Council received and considered a report, presented by the Mayor which set out the recommended 2014/2015 Revenue Budget.
The Mayor reiterated the requirement to set a revenue budget and determine the level of Council Tax for 2014/2015 in accordance with the prevailing legislation. The Mayor stated that the severe cuts were in response to the Governments drive to reduce public sector spending and indicated that Middlesbrough would be required to achieve total budget reductions of more than £67 million over the next three years.
The proposed budget had been subject to extensive consultation with appropriate stakeholders and took into account agreed budget strategies and proposals announced to Council on 20 November 2013 and subsequent amendments to Council on 20 January 2014.
The impact of the Governments statement received on 5 February 2014 relating to the Local Government Finance Report for 2014/2015 and 2015/2016 was outlined. The position for 2014/2015 was broadly in line with the current Medium Term Financial Plan projections. It had been estimated that further budget reductions would need to be made of £25 million in 2015/2016, £20 million in 2016/2017, £14 million in 2017/2018, £13 million in 2018/2019 and £13 million in 2019/2020.
The report referred to a number of identified pressures relating to safeguarding vulnerable children and ongoing demand led pressures within Adult Social Care.
Additional annual provision of £400,000 had been made in respect of the Councils agreed capital programme which included further provision to help advance the Councils Housing Strategy, assessed capital receipts and borrowing costs to deliver the approved capital programme. It was also reported that it would enable a review of the Councils capital programme priorities over the next three to five years and potential areas for new investment as indicated in statements to Council at meetings held on 20 January and 19 February 2014.
In presenting the budget reductions reference was made to a number of mitigating measures put in place of approximately £7 million which included £1.9 million (efficiency and procurement savings, £1 million (Children and Families demand pressures, £0.8 million (Adult Social Care), £2.5 million (maximisation of external funding) and £0.8 million (reduction in pension contributions).
The recommended budget reductions for 2014/2015 were outlined in Appendix A to the report submitted and summarised as £4.355 million (Neighbourhood and Communities), £1.937 million (Wellbeing Care and Learning) and £8.555 million (Corporate and Central Services).
It had been estimated that the full year impact of the 2014/2015 savings as outlined would provide additional savings of £7 million in 2015/2016 and further savings of £2 million in 2016/2017.
It was indicated that although the 2014/2015 budget minimised impact on front line services efficiency savings alone could not meet the projected gap over the medium term.
Specific reference was made to a number of factors which had been considered in respect of the level of Council Tax increase including the current levels of Council Tax and inflation, pressures from caring for vulnerable people, level of budget reductions required and the medium to long term implications of the Governments Autumn Statement and the Local Government Finance Settlement 2014/2015 - 2015/2016. An assessment on the basis of the current criteria indicated that should the Council decide to accept the Governments freeze grant there would be an additional requirement for further budget reduction of approximately £400,000 in 2014/2015 and an overall additional gap shortfall of £17 million over the next 10 years.
The draft Budget requirement for 2014/2015 was estimated at £130.6 million as detailed in Appendix B to the report submitted.
The levels of Council Tax as outlined associated with the budget requirement represented a 1.82% increase on the current years level for Middlesbrough Councils element of the Council Tax for those areas without precepts.
Full copies of each individual equality impact assessments together with a summary and an overall impact assessment of the budget process had been included with the report submitted.
Several Members commented and expressed concerns with regard to a number of areas including specific budget proposals, proposed level of Council Tax, extent of current loans, proposals for capital programme and also suggested areas for further examination including the feasibility of sharing services with other local authorities. Assurances were also sought as to whether or not the £7.6 million relating to the proposed modernisation of back office services and greater use of IT could be achieved.
Members commented on the prevailing economic circumstances and concurred with the Mayor on the areas of concern highlighted with specific regard to the level of cuts and potential impact on the vulnerable. An indication was also given of the measures being pursued by the Council which included possible joint working with neighbouring local authorities. Speaking in support of the proposed Revenue Budget 2014/2015 Members also referred to and agreed with the reasoning for the proposed level of Council Tax and referred to other local authorities in the UK which had not taken the Governments freeze grant offer.
Although different budget criteria the Mayor gave an indication of the benefits of pursuing certain capital projects in response to concerns raised and indicated that further information would be provided. The Mayor reiterated the requirement to set a balanced budget and of the reasoning for the proposed level of Council Tax. Ensuring that the needs of the most vulnerable in terms of the elderly and children were being met was regarded as the main challenge for the future.
In accordance with the regulations, the Monitoring Officer had exercised powers under Article 15.2 (a) (ii) to modify Article 18.5 of the Council Procedure Rules (Part 4 of the Constitution) in order for the Council to comply with the terms of the new regulations, The Local Authorities (Standing Orders) (England) Regulations 2001 (as amended by the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014).
In accordance with the new statutory regulations a recorded vote was taken by roll call of those Members present at that time, the results of which were as follows:-
Votes for (30):
The Mayor, Councillor Bloundele (Chair), Councillors Biswas, Brady, Brunton, Budd, Carr, Clark, Davison, Dryden, Harvey, Hussain, Kerr, P Khan, Loughborough, Lowes, Mawston, McPartland, G Purvis, P Purvis, Rooney, Rostron, Sanderson, J Sharrocks, Taylor, B Thompson, M Thompson, J A Walker, N J Walker and Williams.
Votes against (10):
Councillors Arundale, Cox, Hawthorne, C Hobson, J Hobson, Hubbard, McTigue, Morby, Mrs H Pearson and Saunders.
Abstained from Voting (0).
ORDERED as follows:-
1. That the budget reductions as outlined in Appendix A to the report submitted be approved.
2. That the budget requirement for 2014/2015 is set at £130,600,000 as detailed in Appendix B to the report submitted.
3. That having taken into account the matters set out in Section 32 of the Local Government Act 1992 and the items set out within the report submitted the basic amount of Council Tax for 2014/2015 be increased by 1.82% to £1,355.47 being the average council tax for the whole of the Borough.