Agenda item

(Report by Mr Dance, Cabinet Member for Regeneration & Economic Development, Mr Cockburn, Corporate Director Business Strategy & Support)

(Ms J Hansen, Finance Business Partner, Business Strategy and Support and Mr D Shipton, Head of Financial Strategy, was present for this item)

1.               The Chairman invited the Head of Financial Strategy, Mr Shipton, to introduce the report.  Mr Shipton advised the following:

• The timing of this Cabinet Committee and some others was difficult as the settlement was advised just before Christmas and the final draft budget was planned to be launched on Tuesday, 15 January when the Cabinet papers would be published. As a result there was an offer for those Cabinet Committees that meet before the launch to convene a Budget IMG to discuss their draft budgets before the budget was discussed at County Council on 14 February.
• The provisional settlement from the Government was considered the most complicated settlement that the County Council had received from the Government.  This was due to the introduction of a new funding arrangement with localising the business rates and transferring a number of existing grants into the new business rate model which made the comparison of this year and next year complicated.
• The headline for KCC was overall the settlement was £16 million worse than was forecast as the time of the launch of the budget consultation in September 2012.  The issues did not affect this Cabinet Committee’s portfolio as they were about the changes to the arrangements on the early intervention of grant and the funding for local authority central functions in relation to Education where there were significant reductions that were not anticipated.
• On a more positive note there had been an announcement in the Autumn 2012 from the government that there would be an additional grant to support freezing Council tax 2013/14. This was more than had been forecast at the time of the budget consultation.
• In terms of the overall provisional budget, at the time of the launch of the budget consultation it was estimated that there would be £32 million additional spending pressures, some of those pressures had also increased since the launch of the budget consultation and it was anticipated that the County Council would have in excess of £40 million additional spending pressures to fund next year as well as those funding reductions which meant that the overall position was the need to make £83 to £84 million savings in the proposed budget compared to the £60 million estimated at the time of the launch of the budget consultation. This was all still subject to change before the final draft.

2.               The Chairman asked Members whether they wished to have another Budget IMG meeting.  A Member suggested that it would depend on how the final draft budget figures affected the budget of the Regeneration and Economic Development portfolio’s budget.

3.               Ms Cooper advised that she understood that there were no further pressures on the Regeneration and Economic Development £3.9 million budget as 30% savings had already been achieved over the 2 years.   Mr Shipton indicated that there were no significant proposals affecting this portfolio, following which Members agreed not to hold a further Budget IMG meeting.

4.               RESOLVED that:-

a)         the verbal update by Mr Shipton on the late announcement of the provisional local government finance settlement and the impact on budget timetable be noted; and

b)         the issues raised in consultation and Cabinet’s response set out in the report be noted.