DCLG had been clear at the recent LGA conference there would be no additional funding for local government under a Labour led Central Government. He noted that local authorities needed to look at doing things different, and he commended the approach taken by the Executive Director for Finance & Resources. The Conservative Group were happy to work with other parties in the interests of the city, and their position remained to reduce the budget based on a Council Tax freeze – as set out in their proposed amendment.

32.9    Councillors Robins noted the additional areas discussed in the report and recommendations and hoped there could be more cross-party collaboration on these matters.

32.10  Councillor Hamilton noted he was seconding the amendment on behalf of the Labour & Co-Operative Group. In response to a question he raised the Executive Director confirmed that those in receipt of Council Tax Benefits were liable for a proportion of the total amount payable, therefore, if the rate increased so would the proportion. Regardless of the outcome of the vote on the amendments and recommendations Officers would be able to work up a range of proposals for Members to consider.

32.11  The Chair then put the Labour amendment to recommendation 2.2 (as set out below) to the vote:

            “Instruct the Executive Leadership Team (ELT) to develop budget proposals for 2015/16, for submission to Policy & Resources Committee for consideration, based on a 2% increase in Council Tax.”

32.12  The amendment was not carried.

32.13  The Chair then put the Conservative amendment to recommendation 2.2 (as set out below) to the vote:

            “Instruct the Executive Leadership Team (ELT) to develop budget proposals for 2015/16, for submission to Policy & Resources Committee for consideration, based on a Council Tax freeze.”

32.14  The amendment was not carried.

32.15  The Chair then put recommendations 2.1 and 2.3 to 2.6 to the vote and these were agreed.

32.16  The Chair then put the substantive recommendation 2.2, as outlined in the report, to the vote, and this was not carried.

32.17  The Chair then proposed an amended recommendation 2.2 as set out below and put this to the vote:

            “Instruct the Executive Leadership Team (ELT) to develop budget proposals for 2015/16, for submission to Policy & Resources Committee for consideration.”

32.18  The proposed amendment was carried.

32.19  It was clarified to the Committee that Officers would work up proposals with a view to giving consideration to the different positions of each of the three political groups.

32.20  RESOLVED: That the Committee

1)        Note the resource and expenditure projections for 2015/16 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and appendices 1 to 5.

2)        Instruct the Executive Leadership Team (ELT) to develop budget proposals for 2015/16, for submission to Policy & Resources Committee for consideration.

3)        Require budget proposals to be developed by ELT alongside the creation of a new Corporate Plan for 2015-19, ensuring strong links between the Medium Term Financial Strategy and service and business planning. 

4)        Agree the approach to consultation, engagement and scrutiny as set out in section 5 of this report, which will be designed to shape the new Corporate Plan and Medium Term Financial Strategy as well as the 2015/16 Budget.

5)        Agree the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.15 to 3.20.

6)        Note the resource projections for the capital investment programme as shown in appendix 5.