Agenda item

(1)       This report set out the context at both the national and local level within which the County Council’s Medium Term Financial Plan would be framed over the next three years.

(2)       The report highlighted the three critical issues facing KCC and the rest of local government at the moment as follows:-

(a)       the totality of resources between now and 2011 that are available at a national level for Council services which were set out in the Comprehensive Spending Review 2007;

(b)       how the Council balances increasing demands on its services due to demographic and wider socio-economic change, government imposition of new burdens, climate and environmental change, rising customer service expectations and the Council’s own aspirations for continued innovation and improvement in services at a time of nationally and locally constrained resources; and

(c)        how the Council responds and reacts to the “credit crunch” and the more recent rapidly escalating rises in inflation which was now above the target set for the Bank of England by the Government.

(3)       Mr Chard also highlighted the issues set out on page 2 of the Cabinet report which detailed the areas of most concern for KCC and its partners.  Cabinet noted in particular pressures arising from the way the Dedicated Schools Grant was allocated and Post 16 funding was also highlighted as an area which needed careful consideration and discussion.  Also, should the responsibilities of the Learning and Skills Council be transferred to KCC then that would also create a financial pressure.

(4)       The report further highlighted concerns arising from the continuing grey area in responsibility between the NHS and Local Authorities for the provision of some aspects of health and social care.  The transfer of functions from health to KCC needed to be properly funded as failure to do so would present the County Council with a major risk.  There was  a particular risk associated with the costs arising from the transfer of responsibility for the long term disabled to local authorities and this would have to be included as a specific pressure in the Medium Term Financial Plan.  With regards to reserves the report said that the Director of Finance and the Council’s external auditors have as required, considered the level of general reserves which currently stand at £25.8m to be sufficient to meet the balance of risk. 

(5)       Following further discussion Cabinet:-

(a)       noted the key conclusions from the report as set out in the summary;

(b)       that KCC had developed and strengthened its policy-led budgeting still further in order to ensure that it optimised the allocation of constrained resources to meet local priorities;

(c)        noted the financial planning risks for KCC as set out in paragraph 92 onwards of the Cabinet report;

(d)       agreed that as part of the development of the Medium Term Financial Plan  the responsibility for the long term disabled would be included as a specific pressure.

(e)       the proposed Medium Term planning milestone dates set out in Appendix 1 of the Cabinet Report be noted.