Reason for urgency:

As a result of waiting for Government clarification, the report missed the statutory date for publication.  However the Cabinet will make its final recommendation on the budget at its meeting on 4 February 2016 and therefore the Chairman has therefore agreed to take it as an urgent matter.

The Portfolio Holder for Finance presented the update report for Members consideration, advising that it contained several small changes (including the Council Tax Base) since the report to the previous meeting, which bridged the previous budget gap of £13,000 per annum.

He reported that the Provisional Local Government Finance Settlement had been published and as expected Revenue Support Grant (RSG) for 2016/17 had been reduced significantly, by 61%.  As there had already been an assumption of no RSG in the 10-year budget from 2016/17, no changes had been made to the plan.  For the first time the settlement also included indicative figures for the following three years and these contained a ‘tariff adjustment’ which was in effect a negative Revenue Support Grant.  Discussions with Government were ongoing about this change and the implications to district councils.

The Chief Finance Officer reported that the Local Government Finance Settlement had been published on 17 December and further details and clarifications had been obtained over Christmas. The biggest change was the ‘tariff adjustment’.  Tariffs were one of the tools used to redistribute Business Rates (BR) but the Government had previously said that BR tariffs would not change until 2020 after a review had been carried out.  The reason for the ‘tariff adjustment’ was that Government wanted to reduce Local Authority funding by a significant amount which in Sevenoaks District Council’s (SDC)  case was more than the RSG received.  That was why the tariff adjustment was being referred to as a ‘negative RSG’ because SDC would have to make a payment to Government.

This Council was potentially affected from 2017/18 along with 14 other authorities (including Maidstone Borough Council, Tonbridge & Malling Borough Council, and eight in Surrey), more would be affected in the following two years.

The Leader had met the Secretary of State to highlight the implications of this change and the Chief Finance Officer had compiled a response to the Government Consultation on behalf of the authorities initially affected.

The Final Local Government Finance Settlement for 2016/17 was expected on 11 February and could contain changes to the approach taken to date.  The figures included in the settlement for 2017/18 to 2019/20 were indicative so the 10-year budget had not been adjusted to reflect them.  However, officers were continuing to look into options to address the indicative figures, should the Government continue with them, so that the 10-year budget remained fully funded going forward.

Cabinet would make its final recommendations on the budget at its meeting on 4 February with Council setting the budget on 16 February 2016.

The Chairman commended the work carried out by the Chief Finance Officer for all his hard work coordinating the collective response with the 14 other local authority’s heads of finance.

Public Sector Equality Duty

Members noted that consideration had been given to impacts under the Public Sector Equality Duty.

Resolved:  That the report be noted.