Issue - meetings

Further to Minute No. 31 of the meeting of the Overview and Scrutiny Management Board held on 12th July, 2013, consideration was given to a report and presentation from the Chief Finance Manager stating that, in setting the 2013/14 Revenue Budget, it was recognised that the current budget principles, which had served the Council well since the coalition Government’s programme of austerity begun, would need to be refreshed in the light of recent announcements that further significant funding reductions for Local Government were likely to continue until at least 2018. The report proposed a refreshed set of budget principles on which the 2014/15 General Fund Revenue Budget and Medium Term Financial Strategy should be based.

Included within the report were the proposed Budget Setting Timetable for the 2014/15 Revenue Budget and Medium Term Financial Strategy, as well as the proposed approach to reporting the Council’s in-year financial performance to Cabinet for the financial year 2013/14.

Members noted that with the significant, continuing funding reductions and welfare reform changes that the Council would face until at least 2018, the new Budget principles were proposed to ensure the Council operated effectively within the funding available and delivered savings which would have the least impact on the citizens of Rotherham.

The salient points of the presentation by the Chief Finance Manager were:-

: recent changes as a consequence of the spending review announcements made by the Chancellor of the Exchequer on 26^th June, 2013;

: April 2013 – changes, imposed by central Government, in the way local government is financed and to the welfare system;

: the significant increase in importance of business rates, in terms of a local authority’s income;

: emphasis on the economic performance of local areas; areas performing less well, will have fewer resources to provide services;

: national funding outlook and the changing mix of funding, including the business rates retention scheme, with the revenue support grant reducing;

: the outlook for local authorities, especially the rising costs of adult social care, waste management and also capital financing costs;

: the prediction that the UK economy will take several years to recover;

: using traditional budget principles, the Council has managed significant budget reductions during the past three years, although the next generation of savings will be especially difficult to manage without adopting new budget principles;

: the proposed budget principles were outlined, including the need for the Council to stop doing things that are not important to all people; a Business and Jobs Growth Fund might need to be created;

: the importance of “crime and grime” services for local people; eg: concerns about anti-social-behaviour, noise nuisance and also ensuring that street cleansing and grass cutting services are maintained;

: a forecast of the indicative funding gap from 2014/15 to 2015/16; including revisions as a consequence of the coalition Government’s recent spending review;

: adjustments to Formula Grants;

: the summary position of the Medium Term Financial Strategy; including a funding gap of £20.1 millions  ...  view the full minutes text for item 16

Further to Minute No. 42 of the meeting of the Cabinet held on 3^rd July 2013, consideration was given to a report presented by the Director of Finance stating that, in setting the 2013/14 Revenue Budget, it was recognised that the current budget principles, which had served the Council well since the coalition Government’s programme of austerity begun, would need to be refreshed in the light of recent announcements that further significant funding reductions for Local Government were likely to continue until at least 2018. The report proposed a refreshed set of budget principles on which the 2014/15 General Fund Revenue Budget and Medium Term Financial Strategy should be based.

Included within the report were the proposed Budget Setting Timetable for the 2014/15 Revenue Budget and Medium Term Financial Strategy, as well as the proposed approach to reporting the Council’s in-year financial performance to Cabinet for the financial year 2013/14.

Members noted that with the significant, continuing funding reductions and welfare reform changes that the Council would face until at least 2018, the new Budget principles were proposed to ensure the Council operated effectively within the funding available and delivered savings which had the least impact on the citizens of Rotherham.

The salient points of the presentation by the Director of Finance were:-

: April 2013 – changes, imposed by central Government, in the way local government is financed and to the welfare system;

: emphasis on the economic performance of local areas; areas performing less well, will have fewer resources to provide services;

: national funding outlook (before the recent spending review announcements by the Chancellor of the Exchequer); the changing mix of funding, including the business rates retention scheme, with the revenue support grant reducing;

: the outlook for local authorities, especially the rising costs of adult social care, waste management and also capital financing costs;

: studies by Sheffield Hallam University have produced forecast losses to the local economy arising from welfare reform changes and local authority budget reductions; the implications for the Rotherham Borough area;

: the prediction that the UK economy will take several years to recover; the International Monetary Fund’s decisions on the AAA rating of the UK economy;

: using traditional budget principles, the Council has managed significant budget reductions during the past three years, although the next generation of savings will be especially difficult to manage without adopting new budget principles;

: the proposed budget principles were outlined; eg: to stop doing things that are not important to all people; a Business and Jobs Growth Fund ought to be created;

: the importance of “crime and grime” services for local people; eg: concerns about anti-social-behaviour, noise nuisance and also ensuring that street cleansing and grass cutting services are maintained;

: a forecast of the indicative funding gap from 2014/15 to 2015/16; revisions necessary as a consequence of the coalition Government’s recent spending review;

: adjustments to Formula Grants;

: the triennial review of the Local Government Pension Scheme; increasing  ...  view the full minutes text for item 31

-           Director of Finance to report.

Councillor Akhtar, Deputy Leader, introduced a report by the Director of Finance, which explained that in setting the 2013/14 Revenue Budget, it was recognised that the current budget principles, that had served the Council well since the Coalition Government’s programme of austerity started, would need to be refreshed in light of recent announcements that further significant funding reductions for Local Government were likely to continue until at least 2018. This report proposed a refreshed set of budget principles on which the 2014/15 General Fund (GF) Revenue Budget and Medium Term Financial Strategy should be based.

The report also recommended for Cabinet approval the proposed Budget Setting Timetable for setting the 2014/15 Revenue Budget and Medium Term Financial Strategy (MTFS), and the proposed approach to reporting the Council’s in year financial performance to Cabinet for the financial year 2013/14.

Cabinet Members noted that with the significant on-going funding reductions and welfare reform changes that the Council would face until at least 2018, the new Budget Principles were proposed to ensure the Council operated effectively within the funding available and delivered savings which had the least impact on the citizens of Rotherham.

Resolved:-  (1)  That the refreshed Principles on which the 2014/15 General Fund Revenue Budget and Medium Term Financial Strategy will be based be approved.

(2)  That the proposed budget setting timetable for the Revenue Budget 2014/15 and Medium Term Financial Strategy be approved.

(3)  That the proposed approach to reporting to Cabinet the Revenue Budget Monitoring position for 2013/14 financial year onwards be approved.