Agenda item

In expectation of the final local government settlement for 2017/18 being received in time allowing for proper analysis of that statement, the County Treasurer’s Report on the Council’s Budget for that year will be circulated as soon as it is available; the Cabinet will accordingly consider:

 

(a)         Treasury Management Strategy

 

            The Corporate Services Scrutiny Committee at its meeting on 24 January 2017 considered and endorsed the proposed Treasury Management and Investment Strategy for 2017/18 as set out in the County Treasurer’s Report (CT/17/8) and as now embodied in the proposed budget papers below.

 

(b)        Budget Consultations: Devon’s Business Community, Representatives of Older People and the Voluntary Sector and Trades Unions and Results of the ‘Tough Choices’ online consultation and Town/Parish Council meetings

 

            Report of the County Solicitor (CS/17/10) summarising responses and feedback received, attached.

 

(c)         Scrutiny Committees’ Recommendations

 

            Minutes of the Joint (Health & Wellbeing, Place, People’s and Corporate Services) Scrutiny meeting held on 30 January 2017 relating to the proposed detailed budgets for 2017/18 , attached. 

 

(d)        Other Committees’ Recommendations/Comments

 

            Devon Education (Schools) Forum (Minute 30) –  16 January 2017 (attached).

 

(e)         Impact Assessments

 

            In the exercise of its Public Sector Equality Duty, the County Council must have full regard to and consider the impact of any proposals in relation to equalities prior to making any decisions and any identified significant risks and mitigating action required.  A copy of the impact assessments for the 2017/18 budget has been circulated separately for Members’ attention at this meeting and is also available at:  https://new.devon.gov.uk/impact/published/budget-setting-201718/ alongside any specific quality impact assessments referred to therein undertaken as part of the budget’s preparation also available at: https://new.devon.gov.uk/impact/published/.

 

(f)         Revenue Budget 2017/18, Medium Term Financial Strategy to 2020/21 and Capital Programme 2017/18 - 2021/22

 

Report of the County Treasurer (CT/17/11) (circulated separately)comprising:

 

                                                Introduction

Appendix A                   -               Specimen Statement on Robustness of Budget Estimates and adequacy of the County Council Reserves

Appendix B                   -               Revenue Budget 2017/18 and Medium Term Financial Strategy to 2020/21

Appendix C                   -               Summary Revenue Budget 2017/18

Appendix D                   -               Medium Term Financial Strategy 2017/18 -2020/21

Appendix E                  -               Risk Analysis of Volatile Budgets

Appendix F                   -               County Fund Balance and  Earmarked Reserves for 2017/18

Appendix G                   -               Capital Programme 2018/18 - 2021/22

Appendix H                   -               Treasury Management and  Prudential Indicators 2017/18 - 2021/22

Appendix I                     -               Fees & Charges

                                                        Detailed Revenue Budget & Capital Programmes

 

(Councillors Connett, Dempster, Greenslade, Hannan, Owen and Westlake attended in accordance with Standing Order 25(2) and spoke to this item).

 

1. Treasury Management and Investment Strategy

 

The Cabinet noted that, at its meeting on 24 January 2017, the Corporate Services  Scrutiny Committee (Minute *33 refers) had reviewed and endorsed the proposed Treasury Management and Investment Strategy for 2017/18 prepared in line with the CIPFA Code of Practice (CT/17/8). The Strategy, which had not changed from that adopted for the 2016/17 financial year, would inform the preparation and presentation of the Budget for  2017/18 and consequently:   

 

It was MOVED by Councillor Clatworthy, SECONDED by Councillor Hart and

 

RESOLVED that the Treasury Management Strategy for 2017/18 previously considered and endorsed by the Corporate Services Scrutiny Committee be approved and incorporated in the 2017/18 budget. 

 

2. Revenue Budget, Capital Programme &  Medium Term Financial Strategy

 

The Cabinet also considered and had regard to:

 

(i) the Report of the Chief Executive (CS/17/10) summarising the outcomes of and comments/observations made at consultation meetings with representatives of Devon’s Business Community, Trades Unions, representatives of Older People and the Voluntary Sector and through the Tough Choices on-line consultation and Town/Parish Council meetings;

 

(ii) the Minutes of the joint meeting of the Council’s Scrutiny Committees held on 30 January 2017;

 

(iii) Minute 30 of the Devon Education (Schools) Forum held on 16 January 2017 relating to the budget;

 

(iv) an updated 2017/18 Budget Impact Assessment, circulatedto all Members of the Council prior to the meeting and available at  https://new.devon.gov.uk/impact/published/budget-setting-201718/alongside specific quality impact assessments referred to therein and undertaken as part of the budget’s preparation;

     

(v) the Report of the County Treasurer (CT/17/9) (also circulated prior to the meeting in line with Regulation 7(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012)) on the Revenue Budget and Medium Term Financial Strategy forthe period 2017/18–2020/21 and the Capital Programme for 2017/18-2021/22, including an assessment of the adequacy of reserves, a range of prudential indicators concerning the financial implications of the capital programme and an assessment of the risks associated with the budget strategy and how those would be managed, comprising in detail:

           

Introduction

Appendix A             -           Specimen Statement on Robustness of Budget Estimates and adequacy of the County Council Reserves

Appendix B             -           Revenue Budget 2017/18 and Medium Term Financial Strategy to 2020/21

Appendix C             -           Summary Revenue Budget 2017/18

Appendix D                        -           Medium Term Financial Strategy 2017/18-2020/21

Appendix E           -           Risk Analysis of Volatile Budgets

Appendix F                         -           County Fund Balance and  Earmarked Reserves for 2017/18

Appendix G            -           Capital Programme 2017/18 - 2021/22

Appendix H             -           Treasury Management and  Prudential Indicators 2017/18 - 2021/22

Appendix I              -           Fees & Charges

Detailed Revenue Budget & Capital Programmes

 

In outlining the background to the preparation of the proposed budget the County Treasurer’s Report indicated that, the final settlement not having yet been received, the draft budget had, for the first time, necessarily and properly been prepared on the basis of the provisional settlement figures. The Cabinet was assured that the budget before it was an effective and balanced budget based on the best information available at the time, which could be commended to the Council.

 

The provisional settlement had provided baseline funding for 2017/18 of £128,300,000 (a reduction of £23,300,000 or 15.4% from 2016/17) which had been complemented by grants and income as set out in the summary budgets now submitted. 

 

Members attending under Standing Order 25 recognised the difficulties faced by the Council in setting a budget and welcomed both the approach being taken to prepare a budget based on the provisional settlement and the proposed increase in funding for adult social care, notwithstanding this was a national issue that required a national solution.  The Cabinet also acknowledged concerns expressed previously that the underlying position remained fundamentally the same and that, overall, Devon’s provisional settlement still reflected historic low levels of funding with inadequate funding levels in a number of areas and as between urban and rural areas; the Government having not significantly responded to representations by the LGA and Shire Counties on the need for  fairer funding in a number of service areas.

 

The Cabinet Member for Resources & Asset Management outlined the content and construction of proposed service budgets totalling £459,585,000 for the Council as a whole which included funding for service inflation and commitments of £43,026,000. To manage those combined pressures and set a budget within Government provisional targets, total savings of £22,229,000 would need also to be found in the 2017/18 budget.  In this and the preceding 5 years, the Council had been required to make reductions in its budgets of  £208,000,000 which, as with the proposed budget for 2017/18, had not been without risk - as was set out in full in the Country Treasurer’s Report (Appendix E) .

 

Members noted that the Report also indicated that while the Social Care Precept on Council Tax in 2016/17 had originally been set at 2% per annum for the period 2016/17 to 2019/20 inclusive, the terms of that additional precept had been altered to allow it to be increased by up to 3% per annum in 2017/18 and 2018/19 or 2% per annum over the remaining 3 years of the  'quadrennial' core spending period (i.e. on overall increase of up to 6%).   The 2017/18 Public Health grant had been confirmed at £28,238,000 in line with expectations and while the Dedicated Schools Grant had increased to £477,4500,00 (from £461,800,000) Devon’s schools remained among the most poorly funded in the Country.

 

The targets and draft budgets for each service area, as set by Cabinet and subsequently reviewed by the Council’s Scrutiny Committees, were subject to different pressures and influences. Adult Care & Health services budgets were £216,493,000 providing for inflation and commitments of £26,936,000 and required budget savings of £8,190,000. Children’s services budgets totalled  £118,131,000 with inflation and commitments at £7,843,000 and required  savings of £5,539,000. Communities, Public Health, Environment & Prosperity had a target of £35,203,000 incorporating inflation and commitments of £2,468,000 and savings of £576,000 needed.  Highways, Infrastructure Development & Waste’s target was £56,406,00 with inflation and commitments of £3,496,000 and required savings of £5,527,0000. Corporate Services’ target budget was £33,352 including inflation and commitments of £2,283,000 required savings of £2,397,000.

 

In formulating the proposed budget, as now submitted, the Leader acknowledged the suggestions arising from the various consultations referred to above and to those issues raised by individual Scrutiny Committees; as referred to above.  The Cabinet Member for Community and Environmental Services reiterated his willingness – as previously stated at the Place Scrutiny Committee -  to review the proposed reductions in the contract prices for community composting in this discretionary element of funding through any future procurement exercise, possibly through a phased, more gradual, process.

 

Irrespective of the final settlement and any outstanding grants the Leader re-affirmed that the budget, as now constructed, was lawful and could be approved, that it was a balanced budget prepared on the basis of the best information available to the Council and confirmed also that it included a 3% increase in the Social Care precept for 2017/18 over and above any other allowable Council Tax increase (up to 2%) and that, as a consequence of Scrutiny Committees’ representations referred to above, it also envisaged additional funding for:

 

                                                                                          £

                  Highways: Rural Roads                               2,000,000                            

                  Highways Drainage                                        500,000

                 

The County Treasurer also confirmed that, in her view, the proposed budget represented a sound and achievable finance plan for 2017/18. A Band D Council Tax would, if the proposed budget was approved, increase by 4.99% to £1,267.92p.

 

The Cabinet acknowledged that a Budget 2017/18 Impact Assessment had been prepared previously and taken into account by Scrutiny Committees as part of their earlier deliberations together with those specific impact assessments undertaken as part of the budget’s preparation or in relation to service reviews arising therefrom: to ensure all Members had all relevant information in having regard to the responsibilities placed upon the Council to exercise its Public Sector Equality Duty under s149 of the Equality Act 2010 when considering the proposed budget, its impact and any mitigating action required, prior to making a decision. The preparation of Impact Assessments was necessarily a dynamic process and that individual assessments for specific proposals may necessarily have to be developed and updated with time and an updated Impact Assessment had also subsequently been circulated on 7 February 2017 to all Members of the Council for the purpose of this meeting and the County Council on 16 February 2017 or at any subsequent meeting as referred to above. 

 

The matter having been debated and the options and/or alternatives and other relevant factors set out in the County Treasurer’s Report and/or referred to above,  including the separate risk analyses set out therein:

 

It was MOVED by Councillor Clatworthy, SECONDED by Councillor Hart and

 

RESOLVED that it be recommended to the County Council:

 

(a)  that it record its thanks for the views and comments received from the Council’s Scrutiny Committees, the Devon Education Forum, the Devon Business Community, Trade Unions, the Voluntary Sector and all other consultees from the wider community during the extensive consultation, to which the Cabinet had had regard in formulating budget proposals;

 

(b) that while noting the provisional settlement for 2017/18 of £128,300,000 and recording its dissatisfaction at the failure of Government to announce the final settlement figure in time to enable its incorporation within the budget as now submitted, Cabinet recommends that should the final settlement be at variance from the provisional settlement any resulting shortfall or additional funding be taken from or added to the Budget Management Earmarked Reserve to be dealt with in the normal way and that the s151 Officer be authorised to give effect to this decision and make all necessary adjustments; 

 

(c) that the detailed budgets outlined in Report CT/17/9 and contained in the summary budget booklet now circulated, being within the targets set, be approved;

 

(d) that the net budget of £489,494,000 set out in Appendix C to Report CT/17/9 be approved;

 

(e) that a 3% Adult Social Care Precept be set for 2017/18;

 

(f) that the Council Tax requirement for 2017/18 be set at £358,418,415.02;

 

(g) that the precepts required from each District Council in 2017/18 and the levels of Council Tax for each of the eight property valuation bands consequent upon the budget as amended by adjustments in collection in the current year be approved, as set out in Annex 1 to Appendix B of Report CT/17/9 and in the tables attached to these minutes;

 

(h) that the Medium Term Financial Strategy proposals for 2017/18 to 2020/21 as set out in Appendix D of Report CT/17/9 be approved;

 

(i) that the risk assessments set out in Appendix E to Report CT/17/9 and, in particular, the risks associated with containing costs and maintaining service provision against a background of significant budget reductions be noted and taken into account in determining the final service budgets, levels of reserves and Council Tax figure now recommended;

 

(j) that, subject to (b) above, the report on balances and earmarked reserves as set out in Appendix F to Report CT/17/9 be noted;

 

(k) that the Capital Programme for 2017/18 of £114,751,000 and its financing, as set out in Summary Tables A and B of Appendix G to Report CT/17/9 be approved; 

 

(l) that approval be also given, for planning purposes, to the indicative capital programmes for 2018/19, 2019/20, 2020/21 and 2021/22 shown in Summary Table B of Appendix G to Report CT/17/9: those levels to be reviewed in light of the overall levels of revenue and capital resources available to the County Council for each year;

 

(m) that, as also recommended at 1 above, the Treasury Management and Investment Strategy for 2017/18 set out in Annex 3 of Appendix H of Report CT/17/9 be approved;

 

(n) that the Prudential Indicators for 2017/18 to 2021/22 contained in Appendix H to Report CT/17/9 be approved;

 

(o) that the Minimum Revenue Provision Strategy for 2017/18 also set out in Appendix H to Report CT/17/9 be approved;

 

(p) that the County Treasurer be authorised to effect movements between the separately agreed limits for borrowing and other long term liabilities;

 

(q) that changes to charges in relation to inflationary increases be agreed by the relevant Cabinet Member(s) in consultation with the County Treasurer;

 

(r) that changes to charges within Communities, Public Health, Environment and Prosperity  Services and within Children’s Services be also agreed by the relevant Cabinet Member in consultation with the County Treasurer.

 

[NB:  All Members of the Council had been granted a dispensation to allow  them  to speak and vote in any debate on the setting of the Council Tax or Precept or any fees and charges arising therefrom as a consequence of simply being a resident of or by virtue of being a resident of or a land or property owner in the administrative County of Devon, or by being a parent or guardian of a child in a school on any matter relating to school meals and school transport or in relation to the setting of members’ allowances or by being a parent or guardian of a child in a care or in receipt of a state pension. The Impact Assessments referred to above are available at: https://new.devon.gov.uk/impact/published/budget-setting-201718/ ].