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The Chairman invited Cllr N.D. Harrison, as Chairman of the Budget Scrutiny Review Panel, to introduce the report. Cllr Harrison thanked the Panel Members, the three additional Councillors that attended the meeting on 24 November, the Portfolio Holder for Planning Policy & Finance, the Head of Finance and the Chief Executive for their assistance at the meeting.
The Committee heard that 107 advance questions had been asked as part of the budget scrutiny process, and that the Panel had thoroughly explored not only the savings and growth proposals for 2017/18 but the full service and financial context in which the budget had been prepared.
Councillor Harrison highlighted the conclusions of the Budget Scrutiny Panel and drew the Committee’s attention to the key risks identified by the Panel. The Panel had concluded that these risks were being closely and well managed. The Panel had concluded overall that the service and financial planning proposals were achievable, realistic and based on sound financial practices and reasonable assumptions.
Councillor Harrison noted that the Chief Executive had said that there were fewer risks this year than in previous years. Councillor Harrison drew the Committee’s attention to the fact that the recycling credit withdrawal by Surrey County Council was a significance risk and, together with the loss of NNDR, could have an impact upon the future funding gap. The significance of property revenue in addressing the funding gap and the relationship between property development and the need to increase borrowing were highlighted.
Councillor Harrison noted that the Council now had a static employee headcount and that there was no scope to cut salary costs without a risk to service delivery standards. Councillor Harrison believed that Legal Services could be under budgeted. The Budget Scrutiny Panel had requested that the Executive consider the list of proposed CPDF expenditure, which the Chief Executive noted was not a list of approved expenditure.
Councillor Harrison noted that the impact of the parking strategy upon finances had been raised by the Panel. The Panel had also raised concern that charges upon community events on Council owned sites could have a potentially negative impact.
Councillor Harrison reiterated that the budget had very little impact upon services and the Chairman thanked and congratulated the Panel on a thorough examination.
Member questions and comments related to the following:
• Whether provision should be included for the possibility that the Homelessness Reduction Bill might come into force before 2017. The Chief Executive advised that it was anticipated to manage this event within the budget, if it occurred. This was because it was speculative, the Government had given an assurance to provide funding to local authorities, and the homelessness and temporary housing costs had been well managed this year so far. In the event that the impact of the Homelessness Reduction Bill could not be so funded, CPDF would be utilised.
• New Homes Bonus and the effect of its withdrawal upon Medium Term Financial Plans. The Chief Executive confirmed that the Government was currently committed to paying the New Homes Bonus for 6 years from completion of a property but the Government intended to end this. It would not require legislation to withdraw the New Homes Bonus because to do so was within the powers of the Secretary of State. As a result of this uncertainty, the Council was making no assumptions about the continuation of the New Homes Bonus and would treat any further receipts as a windfall.
• The impact of the withdrawal of Surrey County Council funding and recycling credits was raised. The Chief Executive explained that Surrey County Council was prioritising adult social care and was obliged to cut other services in order to fund its Wellbeing services. It was noted that the differing systems of recycling utilised by the Council and Surrey County Council gave rise to differing perceptions of the benefits of the recycling service.
• The reference to the need to increase the borrowing limit. The Chief Executive advised that in his opinion it was crucial to increase the borrowing limit or else the Council’s ability to close the funding gap of £3.9m would be compromised. It was therefore essential to debate this issue or else the only other option would be to consider the sale of Council assets. It was noted that the Treasury Management Strategy Report would be produced in January 2017. The Chairman noted that a request had been received to add an item to the agenda for the next Committee meeting on 19 January 2017.
• The Chairman noted that this was permitted under the Constitution. The request was discussed and the Committee noted that as there would normally be an obligation to produce a report regarding a decision to apply the urgency procedure and apply the call-in dispensation provision but in this case, the requirement did not arise as the report had been withdrawn by the Chief Executive. The Chairman suggested, and the Committee agreed, the request could be reformulated as a request to the Executive to provide a report to the Overview and Scrutiny Committee on the lessons learned from the recent intention to seek to increase the borrowing limit.
RESOLVED:
(i) That in response to the Service & Financial Planning (Provisional Budget) 2017/18 report, the following comments be submitted for the consideration of the Executive:
a) that the Overview and Scrutiny Committee thanks the Executive Member for Planning and Finance, Executive and Officers for preparing balanced budget proposals;
b) that the Overview and Scrutiny Committee considers the following to be achievable, realistic and based on sound financial practices and reasonable assumptions:
i. The provisional budget proposals for 2017/18 and Medium Term Financial Plan for 2017/18-20121/22;
ii. Savings proposals totally £1.552m;
iii. Growth proposals totalling £0.703m;
iv. Updated Capital Programme;
c) that the Overview and Scrutiny Committee considers the potential impact of the savings and growth proposals on service delivery to be limited;
d) that the Executive be asked to consider the list of CPDF expenditure items as requested by the Budget Scrutiny Panel and set out in the conclusions of their report;
e) that the Overview and Scrutiny Committee thanks the Head of Finance, Chief Executive and Cllr Schofield for their assistance to the Budget Scrutiny Panel;
f) that the Overview and Scrutiny Committee request the Executive to provide to the Overview and Scrutiny Committee a report on the lessons learned from the recent attempt to increase the borrowing limit.
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