Agenda item

David Shipton, Head of Financial Strategy, was in attendance for this item.

1)    Mr Oakford introduced the report. Mr Oakford said that budget reviews had been completed with each of the Cabinet Committees and outlined some of the common themes that were raised. Members had been encouraged to submit suggestions for adjustments to the draft budget. Mr Oakford said that many Members had wanted  the administration to present a range of alternatives to the budget proposals.. There had been many questions on the Safety Valve, but it was explained to Members that this was not part of the current budget as negotiations were ongoing. There was much interest in the state of the Reserves and the effect of any future drawdowns on the Council's financial resilience. Mr Oakford said that no formal suggestions for budget adjustments were passed to be brought to Cabinet. Mr Oakford thanked the Finance officers for their work and the balanced budget was to be put forward to full Council for their consideration.

2)    Mr Shipton gave a PowerPoint Presentation (find attached). He outlined a summary of the comments that were raised during the review of the draft budget from the Cabinet Committees. 

Responding to the comments, Mr Shipton noted that KCC had responded to the provisional settlement proposals from government and always responds to all government consultations on financial matters.

In past budgets, the savings and income as a percentage of the net budget was 2.8% in 2022-2023 and 3.2% in 2021-2022 but in the draft budget for 2023-2024 this had increased to 4.2%.  There were significantly more policy savings than previously. Projected future savings in the medium term financial plan anticipated that this would be at around 3% in 2024-2025. 

The Fair Funding Review was to be delayed by at least 2 years with no definitive date given for when the review would be carried out.     

Mr Shipton said that if the Council was to become insolvent, there was a process to be undertaken which would ultimately lead to a Section 114 Notice. KCC was a long way from being insolvent as long as adequate reserves were maintained commensurate with the risks inherent in the budget. 

There were questions posed by Members in the Cabinet Committees regarding insecure funding.  There were three sources of insecure funding which the Council could not rely on to support the budget: the direct proceeds from the business rate pool with Kent districts, the new homes bonus grant and Kings Hill.

3)    The Leader thanked the Finance Team and other teams from across the Council. The Leader said the risk of a Section 114 Notice was mitigated by adequate reserves being maintained and bysavings being delivered as outlined in the budget.   

4)    Miss Carey noted the difficulty of achieving a balanced budget and said that challenges and suggestions to the budget from backbench Members had not been effective in resolving the underlying issues facing the Council. Miss Carey thanked Members and Finance officers.

5)    Mrs Chandler responded to some of the comments raised during the review and noted that demand pressures were prevalent in statutory areas and allowances had to be made to account for them. In Children’s Social Care, it was noted that preventive care measures had been maintained in the budget to a far greater extent than in other upper tier authorities in the country. It was confirmed that all future work within the directorate would remain children centred.  

6)    The Leader noted that the Council had to accommodate the huge demand pressures that had come from the statutory responsibilities, which made it very challenging to balance the budget within the year. The Council would have to work with NHS colleagues and other partners to ensure that public sector resources were marshalled effectively to ensure they were focussed on the most important areas.   

7)    Mr Murphy noted that all Cabinet Members were available to discuss the budget with all Members if they had any concerns or suggestions. 

8)    The Leader thanked Cabinet colleagues and officers for their work and responsiveness to concerns. 

9)    Mr Hill noted that it was important that discretionary funds be restored when appropriate, as preventive measures were needed to support and maintain the quality of life for residents of Kent.

10)The Leader said that there were three key factors to focus on looking forward: to deliver sustainable budgets, to work with NHS and other partners and sustaining and improving the Council's capacity as a strategic authority. 

11)RESOLVED to agree to the recommendations as outlined in the report.