Cabinet Member for Finance
Decisions Made by Cabinet:
1.1 That the draft General Fund Budget proposals for 2019/20 and four-year outlook set out in the report were endorsed for recommendation to Council on 19 February 2019, subject to further consideration at the next Cabinet meeting on 7 February 2019.
1.2 That the draft General Fund Budget for 2019/20 was based on an increase to Council Tax of £5 per annum (10p per week) for a Band D property, which was equivalent to 3.15%, to support the Council’s overall financial position, which will be considered further at the February Cabinet meeting.
1.3 That a further £25m was invested in CIFCO as set out in paragraph 8.18.
1.4 That a discretionary Care Leavers Council Tax discount of up to 100% was introduced from the 1 April 2019 as set out in section 11.
1.5 That the second empty property premium was increased as per the regulations set out in paragraph 12.9
Reason for Decision: To bring together all the relevant information to enable Cabinet Members to review, consider and comment upon the Councils General Fund budget before the February Cabinet review and recommendations to Council.
Alternative Options Considered and Rejected:
The General Fund Budget for 2019/20 and four-year outlook is an essential element in achieving a balanced budget and sustainable medium-term position. Setting a balanced budget for the coming year is a statutory requirement, therefore no other options are appropriate in respect of this.
Any Declarations of Interest declared: None
Any Dispensation Granted: None
102.1 John Ward, the Cabinet Member for Finance, introduce report BCa/18/54 and stated that the General Fund Budget and the Housing Revenue Account Budget were now separate reports. Major points in the budget were detailed including:
· The projections for the Four-year Outlook was detailed in section 8 and, table 19, at paragraph 8.23, and that the accumulative deficit at the end of this period was £671,000.
· The new homes bonus receipts had been used and £3.375 million excluding these receipts.
· The general fund draft budget required all of the anticipated 2019/20 new homes bonus receipts of £683,000.
· Reliance of reserves amounted to £580,000 to achieve a balance budget.
· Council Tax increase would be continued at the maximum level allowed at £5 per year for a band D property for the next 2 years and 3% for the following 2 years.
· A growth of 1.64% in the band D equivalent, the number of properties for 2019/20 and 1.5% per annum, thereafter, ensured that council tax revenues would to help offset the ongoing cost pressures.
· A provisional Finance settlement of £273,000 was outline in paragraph 4.9 to 4.11.
· A additional investment in CIFCO of £25 million was budgeted to produce a net income after interest charges of £109K next year 19/20 and £327K in 20/21 and then an ongoing £435K in the years thereafter.
· The capital programme showed that investment faced equally over the two years 19/20 and 20/21 as set out in appendix B.
· Section 11 detailed a discretional carer council tax discount of 100%.
· A secondary empty property premium would be introduced with a maximum premium of 100% in 2019/20 as outlined in paragraph 12.9.
102.2 Councillor John Ward MOVED the recommendations in the report which was SECONDED by Councillor Simon Barrett.
102.3 Councillor Barrett asked for clarification of the New Homes Bonus which was part of the revenue income. He referred to the figures in paragraph 8.9 which indicated that if 150 houses were deducted from the total number of houses, then only 63 houses were left to generate income.
102.4 The Assistant Director – Corporate Resources, explained that Table 5 showed the actual monetary amounts and not the number of houses, so the actual 7 new homes bonus income was £63,000 for each of the four years.
102.5 Councillor Barrett asked it this meant that there had to be more than 150 new homes build before the Council would be able to collect any money.
102.6 The Chief Executive explained that the Government had intended the New Homes bonus to be an additional grant to encourage developments. The homes in the table would be equivalent to a Band D development but could in reality be a combination of the size of the houses build and council tax bands.
102.7 Councillor Derek Davis asked for clarification of numbers for the New Home’s Bonus on page 23, table 10. The Assistant Director had mentioned £63,000 but in table10 the figure was £683K
102.8 The Assistant Director – orporate Resources responded that the £63K was the new funding which was received for each of four years, starting in 2017/18. Payments were received every four years and the total funding in 2019/20 will be £683K.
102.9 Questions were raised in relation the Business Rates and if there would be relief for smaller business with income under £51,000. There was a number of national relief grants to help smaller business. However, there will be a new discretionary Business Rates relief available for retail businesses, but the application of this relief will be financed by government and so won’t have a financial impact on the council.
102.10 It was established that the Transformation Fund still existed, and that funds were built by surplus in the budget.
102.11 Councillor Kathy Grandon referred to table 11, page 28 and asked it was the same properties being empty and if the Council received any Council tax from these properties.
102.12 The Assistant Director would provide an answer to this outside of the meeting.
102.13 Councillor Jan Osborne was concerned for the Citizen Advice Bureau (CAB) as the funding for this service had been cut from the Suffolk County Council’s Budget. She asked if any extra funding had been allocated in the Budget to support CAB.
102.14 The response from officers explained that Suffolk County Council (SCC) was still in the process of setting the budget for the County and until this had been finalised the amount of funding for CAB was not available.
102.15 Councillor Frank Lawrenson was concerned about the financial challenge for the Council in relation to the investments in the retail property market made by CIFCO. He referred to recommendation 3.3 and felt that a decision for investing should be deferred to April 2019 due to the current financial market and Brexit.
102.16 Councillor John Ward, Cabinet Member for Finance, stated that CIFCO was no making high risk investment, but long-term investments, which was prudent under the current circumstances. He stated had confidence in the Board of Directors for CIFCO.
102.17 Councillor Nick Ridley supported this and said that the timing was important as the Cabinet needed to authorise the funds now in order to meet the planned investments of the next couple of years for CIFCO.
102.18 The Chief Executive stated that the investment was for next couple of years and that the Business Plan for CIFCO would be presented to Full Council for approval. Recommendation 3.3 approved the funding, but Council would approve how the funding would be invested via the Business Plan.
102.19 Councillor Barrett referred to paragraph 6.5, page 12 and the inclusion of ‘social value’. He felt this was not appropriate for a financial report.
102.20 Members discussed the issue and it was generally agreed that social value was part of the how the Council operated. Improvements to the lives of the residents included not just investment in services and local economy but also the possibility of these bringing other benefits such as apprenticeships.
102.21 In a related question to the above it was clarified that the investments of CIFCO were not intended for residential property investments, but that other investment vehicles, such as the joint venture with NORSE, were used for this purpose.
102.22 Councillor Davis stated that the Overview and Scrutiny committee had scrutinised the Business Plan for CIFCO in June 2018 and that he had attending this committee which had reassured him that CIFCO was managed properly.
102.23 He also thanked officers for the Budget briefing, which had improved his understanding of the budget.
102.24 Councillor Sue Carpendale asked for clarification of table 8, page 20, she was concerned about the reduction of staff costs in this table.
102.25 The Assistant Director – Corporate Resources explained that the reduction in staffing costs was a result in a reduction of the contribution to the Staff Pension Fund for next year. Also, there had been a reduction in the claims for disturbance travel allowance and that the previous predicted costs for this had been less the actual cost. This reduction of staff costs was therefore not directly related to a reduction in staff.
102.26 The Chief Executive informed Cabinet that a management review of the management structure was being undertaken and that there was an assumption that a further reduction in external consultancy and temporary staff would be implemented.
102.27 Councillor Alastair McCraw returned to the question of the investment of £25 million for CIFCO and the recommendation 3.3. He understood that it would take two years to invest £25 million and asked if it was assumed that in two years-time a further £25 million were to be invested.
102.28 Councillor Ward, Cabinet Member for finance, stated that the requirement for the additional £25 million would be address in the MTFS, but that there was not going to be a continued funding request for CIFCO.
102.29 Councillor Ridley added that it would be for the Council to decide in the future.
102.30 Councillor John Hinton made the following points for the report:
· That Endeavour House had been included as an asset
· Stowmarket Customer Access points had also been included under the asset regenerations.
· That he required a clarification of figures in the section on Property Services (page 44) under the heading of Community Safety CCTV. The figures of the £1000 and £29,000 had been set to a total of £29,000.
· That the CCTV cameras in Hadleigh did not work.
102.31 Councillor John Ward, the Cabinet Member for Finance, explained that the adding of figures in this section of the report was a rounding issue. He continued that Endeavour House and Stowmarket access point had been included because there were costs associated with the running of these premises and this was included as assets.
102.32 Kathy Nixon, Strategic Director, responded to the question regarding the CCTV in Hadleigh and informed Cabinet that currently the provision for the CCTV cameras in both Hadleigh and Sudbury were under review, which would be reported back to the Members at a later date. She was also aware that some of the Cameras in Hadleigh were not in working order, but that maintenance had been organised to address this issue.
102.33 A correction was made to paragraph 8.18, page 21: amend 2018 to 2020.
By a unanimous vote
It was RESOLVED: -
1.1 That the draft General Fund Budget proposals for 2019/20 and four year outlook set out in the report be endorsed for recommendation to Council on 19 February 2019, subject to further consideration at the next Cabinet meeting on 7 February 2019.
1.2 That the draft General Fund Budget for 2019/20 was based on an increase to Council Tax of £5 per annum (10p per week) for a Band D property, which was equivalent to 3.15%, to support the Council’s overall financial position, which would be considered further at the February Cabinet meeting.
1.3 That a further £25m be invested in CIFCO as set out in paragraph 8.18.
1.4 That a discretionary Care Leavers Council Tax discount of up to 100% be introduced from the 1 April 2019 as set out in section 11.
1.5 That the second empty property premium be increased as per the regulations set out in paragraph 12.9
Reason for Decision
To bring together all the relevant information to enable Cabinet Members to review, consider and comment upon the Councils General Fund budget before the February Cabinet review and recommendations to Council.