Agenda item

To consider report 55/11 of the head of finance. 

The committee considered report 55/11 of the head of finance, which set out the politically neutral budget position for 2012/13.  This showed the draft medium term financial plan and its supporting papers, the draft growth bids, and the draft capital programme.  The strategic director briefed the committee on the budget position and the options open to the council to balance the budget both in the short and medium term. 

The chair invited Councillor Dudley Hoddinott to ask his question.  Councillor Hoddinott asked (1) where in the budget papers were the costs of introducing free car parking, and (2) how would the council modify the draft budget and medium term financial plan to find £4.98 million to satisfy the legal requirement to produce a balanced budget. 

In response, the strategic director reported that car parking was one of many council services, the costs of which were in the relevant service costs section of the medium term financial plan (under ‘Economy, Leisure & Property’ in the case of car parking).  The council had options to balance the medium term financial plan over its five-year period.  The council has always had options such as reducing service costs, increasing income, or raising Council Tax.  The council also had the option of using the new homes bonus from the government to help balance the revenue budget.  These were political choices.  Cabinet would recommend its solution to the Council in February 2012.  Councillors noted that the committee could scrutinise Cabinet’s proposals in February. 

The government had effectively capped Council Tax increases at 3.5 per cent for 2012/13.  If the council chose not to increase its Council Tax for 2012/13, it would qualify for additional government funds. 

The committee noted that the officers had made a best estimate and had taken a cautious view of the budget position, based on the latest information available.  The officers were reasonably confident this position would not significantly change before Council approved the budget in February but the committee noted there were many variables that could affect the council’s budget, such as government grant and the cost of housing benefit.  The officers regularly monitored the current year’s budget; they would feed any changes in to the draft budget for 2012/13. 

Councillors asked for details of last year’s investment income figures.  The officers agreed to provide these outside of the meeting.  Officers reported on their estimated rate of return on investments in the draft budget; some committee members questioned these estimates and suggested that the officers reviewed these. 

In answer to a question, the leader of the council and Cabinet member for finance reported that with regard to the proposed reduction in partnership grants, the affected organisations had been contacted and the officers were in discussions with them.  However, these were draft proposals at this stage; the final detail would be included in the Cabinet’s budget proposals in February. 

RESOLVED: To note the report.