Agenda item

This report outlines the latest General Fund Budget position for 2018/19.  Members are reminded of the need to achieve savings throughout the three-year period covered by the Medium Term Financial Plan.  Information is provided on the details of the provisional Local Government Finance Settlement 2018/19 and the Council’s financial position following this.

Each Overview and Scrutiny Committee is requested, in the light of the significant budget shortfall in the medium term, to consider all of the proposals identified in this report and make any observations for consideration by the Executive.

Recommendation

It is recommended that the Value for Money and Customer Service Overview and Scrutiny Committee:

1.         in the light of the significant budget shortfall, considers the proposals to balance Waverley’s General Fund budget in 2018/19 as set out in this report and makes any observations to pass to the Executive; and

2.         considers the draft capital programme and fees and charges and passes any comments and observations to the Executive.

Graeme Clark, Strategic Director, introduced the report setting out the General Fund Budget for 2018/19. He explained that the Council was faced with a Budget shortfall of £2.7m over three years however Heads of Service had worked through the detailed budget with their Portfolio Holders and officers were now in a position to present a balanced budget for 2018/19. Key changes from the original projection for 2018/19 included a transitional arrangement with SCC on recycling income, new income from property investments and some changes to fees and charges.

The Government had made changes to the criteria for New Homes Bonus. While this had an impact on income, officers advised that the Council did not rely on this to balance the budget. Instead, the funds were used for invest to save schemes, specifically property investment.

There was a proposed increase of 2.99% to Council Tax, and no changes were proposed to the Council Tax Support Scheme. The Chancellor’s Budget had made provision for an increase to the Council Tax premium charged on empty properties; it would be Waverley’s intention to implement this as soon as it is able to. In response to questions, officers clarified that the additional charge would only be applied once the property had been empty for two years. Cllr Hyman felt that a Council Tax increase each year would negatively affect Waverley’s older residents who were asset rich but cash poor and suggested that the Council look for other ways of generating income.

Graeme Clark also reported that the Council had been corresponding with the Government regarding the negative grant. The Chancellor would be undertaking a ‘fair funding review’ in the Spring which would set new baseline allocations for local authorities based on relative needs and resources. Officers hoped that this might result in the delay or removal of the negative grant and the Committee recommended that the Executive continue to engage with local MPs to have this negative grant removed.

The Committee commented that for 2018/19 the expected income from property would be £250k and queried how conservative this estimate was. Officers responded that this amount would be achieved from recently acquired property, and any further acquisitions during 2018/19 would simply enhance this.

In addition to the 2018/19 budget, some measures were set out which would help to achieve a balanced budget to 2021. These included procurement savings, property income, and efficiency savings. Cllr Holder asked for further details as to where the proposed efficiency savings would come from. Officers responded that reviews would be ongoing throughout the year to identify efficiencies and that these would come to this Committee throughout the year, not just at budget-setting time.

Members noted that there were some proposed increased to fees and charges, but commented that without knowing how frequently a service was used, it was difficult to quantify how much income would be generated. Peter Vickers, Head of Finance, responded that there was information available about how much income was generated from these services, and that this could be made available. Cllr Hyman was concerned that by continuing to increase the charges for services, such as garden waste, a tipping point would eventually be reached, and take-up of the service would drop. Officers responded that while this was something to consider for the future, Heads of Service were confident that with the current fee increases, take-up would not be affected.

Additionally, the Committee noted that delegated authority was sought to set the Building Control fees. Officers explained that this was due to the extremely competitive market in which the Building Control Service operated, and therefore there was a need to be flexible and able to respond quickly to changing circumstances. Members accepted this rationale, however recommended that the fees be reported once they had been agreed.

Cllr Townsend noted that the business rates pilot was not included within the budget. Graeme Clark responded that this had not yet been budgeted for as the Council would only be able to calculate what gains had been received at the end of the next financial year.

The Committee considered the potential impact of the Homelessness Act and whether a contingency budget should be put in place. Members concluded that this was not required at the current time, as the impact would be difficult to quantify, but recommended that the Executive be made aware of this potential risk and that the situation continue to be monitored.

The Committee thanked officers and Portfolio Holders for their hard work in delivering a balanced budget for 2018/19 and looked forward to continuing to work with officers to deal with the budget challenges for coming years.