Agenda item

(1)       The report identified the latest forecasts for next year’s budget and the financial plans for the following years.  This included an analysis of the overall financial outlook for the whole council, appraisal of the existing plans for 2012/13, an update on the budget pressures facing the Environment, Highways and Waste portfolio and recommendations from the Informal Member Group on areas for budget savings.

(2)                   The Autumn Budget Statement was due to be presented to Cabinet on 5 December 2011 and would set out the County Council’s proposed budget strategy following the Chancellor of the Exchequer’s statement to Parliament on 29 November.  The Spending Review 2010 (SR 2010) set out the Government’s four year plans to reduce the budget deficit, and showed an anticipated 21.9% reduction in the Formula Grant for local government over the four year period.  The Local Government Finance settlement for 2011/12 was published on 13^th December 2010 and included provisional grant figures for 2012/13 but did not provide any provisional figures for 2013/14 or 2014/15.  The 2012/13 provisional grant showed a £26.9m reduction in Formula Grant on 2011/12 (8.5%) for KCC. The overall planning assumption for the next medium term financial plan (MTFP) was a £340m reduction in spend in real terms between 2011/12 to 2014/15.

(3)       The approved MTFP for the Environment Highways and Waste portfolio was set out in appendix 1 to the report.  At the time the plan was approved £15m had been set aside for unforeseen “emerging” budget pressures and £28m of savings still needed to be identified in order to balance the budget for 2012/13 against the anticipated level of resources (CLG grants and Council Tax).

(4)       For 2012/13 POSCs were asked to consider what savings would be feasible or acceptable within the Environment, Highways and Waste portfolio in order to close the estimated overall £32m gap across KCC (3.5% of net spend) arising from the combination of additional pressures and the unidentified savings in the existing plan partially offset by the additional grant that would be available.  For the medium term POSCs were asked to consider what strategies should be considered for the Environment, Highways and Waste portfolio if, overall, the council needed to make 15% saving over the next two years.

(5)       The council’s overall strategy would be set out in the Autumn Budget Statement setting out how the authority planned to deal with reducing funding and continuing additional spending pressures. The EHW Directorate would continue to focus on cost avoidance, efficiencies and service reductions.

(6)       Very significant savings were being made in 2011/12 from the Directorate’s revenue budget strategy and additional savings would be made in the medium term as the full year effect of those savings came into effect.  The savings had resulted from contract relets in Waste and Highways, diversion of waste to less costly outlets, major staffing efficiencies and reductions in some service areas.  Proposals were currently being developed to deliver additional savings within the medium term and outline proposals had been discussed at the Budget Informal Members Group and the Waste Informal Members Group meetings. 

(7)       Members of the POSC had had informal member group meetings (IMG) meetings throughout the summer/autumn.  IMGs had found the meetings useful to gain a more detailed insight into budgets controlled by the Environment, Highways and Waste portfolio.  The IMG meetings provided the opportunity to share the budget planning process in some detail with Members as well as discussing areas where the Directorate could potentially make savings in the future.  Members were supportive of the direction of travel outlined by officers and provided some helpful ideas, but it was accepted that due process would be required before they could be factored in to the Directorates medium tem financial plan.

(8)       RESOLVED that the latest forecasts for 2012/13 and the next two years, be noted.