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Meeting of the Environment and Leisure Overview and Scrutiny Committee held on 15/01/2008
General Fund Revenue Estimates 2008/2009


APPENDIX D
Waverley Borough Council

environment and leisure overview and scrutiny committee
15TH JANUARY 2008
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Title:
GENERAL FUND REVENUE ESTIMATES 2008/2009
[Portfolio Holder for Finance: Cllr M H W Band
Portfolio Holder for Leisure: Cllr R Steel]
[Wards Affected: ALL]
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Summary and purpose:

This report updates the Committee on the latest position regarding the General Fund Budget and contains the information reported to the Executive on 8th January. Proposals from the Star Chamber for reducing the Budget shortfall have been reported to the Executive for consideration. These proposals are included within this report and the Committee is invited to make any observations concerning the services within its remit.

The Executive will give final consideration to the Budget on 5th February 2008, including the comments reported from the Overview and Scrutiny Committees, before making recommendations to Council on 19th February 2008.

The purpose of the report is to seek the Committee’s views on the draft Revenue Estimates for the services within its remit.
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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.
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Introduction

1. This Committee received an initial report outlining the main Budget issues for 2008/2009 at its meeting on 26th November 2007. The draft 2008/2009 General Fund Revenue Estimates were presented to the Executive on 4th December 2007. The draft Revenue Estimates for services within the remit of this Committee are now presented for consideration by this Committee. The Executive has requested that the Overview and Scrutiny Committees consider these in detail. The latest Budget position, including proposals from the Star Chamber, is set out for consideration by this Committee and will be considered by the Executive at its meeting on 8th January. Any further advice from the Executive will be reported to this Committee.

2. This report contains the following Annexes:

· Annexe 1 General Fund Budget Summary
· Annexe 2 Budget Position Statement
· Annexe 3 List of Variations
· Annexe 4 Star Chamber Proposals
· Annexe 5 Schedule of Fees and Charges for areas within the remit · Annexe 6 Leisure and Culture Estimates
· Annexe 7 Planning Estimates
· Annexe 8 Car Park Estimates
· Annexe 9 Environment Estimates

The Revenue Support Grant Settlement 3. Waverley’s provisional Revenue Support Grant Settlement for 2008/2009 was announced on 6th December.

4. The details of the Settlement are:

· The headline increase in Waverley’s Grant for 2008/09 is 1%, being £59,000
· Additions to Formula Grant previously paid as specific grants £67,000
· Council Tax capping remains – The Government expects average increases this year to be well below 5%.

5. The difference between the headline increase in Waverley’s Grant and the cash increase is explained by the method used by the Government to calculate the grant entitlement. Each year, the Government calculates a notional Adjusted Formula Grant for the previous year, to which is added the relevant increase for the current year. In the current Settlement, the Adjusted Formula Grant for 2007/2008 is £67,000 higher than the actual Grant, the main difference being the inclusion of the revenue element of the Waste Performance and Efficiency Grant.

6. The initial draft Budget as reported to the Executive on 4th December assumed no increase in Grant and also reflected the ending of the Waste Performance and Efficiency Grant. Therefore the Settlement represents an improvement of £126,000 to the reported shortfall of £685,000.

Concessionary Fares Grant

7. The Government has announced that a specific grant of £262,000 will be paid to Waverley in 2008/2009 to cover the cost of the scheme moving to a nationwide basis from 1st April 2008. There is considerable uncertainty regarding the likely extra cost to Waverley. It is therefore considered appropriate to budget for the extra cost being at the grant level.

Leisure Strategy and Sports Centres Rate Relief

8. The Council’s Leisure Strategy assumed basic refurbishments to the leisure centres at Farnham and Godalming. The cost of the works, together with the new management costs for a 15-year leisure contract, have been included in the draft Budget for 2008/2009. The Executive and Council will be asked to consider additional capital improvements at their February meetings, following Council’s decisions in July 2007 to investigate options for further improvements together with the financial implications.

9. It is now considered appropriate to allow for the benefit of rate relief of at least £150,000 in 2008/2009 as agreed as part of the Leisure Strategy.

Superannuation

10. The initial draft Budget included a figure of £250,000 to cover the expected
Restructure Savings

11. The Chief Executive’s Restructuring proposals have been accepted by Council to be implemented from 1st January 2008. Total savings of £120,000 will be achieved in 2008/2009, with £77,000 of this amount relating to the General Fund.

Pay Increase

12. The Employer’s negotiating Team have made a final offer of 2.5% with a minimum of £700. The cost of this on the General Fund pay bill is 2.8% and this is the amount included on the Budget Summary.

Budget Summary 13. The latest Budget position is shown on the Budget Summary at Annexe 1.

14. This has been adjusted in line with the actual Revenue Support Grant and Redistributed NNDR figures.

Budget Position Statement

15. A statement showing movements from the shortfall of £685,000 as reported to the Executive on 4th December is shown at Annexe 2.

Budget Variations

16. Growth items have been identified as variations to the base estimates and have been given initial consideration during the Star Chamber process. Potential variations are listed at Annexe 3, showing the amount requested for 2008/9, the ongoing cost in future years and the amount recommended for inclusion in the Budget by the Star Chamber. The amount of Variations recommended by the Star Chamber totals £334,880 and is within the figure of £350,000 as previously assumed for growth items.

Star Chamber Proposals

17. The Star Chamber process has resulted in a list of potential reductions to expenditure and increases to income as shown at Annexe 4. This list totals £390,000 and includes further ongoing savings reported as part of the November Budget Monitoring process.

Fees and Charges

18. It is the Council’s practice to review its fees and charges each year with effect from the forthcoming 1st April. Planning and Building Control fees are largely determined by statutory Government guidelines. An average increase of 10% in Planning fees from 1st April 2008, in line with the lower level outlined in Government consultation was allowed for within the initial draft Budget. The Star Chamber has examined the figures in more detail and considers it would be reasonable to assume an average increase of 15% and a further £50,000 income is therefore included within the list of Star Chamber proposals.

19. As well as examining expenditure in detail, the Star Chamber has also undertaken a comprehensive review of fees and charges. Various proposals for increased income have been made and amounts included on the Star Chamber list. Schedules of the proposed fees and charges within the remit of this Committee are included at Annexe 5. These schedules will be approved in February, following consideration of any observations.

Car Park Charges

20. The Star Chamber has given special consideration to the management of the Council’s Car Parks and in particular the charging structure. Operational problems have increased at peak times, particularly following the introduction of effective On-Street Enforcement. This will be the subject of a report to the Executive on 5th February and to Council on 19th February, detailing proposals for tariff changes from 1st April 2008. Car Park income is a significant part of Waverley’s Budget and the Star Chamber considers that a realistic assumption would be an average 10% increase in car park tariffs in 2008/9 to help relieve the operational problem. This is equivalent to approximately £300,000 additional income, as shown on the Budget Summary.

Budget Strategy

21. The Executive has expressed the intention of eliminating the reliance on balances within a four-year period. The 2007/2008 Budget includes the use of a total £600,000 from balances: £150,000 from the Revenue Reserve Fund and £450,000 from the General Fund Working Balance. If the Council agree the Star Chamber reductions as recommended, it will be possible to halve the use of balances within the 2008/2009 Budget. The Budget Summary assumes the Revenue Reserve Fund contribution is discontinued and the use of the working balance is reduced to £300,000.

22. The latest Budget Position Statement, after allowing for all of the movement described above, shows a shortfall of £390,000, before allowing for any Council Tax increase. Each 1% increase in Waverley’s element of Council Tax will generate an additional £80,000. An increase of 4.3% (in line with the latest RPI figure) would produce £344,000, reducing the shortfall to a manageable level below £50,000.

Local Authority Business Growth Incentive Grant

23. In February 2006, the Government awarded Waverley £435,000 for the first year of the Local Authority Business Growth Incentive Scheme (LABGI). In total, £1,010,000 has been awarded to Waverley for the second year of the scheme. The amounts to be awarded for the third (final) year of the scheme will not be announced until February 2008. Officers have examined the information available and consider that Waverley could receive a figure approaching the 2007 amount.

24. However, it is not possible to estimate the amount of grant with any certainty, because relative changes in applicable rateable values for all authorities are calculated, converted into a grant amount and then scaled up or down to match the available allocation pot. Therefore, it would clearly not be prudent to allow for the receipt of the LABGI Grant within the Revenue Budget. The Corporate Management Team’s advice will be that any grant received should be transferred to the Revenue Reserve Fund in accordance with agreed practice over the past two years. It has been used to support capital expenditure mainly on leisure facilities across the Borough, in line with the Council’s Corporate Plan.

Conclusion

25. Any further advice from the Executive on 8th January will be reported to this Committee. Comments made at the Overview and Scrutiny meetings will be reported to the next meeting of the Executive on 5th February 2008, which will agree final recommendations to Council on 19th February 2008.

Recommendation

It is recommended that the Committee:

1. gives consideration to the Revenue Estimates at Annexes 6, 7, 8 and 9; 3. considers the list of Budget reductions, as suggested by the Star Chamber, at Annexe 4, for services within its remit; and _______________________________________________________________
Background Papers (DoF)

Provisional Local Government Finance Settlement 2008/09; Financial Strategy 2008/09 – 2010/11; Finance Seminar slides; Community Strategy; Revenue Budget 2007/08.
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CONTACT OFFICER:

Name: Brian Long Telephone: 01483 523253

E-mail:blong@waverley.gov.uk







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