Agenda item - Revenue & Capital Budget Planning and Resource Update 2019/20

Report of the Executive Director Finance & Resources

RESOLVED: That the Committee –

(i)             Noted the resource and net expenditure projections for 2019/20 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and Appendices 1 and 2 based on a 2.99% Council Tax increase.

(ii)          Noted the latest revised savings requirement of £11.559 million for 2019/20 which will be adopted for budget setting purposes as detailed at paragraph 3.51.

(iii)         Instructed the Executive Leadership Team (ELT) to refresh the current 4 Year Service & Financial Plans and develop further investment and savings proposals to address any outstanding budget gaps for 2019/20 based on the MTFS assumptions in this report for consideration by Policy, Resources & Growth Committee.

(iv)         Agreed the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.25 to 3.27.

(v)          Agreed to consult on reducing Council Tax Reduction minimum liability.

(vi)         Noted the resource projections for the Capital Investment Programme as shown in Appendix 3.

29.1    The Committee considered the report of the Executive Director for Finance & Resources, which provided a budget planning and resource update for the 2019/10 budget process, including an updated Medium Term Financial Strategy (MTFS).

29.2    Councillor Wealls referred to the service pressure funding for Environment Economy & Culture, and noted that £0.800m was to support additional costs within City Clean and asked how much of that was for agency costs as a result of staff turnover, and how much of it was pressure on income targets for commercial waste. The Executive Director for Economy, Environment & Culture said that he didn’t have the specific figures, but the projected figure of £0.800m would have been made up of a number of things such as staff costs associated with weekend work, some agency costs and some pressure on income targets, but in addition it included some pressures on income targets within building control as set out in the report such as the cost of electricity for street lighting. The Executive Director for Finance & Resources said it was hard to be accurate with anticipated pressures for 2019/10 but the figures were based on what was known and officers had to make a prudent estimate.

29.3    Councillor Wealls said that City Clean was going to remodelled and there was a report with no financial figures in it, but in this report there was a projected service pressure of £0.800m when the proper business plan had not been agreed. The Executive Director for Economy, Environment & Culture said that Item 40 on the agenda provided more information on this matter and the full business plan for commercial waste would go to the Environment, Transport and Sustainability Committee in due course.

29.4    Councillor Mac Cafferty said that many other Local Authorities were also facing difficult financial decisions, and asked if this Council shared information on best practices with them. The Executive Director for Finance & Resources said they did; the Council was a member of CIPFA and they were running a number of initiatives and reviews for Councils, and this authority was also a member of Orbis which was useful.

29.5    Councillor Janio asked if Brighton & Hove City Council had bid for last year’s Business Rate 100% retention. The Executive Director Finance & Resources said that unfortunately Brighton & Hove City Council was not in the category who could bid. Councillor Janio referred to policy, and suggested that wasn’t the case. The Executive Director Finance & Resources clarified that whilst the policy did not exclude unitary authorities, it was made clear that by the DCLG that they were looking at bids from two tier authorities.

29.6    Councillor Gibson referred to the shortfall of income from commercial property rents, and said that currently the Council were looking at getting a more balanced portfolio, and in doing that the Council was disposing of properties with poor rental income and then acquiring higher performing properties. However that had led to a period of no rental income, and the Asset Management Board was considering whether it was preferable to acquire a property and then fund it from the proceeds of the sale of other properties. The Executive Director Finance & Resources said that the Council would look at any asset acquisition and disposal which would be beneficial to the Authority and any sequence which was the most appropriate.

29.7    Councillor Gibson noted that there was a 3.5% increase arising from the PFI contract and asked if that rate could be renegotiated as that was not the rate at which costs were increasing. The Executive Director Finance & Resources said that the PFI contract was being reviewed through external accountants, and one question was whether there was an alternative finance arrangement. It was not straight forward but experts were looking at the arrangements, and whilst it may not be possible to buy out of the contract it might be possible to renegotiate to reduce the costs.

29.8    Councillor Gibson noted the potential requirement to sell off high value homes when they became vacant, but he had heard that that policy may be scrapped. The Executive Director Finance & Resources said that related to government policy and he would have to get back to the Councillor.

29.9    The Chair noted that an amendment had been received from the Green Group, and asked Councillor Mac Cafferty to propose the amendment.

29.10  Councillor Mac Cafferty noted that the report made reference to looking at Council Tax reduction minimum liability, and said that the amendment was being proposed to ensure that there was consultation. He formally proposed the following amendment:

             Insert recommendation 2.5 to the report, as shown in italics:

2.4 Agree the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.25 to 3.27;

              2.5       Agree to consult on reducing Council Tax Reduction minimum          liability
           

2.5 2.6 Note the resource projections for the Capital Investment Programme as shown in Appendix 3.
 

29.11  Councillor Gibson seconded the amendment.

29.12  The Committee agreed the amendment.

29.13  RESOLVED: That the Committee –

(i)             Noted the resource and net expenditure projections for 2019/20 and the Medium Term Financial Strategy (MTFS) projections set out in the body of the report and Appendices 1 and 2 based on a 2.99% Council Tax increase.

(ii)          Noted the latest revised savings requirement of £11.559 million for 2019/20 which will be adopted for budget setting purposes as detailed at paragraph 3.51.

(iii)         Instructed the Executive Leadership Team (ELT) to refresh the current 4 Year Service & Financial Plans and develop further investment and savings proposals to address any outstanding budget gaps for 2019/20 based on the MTFS assumptions in this report for consideration by Policy, Resources & Growth Committee.

(iv)         Agreed the proposed approach to reviewing the Council Tax Reduction Scheme as set out in paragraphs 3.25 to 3.27.

(v)          Agreed to consult on reducing Council Tax Reduction minimum liability.

(vi)         Noted the resource projections for the Capital Investment Programme as shown in Appendix 3.