The
Director of Corporate Resources will provide an oral update under this item.
Mr. N. J. Rushton CC, the Leader of the Council has been invited to attend for
the Medium Term Financial Strategy (MTFS) items.
A copy
of the full MTFS Report and appendices considered by the Cabinet on 13 December
2016 is attached for Commission members only on PINK paper.
Minutes:
The
Committee considered an oral report of the Director of Corporate Resources
concerning the context and overall position with respect to the Council’s
Medium Term Financial Strategy (MTFS) 2017/18 to 2020/21.
The
Director reported the following matters:
·
This year’s MTFS represented the Council’s seventh “austerity”
budget. The “Fairer Funding” campaign remained crucial to the Council’s
financial outlook as Government grant was expected to disappear completely by
2020;
·
Of the Council’s planned £68 million savings programme, £44
million had been identified, leaving a funding gap of £24 million. Around 15
areas of the Council’s business had been identified as a means of attempting to
address this gap, though it was known that even if all were to be pursued to a
successful conclusion they would not fully bridge the gap;
·
Since the circulation of the MTFS report to the Cabinet’s meeting
in December there had been some changes to the MTFS, which were mostly
positive. These included a new Adult Social Care Fund of £2.4 million, an extra
£1.3 million which could be harnessed through Council Tax and business rates,
one-off funding of £200,000 for education services and a new £2.8 million
highways grant. There were other funding opportunities available in Highways
and Transportation;
·
It was hoped that significant savings could be harnessed via a
change in the way Council Tax was organised across the districts;
·
Pooling of business rates would enable the Council to make up to
£4 million this year and up to £6 million next year.
The
Chairman welcomed to the meeting the Leader of the Council, Mr. N. J. Rushton
CC to the meeting. The Leader reported the following matters:
·
The Cabinet Lead Member for Finance, Mr. J. B. Rhodes CC had been
unable to attend today’s meeting as he was attending a County Council’s Network
meeting on the Council’s “Fairer Funding” campaign. It was hoped that the
Council’s funding model would be adopted across the country and whilst it had
received general support there were some councils who would be worse off as a
result. The Council maintained a strong relationship with local MPs and it was
felt that all were in agreement with the funding model the Council was
proposing;
·
The 1.99% increase in council tax alongside the 2% levy for adult
social care was the maximum that Leicestershire families would be able to cope
with in the present financial climate. The Council could have chosen to front
load the increases by having two 3% rises followed by a 0% rise in the third
year of the MTFS. This approach would have led to an increased resources
of around £8 million though it had been
a political decision to phase the increases over three years, making it more
manageable from the point of view of the public;
·
The Secretary of State for Communities and Local Government, Sajid Javid MP would be attending
a County Council meeting relating to the Combined Authority proposals and this
meeting would be used as an opportunity to press the need and urgency for
Leicestershire’s funding model to be adopted.
Arising
from questions from members, the following points were noted:
·
In response to concerns that rising demand for SEN education was
making it difficult to sustain the budgetary position, it was noted that there
was a plan in draft form which aimed to address the need for provision of
sufficient SEN placements within the County as out of County and independent
placements came at a high financial cost to the Council (£60,000 per pupil). It
was hoped that a free school could be established to enable those with SEN to
be placed locally. The Children and Families Overview and Scrutiny Committee
would be pursuing this issue as part of its work programme;
·
The Council’s response to the financial settlement had been sent
to the Government. A copy of the response would be provided to members
following the meeting;
·
The national concern about the current state of the NHS largely
related to “bed blocking”, the picture locally was different and was known to
be based more around the provision of community hospital beds;
·
No details had yet been established for the basis on which
business rates would be retained by local authorities. A consultation exercise
was expected to be launched nationally in the coming weeks.
RESOLVED:
(a)
That the information provided be noted;
(b)
That the comments of the Commission be forwarded to the Cabinet
for consideration at its meeting on 10 February 2017.