Agenda item

Report of the Head of Finance (attached on the website and circulated as a separate printed pack)

This report will be considered by Cabinet on 13 February and by Council on 20 February.

Purpose: the committee is asked to consider the report and the budget proposals and make comments and recommendations to Council.

The committee considered the report of the Head of Finance to Cabinet on 13 February 2014. Council would consider the report, the recommendations of Cabinet, and any recommendations from this committee on 20 February 2014.

Mr D Dodds, Cabinet Member, Mr W Jacobs, Head of Finance, and Mr S Hewings, Shared Accountancy Manager, introduced the report.

In answer to questions from the committee, they and Mr Steve Bishop, the strategic director, reported that:

·         Page 85 - The Didcot and Science Vale item shown as deleted was only for one year’s funding in 2013/14.

·          Page 87 - Notification of central funding to support the Localism Act 2011’s community right to bid in 2014/15 was given in the last government settlement. This has been built into the budget.  The notification did not discuss payments in future years so it is treated this as one-off in 2014/15 only. Previously the funding for community right to bid/challenge was not received in time to include in the budget. 

·          Page 96 line 11 – The reduction in car park budget arises from some small realignments of budgets to the levels of actual costs experienced in 2012/13, which are also expected in 2014/15. The car park account is anticipated to have a steady income over the next three years with modest reductions to expenditure and therefore is not expected to result in the council generating a significant surplus on its car parks.

·          Page 96 line 14 - Most of the reduction in the housing benefit budget is due to being able to reduce the bad debt provision due to good overpayment collection rates. The council's housing benefit expenditure is over £30 million, so the variance is a very small percentage of this.

·          Page 101 - Calculation of contingencies had changed to reduce the overall amount held. A central £200,000 contingency fund was available should the new calculations underestimate the amounts required for individual projects such as housing advice. Removing individual projects’ contingency funds should also provide more accurate quarterly forecasting.

·          Page 103 - CMTR -6  A written answer on the purpose of the growth bid for a feasibility study for the Didcot gateway site and how this fitted in with the public exhibition that has already taken place would be supplied.

·          Page 107 - An increase in the garden waste collection charge was considered, but the current charge was reasonable and sufficient to provide the service.

·          Pages 81 and 120 - The community investment fund grant scheme had been renamed Community Capital Grant Scheme

·          Page 121 – ‘Land Drainage 036’ relates to outstanding drainage works that will be required at Ladygrove, Didcot, once the Ladgrove East development has received planning consent.  The full works required for a fully adequate scheme and their associated funding will be negotiated as part of any s106 agreement for the development.

·          Page 121 - The budget for Didcot leisure centre has increased to reflect changes to the project and associated costs since planning for this started. Delays are related to access to the land; however these should be resolved. The leisure mix for the new facility will be brought to the scrutiny committee and then agreed once the design is completed. Later in 2014, officers will also be in a position to deliver on the motion passed at Council on 24 October 2013 "Council recommends Cabinet consult widely with Didcot residents and those living within a 10 mile radius of Didcot on plans for Didcot Wave before any decisions are taken on its future and brings any proposals about the new Didcot Leisure Centre mix of facilities to Scrutiny Committee before making decisions that could impact on Didcot Wave".

·          Page 137 - The medium term financial strategy, to be considered by Council, recommended keep £50 million in reserves. It was expected that interest rates would increase in the longer term. Previous budgets have been prudently cautious and tended to overstate expenditure.  The budget was the best estimate of expenditure and income however if was still prudently set and so there remains a risk of an underspend. There were still savings which could be made by more cost-effective and larger private sector contracts and projects such as the current accommodation sharing.

·          The inflation figure used was the net of the inflation added to both income and expenditure budgets.

Councillors raised concerns and made comments:

·          Would the land drainage scheme at Ladygrove, Didcot, be comprehensive enough to prevent flooding, or be curtailed by the funding the developer was willing to provide?

·          There were concerns over delays to Phase 2 of the Orchard Centre in Didcot and the effect on traders on Broadway, given the uncertainty over the new Homes Bonus in the longer term and the economic challenges.

·          The list of lead officers for capital schemes should be updated so that councillors could contact those managing schemes in their wards.

·          Given the proposed use of reserves and the uncertainty over the continuation of funding such as the New Homes Bonus, there was a serious financial threat to the council’s viability in the longer term which could prove difficult to address in future years.

The committee noted that the budget set out in the report to Cabinet would be considered by Council on 20 February and made no recommendations or comments for changes to this.