The Leader and Cabinet Member for Finance said that work on the budget was ongoing and he welcomed ideas to achieve savings. He suggested Members could meet with the Section 151 Officer.  The Leader and Cabinet Member for Finance went through the report, highlighting the main points.

Referring to the Council’s £25.5million reserves, the Leader and Cabinet Member for Finance said the majority of reserves were allocated and could not be used for general budgeting purposes.  He highlighted the various projects on the Isle of Sheppey that had received or been allocated funding through the Sheppey Improvement Fund.

The Leader and Cabinet Member for Finance explained that the Business Rates Volatility reserves was money set aside in case there were changes to the valuation of properties.  He said the reserves had historically been much more robust than necessary and £1million had been transferred to fund the Special Projects Fund.  The Leader and Cabinet Member for Finance added that money from the Business Rates Volatility could be transferred to the General Fund, unlike the Kent Pool Economic Development Business Rates.

The Leader and Cabinet Member for Finance spoke positively about SBC’s share of the Kent Pool Economic Development Business Rates and how it had been spent in the Borough as set out on page 31 of the report.  He said that the balance of the fund was £1.1million which could be used for projects but not to support the core budget or other reserves.

The Leader and Cabinet Member for Finance listed the north Kent authorities that SBC shared funds within the North Kent Housing & Commercial Growth Business Rates fund, stating that SBC’s share was £1.7million.  He said that the fund was to be used to fund the Swale Rainbow Local Housing Company setting up and future costs.

The Leader and Cabinet Member for Finance said that Heads of Services were reviewing their reserves

Members asked questions and raised points including:

·         Were Councils directed on what remaining funds should be spent on?;

·         how much of the reserves could be used to prop up revenue spending?;

·         sought information of the breakdown of the £250k Sheppey Improvement Fund;

·         would the Community Infrastructure Levy (CIL) ever be implemented?:

·         suggested looking more thoroughly at the items in the £488k Smaller Reserve Fund as some funding might no longer be necessary;

·         was concerned that Heads of Service (HoS) were being asked to identify savings of 5% on the 2021/22 staffing budget when officers were already under pressure;

·         praised the helpful report;

·         sought clarity on what ‘unavoidable’ costs actually were?;

·         should be looking at how to increase income not reducing spending;

·         highlighted that the Medium Term Financial gap of £3.3million rightly excluded additional pressures in year but also excluded unavoidable cost pressures;

·         SBC were already struggling to provide a proper service without more cuts; and

·         all options to avoid cuts to the staff budget should be explored.

The Section 151 Officer explained that some reserves were ring-fenced for timing differences for the collection funds, so funds would be carried over at year-end and reserves may appear higher than they actually were.  She said that funding could be re-allocated for projects that had more priority but this would be looked at on a reserve-by-reserve basis.  The Leader and Cabinet Member for Finance said the General Fund could be called upon to prop up reserves.  The Head of Finance and Procurement said HoS were already looking through their allocations and he would seek confirmation from the Head of Planning Services whether the funding set aside for CIL would be required.  He assured Members that every single allocation was being reviewed.

The Leader and Cabinet Member for Finance said that staff costs were the biggest part of the budget and he explained that year-on-year there had been an underspend on the staff budget resulting in additional funding which this year would be spent on the Covid-19 Pandemic recovery fund.  He said there would be big challenges ahead.  The Section 151 Officer explained some of the technical terminology that was required.

The Leader and Cabinet Member for Finance said that SBC officers were doing everything they could to provide the best service in the Borough and reserves would be used to limit any cut to the staff budget.  He reminded Members that reserves were not infinite, and income to Local Government had remained static whilst costs had risen.

The Leader and Cabinet Member for Finance thanked everyone for a useful discussion.