Meeting documents

Councillor Mordue

Cabinet Member for Finance, Resources and Compliance

To consider the attached information.

Contact Officer:  Andrew Small (01296) 585507

(a)       Decision(s)

That Council be recommended to accept the Government’s 4 year funding offer and to submit a link to the appendices attached to the Cabinet report as its Efficiency Plan and supporting evidence in order to satisfy the conditions of acceptance of the 4 year funding settlement for the period 2016/17 to 2019/20.

(b)       Reason(s) for Decision(s)

            Acceptance of the Government’s offer will create certainty over a significant part of the Council’s future resources and allow the Council to create Medium Term Financial Planning Targets with greater certainty over the amount required to balance the budget.

(c)       Alternative Option(s) Considered

            Not to take up the Government’s offer.  If this were the case RSG funding would be subject to the existing yearly process for determining local government finance, with all the uncertainties this entails.

(d)       Relevant Scrutiny Committee

            Finance and Services.  However as this matter will be considered by full Council, it is not subject to call-in.

(e)       Conflicts of Interest / Dispensation(s)

None.

As part of the December, 2015 spending review, the Secretary of State for Communities and Local Government had made an offer to councils to take up a four year funding settlement for the period 2016/2017 to 2019/2020.  In order to accept this offer, councils had to prepare an efficiency plan for publication by 14 October, 2016.  The Secretary of State had not issued guidance on what an efficiency plan should contain – a development welcomed by the local government community generally.

The offer made by the Government was to any council that wished to take up a four year funding settlement.  The purpose of the offer was to help local authorities prepare for the move to a more self-sufficient resource base by 2020.  The multi-year settlement was intended to provide funding certainty and stability for the sector, thus enabling more proactive planning of service delivery and to support collaboration with partners.  The Government expected these multi-year settlements to be used to strengthen financial management and efficiency, including maximising value in arrangements with suppliers and making strategic use of reserves in the interests of residents.

The Medium Term Financial Strategy agreed by Council in February, 2016 had incorporated the funding provided within the four year settlement offer.  However it had related only to Revenue Support Grant (RSG) which was a reducing proportion of total Council funding, currently £1.569m in 2016/17, decreasing to a negative figure (payment to the Government) of £0.687m in 2019/20.  If the offer was accepted it would provide greater certainty as the funding received would not be less than outlined in the final settlement and would not be subject to the yearly process determining the local government finance settlement.

The grant settlement number had always been a volatile and difficult to predict element of budget planning and the certainty provided by a four year settlement would allow the Council to plan with greater certainty in the later years of the MTFP period.  The following table was submitted showing the settlement funding assessment per year, including RSG:-

 The offer made by the Government was as follows:-

"On 9 February we provided summaries and breakdown figures for each year to your s151 Officer.  From those figures the relevant lines that are included in the multi-year settlement offer, where appropriate, are:

·         Revenue Support Grant;

·         Transitional Grant; and

·         Rural Services Delivery Grant allocations.

In addition, tariffs and top-ups in 2017-18, 2018-19 and 2019-20 will not be altered for reasons related to the relative needs of local authorities, and in the final year may be subject to the implementation of 100% business rates retention. The Government is committed to local government retaining 100% of its business rate revenues by the end of this Parliament. This will give them control over an additional £13 billion of tax that they collect. To ensure that the reforms are fiscally neutral local government will need to take on extra responsibilities and functions. DCLG and the Local Government Association will soon be publishing a series of discussion papers which will inform this and other areas of the reform debate.  The new burdens doctrine operates outside the settlement, so accepting this offer will not impact on any new burden payments agreed over the course of the four years. The Government will also need to take account of future events such as the transfer of functions to local government, transfers of responsibility for functions between local authorities, mergers between authorities and any other unforeseen events. However, barring exceptional circumstances and subject to the normal statutory consultation process for the local government finance settlement, the Government expects these to be the amounts presented to Parliament each year".

No guidance had been issued by the Government for the production of these efficiency plans but they must cover the full four year period and be open and transparent about the benefits they would bring to both the Council and the community.  Further, the Government did not expect this to be a significant burden on councils but rather a drawing together of existing corporate plans and strategies, and this had been this Council’s approach.

At the time that the Council had set its budget in February, 2016, the detail of what the Plan should contain, nor the process for accepting the offer had been known, and although Council had authorised the Director with responsibility for finance, after consultation with the Cabinet Member for Finance, Resources and Compliance to accept the offer, it had been agreed that if time permitted, a report would be submitted to Council.

It was reported that ultimately the process and the requirement for acceptance had been light touch and although no special report or strategy was required, it had been felt that a report should be made to Cabinet with a request that Council be recommended to accept the offer.

Council had already agreed the basis of its efficiency statement as part of its strategy for balancing the budget within its Medium Term Financial Plan.  This was an integral part of the budget adoption process in February, 2016 and the budget report approved by Council was reproduced as part of the Cabinet report.  In accepting the Government’s offer, the Secretary of State would be directed to this statement as demonstration of compliance with the terms of acceptance.

The Council had a proven track record of being innovative and creative in terms of its approach to identifying solutions to the budget gap created by the on-going reductions in Government Grant.  Evidence of this could be further found in the form of the two conferences which the Council had recently held for its peers to showcase the income generation and efficiency solutions it had developed.  A document illustrating this was also attached to the Cabinet report.

Accordingly, it was,

RESOLVED –

That Council be recommended to accept the Government’s four year funding offer and to approve the submission of a link to the Appendices to the Cabinet report as the Council’s Efficiency Plan and supporting evidence in order to satisfy the conditions of acceptance of the four year funding settlement for the period 2016/17 to 2019/20.