| 201 | Consideration was given to a report of the Head of Finance on behalf of the Leader and Deputy Leader of the Council that summarised the Council's capital programme for 2006/2007
and future years in the light of the Council's priorities and resources available.
The detailed capital programme proposals were shown in Appendix 1 to the report.
The prudential framework had set the key objectives detailed in the report.
In 2006/07 the Council would receive a Major Repairs Allowance (MRA) of £1,981,200. The MRA would be included within the Housing Revenue Account (HRA) subsidy payments made by Government. Since the resources were intended to fund Capital expenditure however, the Council was required to transfer this amount to a Major Repairs Reserve which would then be available to finance the Council's Capital Programme. There was not a requirement to spend all of the MRA in the year in which it was given. It could be held in the Reserve for use in future years. In 2006/2007, it was estimated that the full MRA of £1,981,200 would be used to finance capital (HRA) expenditure.
On 8 February 2006 Council had approved a report on the Prudential Indicators for Gedling Borough Council for the financial years 2006/2007 - 2008/2009
It was, therefore, proposed that Prudential Borrowing of £1,000,000 per year for 2006/07 and 2007/08 be undertaken in the achievement of the Decent Homes Standard, based on current medium term projections.
The proposed General Fund Capital Programme would require that borrowing be undertaken to balance the financing of the programme in the absence of the generation of capital receipts
Included in the proposed 2006/07 programme were the schemes approved for deferral by Personnel and Resources Committee in September 2005 due to capital receipts generation being below levels anticipated as a result of a declining housing market. As there had been no upturn in the level of capital receipts generation these schemes would now be financed by borrowing.
The overall level of affordable borrowing included to finance the proposed General Fund programme for 2006/07 was £2.5m. Further affordable borrowing of £3.5m 2007/08 and £2.2m 2008/09 was anticipated for the future programme.
Capital Receipts receipts were estimated to be £2.2m in total and had been identified as financing in the Housing Revenue Account and Housing General Fund Programmes over 2004/05 to 2006/07.
Other usable capital receipts that were expected to be generated in 2006/2007 were £172,000 General Fund and £346,000 Housing Revenue Account. The receipts would arise from various Land Sales as well as Houses sold under Right to Buy legislation.
External funds such as Disabled Facilities Grant and contributions from other authorities would continue to be important in the funding of capital expenditure and schemes partly financed in this way were included in the programme. Grants and contributions totalling £615,700 were included for 2006/2007. Expenditure in the capital programme had been grossed up, and the contributions were shown in the report as adding to the resources available to finance the programme.
An estimate of resources for the current year and the next three years was also detailed in the report.
A table in the report summarised the proposed Capital Programme for 2006/07 in the sum of £7,071,000. The full programme of schemes was detailed in Appendix 1.
CAPITAL PROGRAMME 2006/07£000 2007/08£000 2008/09£000
Leader 268 31 27
Agenda 21, Crime and Community Development 0 0 0
E-Government, Members and Property Services 98 318 80
Development and Econ Regeneration 0 0 0
Direct Services 900 1,502 597
Leisure Services 1,793 110 0
Finance 57 57 57
Future Equipment Replacement 0 150 150
Future Service Development Bids 0 1,500 1,400
Total Other Services 3,116 3,668 2,311
Housing Investment Programme 3,955 3,890 2,939
Total Capital Programme 7,071 7,557 5,250
The programme included replacement equipment and vehicles which were required to ensure continuation of existing services provision, schemes deferred by Personnel and Resources Committee as described in paragraph 4.4.2 of the report, Resource Developments Bids from 2004/05 and 2005/06 which had continuing impact into 2006/07 and Resource Development Bids for 2006/07 approved by Cabinet on 12 January 2006 and further considered by Scrutiny Committees.
For completeness the full set of Resource Development Bids was shown at Appendix 2 to the report.
After consideration it was:- |
| 202 | The Head of Finance on behalf of the Leader/Deputy Leader of the Council presented the General Fund Revenue Budget and Performance Plan for 2006/07 for approval.
Under the Council's constitution, the Cabinet had made its final performance plan and budget proposals after consideration by the Scrutiny Committees of the draft performance plan and budget.
Statutory consultation with business rate payers was currently being undertaken and any responses received would be presented at the meeting.
The final budget and performance plan proposals determined by Cabinet would be considered at the Council Budget meeting on 1 March 2006. The Borough Council had a statutory responsibility to determine its council tax by 10th March.
The Council had developed its Strategic Corporate Plan 2005-2008, setting out its Key Aims and Key Improvement Plans. This incorporated the statutory requirements for a Best Value Performance Plan. The Corporate Plan also incorporated the Council's Medium Term Financial Strategy. It would be updated and rolled forward to cover the period 2006-2009 in June 2006.
Budget and service planning processes had been combined. This represented good practice and had been acknowledged as such by the Audit Commission.
Proposals for service developments have been determined in line with the Council's Key Aims and Key Improvement Plans.
It was also reported that Improvement Tasks represented the most significant activity the council proposed to carry out during the year to ensure continuous improvement. Most represented "one-off" developmental activities - but some were ongoing activities critical to overall improvement.
In respect of Central Government Funding, Cabinet had received a report on 15 December 2005, showing the Council's Provisional Revenue Support Grant of £8.215m 2006/07 and £8.659m 2007/08. The Final Revenue Support Grant Settlement figures were now available and these showed minor increases, resulting in £8.217m 2006/07 and £8.668m projected for 2007/08. These funding levels should enable the Council to maintain sustainable revenue growth and support a modest capital programme in the medium term.
In developing a budget proposal, assumptions on the core budget had to be made and the various assumptions in respect of inflation and technical changes are shown at Appendix 1 to the report. These had been included in both the annual budget and MTFS calculations. In addition, the Cabinet had already agreed in principle to support the cost of improving the statutory concessionary travel scheme to a countywide free travel scheme and the additional costs of some £630,000 per annum had been included in the base budget.
The Council was also currently considering its options in respect of the management of Council Housing Stock and a final decision was expected soon. The annual budget included a sum of £300,000 set aside for the development of a stock transfer option, which could be offset against any capital receipt if stock transfer were to take place.
By comparing the actual calculated core budget for 2006/07 to that predicted in the MTFS for 2006/07 at this point in the previous year, the impact of efficiency savings could be clearly seen and the following major items of efficiency totalling £528,000 had been included in the core budget for 2006/07.
The following table summarised the proposed General Fund Budget for 2006/07. The detailed budgets together with performance plans were presented in Appendix 2. The major variances between the original estimate for 2005/06 and the estimate for 2006/07 were analysed by Portfolio at Appendix 3.
General Fund Budget Summary 2006/07
Portfolio 2005/06Original 2006/07Estimate Variance
£ £ £
Leader 1,995,200 2,798,300 803,100
Agenda 21, Crime & Community Development 1,265,800 1,386,300 120,500
E-government & Member Services 0 0 0
Development & Economic Regeneration 317,900 362,200 44,300
Direct Services 4,627,400 4,964,700 337,300
Housing General Fund 522,400 980,700 458,300
Leisure Services 2,835,600 2,894,500 58,900
Finance 466,500 13,700 (452,800)
Total 12,030,800 13,400,400 1,369,600
On 12 January 2006, Cabinet had approved the list of 2006/07 Resource Development Bids, detailed in the report and subsequently, for referral to Scrutiny Committees.
The revenue implications i.e. ongoing running costs, of the proposed 2006/07 Capital Resource Development Bids were detailed in Appendix 5 along with the estimate of costs in the medium term. These costs were included in the General Fund Revenue Estimate summarised in paragraph 5.1 of the report.
As detailed in Appendix 1 paragraph 3(i)of the report, it was proposed that borrowing be undertaken to finance part of the capital programme in 2006/07 to 2010/11. Borrowing had an impact on the revenue budget in terms of interest costs and principal repayment and this was reflected in the General Fund Revenue Estimate summarised in paragraph 5.1 above and the medium term financial strategy.
The table detailed in the report identified the impact of all the options that are proposed, including:
i) The incremental increase in base revenue expenditure from 2005/06.
ii) Fees and charges to be increased by an average 5%.
iii) Revenue Resource Developments 2006/07 totalling £180,200.
iv) The ongoing revenue implications of Capital Resource Developments 2006/2007 totalling £70,200 (Appendix 5).
v) Anticipated cost of borrowing to finance the capital programme for 2006/2007 - 2010/11.
vi) The achievement of the efficiency savings in 2006/2007.
vii) An increase in Council Tax of 3.0% for 2006/2007 giving a Band D Tax of £131.18 (previously £127.36).
A minimum balance of 7.5% of total projected net expenditure on the General Fund was required in accordance with the Council's approved Financial Strategy. This required the balance to be £1,005,000 for 2006/07.
The Authority continued to increase the amount of activities undertaken in association with a variety of partners. This required reliance on partnership funding and/or the delivery of integrated programmes, e.g. the financial link between the Council's investment in recycling and the development of a local Material Recycling Facility, in order to deliver on time and within budget.
Current proposals allowed only for a very minimal amount of new developments over the medium term, therefore, for the Council to meet its stated objectives, future growth was dependent upon greater efficiency savings, redirection of resources and the development of new fees and charges.
The Council's plans already provided for additional income of £15,000 in 2006/07 and £138,000 per annum 2007/08 onwards from the introduction of Car Park Charges. Original plans had income arising from the 2004/05 financial year but this has not been achieved. The delay in implementing such items had represents an increased financial risk, as did the Council's ability to manage the delivery of the Capital programme, where delays on schemes impact on the revenue budget and could give rise to poor treasury management decisions. Close attention to these issues was required in order to avoid pressure to increase the minimum level of balances.
The council tax for a band D property for 2005/06 was £127.36. The level of council tax for 2006/07 would be dependent on the extent of service developments and financial risk issues that the Council decided to provide for in the budget for next year. For illustration, an increase in council tax by 1% provides additional funding of £48,000.
After consideration it was:- |