Agenda item

The Service Director Finance will present an update on the 2018/19 Budget Setting and Minimum Term Financial Strategy.

The Service Director, Finance, introduced the presentation by outlining the policy changes impacting on the budget.  These included the ability to raise Council Tax by 3% and implement the 1.5% precept for adult social care.  Income from business rates had been confirmed as had Revenue Support Grant.

Members noted the NJC pay award of 2% in 18/19 and 19/20, and with greater increases  for lower grade staff, which was materially different from previous assumptions.  Also noted was the investment in 14 additional children’s social workers, and the financial pressures from demographics in excess of previous predictions, particularly in relation to looked after children, and the cost of out of borough placements.

Members questioned the reasons behind the increased costs in relation to looked after children.  It was noted that this was broadly in-line with other comparable authorities, but there was a national upward trajectory in costs for responding to complex care needs.  Members noted that this area was considered as part of the placement sufficiency strategy

The committee was made aware of the current position of the Medium Term Financial Strategy which was balance if all assumptions made held true. These assumptions included the delivery of foundation living wage for all BMBC workers, and £1.7m towards contractors paying the living wage. They also included the delivery of efficiency savings to the value of £4.4m in 2018/19, and limited investment in highways, children social care and housing.

Noted was the assumption that the collection rates for business rates and council tax remained stable, and that all Better Care Fund finance would be received by the council for adult social care.  Members also noted the 1% reduction in housing rents.

A net budget of approximately £169m was noted. Members questioned whether there had been any significant changes to the Core, and whether this impacted on governance.  Within the Core the only items of note were the delivery of previously agreed efficiencies, and the pay award. However it was suggested that if further savings were required in this area, this could have a greater impact.

The committee were apprised of the current situation with regards to reserves and balances.  It was noted that additional capital receipts, improved final accounts due to underspend, and the new homes bonus had increased the balance to 78.1m.  The previously approved capital investment of 55.4m reduced this to 22.7m.

Members noted that planned use of the remaining reserves, including transferring 6.5m to the contingency budget for Glassworks, 2m of investment in IT infrastructure, which had seen previously underinvestment, the purchase of a commercial site in Elsecar, and increasing the network coverage of superfast broadband.

In addition to the capital investment, reserves had been earmarked to facilitate the accumulated deficit in relation to Special Educational Needs, and to respond to the changes in government policy in regards to debt.

Questions were raised relating to the 5m of overspend in relation to Special Educational Needs, and it was noted that this had been a complex area to manage.  Members acknowledged that this was part of a national issue regarding the demand placed on Schools High Needs Block Funding.

With regards to the further 6.5m to the Glassworks contingency budget, it was noted that this was to bring back the contingency budget to 10m, following cost overruns.  It was suggested that further overruns were less likely to be seen in the following phase once relevant consultants were in place, but it was also noted that the delivery of the Glassworks remained a high priority for the Council.

Members queried the small amount of reserves remaining, and it was noted that this was in addition to the minimum working balance of 15m, and that should additional demand be placed on the budget, this would require de-prioritisation in other areas.

The Committee discussed the collection rate of council tax in some detail, and the likelihood this could be maintained given the increases.  It was noted that rates were historically high in Barnsley, and that the policy on collecting debt had been recently reviewed to be more supportive to those in arrears. Also noted was the hardship relief scheme for the most vulnerable. It was suggested that the relatively static population of Barnsley could have a positive impact on collection rates.

Members noted that the financial position was balanced for the 2018/19 financial year, and stable for 2019/20, but that there was uncertainty from 2020 onwards.  This was as a result of a number of factors including Brexit, devolution, changes to business rate retention, and the outcome of the local government fair funding review.

RESOLVED:-

(i)            that the Service Director, Finance, be thanked for the presentation; and

(ii)          the content of the report and presentation be noted.