Agenda item

To consider the attached report (FPM-020-2018/19).

The Assistant Director Accountancy presented a summary of the detailed directorate’s budgets for 2019/20. The budgets were presented on a directorate by directoratebasis in line with the revised management structure. It contained some background to each service heading and any CSB (Continuing Services Budget) and DDF (District Development Fund) changes proposed. This was the member’s opportunity to comment and make recommendations prior to the budget being formally set on 21 February 2019.

 

Initially the budget setting process commenced in July 2018 with the presentation of the Financial Issues Paper which incorporated the Medium Term Financial Strategy (MTFS), which confirmed an identified savings target for 2020/21 and 2021/22 of £0.3 million. Furthermore, the settlement figures that had been provided in December 2015 for the four year period had subsequently reduced, although appearing slightly better than expected for 2019/20. It included a reversal of the previous decision on a Negative Revenue Support Grant worth £280,000 and a New Homes Bonus allocation of £452,000. The MTFS had previously assumed the CSB element would drop to £116,000 going forwards and given the volatile nature and potential revisions to the formula, it was seen prudent to reduce the CBS slightly to £100,000, whilst putting the rest into the DDF. The CSB lists now showed a reduction of £749,000 over the three year period from 2019/20 with £900,000 being diverted to the DDF in 2019/20 and 2020/21. There was also a one off windfall in 2019/20 of £50,000 which related to the redistribution of surplus Business Rates levy income collected by Central Government.

 

The commitment made to move to 100% retention of Business Rates locally had changed to 75% during 2018/19 and a consultation had been launched with responses required by 21 February. The Essex authorities (excluding Thurrock) had applied to be a pilot status, although the county had not been successful and it was expected that the current retention proportions (40% District, 9% County and 1% fire) would change.

 

Furthermore, Support Service Allocations had now been made discretionary and the budget had been prepared on the basis of allocations only to the HRA and corporate activities.

 

The new Council structure and budget databases had to be created and prepared by the end of October 2018 to enable budget process, although it had included the Governance and Member Services directorate which had now been removed. The intention was to disaggregate Governance and Members Services budget when the formal budget papers were put together.

 

The budgets highlighted areas where either Continuing Services Budget (CSB), District Development Fund (DDF) savings or growth and Invest to Save (ITS) expenditure had occurred and that ITS in particular, included with the budgets relating to revenue items only. Each budget was presented by the relevant Service Director.

 

Chief Executive

 

The Assistant Director Accountancy advised that budget was made up of support services and corporate activities. The original estimate for 2018/19 had been expenditure of £994k with a probable outturn of £981k. The net decrease had been attributed to the Corporate Fraud Investigation Team actively selling their services to other authorities.

 

Business Support Services

 

The Assistant Director Accountancy reported that the service area was responsible for providing support to the other service areas including business support, ICT, accountancy and the People Team.

 

He advised that the probable outturn for 2018/19 was £4.6m with net expenditure of £3.5m. The reason for most of the movement was the ICT Strategy and the large negative figure in 2019/20 related to the People Strategy and was included under Finance Miscellaneous until further details could be provided.

 

Commercial & Regulatory Services

 

The Commercial & Regulatory Services Director advised that the service area brought together the Commercial functions, Environmental Regulatory services, Emergency Planning, Risk Management and North Weald Airfield operations.

 

He advised that the probable outturn 2018/19 was £3.6m with the net expenditure of £4.1m in 2019/20. The increase had been due to the Shopping Park £2.2m contribution which would increase to £2.5m 2019/20. There were also rises expected in the business premises income of £100,000 which could rise further when the details of the Land Mark building lets were finalised. Furthermore, the Saturday market contractor at North Weald Airfield had been finding trade difficult and their income had reduced in the last two quarters. A reduced rental income had been agreed and the Council had exercised their right to retender, in the hope that a better income stream could be provided.

 

Community & Partnership Services

 

The Community & Partnership Services Director advised that service area now included Economic Development in conjunction with Planning Services and Private Sector Housing, Museum and Heritage and Community Safety Services.

 

The probable outturn for the 2018/19 was £3.5m and the next expenditure for 2019/20 was £3.8m. The uplift and expenditure at the year end and within 2019/20 related to the DDF item of the appointment of the three funded Police Officers and for Town Centre Support, Strategy and Smart Place Work, which was part of the economic development. Also in the Economic Development budget there was £350,000 for superfast broadband. 

 

Contract & Technical Services

 

The Acting Chief Executive advised that the service area brought together Technical service, contracts, the Waste and Leisure Contracts.

 

The probable outturn for 2018/19 was £7.6m and would reduce to £6.7 in 2019/20, which had been driven by the additional income through the leisure and car parking contracts. The new car park tariffs would generate around £300,000 and the leisure management contract would deliver the £1m savings per annum. There was also a £100,000 DDF item for Match Funding the County Highways Panel.

 

The waste and recycling markets continued to be under pressure to find other outlets for the waste and recycling products and the Council had a risk share arrangement that would need to be considered and incorporated into the budget. The Contaminated Land and Water Quality budgets continued to fluctuate, although this was a reactive service. 

 

Customer Services

 

The Customer Service Director advised that service area brought together Revenues and Benefits, Customer Services and going forward it would include Governance and Members Services.

 

The probable outturn for 2018/19 was £3m and would increase slightly to £3.2m for 2019/20. There was a single CSB saving of £70,000 from the People Strategy in both 2018/19 and 2019/20, which related to post now deleted. The DDF included the People Strategy implementation costs of £126,000 and costs relating to additional staffing to improve revenue collection, although the Council received precepts that more than covered the associated costs and a one-off grant to help with the new burdens placed on the Council from Central Government.  

 

Governance & Member Services

 

The Customer Service Director advised that the service area included Members Services, Elections, Transformation and Legal. The Leadership Team had reviewed the services and allocated the services into other areas for 2019/20. The Legal services would now come under Business Support Services, Governance and Members Support under Customer Services and Transformation would now fall under the Strategic Director level.

 

The probable outturn for 2018/19 was £2m and the net expenditure was £1.8m for 2019/20. The largest items of DDF related to Transformation, the Service Accommodation Review and election costs and similarly in 2019/20, the costs were associated with Transformation and election. The biggest savings had come from the salary savings from within the People Strategy.

 

Housing & Property

 

The Acting Chief Executive advised that the service area included Property Maintenance, Housing and Development.

 

The probable outturn for 2018/19 was £699,000 and would reduce to a net expenditure of £634,000 in 2019/20. The largest change to CSB was in relation to the People Strategy which provided £27,000 in 2018/19 and £47,000 in 2019/20. The DDF item was in relation to the Building Maintenance programme which was £253,000 in 2018/19 and in terms of probably outturn £160,000 in 2019/20. 

 

Planning Services

 

The Planning Services Director advised that the service area included Planning Policy and Development Management including the Local Plan.

 

The probable outturn for 2018/19 was £2.02m and would increase to a net expenditure of £2.9m. The fluctuations were due to the DDF items in 2018/19 from the Garden Town Project which was expected to be spent the following year. Additional income was expected in 2018/19 and 2019/20 from Development Control which was to be spent purely on planning services. The Local Plan had now been submitted and further DDF expenditure had been allocated.

 

HRA

 

The Assistant Director Accountancy advised that some of the expenditure and income allocated to the HRA was governed by legislation and were therefore not controlled by the Council. The budget related to the management and maintenance of council properties and 25% of the total costs were charges for corporate activities.

 

He advised that the probable outturn for 2018/19 was £409,000 followed by a surplus of £29,000 in 2019/20. Also a transfer of £500,000 was anticipated to be transferred to the Self-Financing Reserve in 2019/20. It was also worth noting was that there were 53 weeks in 2019 and clarification was required on whether the 1% rent reduction was required each week or across the year.

 

The Leader thanked the officers for the detailed budgets and the work which had been involved to incorporate the changes in the responsibilities within the new service areas.   

 

Recommended:

 

(1)          That the detailed directorate budget for Community & Partnership Services be recommended to the Cabinet for approval;

 

(2)          That the detailed directorate budget for Commercial and Regulatory Services be recommended to the Cabinet for approval;

 

(3)          That the detailed directorate budget for Housing and Property Services be recommended to the Cabinet for approval;

 

(4)          That the detailed directorate budget for Planning Services be recommended to the Cabinet for approval;

 

(5)          That the detailed directorate budget for Contract and Technical Services be recommended to the Cabinet for approval;

 

(6)          That the detailed directorate budget for Business Support Services be recommended to the Cabinet for approval;

 

(7)          That the detailed directorate budget for Customer Services be recommended to the Cabinet for approval

 

(8)          That the detailed budget for the HRA be recommended to Cabinet for approval.

 

Reasons for Decision:

 

To give Members an opportunity to review and provide recommendations on the detailed budget prior to adoption by Council.

 

Other Options Considered and Rejected

 

Other than deciding not to review the budget there were no other options.