Agenda item

Budget Proposals Presentation

Minutes:

50.1    John Chance, Head of Finance and Revenues presented the budget update and also present were Councillor M Cook, as Portfolio Holder for Resources and Councillor D Ellesmere, the Leader of IBC.

 

50.2    The Budget Working Group had been considering the budget on a regular basis since October 2018, the Local Government Finance Settlement had been published on 13 December 2018 and the budget would be set in line with the ‘Building a Better Ipswich’ corporate objectives.  Another year had been added to the Medium Term Financial Position (MTFP) set in February 2018 and the base gap after four years was now set at £0.997m, after £5.450m of savings had been delivered and the amount of usable reserves as at February 2018 had been £5.259m of which most would be used.  It was confirmed that this would be the final year of the 4 year settlement, the Negative Revenue Support Grant (RSG) had been removed, the Council Tax cap had been maintained at 3% and Ipswich had not been successful in gaining another year of the Business Rate pilot.  The New Homes Bonus income had been reduced by a ¼, from 6 to 4 years only.   

 

50.3    The year 2022/23 had been added to the General Fund ‘Gap’ position and the reserves to achieve a balance were now at £4.160m.  The assumptions used to identify the gap for 2018/19 had remained and the same assumptions would be used to project the 2022/23 gap position.  Since February 2018 further costs had arisen and the total budget gap position before action was £10.453m.  The return from financing the arms-length companies, in particular IB Assets, had been £468k this year, the Big Ticket savings programme had been on target and would continue in future years to underpin the additional financial pressures, which left the current reserves figure at £9.103m.  With a minimum working balance of £2m, the useable reserve would reduce to £7.103m and the timetable culminating in the 27 February 2019 Council meeting was considered.

 

50.4    Councillor Ellesmere commented on the overall background in relation to the future renewal of waste contracts, the ongoing reduction to the New Homes Bonus, and key investments made in the Town Centre.  During the next year there would be the possibility of using the funding reserved for a Heritage Lottery Funding bid for the Museum and for Broomhill Pool and the Public Realm consultation would commence shortly.  The overall message was that the budget position remained challenging; but IBC were in a reasonable position to make significant investments in the town while protecting frontline services.

 

50.5    Councillor M Cook said how long term planning was important, some reserves would be used but this enabled IBC to see how things evolved and the use of reserves would had enable more long term stability.

 

50.6    Councillor Pope asked how much of the reserves would be used and Councillor Ellesmere said that the plan was to use the reserves allowed over a 5 year period while keeping the minimum balance of £2m allowed within the reserves and that every year since 2011 it had been predicted that no reserves would remain but without cutting services there was a current reserves balance. Mr Chance said that it was an assumption that there would be an underspend of £1.4m in Quarter 2 so the starting figure would be lower.   In response to a question from Councillor Pope about the Council Tax increase for 2019/20, Councillor Ellesmere said that no final decision had been made yet, the maximum possible increase would be 3%, the same as last year, even though last year’s increase had only been 2%.  He pointed out that even if the increase for 2019/20 were to be the maximum of 3% this would still be less than any increase expected by the Police & Crime Commissioner’s Office or Suffolk County Council. 

 

50.7    Councillor Holmes asked about whether the Business Rate pilot allowance had been used for the Public Realm Strategy and Councillor Ellesmere said that the contributions had been used to fund several projects and the Chief Executive said that the £2m had supported last year’s budget, a bid had been submitted for this year but unfortunately IBC had not been successful.

 

50.8    Councillor Gage asked whether any cuts would be made to grants for the voluntary sector and the Chief Executive said that there was no intent to reduce grants to the voluntary sector, many bids were now made for 3 year funding deals to allow the voluntary sector a greater degree of sustainability.  Councillor M Cook said that any ideas on how to make future savings and maintain growth would be welcomed.  The Chair thanked Mr Chance and Councillors M Cook and D Ellesmere for their attendance.