The Director of Strategic Resources presented a report on the projected Medium Term Financial position for 2014/2015 to 2016/2017 and the budget strategy.
In terms of the 2012/2013 Final Outturn it was reported that overall the Council had made approximately a £191,000 net saving against its General Fund Budget for 2012/2013. It was noted that in addition to planned budget reductions of £11.8 million, further accelerated savings of £2.7 million in respect of staffing and running costs had been achieved which would contribute towards the planned budget reductions in 2013/2014.
In setting the 2013/2014 budget, identified structural budget issues had been addressed and £12.7 million reductions in service expenditure applied and extra investment of £4.3 million in key services.
The Board was advised of a detailed budget monitoring exercise which was nearing completion early indications from which identified spending pressures with regard to Wellbeing Care and Learning, and Neighbourhoods and Communities.
Overall Government expenditure in 2015/2016 was planned to reduce from £315.7 billion to £312.9 billion which represented a 2.6% reduction. From information made available in July 2013 Middlesbrough would be receiving a significantly higher reduction in Government support than the national average of 10% in 2015/2016 as a result of the Council's higher than average dependancy on Government support and in particular the impact of additional top slicing of the settlement and the higher proportional impact on the basic Revenue Support Grant entitlement. Although further details were awaited there was a proposal in 2015/2016 to passport 35% of New Homes Bonus through to Local Enterprise Partnerships (Tees Valley Unlimited) which would result in an additional circa £500,000 pressure to the Council.
The Board's attention was drawn to a number of identified potential pressures relating to safeguarding vulnerable children based on assumptions in respect of levels of demand for placements of looked after children.
Reference was also made to Adult Social Care for which an annual provision of £2.3 million had been made to deal with estimated ongoing demand led spending pressures.
Other cost pressures referred to in the report included reduced car parking charges in respect of Zetland car park; impact of the construction of a crematorium in Redcar and Cleveland; deficit in respect of income from commercial rents and charges; impact of grant changes including Homes Bonus and Council Tax benefit grants; and additional annual provision of £400,000 in respect of the Council's agreed Capital programme.
Appendix A of the report submitted outlined the expected position over the medium term 2014/2015 - 2016/2017 and Appendix B illustrated the potential impact on the Council's gross expenditure and income in 2014/2015 and for the three year period 2014/2015 to 2016/2017. An outline of the proposed budget process timetable was outlined in Appendix C of the report.
In commenting on the current assessment of budget pressures with regard to safeguarding vulnerable children Members requested further information on the budget and the measures to mitigate such pressures to ensure that there was adequate provision.
ORDERED as follows:-
1. That the Director of Strategic Resources be thanked for the information provided.
2. That futher information be provided on the predicted future budget pressures and on the measures that are in place to address such issues.