Issue - meetings

(Previously circulated – Members are asked to bring their copy with them to the meeting.

Mr N J D Chard, Cabinet Member for Finance; Ms L McMullan, Director of Finance; Mr A Wood, Head of Financial Management; and Mr B Smith, Group Manager, Financial Planning and Budget, will attend the meeting at 10.00 am to answer Members’ questions about the draft medium-term plan and budget proposals.

The five Policy Overview Committees are meeting during the weeks leading up to this meeting to consider the medium-term plan and budget proposals relating to their service areas.  Any proposals from any of the POCs which, if accepted, could have an impact on other parts of the budget will be reported to the Committee at its 26 January meeting.  The comments on the medium-term plan and budget proposals made by the five Policy Overview Committees and by this Committee will be reported to Cabinet at its meeting on 2 February.

The Committee considered the Cabinet’s proposed 2009/10 budget and Medium Term Financial Plan for 2009-12 and welcomed Mr N J D Chard, Cabinet Member for Finance, Ms L McMullan, Director of Finance and Mr A Wood, Head of Financial Management to the meeting.

Mr Smyth began the debate by congratulating the Finance Service for ensuring that the budget papers were produced a fortnight earlier than they had been in previous years, giving Members greater opportunity to read and digest the papers.

Referring to the press release that accompanied the publication of the budget papers, Mr Smyth asked Mr Chard to comment on the statement of the Leader of the Council that ways would be investigated to reduce the proposed increase in the Council Tax to below 2.85%. Mr Smyth also asked if the level of 2.85% was sustainable for 2010/11, stating that on two occasions in the past, the first year of a new 4-year Council term had involved a much higher increase in Council Tax than the immediately preceding year. Mr Chard stated that the proposed increase in Council Tax was highly commendable, given the Government’s grant settlement for KCC and the spending pressures being faced by the authority. He acknowledged that the affordability of Council Tax payments was never more important than in the current economic climate and every opportunity would be taken to trim budgets further without affecting service delivery. With regard to the sustainability of the increase in Council Tax, Mr Chard commented that it was important to maintain stability, but warned that there was no absolute guarantee that grant levels would be maintained for 2010/11 given the unprecedented economic outlook and that further cost pressures might also impact on the level of the Council Tax 2010/11.

In response to a question from Mr Truelove on the impact of investments in Icelandic banks (page 25 of the MTP, paragraph 3.28), Ms McMullan stated that there was no impact in terms of the loss of capital or interest, as a claim had been submitted for the principal plus interest. She added that the DCLG had confirmed that there would be no bottom line impact on either the 2008/09 accounts or the 2009/10 council tax. In response to a further question from Mr Truelove about the impact of any future loss, Ms McMullan referred Members to page 46 of the Budget Book, stating that any future loss would be reflected under “interest on cash balances”. Slightly later in the meeting, but relating to this particular issue, Mr Simmonds reminded Members that it was just such events for which KCC held reserves and the prudence of this policy was now clear to see.

Mr Smyth referred to a statement made by David Cameron MP earlier this month at a press conference, at which he said that if there was a Parliamentary Election in April 2009 and the Conservative party came to power, he would issue an instruction to all of his Ministers that their departments’ budget increases would be  ...  view the full minutes text for item 124