It was the fourth year of the current Business and Financial Planning Strategy, which included the 10-year budget. The Group Manager – Financial Services considered that the strategy was successful and the Council’s external auditors, Grant Thornton, had also reflected this view in their audit report.

Since it was agreed by the Council in February, a number of changes had been made to the 10-year budget and each change was explained. The existing 10-year budget had been rolled on a year. Pay inflation had reduced to 1% in 2014/15 and 2015/16, 1.5% in 2016/17 and 2017/18 and 2% in later years. Central Government had announced a reduction in Government Support of 10% in 2015/16, however the likely protection of education and adult social care meant the District Council could face cuts in its support of approximately 18% in 2015/16. The New Homes Bonus was now expected to continue after 2016/17, however the Government had also announced that 40% of the fund would be utilised for the Single Local Growth Fund. The assumptions  for  council tax have reduced so that they were more in line with inflation though council tax levels were ultimately a Member decision..

In response to a question, the Chairman stated that there was contingency within the  Action and Development Reserve for disasters. Officers added that this reserve could be replenished when the reserves were considered later in the budget process.

Staff pay increments would continue but following the review of staff terms and conditions two years ago they had reduced and were expected to diminish further. This had been taken account of in the savings. The reforms around the introduction of the Universal Benefit were still noted as a risk.

Concerns had been raised at comments from the Secretary of State for Communities and Local Government that the Council should seek to reduce income from car parking. It was clarified that the Secretary of State’s concern was on-street parking, monies from which were tightly controlled. There was no risk to monies from car parks. In February 2013 the former Portfolio Holder for the Cleaner and Greener Environment had stated that on-street car parking costs in the district were neutral.

It was presumed that £520,000 would be contributed to fund a deficit in the Superannuation Fund following the triennial valuation to be held in November 2013. This presumption had been made prior to the adoption of new actuaries, Barnett Waddingham, who held their first valuation in November 2010. Although the last valuation was an improvement on previous ones, the Council had allowed the assumption of a £520,000 deficit to slip by 3 years in case the last valuation was exceptional. The Chairman was concerned that Gilt yields had been suppressed and the Kent County Council pension fund was becoming a more mature one.

Public Sector Equality Duty

Members noted that there were no adverse equality impacts arising from the report.

Resolved: That Cabinet be advised on the Advisory Committee’s views on the ten-year financial planning approach and principles set out in the report.

It was noted that 10-year budget strategies were recommended practice but other Local Authorities were still reluctant to adopt them. Such a strategy required cuts to be made earlier or else the budget would show a large deficit.