Agenda item

This report presents to the Executive the Council’s draft Financial Strategy for 2008/09 to 2010/11.  In doing so it covers both the Council’s financial position for the next three years (the Medium Term Financial Forecast or MTFF) and potential options for bridging the gap between the expected budgetary position and the funding available.  It also attempts, for the first time, to formalise a number of financial policies relating to the Council’s financial management.

RESOLVED:a) That the attached financial strategy be endorsed, whilst it be noted that:

(i)The revised calculation base for the MTFF currently excludes requests for funding expenditure on Council priorities and service aspirations;

(ii)The initial funding gap (excluding priority and aspirational growth) of £10.484m;

b)That the proposed approach to balancing the budget be formally adopted and the relevant savings targets be noted:

(i)2.5% per service;

(ii)plus 2.5% per director;

(iii)plus a 5% yield on income budgets (including an analysis of the options available to extend the Council’s trading activities);

c)That the proposed response to the Policy Prospectus request for proposals to influence current and future funding decisions at a national level be supported;

d)That the Head of Finance be requested to develop a response to the extant consultation on potential changes to the grant distribution formula with a particular focus on:

(i)Delivering changes to the Area Cost Adjustment for York,

(ii)Ensuring that new arrangements for concessionary fares are funded either as a specific grant or are excluded from formula damping calculations,

(iii)             Opposing the proposed changes to the day visitor funding calculation;

                        e) That the Chief Executive be requested to table proposals for public consultation based on techniques exemplified in paragraphs 22b, c and d of the report.

REASON:a) & b)To enable the commencement of formal budget planning for 2008/09;

c)                  To maximise the Council’s potential influence on national funding policy and decisions;

d)                 To ensure that York’s views are reflected in any final decision on national funding changes;

e)                 To ensure a full consultation exercise takes place.

Members received a report which presented the Council’s draft Financial Strategy for 2008/09 to 2010/11.  In doing so it covered both the Council’s financial position for the next three years (the Medium Term Financial Forecast or MTFF) and potential options for bridging the gap between the expected budgetary position and the funding available.  It also attempted, for the first time, to formalise a number of financial policies relating to the Council’s financial management.

The report also set out the Policy Prospectus response on the future of a Fair Grant for York, which was, in summary, that:

·  The Council would pursue a robust response to three aspects of the national funding consultation, these being the Area Cost Adjustment, Tourism Funding and proposed arrangements for Concessionary Fares.  Where appropriate this response would look to include wider stakeholders such as the local MPs.

·  Officers would look to identify and exploit opportunities to establish York as an opinion leader for local government financial issues.  It was noted that the benefits of such an approach were only likely to be realised in the medium to long term.

Officers reported that an extra £0.5m had been made available to the Council under the Local Authority Business Growth Incentive Scheme (LABGI).

Members expressed concern regarding the low level of grant received from central government and highlighted the major challenge that this created for the Council, in the light of increased demand for public services and increased delegated responsibilities from the government.

Having considered the advice of the Shadow Executive, it was

RESOLVED:a) That the attached financial strategy be endorsed, whilst it be noted that:

(i)The revised calculation base for the MTFF currently excludes requests for funding expenditure on Council priorities and service aspirations;

(ii)The initial funding gap (excluding priority and aspirational growth) of £10.484m;

b)That the proposed approach to balancing the budget be formally adopted and the relevant savings targets be noted:

(i)2.5% per service;

(ii)plus 2.5% per director;

(iii)plus a 5% yield on income budgets (including an analysis of the options available to extend the Council’s trading activities);

c)That the proposed response to the Policy Prospectus request for proposals to influence current and future funding decisions at a national level be supported;

d)That the Head of Finance be requested to develop a response to the extant consultation on potential changes to the grant distribution formula with a particular focus on:

(i)Delivering changes to the Area Cost Adjustment for York,

(ii)Ensuring that new arrangements for concessionary fares are funded either as a specific grant or are excluded from formula damping calculations,

(iii)             Opposing the proposed changes to the day visitor funding calculation;

                        e) That the Chief Executive be requested to table proposals for public consultation based on techniques exemplified in paragraphs 22b, c and d of the report.

REASON:a) & b)To enable the commencement of formal budget planning for 2008/09;

c)                  To maximise the Council’s potential influence on national funding policy and decisions;

d)                 To ensure that York’s views are reflected in any final decision on national funding changes;

e)                 To ensure a full consultation exercise takes place.