The Director of Corporate Resources will provide an oral update
under this item.
Mr. N. J. Rushton CC, Leader of the
Council, and Mr. J. B. Rhodes CC, Cabinet Lead Member for Corporate Resources,
have been invited to attend for the Medium Term Financial Strategy (MTFS) items.
A copy of the following documents is
attached for Commission members only:
·
MTFS Report considered by the Cabinet
on 11 December 2014
·
MTFS Report considered by the Cabinet
on 14 January 2015
·
The County Council’s response to the
Local Government Settlement
·
“Leicestershire’s
Future” Consultation on Draft Financial Plan 2015‐19
Minutes:
The Commission
considered an update from the Director of Corporate Resources concerning the
financial context and overall position of the County Council in respect of the
Medium Term Financial Strategy (MTFS) 2015/16 – 2018/19 which was set out in
the following documents before the Committee:
·
The
MTFS report considered by the Cabinet on 11 December 2014;
·
The
MTFS report considered by the Cabinet on 14 January 2015;
·
The
County Council’s response to the Local Government Settlement;
·
‘Leicestershire’s
Future’ – Consultation on the draft Financial Plan 2015-19;
·
A
briefing note setting out changes to the MTFS approved by the Cabinet for
consultation on 11 December.
The Chairman
welcomed to the meeting Mr. N. J. Rushton CC, Leader of the County Council and
Mr. J. B. Rhodes CC, Deputy Leader of the County Council to the meeting.
The Chief Financial
Officer, the Leader and the Deputy Leader all spoke. The Chief Financial
Officer provided a brief explanation of the changes to the MTFS since December
2014 and the overall impact on the four year MTFS. He then went on to highlight
the following issues:-
·
The
current Local Government Settlement was to 2015/16 and recognising that there
was a General Election due to be held in May 2015, the MTFS would need to be
revisited when local government settlements beyond 2015/16 were known. In this
regard there was the risk that an incoming Government could require the front
loading of savings;
·
Whilst
there was £28million growth provision for service pressures in the budget members
were advised that there remained in place significant cost and demand risks
relating to:
o the Government fully funding of the Care Act
proposals;
o the impact on social care budgets of the early
discharge of patients from hospital settings. In this regard it was reported
that the County Council had received a grant of £520,000 to address the
pressures on acute hospital caused by delayed discharges, but the grant had to
be spent by 31st March 2015;
o the pressure nationally to increase the level
of the minimum wage which in turn would be reflected in higher commissioning
costs particularly in relation to care services.
The Leader and the
Deputy Leader then advised the Commission on the Fairer Funding Campaign and
the implications for the County Council as follows:-
·
The
County Council had made strong representations to the Government about the
historic low level of funding for the County Council and the Leader would put
this case again to Rt Hon Eric Pickles MP, Secretary
of State for Communities and Local Government when he visited Leicestershire
the following day The Leader indicated that he had prepared a letter to pass on
to the Secretary of State. He indicated that he hoped for a response to the
letter before the Council’s budget meeting;
·
The
funding position was set out in the Annexe to the County Council’s response to
the Local Government Settlement. The implications of not obtaining a fair
settlement would mean the County Council having to make some unpalatable
savings and consider structural change, as set out in paragraph 14 of the
Annexe;
·
With
regard to the potential solutions to the fair funding issue set out in
paragraph 21 of the Annexe, members were advised that a Fairer Government
Funding and a fairer distribution of Business Rates and possibly localisation
of business rates would make a very significant difference. The other solutions
listed were to demonstrate that the County Council had explored other options
but recognised that these would create local difficulties.
In response to questions the Commission was
advised as follows:-
·
The
Administration recognised that the Fairer Funding campaign would not yield
immediate results but it was hoped that some progress could be made before
2016;
·
Given
the current position the Leader advised that even if there was no cap he would
not presently recommend a Council tax increase of more than 1.99%;
·
The
Administration welcomed the support given by the other parties to the broad
approach taken to address the challenges facing the Council.
RESOLVED:
That the update of
the Chief Financial Officer and the Leader and the Deputy Leader be noted and that the comments made at this meeting be
forwarded to the Cabinet for consideration at its meeting on 6 February 2014.