Agenda item

To consider a report by the Chief Finance Officer, which provides an update on the process to deliver the revenue budget for 2017/18 (copy enclosed).

A report by the Chief Accountant (CA), which provided an update on the process to deliver the revenue budget for 2016/17, had been circulated previously.

Councillor J. Thompson-Hill, assisted by the CA, provided a detailed summary of the report.  It was explained that the report in January had summarised the Freedoms and Flexibilities process which had successfully delivered balanced budgets for 2015/16 and 2016/17.  Monitoring of budget performance would continue to be reported monthly to Cabinet, and the Cutting Our Cloth Task and Finish Group was in place to monitor the impact of budget decisions taken as part of the process.

Following receipt of the Final Settlement in early March work had commenced on defining a new budget process to deliver the 2017/18 budget.  However, the assumptions which would inform the detail of the Medium Term Financial Plan (MTFP) and the process itself were under development.  The Key Assumptions Informing Development of MTFP had been included in the report, together with, the   Principles of the 2017/18 Budget Process.

Members were informed that a draft timetable, Appendix 1, had been developed, which would be subject to further change.  The timetable expanded on the following four stages of the budget process:-

1)            Define and develop the process

2)            Identify initial proposals

3)            Consult on and finalise proposals

4)            Final approval stages

The CA explained that the timetable, Appendix 1, had changed as the forms had been presented to SLT prior to the scheduled date of the 7^th April, 2016.  Details of the changes were outlined for Members and it was emphasised that this would be a one year process.  It was confirmed that all stages would allow for consultation and engagement with the relevant stakeholders.  A further update would be provided at the next meeting, by which time both the MTFP and the budget process would have been consulted on and approved.  Based on current assumptions around funding and cost pressures the forecast budget gap for 2017/18 was £4.4m.  Previous reports had highlighted in detail the significant consultation process undertaken to deliver the 2015/16 and 2016/17 budgets.

The proposed budget process for 2017/18 had been summarised in Appendix 1, together with, details of the adopted consultation process.  It was explained that it was likely that funding reductions to LAs in Wales would continue in the medium term, and while the Council would endeavour to be more efficient to save money, this in itself may not be sufficient in future.  Budget decisions would become more difficult and probably require a longer lead-in time to deliver.

The proposed budget process for 2017/18 would help deliver a balanced budget and enable the Council to take account of key funding assumptions, service pressures, levels of cash reserves and the levels of fees and charges within the Council.

The Chair explained that he was pleased that the impact on services had been considered.  The CFO provided an outline of how the service impact would be split into two elements with a view to meeting efficiency targets, these would be proposed and then subsequently adopted by the respective services.

Councillor S.A. Davies emphasised the importance of Member involvement at the outset of the process, particular reference being made to Member input at Budget Workshops.  He also expressed concerns about the impact of budget related decisions on the general public, the consequences arising from the rapid increase of pupil numbers in Denbighshire schools and of directives received in relation to cash reserves held by Councils.  The Chair referred to the budget setting and decision making processes and endorsed the views expressed by Councillor Davies regarding the need for greater Member involvement at the outset of the budget setting process. Councillor J. Thompson-Hill outlined a discrepancy in the colour coding in Appendix 1, and explained that reference to the 23^rd March, 2016 should be yellow and not blue. 

Councillor H.H. Evans felt that the budget setting process adopted by Denbighshire was as good as any in Wales, and he highlighted problems previously experienced in encouraging Member involvement in the process.

The Committee considered views expressed by the Committee regarding Member involvement at the outset of the budget process, and it was suggested that the matter be considered at the SLT Session on the 7^th April, 2016 and Council Briefing on the 6^th June, 2016.

The Committee considered views expressed by the Committee regarding Member involvement at the outset of the budget process, and it was suggested that the matter be considered at the Group Leaders Meeting on the 4^th April, 2016 and Council Briefing on the 6^th June, 2016.

The CFO and CA provided an outline of the timescales pertaining to the budget process and the impact with regard to the programme for undertaking operational decisions.

The CFO explained that all the information produced previously was available in the Members library and the principles had not changed.  However, he reminded the Committee that the new process would be dependent on the outcome of the Final Settlement, and he felt that the savings target might be higher than required.

During the ensuing discussion, Councillor H.H. Evans agreed to raise the issue at the Group Leaders meeting on 4^th April.  Councillor J. Thompson-Hill confirmed that he would attend the meeting to provide an overview and report back to Members.

RESOLVED – that, subject to the above proposals, the Corporate Governance Committee receive and note the contents of the report.

    (RW, SG, Cllrs HHE & JTH to Action)