Agenda item

Agenda item

Draft General Fund and HRA Budget 2020/21

A report of the Head of Finance and Property Services setting out the draft General Fund and HRA Budget 2020/21, to be considered by Cabinet on 16th December 2019, for scrutiny by the Panel.

 

Having undertaken scrutiny of this matter, the Panel will need to identify any observations or recommendations that it wishes be included in its draft report.

Minutes:

Considered a report of the Head of Finance and Property Services setting out the draft General Fund and Housing Revenue Account (HRA) Budget 2020/21, to be considered by Cabinet on 16th December 2019, for scrutiny by the Panel (item 7 on the agenda supplement filed with these minutes).

 

Having undertaken scrutiny of the matter, the Panel would need to identify any observations or recommendations that it wished be included in its draft report.

 

Assisting with consideration of the report: The Cabinet Lead Member for Finance and Property Services, the Strategic Director of Corporate Services, the Head of Finance and Property Services.  A summary of the current position, the challenges faced, and the actions planned, particularly in relation to the General Fund, was given by the Cabinet Lead Member, assisted by the Strategic Director.

 

Summary, key points of discussion:

 

(i)         Currently no plans to reduce services or staff.

(ii)        Reference to recent review of recharges and firm approach in respect of any non-necessary service pressures.

(iii)       High priority being given to meeting the challenge, particular reference to commercialisation and transformation work.

(iv)       Reference to £975k deficit in draft Budget, balances on agenda supplement page 8 (Table 1 in the report) set out the working balance of £4.8m which took into account the shortfall for 2019/20 of £971k also.  

(v)        Reference to importance of transformational changes in meeting the shortfall, historically those changes had not been realised.  In response, the MTFS included a transformation/efficiency plan, that had been refined as part of the budget setting process such that all items included were considered to be deliverable (those that were not considered so had been removed).  Reference also to the challenge of the £300k Nonspecific Savings target in the draft Budget and how that had been dealt with via line by line reduction in individual non-staff, non-contractual budgets.  In conclusion, draft Budget figures reflected elements of transformation plan considered to be deliverable in 2020/21.

(vi)       Question regarding elements of commercialisation within the draft Budget?  Agenda supplement page 14 (Appendix 1 in the report) showed the inclusion of £150k net income from new commercial property investment and £30k commercialisation income from review of fees and charges, considered to be achievable amounts, based on experience elsewhere and investment Council would make into capability in the area of commercial property investment.

(vii)      Question regarding level of reserves at end last financial year?  Agenda supplement page 8 (Table 1 in the report), 2018/19 column showed end of year reserves of £10.7m, representing all the reserves, focus was working balance of £6.8m.  Confirmed that expecting to use reserves of £1m in the current year.  Although in line with the budget, the Council had been spending in excess of funding, illustrated by its use of reserves, question as to when it would decide not to do so by either cutting services or making efficiency savings at a faster rate?  Not appropriate to continue to overspend, better to make tough choices now.  In response, reference to high priority being given to both increasing income and making savings, realistically and clearly set out in the MTFS.  Recognised that continued use of reserves was not sustainable.  A prudent approach was being taken in a very uncertain environment and officers and Cabinet Lead Members would be working hard to deliver the draft Budget set out, there being no other option.

(viii)     All activity taking place in the area of the Council’s finances and all policies and plans relating to that indicated that the Council was endeavouring to deal with the challenge faced.  It was hoped that the speed of transformation required would reflect that and could be achieved.

(ix)       Suggestion that undertaking a sensitivity analysis/considering the worse case scenario might provide a more prudent approach?  Challenge being set by MTFS/draft Budget considered appropriate/realistic.  Not possible to state exact contribution to required savings from transformation.

(x)        Following concern regarding the need for commercialisation proposals to deliver, further information given on the expertise to be secured to ensure that, together with the challenges involved.  Checks and scrutiny that any proposed investment would be subject to briefly outlined.

(xi)       No general inflation provision for some of services, represented an additional pressure.

(xii)      Agenda supplement page 10, paragraph 23, Reinvestment Reserve: Confirmed that transfer of £122k related to 2020/21.

(xiii)     Agenda supplement page 10, paragraph 24, Capital Plan Reserve:  Confirmed that £1,093k was current year’s anticipated end of year balance.

(xiv)     HRA, concern that proposed 2.7% rent increase would further increase arrears.  May be the case, would monitor.  Anticipated that most tenants would be in position to afford increase.

(xv)      Information provided on the consultation arrangements for the draft Budget, those consulted, and the documents provided to assist that.  All comments taken into account, ideas to assist the Council welcomed.  Confirmed that officers and Cabinet Lead Members available to assist with queries from any consultee.  Complexity of information recognised.

(xvi)     Reference recommendation 2 in the report, that Loughborough Special Expenses Budget and Levy 2020/21 be endorsed for consultation.  Confirmed that, due to General Election, next Loughborough Area Committee meeting had been moved from December to 6th January 2020, new meeting date should allow for the Committee to be consulted on the matter, members of the Committee had been consulted on the change of meeting date and implications of that.   

 

RESOLVED that the report setting out the draft General Fund and HRA Budget 2020/21 be noted and Recommendations 1 and 2 to Cabinet therein be endorsed.

 

Reason

 

To acknowledge the Panel’s consideration of the matter as part of its budget scrutiny role and to provide the opportunity for consultation on the budgets set out.  

Supporting documents: