Agenda item

Cabinet received a report which was formed part of the Council’s formal budget process, as set out within the Constitution and as per legislative requirements to set a balanced budget for 2016/17.

The purpose of the report was for Cabinet to consider budget proposals for recommendation to Council on 9 March 2016.

Cabinet would have a further opportunity to review proposals on 29 February 2016, before making a final recommendation to Council.

The Cabinet Member for Resources introduced the report highlighting the main points contained within. The report updated on the financial picture for the forthcoming year ahead and beyond and how the Council proposed to tackle the financial challenges. The first phase of the budget proposals had been approved and the report started the budget conversation on the second phase.

Following on from government grant cuts of approximately £54 million and increased demand for services worth over £14 million, the Council would need to adapt and improve its efficiency in order to save over £24 million, whilst continuing to invest in the city for the benefit of this, and future generations. The Council had not yet received its financial settlement from the Government for the next year, which had been delayed. An update would be provided on the position at the Cabinet meeting to be held on 29 February 2016.

The second phase of proposals detailed how remaining savings would be made, with there being no proposed reduction in services for residents. The Council aimed to become more self-sufficient by selling services to other local authorities in order to generate income and to continue to take the dividends from growth and invest to make savings in the long term.

The proposals did include a council tax increase, half of which would be used to invest in Adult Social Care. Peterborough would continue to have one of the lowest Council Tax levels in the country.

The budget consultation would remain open until 7March 2016 and feedback would be considered at the Cabinet meeting to be held on 29 February 2016, with recommendations to be made to Full Council on 9 March 2016.

Following further comments from the Council’s Corporate Director Resources and the Service Director Financial Services, Cabinet debated the report and in summary, key points raised and responses to questions included:

·         It was commented that the creation of a Housing Joint Venture Company, with a third party, was actively underway to create all types of housing in the city;

·         The Council could only borrow to fund expenditure on assets that had a long term life e.g. schools and road infrastructure improvements;

·         In the Phase 2 Budget Proposals, the debt repayment profile would change to a repayment of the same amount every year;

·         Investment in transport infrastructure proposed a £10.5 million planned investment in Bourges Boulevard which would focus on cyclists and pedestrians, the development of Junction 20 serving Paston and Norwood and the resurfacing of Nene Parkway;

·         There were significant investment proposals alluded to relating to street lighting which would be brought to a future Cabinet meeting for consideration; and

·         If the increase in Council Tax did not go ahead then the Council would face £50 million worth of cuts.

Cabinet considered the report and NOTED:

1.    The advice of the Chief Finance Officer per Schedule A, the continuing uncertainty of national public finances, and the risks surrounding forecasts and budget proposals.

2.    That all grant figures were provisional pending the Final Settlement in February

and APPROVED: 

3.     The approach to the Phase 2 budget consultation.

4.    The draft Medium Term Financial Strategy 2016/17 – 2025/26 (including Phase 2 budget proposals) for consultation as set out in the Schedules attached to the report which comprised of:

a. Report of the Chief Finance Officer.

i.  Proposed a Council Tax rise of 2% for 2016/17, with indicative increases of 2% for future years for planning purposes.

ii. Proposed a Social Care precept of 2% for 2016/17.

b. Forecast Revenue Outturn 2015/16.

c. Budget Proposals, Key Figures & Cash Limits.

i.  Approved for consultation the Fees & Charges proposals as detailed in Schedule C section 12 of the report.

d. Treasury Strategy & Minimum Revenue Provision Policy.

e. Capital Strategy, Programme & Disposal 2016/17 – 2025/26.

f.  Asset Management Plan.

g. Phase 2 Budget Conversation Document.

and further RESOLVED:

5.   To delegate authority to the Chief Finance Officer to investigate the government’s offer of a four-year finance settlement (Schedule A of the report) and to take action if necessary before the next Cabinet meeting. If this delegated authority was exercised, details would be reported at the next scheduled meeting.

REASONS FOR THE DECISION

To enable consultation to occur, which will in turn allow Cabinet to recommend to Council the Phase 2 budget proposals.

ALTERNATIVE OPTIONS CONSIDERED

There had been no alternative options considered in this instance.