Agenda item

The Leader of the Council provided the Council with an update of business considered by Cabinet at its meeting held on 10 July 2019 (for copy see file of Minutes).

The Chair informed the Council that one question had been received from Councillor Craig Martin, in relation to Item 4 of the Cabinet Report (2018/19 Final Outturn for the General Fund and Collection Fund), as follows:

Considering there is a net underspend of £11 million from 2018/19 Final Outturn. Which resulted in an increase in earmarked reserves of £5.6 million, following a review of reserves, post year end.

Would the Portfolio Holder reallocate this money for spending on items identified by members for much needed extra funding such as highways, community centres, introducing 20mph speed limits, and dealing with backlog of dropped kerbs?

The Chair of the Council invited the Cabinet Portfolio Holder for Finance, Councillor A Napier to respond.

Councillor Napier thanked Cllr Martin for his question and explained that the cabinet report referred to clearly set out how the change in reserves was allocated as part of the close-down of the year end accounts.

Councillor Napier explained that all Councillors should understand the importance of the areas identified in the question and everyone was more than aware of all the financial pressures faced and dealt with by the Council. The Council needed to reflect that it had been through ten years of austerity, through which time it had managed its finances very well by maintaining investment in frontline services despite cuts made to grants year after year. Councillor Napier reminded the Council that over the last two years £12m had been invested in Children’s Services, whilst the government continued to reduce funding and that was why any decisions relating to the use of the budget were made as part of the Council’s budget setting process where all opposition groups had the opportunity to set out their proposals prior to the budget being agreed.

The Council had already agreed to use £5.5 million pounds of reserves to set the budget for the current financial year.

Councillor Napier looked forward to the budget debate taking place over the coming months through the established and transparent procedures that were already in place.

In response, Councillor Martin asked how a significant surplus of £11m had been generated and why the Council felt the need to spend this on PFI costs, academisation of schools and capital projects.

Councillor Napier explained that all Members ought to be aware of the excellence of the Council’s strategic financial management, throughout a period of ever reducing resources, going back to 2009. The Council prided itself on its medium-term financial planning and highlighted some of the uncertainties that the Council was facing, including the recently announced ‘spending round’, which detailed one-off areas for 2020 but nothing beyond that point. Councillor Napier questioned how the Council could plan on this basis.

Councillor Napier also informed the Council that delays to areas such as the fair funding review, comprehensive spending review and business rate retention, which incorporated the revenue support grant and public health grant and could potentially mean a reduction in revenue £18.6m in 2021 had been extremely unhelpful.

Finally, Councillor Napier referred to the Shared Prosperity Fund (the replacement for the European Structural Investment Fund) which the Council should have been consulted about in late 2018. The Council had been lobbying the government through the Industrial Communities Alliance around three very important areas - What is the amount? How will it be distributed? and What are the governance arrangements? The government had been non-committal in respect of these matters.

Councillor Napier explained that the areas highlighted were very important, however, it was imperative to continue with the budget setting process as opposed to choosing one-off areas.