To review the draft budget 2017/18 and make the necessary recommendations to the Cabinet on 1 February 2017. 

Cabinet, Strategic Management Team and Heads of Service have been invited to attend.  The Medium Term Financial Plan and 2017/18 Revenue and Capital Budgets report, Settlement update and the draft Budget Book have been attached.

The Cabinet Member for Finance and Performance introduced the report, which had been considered by the Cabinet on 7 December 2016, and drew attention to the update on pages 45 and 46 regarding the Local Government Financial Settlement which had been announced on 15 December 2016.  The Budget Book had been updated to reflect this, and was set out on page 54 onwards.

The Chairman congratulated the Head of Finance and his team for the way in which the budget was presented.  He suggested that Members should focus their questions on pages 45 and 46, and then pages 54 onwards. 

In response to a question regarding an announcement by Gavin Barwell MP that money would be available for Swale for affordable housing and where this would appear in the budget, the Head of Housing advised that the money was not specifically for starter homes and they were currently working through the guidance to see how the money could be spent.  The Head of Finance undertook to provide additional information.

In response to a question regarding the Transformation Team, the Chief Executive clarified that the eighteen month period would finish around October 2017, but it was possible that an extension to the work of the team would be subject to discussion nearer the time.

·        Page 30 – in response to a question regarding the table, the Head of Commissioning and Customer Contact explained that the index was reviewed when contracts were re-negotiated by agreement of formally renewed. 

·        Page 55 – Increase in homelessness costs: in response to a comment that the figure was optimistic, the Head of Finance and the Head of Resident Services advised that the figure included in the budget was realistic but challenging, and the budget was closely monitored and regularly reported to Members.  It was a reactive service and homelessness was expected to increase, but they were working on ways to reduce the cost of provision as it was increasingly challenging to reduce the volume.

·        Page 56 – Environmental Health: a Member asked whether £7,500 was reasonable given there may be additional cost pressures around monitoring air quality.  The Mid -Kent Environmental Health Manager advised that the forecast was realistic and could be maintained.  In response to further questions regarding air quality, and whether more budget was required to improve air quality across the Borough, the Mid-Kent Environmental Health Manager advised that the savings related to a Kent-wide contract, and that Swale had taken over management arrangements from Medway for the air quality monitoring contract.  It was also clarified that the increase in shellfish sampling costs was due to increased costs being passed on to the Council from the contractor, Port of London.

·        Page 56 – Resident Services: it was clarified that this service was being brought back in-house as it would generate a new income stream.

·        Page 57 – Garden Waste collections: in response to a question, the Cabinet Member for Environment and Rural Affairs was confident that subscriptions would increase in spring, and referred to a successful advertising campaign.  Another Member commented that this service saved time and fuel when compared with taking garden waste to a Kent County Council (KCC) refuse site.

·        Page 58 – Net loss of income due to vacant site at Gas Road and other rent increases: the Head of Property Services advised that Gas Road, Sittingbourne was an open storage site which had been let to a haulage contractor, but planning permission for his activities on the site had not been granted and so the licence had been terminated.  There was some remaining waste to be cleared so the loss of income was the part-year effect before the site could be rented out again. 

·        Page 59 – Kent Rural Housing Enabler (KRHE): the Head of Resident Services advised that the KRHE had not been fully undertaking their role in recent years, and that the proposed reduction to the agency would not leave the Council at risk as monies would be available should the role be reinvigorated in the future.

·        Page 60 – Print Room: the Cabinet Member for Finance and Performance was confident that the saving proposed would not diminish the service provided.

·        Page 61 – Savings on newspapers etc: the Director of Corporate Services advised that these reductions were as a result of a review across the Council.

·        Page 62 – Minimum Reserve Provision (MRP): the Chief Accountant advised that the MRP Policy was an appendix to the Budget, and explained how this had been calculated and that the External Auditors agreed that the proposed change was prudent.

In response to a question as to what the Council’s six medium/large issues were that were most likely to have adjustments made to them, the Head of Finance advised that the report to the Cabinet meeting on 1 February 2017 included a risk register.  The highest risks in the register were funding reductions; Sittingbourne Town Centre; local business rates/appeals; the leisure centre contract; New Homes Bonus; and homelessness.  Sittingbourne Town Centre and, in the longer-term, business rates, were his biggest ‘worry’ at present.  The Chief Executive acknowledged that business rates were volatile and therefore a high level of reserve was required to help manage unexpected events.

In response to a question regarding the renewal of contracts, the Head of Commissioning and Customer Contact advised that there were regular reports to Strategic Management Team regarding contracts, and at every opportunity major contracts had been reviewed and renegotiated to generate savings.  The procurement team also ensured that the commissioning process delivered good value for money.

·        Page 64 – in response to questions, it was confirmed that the figures were net and so, for example, the Planning Services budget included income from planning fees as well as expenditure.  The Chief Executive’s budget included other services such as the Policy Team.

·        Page 69 – Transformation Project: the Chief Executive advised that the team was concentrating on digital transformation and the re-design of service delivery.  The Leader referred to the recent Member Briefing by the Transformation Team and that the slides were available for all Members.  He hoped that Members would attend any further briefings by the Team.

·        Page 69 – Recycling and Waste Minimisation: the Cabinet Member for Environment and Rural Affairs advised that a response had been submitted to KCC regarding proposed changes to their household waste centres, and that restrictions were counterproductive.  Fly-tipping was regularly monitored, and Swale had a good record of taking fly-tippers to Court.  The Head of Commissioning and Customer Contact advised that the additional £20k of projected income was centred on bulky waste collections, and that there had been no significant increase in fly-tipping since the concessions had been removed.  The Cabinet Member for Safer Families and Communities referred to discussion at a recent Policy Development and Review Committee, and that fly-tipping had been agreed as a strategic priority for the Community Safety Partnership.  Members asked to see a copy of the response to the KCC consultation and monitoring information about fly-tipping.

·        Page 70 – Parish Councils (footway lighting): the Chief Accountant advised that this budget was available to parish councils for footway lighting.  The Leader advised that if the Parish Council chose to fund additional lighting it would not be funded by Swale Borough Council.

·        Page 71 – Pollution Control: the Chief Accountant explained that this figure was as a result of a virement.

·        Page 76 – Capital Programme: in response to a question about whether the Council was planning to fund housing, to address homelessness, inadequate housing and mental welfare, the Leader advised that the Council would borrow to fund any project that produced sufficient returns.  The Chief Executive advised that there was already a project in place looking at opportunities for house building which could be shared with the Scrutiny Committee.  The Head of Finance further clarified that there were two criteria regarding Council investment, namely the level of return, and the strategic impact in terms of regeneration, employment, and generating business rates.

The Chairman asked the Committee if there were any recommendations for the Cabinet, but there were no proposals.

Resolved:

(1) That the report be noted.