Agenda item

The Commissioner presented a report on the proposed budget for 2013/14 and informed the meeting that in order to ensure a stable resource base was provided over the coming year, and that the Constabulary had the resources needed to continue to deliver high quality services he proposed to increase council tax by 2% which for an average Band 'D' property would increase the annual precept by approximately £3 from £149.93 in 2012/13 to £152.93 in 2013/14.

The Commissioner also reported that he intended to reject the offer of a two year only 1% Government grant for freezing the policing precept, as he  believed that acceptance of such a grant would hurt the police service in the long term by storing up greater financial pressures for the future.

Mrs Kitto, Chief Finance Officer from the Office of the PCC, outlined the contents of the proposed budget and reminded the Panel that there were still a number of uncertainties regarding funding and final council tax base figures and clarification was being sought from the Home Office, local authorities and other partners in order that the budget could be finalised.

The Panel was informed that £31.3m of savings had already been delivered in the first two financial years of the current Comprehensive Spending Review and that a further £6.4m would be delivered in 2013/14 and that these had been factored into the overall 2013/14 budget proposals.  With regard to the future it was noted that further savings of £22m would be required between 2014/15 and 2016/17, of which £2m had already been identified. In total £60m of savings, representing more than 20% of the budget, would be required between 2011/12 and 2016/17.

When considering the proposed budget the following points were raised by members of the Panel.

·  With regard to the efficiency savings set out in the report it was suggested that clarification was needed as to how the savings were divided between operational and 'back office' budgets.

In response the Chief Executive informed the meeting that in view of the small number of staff employed by the Office of the Police and Crime Commissioner  certain functions such as Human Resources or legal advice were provided by the constabulary for both the Office of the PCC and Lancashire Constabulary.  The Chief Executive also stated that some functions were carried out by third party organisations under shared service or collaboration agreements.  It was also reported that any further efficiencies which were identified by the ongoing review of management costs would be applied to both the Office of the PCC and the Constabulary. 

·  In view of the need to secure further savings in the future it was suggested that consideration be given to 'back office' support functions being provided by other local authorities and the Commissioner acknowledged that this was something which could be explored.

·  In response to a suggestion that more information be provided regarding the separation of costs associated with the Constabulary/Office of the PCC the Commissioner informed the Panel that this detail would be finalised before the budget is set in February.  However, with regard to future budgets the Commissioner acknowledged that more detailed information and clarification of the respective budgets of the Constabulary/Office of the PCC would be of assistance to the Panel.

·  It was noted that as part of the finance settlement the government had set the limit which would be used to determine whether a council tax increase was excessive as being 2% and that any decision to increase in excess of 2% would trigger a referendum.  The Chief Finance Officer reported that the Commissioner was proposing to increase council tax by 2% and that this equated to approximately £3 on an average Band 'D' property. The final precept amount would however be finalised once all the funding uncertainties had been resolved to ensure that the 2% limit would not be exceeded, thereby avoiding the need for a referendum.

·  It was also noted that the government had announced that a higher threshold had been set for those PCCs whose council tax was in the lower quartile where a referendum would only be triggered if the PCC increased their basic level of council tax by more than 2% and there was a cash increase of more than £5 in the relevant basic amount. However, the Commissioner reported that as Lancashire had the 11^th lowest council tax for all PCC areas (and the 6^th lowest for the shire Authorities) this flexibility did not apply.

·  In response to a suggestion that reserves be used to dampen the current level of uncertainty regarding funding the Commissioner informed the meeting that such a move would still require future efficiency savings to be made and that he preferred to hold reserves for any unforeseen circumstances which may arise.

Following consideration of the proposed 2013/14 budget as set out in the report it was MOVED and SECONDED that the Panel do not agree the proposal to increase the council tax precept by 2% for 2013/14 and should instead recommend the Commissioner to accept the Council Tax Freeze Grant which was available for two years only and would be the equivalent of a 1% increase in council tax. 

On being put to the VOTE the motion was LOST and it was.

Resolved: That the Police and Crime Panel for Lancashire -

1. Note the details of the provisional 2013/14 police finance settlement and the overall impact on Lancashire's budget, as set out in the report presented.

2. Note the remaining funding gap of £1.5m in 2013/14 and the planned
efficiency measures set out in the report which are required in order to deliver a balanced budget in 2013/14.

3. Agree to the Commissioner's proposed increase in the council tax precept by 2% for 2013/14 and that he be informed in writing of the decision by the Chair before the 8^th February 2013.

4. Recommend the Commissioner to explore the possibility of 'back office' support functions being provided by other local authorities in order to secure efficiency savings.

5. Note the level of uncertainty around some of the key strands of funding for 2013/14 and that the final information will be incorporated into the budget setting report to be presented to the Commissioner in February in order to formally set the 2013/14 budget and the council tax precept.