Issue - meetings

County Councillor David Borrow, Deputy Leader of the County Council, and Gill Kilpatrick, County Treasurer, presented reports setting out updates on the County Council's financial position for 2014/15 and the financial strategy for 2015/16 - 2017/18.

The County Treasurer reported that both reports looked at the overall financial health of the County Council, both for the current year and, in terms of the future, over the next three years. During 2014/15, the County Council would need to achieve savings of £76m and it was therefore important that progress was carefully monitored. 2014/15 had seen a greater level of demand, particularly on social care services and the reports set out other areas of increased demand.

It was reported that, as at 30 September 2014, there was an overall in year net underspend of £4m in relation to the revenue budget. This included an underspend in the Environment Directorate due to changes to the Waste PFI contract, together with an underspend in relation to capital financing, due to changes to the County Council's investment portfolio.

In terms of the Capital Investment Programme, it was reported that 84.4% of the programme was on target with slippage attributed to, for example, planning issues and the review of the County Council's property portfolio.

Balances remained robust at £36m with the Downsizing Reserve amounting to a further £73m of uncommitted funds.

In terms of the future, reference was made to the overall savings requirement of £300m between 2014 and 2018 with £142m of those savings agreed by the Full Council in February 2014. The report set out how the financial situation had changed since then, making particular reference to the changes in demand and costs such as demand for social care, landfill tax and waste transport, all of which equate to an additional £9m of costs over the next three years. The potential impact of the Care Act, beyond the first year, together with costs associated with Deprivation of Liberty Safeguards were also further potential costs. The report made reference to inflationary pressures and changes in costs, particularly around the pay bill and Education Services Grant, which would benefit the County Council by £4m. Legacy financial costs, such as capital financing charges, pension costs and energy costs, would add an additional £14.5m to costs over the next three years. Changes in resources around business rates, council tax and the New Homes Bonus, would also mean additional costs of £4.6m over the next three years.

Additional risks for the future included changes following the May 2015 General Election and further likely reductions in local government finance settlements in future years. By 2017/18, it was highlighted that the County Council would have a budget envelope of £689m.

At this point, proposals for future service offers were tabled which would be the subject of initial consultation prior to the formal consultation on the Cabinet's proposals which would take place following the meeting of Cabinet on 8 January 2015. Reference was also made to the Budget Scrutiny Working Group which  ...  view the full minutes text for item 7

The Committee received reports setting out updates on the County Council's financial position for 2014/15 and the financial strategy for 2015/16 - 2017/18.

It was reported that the current position represented a forecast underspend of around £4m in the revenue budget, notably taking into account the changes made to the Waste PFI arrangements and contributions from treasury management. Demand pressures continued, particularly in the area of social care, and careful monitoring and management would need to continue.

In terms of the Capital Programme, it was reported that 84.4% of the programme was on target with slippage attributed to, for example, planning issues and the review of the County Council's property portfolio.

The committee then considered the position for the future. It was recognised that there remained the requirement to make savings of £300m between 2014 and 2018, with £142m of those savings agreed by the Full Council in February 2014. The report set out how the financial situation had changed since then, making particular reference to the changes in demand and costs such as demand for social care, landfill tax and waste transport, the potential impact of the Care Act and Deprivation of Liberty Safeguards. Changes were also expected in the Education Services Grant, which would benefit the County Council by £4m, as well as business rates, council tax and the New Homes Bonus, would also mean additional costs of £4.6m over the next three years.

The committee noted that the general election in May 2015 brought additional uncertainty to a wide range of issues connected with local government financing and services. By 2017/18, it was highlighted that the County Council would have an expected total overall revenue budget of £689m.

It was reported that Cabinet on 6 November would publish the full set of options developed by officers for the service offer that the council will make in future. It was highlighted that these were not at this stage options chosen by Cabinet, but the full set of options developed, in order for there to be a full and open consultation, including with the Budget Scrutiny Working Group. Cabinet would then agree its proposals for the formal consultation at its meeting on 8 January 2015.

Resolved: That the recommendations in the reports to Cabinet be noted and that no additional comments or suggested alternative recommendation be made.