Agenda item

The Cabinet Member for Finance, Growth and Investment introduced an update report on the Council’s Medium Term Financial Strategy (MTFS) which focussed on the proposals to address the 2017/18 budget gap, the potential impact on the MTFS of the Chancellor’s March 2016 Budget Statement and the delivery of the Ambition 2020 programme.

In December 2015, the Department for Communities and Local Government (DCLG) announced an offer to Councils of a provisional four-year settlement. The Cabinet Member explained that accepting the offer would provide the Council with a degree of financial certainty going forward and, with reference to the link between the MFTS and the Ambition 2020 programme, suggested that the savings that the latter would ultimately realise would lessen the impact on residents as well as protect jobs. 

The Cabinet Member added that the MTFS that was approved by the Assembly earlier in the year was based on a number of assumptions and estimates at that time.  Changes to the Council’s prevailing financial position, a reassessment of the assumptions applied and a re-examination of service needs in the light of the Ambition 2020 programme had resulted in the proposed rescinding of savings ACS/SAV/12a, CEX/SAV/54 and CEX/SAV/54g and write-off of saving ACS/SAV/36 for the reasons detailed in the report.  The Cabinet Member also introduced a proposal to rescind saving CEX/SAV/73, which would have involved reverting to the statutory redundancy pay scheme from October 2016, as a consequence of the positive outcomes from the current voluntary redundancy scheme and the limited impact that moving to the statutory scheme would have on future redundancy costs to those that would be eligible, the majority of whom were on the lower pay grades.

The Cabinet resolved to:

(i)  Agree to accept the Department for Communities and Local Government (DCLG) four-year local government settlement, as set out in paragraphs 3.3 and 3.4 of the report;

(ii)  Agree to use the “Council’s Response to the Growth Commission and Ambition 2020” report to Cabinet on 19 April 2016 as the basis of its Efficiency Plan statement, to be submitted to DCLG by 14 October 2016;

(iii)  Agree to the growth items required in the MTFS, as set out in section 8 of the report;

(iv)  Agree to reverse savings proposal ACS/SAV/12a, agreed by Minute 71 (16 December 2014), in respect of funding for the Citizens Advice Bureau savings in order to support the Council’s Community Solutions approach, as detailed in paragraph 8.3 of the report;

(v)  Agree to reverse savings proposals CEX/SAV/54 and CEX/SAV/54g, agreed by Minute 31 (7 October 2014) and Minute 71 (16 December 2014) respectively, in relation to proposed Insurance and Freedom of Information shared services with Thurrock Council which are not now being progressed, as detailed in paragraph 8.5 of the report;

(vi)  Agree to write off savings proposal ACS/SAV/36, agreed by Minute 71 (16 December 2014), in relation to the Leisure Trust proposals to avoid double counting in the MTFS, as detailed in paragraph 8.4 of the report;

(vii)  Note the proposed savings targets from the A2020 programme, delivering £9.8m savings net of costs, as outlined in Appendix 1 of the report;

(viii)  Note that the Medium Term Financial Strategy budget gap had increased to £66m following revisions to assumptions, the amendments referred to above and a further projected cut of £6m by 2020/21 in the funding received from Government;

(ix)  Note that Ambition 2020 was forecast to deliver savings of £45.5m by 2020/21 and savings of £9.2m for 2017/18, which reduced the Council’s budget gap to £21m by 2020/21;

(x)  Approve the use of £2.3m of reserves as a one-off saving to balance the 2017/18 budget position;

(xi)  Approve the use of un-earmarked capital receipts to fund the cost of the Ambition 2020 transformational programme in line with the statutory guidance issued by DCLG, as set out in paragraph 7.9 of the report; and

(xii)  Agree to reverse savings proposal CEX/SAV/73, agreed by Minute 71 (16 December 2014), in respect of the cessation of the redundancy multiplier (x1.5) and reverting to the statutory redundancy pay scheme from April 2016 (later deferred to October 2016), following the positive outcomes from the current voluntary redundancy scheme and the limited impact that the removal of the multiplier would now have on future redundancy costs relating to the remaining long-serving staff who joined the Council prior to 1 January 2007, the majority of whom were on the lower pay grades.