Agenda item

B Report of Director of Finance and Support

Cabinet approved the Medium Term Financial Strategy 2011-14 as set out in appendix A.

Cabinet agreed that the Medium Term Financial Strategy be used as a guide to financial planning for the 2011/12 and medium term budgets.

Councillor Mildren observed that it was difficult to plan ahead in the current circumstances. He noted on page 13 of the Appendix the impact on car park usage and the current situation in respect of concessionary fares and the effect on the minimum revenue provision on the budget set out on page 14.

Councillor Clarke commented that some budgetary proposals did not appear to be reflected in the Medium Term Financial Strategy such as the market testing of Environmental Services, the creation of the Leisure Trust and the reduction in car park income. These should be reflected before budget setting.

Councillor Perkins, as the relevant Portfolio Holder, submitted a report that sought approval to a Medium Term Financial Strategy for 2011 to 2014. The strategy underpinned the General Fund Revenue, Capital and HRA budgets and had been set against the Government’s Comprehensive Spending Review and the consequent reduction in funding to the Council over the next two years. Prior to 2007 the Council had been categorised as one of the worst performing Council’s and the Administration had been determined to improve the situation for the Council Tax Payer. This strategy would ensure that resources were allocated in line with corporate priorities and that the best way of delivering services would be investigated. The Council would work with the private, public and voluntary sectors. He referred to the Council Change Programme. A three year balanced budget would be presented alongside the Medium Term Financial Strategy. The risk to the Council had been minimised and adequate reserves planned for. Growth would only be supported in priority areas that also would provide value for money. Where funds were available they would be invested in the money markets and the Council’s property portfolio in line with the Asset Management Strategy. The Council’s expenditure would reduce by 28% over four years; this reduction being front loaded by a reduction of 14.5% in 2011/12. In February 2010 a budget gap of £5.2m had been forecast and ways had been found to close that gap. In respect of the HRA, the issues were deep rooted which the Government had recognised; details were now awaited as to how the HRA might be bought out and the level of debt that the Council might inherit. There was also the issue of Right to Buy monies going back to Government. In respect of the Capital Strategy a three year rolling programme had been provided for with funding to come from, primarily, grants and capital receipts.

Councillor B. Markham expressed his thanks to the Portfolio Holder and the Officers in achieving the Strategy.

Councillor Perkins commented that in respect of Car Park income no increases had been built into the Strategy; that in terms of the Minimum Revenue Provision there was now a requirement to write off assets over their economic life. Provision for this was included in the General Fund budget. and in respect of works to the Grosvenor/ Greyfriars Car Park it was anticipated that usage of the other Town Centre car parks would increase and thereby offsetting any loss in income whilst it was closed.

The Chair noted that the Council’s Formula Grant settlement would reduce from £18.9m in the current year to £12.2m in 2013/14. The way in which services were provided was linked to this; the Administration wanted to maintain services and improve value for money. If the Administration had not taken the action it had done since 2007 the situation the Council now faced would have been catastrophic, however, it could now be faced with a degree of confidence because of the work that had been done to make savings and to maintain services.

RESOLVED:  1. That the Medium Term Financial Strategy 2011-14 as set out  in appendix A be approved.

                       2. That the Medium Term Financial Strategy be used as a guide to financial planning for the 2011/12 and medium term budgets.