The report set out the major financial pressures the Council was likely to face over the next four years, together with a proposed strategy for setting a balanced and sustainable budget for 2012/13 and beyond.  The Council had an excellent track record in identifying, planning for and addressing financial challenges. In light of the challenging financial position facing all authorities a year ago, for 2011/12 the Council brought its budget setting process forward by two months and produced a 10-year budget together with a four-year savings plan. This provided the Council with a stable basis for future years, which addressed the reduction in Government funding as well reducing its reliance on reserves.

Building on the considerable progress made over recent years, the report updated Members on significant risk areas as well as setting out the way forward for service prioritisation, business and financial planning, financial strategy and the budget setting process.  The overall emphasis was on building on the strong framework provided by the 10-year budget, whilst taking into account any new financial burdens and changes in the economy that had an impact on budget assumptions. The report also provided Members with the proposed timetable for the budget setting process. 

A Member commented on the opportunities offered by the possible income stream that could be achieved if Councils were allowed to retain business rates with new powers to potentially borrow against those revenues.  He was advised that at the moment it was unclear how this may operate in practice and therefore no assumptions were being made and no significant extra income was expected.

Members were advised that the way reserves had been used they would have run out in three years and funds would have had to have been found from the revenue budget. Instead their use had been smoothed over the ten year period and the budget stabilisation reserve was being used as a mechanism for preventing unexpected movements between budget years.  The level of reliance on reserves had significantly reduced and in the longer term, more sustainable solutions could be sought and if the economic recovery resulted in positive outcomes for the Council then the reliance on the reserves could be reduced or their  period extended beyond the ten years.

The Chief Executive confirmed that partnership working was still very much on the agenda.  The thrust of the Secretary of State’s policy was to encourage partnership working and service sharing, especially for District Councils.  Meetings were continuing with other Councils in order to look for further opportunities for partnership working.  However he advised that when working with others it was a matter of persuasion and that timescales were not always as quick as one would like.

Looking at the variable income sources a Member queried why more opportunity was not taken to increase Development or Building Control fees rather than just car parking charges.  The Chief Executive explained that Development Control fees were set to a national scale.  All the statutory obligations were regulated by set fees, and Building Control fees were also subject to commercial competition.  The issue had been taken up with the Local Government Minister and it was hoped that under the current Government review of planning fees, Councils would at the very least be allowed to set fees at a rate that would allow them to break even.  It was noted that pre-application advice was a moot point, as a council this was not yet extended to householders but only developers and commercial applications.  A Member suggested investigation of more commercial rubbish collection services as a potential source of income.

Resolved:      That the report be noted and the comments made on the proposed budget strategy, reported to Cabinet.