Agenda item

The Council gave consideration to the report and appendices (at pages 25 - 56) as jointly-delivered by the Chief Executive, in the absence of the Interim Chief Finance Officer (Section 151 Officer), and the Chair of the Policy, Finance and Development Committee, Councillor Mrs S B Morris, which should be read together with these minutes as a composite document.

The Chief Executive stated that the report was a technical consolidation for Members’ consideration of the information hitherto resolved at the meetings of the Service Delivery Committee held on 19 January 2016 and the Policy, Finance and Development Committee held on 02 February 2016, respectively.

Councillor Mrs S B Morris sought to introduce the Council's Budget proposals for 2016/17, noting the challenging times faced by the public sector and, in particular, local government. With reference to the ‘General Fund Budget Summary 2016/17’ as set out in Appendix 1 (at page 30), the net Committee expenditure in 2016/17 was cited to be just under £6.1 million, over £300,000 less than in 2015/16, owing to a reduction in the Council’s Revenue Support Grant of over £400,00 whilst, at the same time, the costs of financing the Council’s investment in services had increased. This was said to include investment in a new fleet of refuse vehicles and the two, new Leisure Centres and Swimming Pools which had doubled the annual interest and principal repayments from £306,000 in 2015/16 to £626,000 in 2016/17.

The Member stated that in order to balance the books, the Council was proposing to identify savings in 2016/17 largely around staffing levels, citing the Council’s earlier resolution in December 2015 to reduce the use of agency, contractor and interim staff. In addition, savings were said to be found from the current establishment by deleting posts that have been vacant for some time. She stated that a further review of the establishment across the Council's services would also be undertaken, in respect of which: any staff reductions would only be agreed if there was certainty that community services would not be affected; and no compulsorily redundancies would be sought, thus avoiding considerable costs and risks to service disruption. She further stated that in future years, the Council would look to find further savings from the better use of technology, asset rationalisation and new ways of working.

The Member reported that grant funding from central government was to be reduced from £1.1 million in 2015/16 to just over £700,000 in 2016/17, with all local authorities having seen similar reductions. She stated that the government had announced their intention to phase out this grant entirely by 2020, which would see further reductions. At a national level, it was said that the government’s belief in an economic recovery would mean that there will be more business activity (and more business rates for Councils to collect) in the coming years, and that the extra business rate income would offset the reductions in grant. However, the problem for Councils like Oadby and Wigston was said to be a difficult one, insofar as it was hard to see where the extra business rates were likely to materialise: as such, the issue required further consideration and would feature in the iteration of the Council's MTFS next month.

The Member noted that, for the first time in some years, the Council was proposing to increase its Council Tax given that the Council Tax Freeze Grant would not be available from 2016/17 and signposted Members to the details set out at agenda item 12 (at pages 57 - 60) and the first supplementary agenda update (at pages 2- 9).

The Member equally noted that, despite the significant financial challenges, the Council would continue to invest in the long-term in services, assets and infrastructure. With reference to the ‘Capital Programme 2016/17 to 2018/19’ as set out in Appendix 4 (at page 39), the Programme was said to include: over £3.7 million on the refurbishment of Boulter Crescent; just under £800,000 on new, more efficient refuse vehicles; over £400,000 on disabled facilities grants to improve the quality of life for local residents; and £250,000 on the Blaby Road Park Pavilion.

With reference to the ‘Housing Revenue Account’ as set out in Appendix 3 (at page 33), citing the effect this Council’s spending plans, the Member stated that, in respect of Housing Services, the government had decided that in each of the next four years, housing rents were to be reduced by 1% in order to reduce the bill for housing benefits. However, it was noted that although rents were being reduced, the Council’s policy of increasing service charges and garage rents by CPI inflation plus 1% would continue, which for 2016/17 equated to an increase of 1.1%.

With reference to the ‘Risk and Sensitivity Analysis for 2016/17’ as set out in Appendix 7 (at pages 51 - 56), the Member advised that the Council's over-arching financial policy was to ensure that the Council did nothing to put its financial standing at risk. As part of the planning of the 2016/17 budget, she informed Members that she had instructed the Council's Interim Chief Financial Officer to systematically review the proposals (as outlined) and to give his professional advice on the associated risks, as set out in Appendices 6 and 7 (at pages 41 - 45 and 46 - 49). Based on his advice, the recommendations contained in the report regarding the use and maintenance of reserves were set out at paragraphs 2.6 and 4.6.

The Member stated that, give the challenges faced, the Council would have to change the way it does business. This was to said to be (already) achieved: with the successful opening of the Customer Service Centre; by seeing reductions in staff numbers, whilst working smarter and making better use of new technology; and by finding new ways of engaging and working with our partner organisations. Commending the Budget, the Member surmised that she remained confident that the Council would continue to thrive and described the Council as being ambitious for the area, for the communities it served and for the way it would operate.

Councillor Mrs S B Morris moved the recommendations as set out at paragraphs 2.1. to 2.8 of the report (at pages 25 - 26).

Councillor Mrs L M Broadley commended the Council’s capacity to balance its books without affecting frontline services given the difficulties posed by funding cutbacks.

Councillor Mrs L M Broadley seconded the recommendations.

The Leader of the Opposition, Councillor B Dave, raised an concern in respect of the underlying issues pertaining to the Budget’s preparation as a statutorily-mandated accounting exercise, citing an approximate under/overspends of c. £1 million and the fluctuation of cost-centre budget allocations purportedly ring-fenced for specific service-area purposes. He stated that there were no significant concerns in respect of the Budget’s overall intended direction nor with the figures contained therein.

Councillor Mrs S B Morris advised that the process(es) concerning the Budget’s preparation was a highly prescriptive one as dictated by government regulations.

Councillor J Kaufman acknowledged the significant achievements secured by a small, Liberal Democrat administered Council (viz. free garden waste collections, free parking, two new leisure facilities, Customer Service Centre’s opening) which continued to serve and benefit the residents of the Borough, despite the increasingly-austere economic climate all local authorities continued to weather. The Member commended all the Council’s Officers involved who made their realisation possible.

With reference to the ‘General Fund Budget Summary 2016/17’ as set out in Appendix 1 (at page 30), Councillor G S Atwal enquired as to the rate of interest accumulated upon the two-fold increase in capital financing (i.e. from £306,180 to 626,660) across 2015/16 and 2016/17. The Member also enquired as to the impact of the proposed reductions to staffing costs upon the viability of the Council’s workforce. He further stated that he supported a more progressive policy in respect of increases to Council Tax in order to lessen the immediate impact upon residents.

With reference to the ‘Housing Revenue Account’ (HRA) as set out in Appendix 3 (at page 33), Councillor G A Boulter stated that government-led requirement to reduce rents by 1% per annum over the next four years served to weaken the Council’s HRA Business Plan. He further raised concerns as to implications stemming from the concurrent reductions in housing benefit and the increases in private-sector rents, which was said to be prohibiting many young and single people from being adequately-housed and, or, securing a footing on the property-ladder. The Member nevertheless commended the high-standard of the Council’s housing stock, citing the refurbishments currently being undertaken at Boulter Crescent, Wigston. The Member lastly criticised the government-led requirement for the Council to dispose of its highest-valued housing stock, as a means to plug the financial gap sustained to Housing Associations following the extension of the Right to Buy scheme as opposed to any reinvestment of funds into housing stock. He invited Opposition Members to lobby their Conservative counterparts in Parliament to address the same.

The Chief Executive accepted the concerns raised by Councillor B Dave. He stated that a concerted effort was needed to prudently balance the Budget and in innovative ways to adapt to the ever-changing economic climate. He reported that the two-fold increase in capital financing was a result of an intended investment in a new fleet of recycling vehicles and the two, new leisure facilities: as part of the contract, it was said that the latter now negated the payment of an ongoing management fee and ultimately accrued a significant saving to this Council over the contract’s lifetime.

Councillor Mrs A R Bond alleged that there was a disproportionate concentration of capital works in the Wigston area. She further raised a concern of a resident who had condemned the state of repair of Chartwell House, Oadby and requested that in/exterior refurbishment works be undertaken as soon as practicable.

Councillor G A Boulter reported that capital works were being undertaken in the Oadby area, citing refurbishments at King Street, Oadby as an example. He stated that the structural integrity of Chartwell House was not at any imminent/dangerous risk, that its refurbishment programme was to be brought forward and that re-painting of the building exterior was to be completed before the year end.

The Leader of the Council stated that capital receipts were invested throughout the Borough’s three urban areas. He reported that Chartwell House had been earmarked for potential refurbishment and further encouraged Members to use the Members’ Enquiry System so that residents’ concerns could be captured.

The Leader of the Council emphasised that the Council’s recent investments sought to secure long-term savings and that considerations about appropriate reserve levels were important to maximise the benefit of investment opportunities if, and when, implemented sensibly with a degree of forward-planning. For example, and with reference to the comments made by the Chief Executive, he reported that a £6 million saving was to be accrued over the leisure contract’s 20-year period. He acknowledged the challenges ahead faced by this Council but remained confident in protecting front-line services within the Borough and in such a way as to continue to improve the standard and efficiency of service-delivery within inherited budgetary-constraints. He noted that although the balancing of the Budget was a complex exercise, which required further attention by the Interim Chief Finance Officer, he said that this Council’s position was comparatively strong and commended the same.

RESOLVED THAT:

(i)        The General Fund net revenue budget estimates for 2016/17 totalling £6,414,876 be approved (as set out in Appendix 1);

(ii)       The capital programme for 2016/17 amounting to £6,323,764 be approved (as set out in Appendix 2);

(iii)      The Housing Revenue Account draft estimates for 2016/17 be approved (as set out in Appendix 3);

(iv)      The Chief Finance (Section 151) Officer be authorised to arrange the financing of the capital programme, as necessary;

(v)       A decrease of 1.00% in housing rents (as set out in Appendix 3, paragraph 4.2) and increases in other charges (as described in Appendix 3, paragraph 2) be approved;

(vi)      The list of reserves and balances (as set out in Appendix 5) be approved;

(vii)    As set out in the Chief Finance (Section 151) Officer’s statement (at Appendix 6), the following polices be approved, namely:

(a)       An absolute minimum level of General Fund reserves of 5% of annual net expenditure throughout the period between 2016/17 to 2019/20 be held;

(b)       An absolute minimum level of General Fund reserves of 5% of annual net Holding an optimal level of reserves of between 5% and 10% of annual net expenditure over the period 2016/17 to 2019/20 be held to cover the absolute minimum level of reserves, in-year risks, cash flow needs and unforeseen circumstances;

(c)       A maximum recommended level of reserves of 10% of annual net expenditure for the period 2016/17 to 2019/250 be held to provide additional resilience to implement the Medium Term Financial Plan;

(d)       A Reserves Strategy be adopted to maintain the recommended optimal level of reserves within the relevant period (2016/17 to 2019/20); and

(e)       In relation to the Housing Revenue Account (HRA), reserves at a minimum of £300,000 be maintained.

(viii)      The risks and sensitivities surrounding the Budget (as set out in Appendix 7) be noted by Members.

Votes For                   20

Votes Against            0

Abstentions               1