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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 09/01/2007
FINANCIAL STRATEGY 2007/2008 – 2009/2010
GENERAL FUND BUDGET UPDATE 2007/2008



Summary & Purpose
This report updates the Executive on the latest position regarding the General Fund Budget. It contains proposals for reducing the Budget shortfall for which the Executive is requested to give consideration.

The proposals from the Executive will be the subject of consideration by meetings of the Overview and Scrutiny Committees during January. The Executive will give final consideration to the Budget on 6th February 2007, including the comments reported from the Overview and Scrutiny and Licensing Committees, before making recommendations to Council on 20th February 2007.

APPENDIX B.1
Waverley Borough Council

Executive - 9th JANUARY 2007

Title:
FINANCIAL STRATEGY 2007/2008 – 2009/2010
GENERAL FUND BUDGET UPDATE 2007/2008
[Wards Affected: All]

Summary and purpose:

This report updates the Executive on the latest position regarding the General Fund Budget. It contains proposals for reducing the Budget shortfall for which the Executive is requested to give consideration.

The proposals from the Executive will be the subject of consideration by meetings of the Overview and Scrutiny Committees during January. The Executive will give final consideration to the Budget on 6th February 2007, including the comments reported from the Overview and Scrutiny and Licensing Committees, before making recommendations to Council on 20th February 2007.

Environmental implications:

There are no direct environmental implications as a result of the recommendation of this report. However, the estimates do include services that do have very significant environmental benefits.

Social / community implications:

There are no direct social/community implications as a result of the recommendation of this report. However, the estimates do include services that do have very significant social/community benefits.

E-Government implications:

The Estimates contain budgets to enable the delivery of Waverley’s E-Government Strategy.

Resource and legal implications:

There are no direct legal implications as a result of the recommendation of this report. Resource implications are contained throughout the report.

Introduction

1. The draft 2007/2008 General Fund Revenue Estimates were presented to the Executive on 5th December 2006. Members are requested to refer to the detailed Estimates contained at Annexe 1 to the Budget Item for that meeting and to bring these papers to the meetings in January.


The Revenue Support Grant Settlement 2. Waverley’s provisional Revenue Support Grant Settlement for 2007/2008 was received at the end of November. The key figures were reported to the Executive on 5th December.

3. The details of the Settlement are:
As expected, the headline increase in Waverley’s Grant for 2007/08 is 2.7%
Waverley actually receives a cash increase of 2.6% being 146,000
Council Tax capping remains – The Government expects increases to be below 5%

Budget Summary 4. The latest Budget position is shown on the Budget Summary at Annexe 1.

5. This has been adjusted in line with the actual Revenue Support Grant and Redistributed NNDR figures. Surrey County Council has advised that the increase on Superannuation Backfunding from 1st April 2007 will be 4.4 % and the Budget Summary now includes the resultant cost to the General Fund of 33,750. The Budget Summary shows the need to achieve a shortfall of 302,000 in order to restrict the Council Tax increase to 3.9%, in line with the latest Retail Price Index (RPI). The Executive has indicated a desire to restrict the increase in Waverley’s element of Council Tax to the level of inflation.

Potential Reductions

6. Following the Executive of the 5th December, the Management Team commenced the process of examining the draft Budget for further possible reductions. The Budget Monitoring process to the end of November has also identified several ongoing savings and these are included in the list of potential reductions as shown at Annexe 2. This annexe includes an appraisal of the impact of these reductions, which total approximately 273,000.

Budget Strategy

7. The Executive has indicated a desire to restrict the increase in Waverley’s element of Council Tax to the level of inflation. The latest increase in the RPI Index (to the end of November) is 3.9%. The suggested reductions put forward, together with the effect of the new tax base and the Collection Fund position, should deliver a Council Tax increase of 3.9%.

Capital Programme

8. The draft Capital Programme was presented to Members during the November/December cycle of meetings. The Executive requested that the Overview and Scrutiny Committees receive a revised presentation of this statement in January to show clearly the movements in budgets between the years. The format of the Programme attached at Annexe 3 is designed to show this and will be presented to each Overview and Scrutiny Committee.

Local Authority Business Growth Incentive Grant

9. Last February, the Government awarded Waverley 435,000 for the first year of the Local Authority Business Incentive Growth Scheme (LABGI). Grants under the scheme will be awarded to local authorities for three years. The Government has been reviewing the criteria and operation of the scheme during the past year and have indicated proposed changes to be introduced from February 2007. Officers have examined the information available and calculate that Waverley should receive at least as much in 2007 as 2006 and on the basis of the proposed changes Waverley would receive a considerably higher figure.

10. However, The Government is still considering representations and state that they may introduce further substantial changes prior to the grants being announced. In particular, Waverley would suffer if a stringent ceiling were re-introduced, which would limit amounts paid in order to spread the grant more evenly across other authorities. Therefore, it would clearly not be prudent to allow for the receipt of the LABGI grant within the Revenue Budget. The Management Team’s advice will be that any grant received should be transferred to the Revenue Reserve Fund as was agreed last year.

Conclusion

11. The Overview and Scrutiny and Licensing Committees will give further consideration to the Budget at their meetings in January. Comments made at these meetings will be reported to the next meeting of the Executive on 6th February 2007, which will agree final recommendations to Council on 20th February 2007.

Recommendation

It is recommended that the Executive:

1. gives further consideration to the General Fund Budget for 2007/2008; 2. considers the list of suggested Budget reductions at Annexe 2, which will be discussed by the Overview and Scrutiny and Licensing Committees; and
Background Papers (DoF)

Provisional Local Government Finance Settlement 2007/08; Financial Strategy 2007/08 – 2009/10; Finance Seminar slides; Community Strategy; Revenue Budget 2006/07.

CONTACT OFFICER:

Name: Brian Long Telephone: 01483 523253

E-mail: blong@waverley.gov.uk







Comms/exec/2006-07/273