Agenda item

To consider the report of the Head of Treasury Services.

Scrutiny Committee – Resources considered the proposed estimates and capital programme at their meeting on 27 January 2010 and their comments will be reported.

(Report circulated)

The report of the Head of Treasury Services was submitted, seeking approval to the General Fund revenue estimates for 2010/11 and recommending the Band D level of Council Tax for 2010/11. The report also included the proposed Capital Programme for 2010/11 and future years, and a note of the proposals in respect of the Housing Revenue Account. The Head of Treasury Services circulated an additional report informing members of the latest financial position regarding the money deposited with the Icelandic banks and the implications that this had on the Council’s overall revenue budget for next year and beyond. 

Scrutiny Committee – Resources considered the proposed estimates and capital programme at their meeting on 27 January 2010 and their comments were noted. The comments of Scrutiny Committee – Economy were also noted and their proposal to transfer £7,000 from the City Centre Activities budget to the Vibraphonic Festival was supported. The comments of the Scrutiny Committee – Community were also noted, specifically in relation to the street sweeping budget. Executive accepted their request for an approach to be made to the Dean and Chapter and other bodies for whom the Council undertakes cleansing and road sweeping with a view to a contribution being made to the costs of the service.

Councillor Mitchell, seconded by Councillor Cole, moved that the proposal to close public toilets was halted and that instead the provision for next year’s staff pay award was reduced from 1% to 0.7%, saving the Council an equivalent amount of £60,000. He emphasised that the budgetary process had been extremely difficult but the Administration was responding to public opinion in respect of the proposed closure of certain public conveniences. Some Members expressed concern about reducing the budget for the pay award and the message this sent to staff but were informed that this would have no impact on the outcome of the nationally negotiated agreement. The Local Government Employers were proposing a zero increase for staff in 2010/11.  Other members suggested the Council should consider other potential measures to generate income or make savings, including increased car parking charges and outsourcing particular services. The proposal to amend the budget in respect of the staff pay award was put to the vote and agreed.    

The Head of Treasury Services informed members that following the decision of the Winding-Up Board of Glitnir not to grant preferential creditor status to UK local authorities, the Council had submitted an additional application to Communities and Local Government (CLG) for capitalisation of potential Icelandic bank losses. On 1 February the Council had received a letter from the CLG refusing the Council’s application to capitalise  £1,832 million. The Council was confident that it had satisfied the CLG’s criteria, including the “exceptional financial difficulties test”, and had not yet received any specific detail as to why they had been unsuccessful.

Executive members were very disappointed to learn of the CLG’s decision and the very serious implications for the Council’s revenue finances and urged that the Council continue to lobby and work with other interested parties, including the LGA and the other local authorities affected, to seek a positive outcome.

Executive recommended that:-

(1)        the budget proposal to close public toilets next year is stopped and that instead the provision for next year’s pay award be reduced from 1% to 0.7%, saving the Council an equivalent amount of £60,000;

(2)        £7,000 be transferred from the City Centre Activities budget to the Vibraphonic Festival budget;

(3)        an approach be made to the Dean and Chapter and other bodies for whom the Council undertakes cleansing and road sweeping with a view to a contribution being made to the costs of the service;

(4)        subject to (1) and (2) above, the Council’s overall spending proposals in respect of both its revenue and capital budgets be approved;

(5)        the council tax for each band be recommended to the Council as set out in section 24.3 of the report, subject to Devon County Council, Devon and Cornwall Police Authority and the Devon and Somerset Fire Authority confirming their Band D levels respectively;

(6)        when the actual council tax amounts for Devon County Council, Devon and Cornwall Police Authority, and the Devon and Somerset Fire Authority are set then the revised council tax levels be submitted to Council on 23 February 2010 for approval;

(7)        the statement given by the chief finance officer as required under Section 25 of the Local Government Act 2003 be noted;

(8)        the latest financial position regarding the money deposited with the Icelandic banks be noted and the Council continue to lobby and work with other interested parties in seeking a positive capitalisation decision from Communities and Local Government in respect of the Icelandic investments; and

(9)        if a positive decision on capitalisation is not forthcoming, then the Head of Treasury Services will report back to Executive on 13 April on possible options and actions that need to be undertaken in order to deliver a sustainable financial position for the Council in  the medium term.

The report of the Head of Treasury Services was submitted, seeking approval to the General Fund revenue estimates for 2010/11 and recommending the Band D level of Council Tax for 2010/11. The report also included the proposed Capital Programme for 2010/11 and future years, and a note of the proposals in respect of the Housing Revenue Account. The Head of Treasury Services circulated an additional report informing members of the latest financial position regarding the money deposited with the Icelandic banks and the implications that this had on the Council’s overall revenue budget for next year and beyond. 

Scrutiny Committee – Resources considered the proposed estimates and capital programme at their meeting on 27 January 2010 and their comments were noted. The comments of Scrutiny Committee – Economy were also noted and their proposal to transfer £7,000 from the City Centre Activities budget to the Vibraphonic Festival was supported. The comments of the Scrutiny Committee – Community were also noted, specifically in relation to the street sweeping budget. Executive accepted their request for an approach to be made to the Dean and Chapter and other bodies for whom the Council undertakes cleansing and road sweeping with a view to a contribution being made to the costs of the service.

Councillor Mitchell, seconded by Councillor Cole, moved that the proposal to close public toilets was halted and that instead the provision for next year’s staff pay award was reduced from 1% to 0.7%, saving the Council an equivalent amount of £60,000. He emphasised that the budgetary process had been extremely difficult but the Administration was responding to public opinion in respect of the proposed closure of certain public conveniences. Some Members expressed concern about reducing the budget for the pay award and the message this sent to staff but were informed that this would have no impact on the outcome of the nationally negotiated agreement. The Local Government Employers were proposing a zero increase for staff in 2010/11.  Other members suggested the Council should consider other potential measures to generate income or make savings, including increased car parking charges and outsourcing particular services. The proposal to amend the budget in respect of the staff pay award was put to the vote and agreed.    

The Head of Treasury Services informed members that following the decision of the Winding-Up Board of Glitnir not to grant preferential creditor status to UK local authorities, the Council had submitted an additional application to Communities and Local Government (CLG) for capitalisation of potential Icelandic bank losses. On 1 February the Council had received a letter from the CLG refusing the Council’s application to capitalise  £1,832 million. The Council was confident that it had satisfied the CLG’s criteria, including the “exceptional financial difficulties test”, and had not yet received any specific detail as to why it had been unsuccessful.

Executive members were very disappointed to learn of the CLG’s decision and the very serious implications for the Council’s revenue finances and urged that the Council continue to lobby and work with other interested parties, including the LGA and the other local authorities affected, to seek a positive outcome.

RECOMMENDED that:-

(1)        the budget proposal to close public toilets next year is stopped and that instead the provision for next year’s pay award be reduced from 1% to 0.7%, saving the Council an equivalent amount of £60,000;

(2)        £7,000 be transferred from the City Centre Activities budget to the Vibraphonic Festival budget;

(3)        an approach be made to the Dean and Chapter and other bodies for whom the Council undertakes cleansing and road sweeping with a view to a contribution being made to the costs of the service;

(4)        subject to (1) and (2) above, the Council’s overall spending proposals in respect of both its revenue and capital budgets be approved;

(5)        the council tax for each band be recommended to the Council as set out in section 24.3 of the report, subject to Devon County Council, Devon and Cornwall Police Authority and the Devon and Somerset Fire Authority confirming their Band D levels respectively;

(6)        when the actual council tax amounts for Devon County Council, Devon and Cornwall Police Authority, and the Devon and Somerset Fire Authority are set then the revised council tax levels be submitted to Council on 23 February 2010 for approval;

(7)        the statement given by the chief finance officer as required under Section 25 of the Local Government Act 2003 be noted;

(8)        the latest financial position regarding the money deposited with the Icelandic banks be noted and the Council continue to lobby and work with other interested parties in seeking a positive capitalisation decision from Communities and Local Government in respect of the Icelandic investments; and

(9)        if a positive decision on capitalisation is not forthcoming, then the Head of Treasury Services will report back to Executive on 13 April on possible options and actions that need to be undertaken in order to deliver a sustainable financial position for the Council in  the medium term.

(Report circulated)