Agenda item

The Leader of the Council, Cllr Mark Hawthorne, presented the recommendation from the Cabinet meeting on 6 February 2013.  He said that 2013-14 was the third budget of the ‘Meeting the Challenge’ Programme.  The programme would achieve £114 million in savings to reflect reductions in funding from central government and increasing demand for services, particularly from the most vulnerable people.  Adult social care spending to meet the needs of vulnerable people represented around half of the Council’s budget.  Whilst other local authorities had been reducing spending in this area, the Council had invested an additional £4 million over the last three years.

 

He stated that the Council was continuing to invest in jobs and growth.  He referred to the Grow Gloucestershire campaign to kick start the local economy and help young people back to work, support for the doubling of the Kemble to Swindon railway line, the first time buyers’ scheme, the rural broadband project and the ‘Yes to Jobs’ website to encourage young people to take up apprenticeships.  He said that the 2013-14 budget would provide a further £1 million for the first time buyers’ scheme and investment in a new business loan scheme through the government backed ‘Full Circle’ scheme which would result in around £1.4 million being made available to local businesses. 

 

He reported that £29 million had been invested in flooding since 2007 and he noted that this had paid dividends in recent months by protecting 500 homes that would have otherwise been flooded. He confirmed that the Council would continue to invest in flood prevention in 2013-14.

 

Cllr Hawthorne declared that for the third year running the council tax was being frozen.  He noted that £100 million in savings had already been achieved, many ahead of target. The headcount had been reduced by 1,500, 80 offices had been closed across the county and the number of councillors would be reduced from 63 to 53 from May 2013.

 

He presented the following additions to the Cabinet recommendation on pages 25 and 26 of the agenda pack:

 

a)        To move £3 million from forecast underspends to pay for additional road repairs.  This was in addition to the £2.1 million announced in November and December 2012.

b)        To move £1 million from the Transformation Reserve to fund a package of measures to promote adoption.

 

Cllr Theodoulou, the Cabinet Member for Finance and Change, seconded the amended recommendation from the Cabinet and spoke in support of the proposals.

 

A member said that he supported a freeze in council tax and the amendments proposed to the Cabinet recommendation.  He noted that the freeze to council tax had been made possible as a result of the Coalition Government providing a specific grant to local authorities across the country.  He expressed concern, however, that funds were being wasted because of bad decisions.  He referred to the costs of £200,000 incurred on the libraries judicial review which could have been avoided and the £0.5 billion committed to the residual waste facility over 25 years.

 

Another member said that Gloucestershire Fire and Rescue Service had gone from strength to strength with four new fire stations now operational.  The new stations would significantly improve response times to incidents.  He noted that the Council would shortly have the first self-funded Registration Service in the country.      

 

On being put to the vote, the following additions to the Cabinet recommendation were supported:

 

a)        To move £3 million from forecast underspends to pay for additional road repairs.

b)        To move £1 million from the Transformation Reserve to fund a package of measures to promote adoption.

 

 

Cllr Andrewartha presented the following amendment:

 

The Liberal Democrats propose to amend the Administration’s budget as per the details set out below:

 

We support the decision to freeze the council tax for the forthcoming financial year.  We also agree with the four priority areas namely:

·         Getting our own house in order

·         Protecting vulnerable people

·         Supporting active communities

·         Building a sustainable county

 

However, we not only believe that with £124 million held in balances and reserves the county has surplus resources available to improve services, boost the economy and create jobs, we also believe that the balances are not constructed in such a way to illustrate either the financial risks we face or the service risk the most vulnerable in our society face.

 

We therefore propose the use of surplus reserves to invest in the following projects:

 

a)        £5 million in addition to the £3 million already announced for road repairs thus helping to build a sustainable county.

b)        £300,000 to double the funding available for district councils to help them support youth activities in active communities.

c)        £250,000 to double the funding available for the Community Infrastructure Grant Scheme to further support active communities and protect vulnerable people.

d)        £250,000 for grants for youth projects offering sport, drama or music to support active youth activities and strengthening the sport and cultural base as part of building a sustainable county.

e)        £1 million ‘invest to save’ in modern technology and green energy both to give a financial return and contribute towards a sustainable county.

f)         To use our land assets to work with the district councils and the Local Enterprise Partnerships to provide freehold employment sites to help grow and attract employment throughout the county.  This is a cost neutral proposal that will possibly delay the disposal of land but will not only see a financial return but will result in a growing employment base within an expanding economy.

 

The total cost is £6.8 million made up as follows:

£1.2 million from balances thus reducing balances to £18.521 million (£24,000 more than balances at 31 March 2012) and £5.6 million taken from the Transformation Reserve.

 

The net result on total usable reserves will be a reduction of £6.8 million (5.5 per cent) to £116.495 million.  In addition the reserves should be amended such that both the financial risks the Council faces and the service risk the most vulnerable in our society face are protected as much as practicable in these turbulent times.  Reserves would be changed such that a new earmarked reserve of £2 million was created to minimise the risk in the area of vulnerable children and adults (the ‘Care Reserve’).  This would be financed by a further reduction in the Transformation Reserve resulting in that reserve being reduced to £4.781 million.

 

Cllr Hilton seconded the amendment.

 

After a short adjournment, the Leader of the Council responded to the amendment.  He noted that the budget put forward by the Cabinet had been developed over many months in consultation with residents and he did not support a last minute raid on reserves.  He believed that the proposals were ill thought out as reserves were set aside for specific purposes and there was a danger that vulnerable people might be put at risk.

 

Cllr Hilton said that the Transformation Reserve was not set aside for a specific purpose and it was sensible to use it in the way proposed.  He believed that it was hypocritical of the Leader of the Council to suggest that the Liberal Democrat amendment was ill thought out when he was suggesting the use of reserves himself.  He stated that the consultation undertaken by the Council indicated that road maintenance was a priority.  In overall terms, he noted that the current level of reserves amounted to 29 per cent of the Council’s budget.

 

Other members spoke strongly in support of the amendment believing that it represented a sensible and constructive use of Council reserves.  They noted that the Rt Hon Eric Pickles MP, the Secretary of State for Communities and Local Government, was encouraging local authorities to use their reserves to support local communities.  They expressed serious concern that the Council was withdrawing services and expecting other organisations, including parish and town councils, to provide alternative funding.

 

A member questioned how the extra investment in roads had been evaluated.  The amendment suggested that £5 million be simply added to the extra £3 million announced by the Administration.  He said that it was not just about spending extra money but looking at the way highways maintenance was carried out in the county.  The ‘fix first time’ and ‘impact day’ highway initiatives in Gloucestershire were recognised nationally as best practice. 

 

Other members stated that roads in the county were in desperately poor condition.  They believed that spending money now would prevent roads deteriorating  which would result in far more costly repairs in the future.

 

On being put to the vote, the amendment was not supported.   

 

Parts a), b) and c) were each voted on in turn and parts d), e) and f) were taken together.

 

Speaking in support of the substantive motion, the Cabinet Member for Finance and Change stated in a climate of reduced government funding the Council’s values were clear.  It was living within its means, reducing debt, focusing on vulnerable people, improving the local infrastructure, helping first time buyers, providing job opportunities and helping communities to help themselves.  He noted that additional funds were being made available for priority areas such as flood prevention and road maintenance.  The proposed 2013-14 budget identified savings of £35 million making a total of £100 million over the last three years.  He believed that the Council’s finances were in good shape and reserves were adequate.

 

A member expressed serious concern that there were not adequate safeguards for users of day centres when they were closed.  He recognised that whilst the transfer of services to community groups had worked well in some areas, he questioned what action would be taken where it was not a success and communities were losing services.  He also expressed concern that there was no reference to the flood alleviation levy in the budget papers.  He believed that it was important for the Council to be upfront about the charges it was levying. 

 

Another member said that she was concerned about the withdrawal of important services to the public not only at a local level, but also at a national level.  She referred to local cuts to libraries, the poor condition of the county’s roads, the reduction in police officers and cuts in funding for the voluntary sector, the Arts, the Music Service and sports. 

 

RESOLVED

 

1	That the 2013/14 update of the Council Strategy 2011-2015 is approved by Council.
2	That, having considered the additional consultation responses and the Public Sector Equality Duty Assessment, approval is given to the Medium Term Financial Strategy and the revenue and capital budgets for 2013/14, council tax for each valuation band, and to issue precepts on each district collection fund as set out below:
	Gloucestershire County Council 2013/14 budget:
			£000
		Original 2012/13 reworked Budget	425,230
		Inflation	7,446
		Cost and spending increases	12,307
		Cost Reductions	-35,199
		Total (excluding Public Health)	409,784
		Public Health	21,126
		Total (All)	430,910
		Less:
		Formula Grant Council Tax Freeze Grant (2012/13 and 2013/14) Public Health Grant NHS Funding New Homes Bonus One off Transitional Grant Education Single Grant Education Statutory Responsibility Grant	159,590 8,573 21,126 9,055 1,819 664 5,400 1,247
		Total to be precepted (Council Tax Requirement)	223,436

 

	Tax base	Total precept
	Total	£
Cheltenham	38,425.70	41,903,226
Cotswold	36,200.30	39,476,427
Forest of Dean	25,973.10	28,323,665
Gloucester City	34,394.14	37,506,810
Stroud	40,187.91	43,824,916
Tewkesbury	29,712.41	32,401,383
Total		223,436,427

 

 

3			That the net one-off increase of £557,000 received in the final Financial Settlement for 2013/14 is used for additional debt redemption.
4	a)		That approval is given to the Capital programme set out in Annex 9  of the MTFS
	b)		That approval is given to the Operational Boundary and Authorised Limits of borrowing, as set out in the Treasury Management Strategy, at Annex 10 in the MTFS as follows:
				2012/13	2013/14	2014/15	2015/16
				£000	£000	£000	£000
		Operational Boundary		495,000	495,000	495,000	495,000
		Authorised Limits		525,000	525,000	525,000	525,000

 

	c)	Noting that the authorised limit for 2013/14 will be the statutory limit determined under section 3 (1) of the Local Government Act 2003
	d)	That the approval is given to the Prudential Indicators for Treasury Management set out in Annex 10 of the MTFS for
		(i)	Upper limit of fixed interest rate exposure of £450 million of net outstanding principal sums
		(ii)	Upper limit of variable rate exposure of £200 million of net outstanding principal sums
		(iii)	the maturity structure of borrowings as set out in Annex 10
		(iv)	the upper limit for principal sums invested for more than 364 days of £30 million
	e)	That approval is given to the Treasury Management Strategy set out in Annex 10 of the Medium Term Financial Strategy.
5		That approval is given to the Risk Management Strategy set out in Annex 11 of the Medium Term Financial Strategy. 6

6                 Regarding the 2012-13 forecast underspend:

a)      To move £3 million from forecast underspends to pay for additional road repairs in 2013-14.

b)      To move £1 million from the Transformation Reserve to fund a package of measures to promote adoption in 2013-14.