The report of the Chief Executive and the City Treasurer is now enclosed.

A report submitted by the Chief Executive and the City Treasurer out the background and the context for the suite of reports being considered at the meeting that constituted the Council’s budget proposals for 2019/20 and beyond. The report examined and explained:

·         the priorities that had shaped the three year Strategy;

·         progress to date, building on the recent State of the City analysis;

·         a summary of the financial position; and

·         the required statutory assessment of the robustness of the proposed budget.

The next year, 2019/20, was to be the last year of the Government’s four-year local government Finance Settlement. The future beyond 2019/20 was uncertain and the principal uncertainties were described in the report.

The report examined the development of the 2019/20 budget and the many budget changes that had been made throughout 2018/19 that were part of the context for the 2019/20 proposals.

The report explained the savings proposals contained in the 2019/20 budget. The budget also included proposals for additional investment above that originally planned as part of the 2018/19 budget setting process:

·         £4.6m additional investment into Children’s Services to address budget pressures due to the increased number of placements for looked after children as well as seeking to release resource for early help and prevention, and a further £150k for Youth Services;

·         £7.6m (rising to £8.0m for years 2 and 3) into adult social care to ensure service stability and that residents can access services on a timely basis;

·         £500k to support further action to tackle littering, fly-tipping and poor business waste management;

·         £255k to support food inspections;

·         £500k for enhanced enforcement activity in the private rented sector, as part of the homelessness budget; and

·         £1.1m for welfare related support funded from additional council tax revenues in 2019/20, with the intention being for these costs will to be met from additional Council Tax income relating to the proposed changes to empty property reliefs.

The report showed how as a result of additional monies announced by Government a balanced budget was now anticipated for 2018/19. A balanced budget was also being proposed for 2019/20. The overall position was:

It was explained that the Local Government Act 2003 required the City Treasurer as the Chief Finance Officer to report to the authority on the robustness of the estimates made for the purposes of the calculations and the adequacy of the proposed financial reserves. The report set out the City Treasurer’s assessment.

The City Treasurer had examined the major assumptions used within the budget calculations and had carried out sensitivity analysis to ascertain the levels of potential risk in the assumptions being used.  The key risks identified to the delivery of a balanced budget and their mitigation were set out in the report.

It was the opinion of the City Treasurer that any significant budget risks to the General Fund and the Housing Revenue Account had been identified and that suitable proposals were being put in place to mitigate against these risks where possible. The Council’s Budget Monitoring procedures were well established and designed to monitor high level risks and volatile budgets. An assessment of anticipated business rates income had been carried out based on the information available and provision had been made for outstanding appeals. The provision was considered to be a prudent.  The City Treasurer considered that the assumptions on which the budget had been proposed, whilst being challenging, were manageable within the flexibility allowed by the General Fund balance. This, and the fact that the Council holds other reserves that can be called on if necessary, meant that the City Treasurer was confident that overall the budget position of the Council could be sustained within the overall level of resources available.

Thanks were expressed at the meeting for the hard work of the City Treasurer and all the Council’s staff who had contributed to the preparation of the budget and business plans.

Decisions

1.         To agree to consider the proposed Revenue Budget and Capital Strategy in the context of the overarching framework established in this report.

2.         To note the City Treasurer’s review of the robustness of the estimates and the adequacy of the reserves.