Agenda item

Report by Director of Finance, Performance and Procurement. 

The attached report sets out the Medium Term Financial Strategy (MTFS) 2019/20 to 2022/23, the Revenue Budget 2019/20, the Capital Strategy 2019/20 to 2023/24 and the Treasury Management Strategy Statement 2019/20.

The Chairman of the Performance and Finance Select Committee has been invited to join the meeting for this item.  A summary of the comments and recommendations made by the Select Committee at its meeting on 17 January 2019 on the draft budget proposals is attached. 

The Cabinet is asked to endorse the Medium Term Financial Strategy 2019/20 to 2022/23,  Revenue Budget 2019/20, Capital Strategy 2019/20 to 2023/24 and Treasury Management Strategy Statement 2019/20 for endorsement by County Council on 15 February 2019. 

Following consideration of the report at its meeting on 29 January 2019, the Cabinet resolved to endorse the Medium Term Financial Strategy 2019/20 to 2022/23, Revenue Budget 2019/20, Capital Strategy 2019/20 to 2023/24 and Treasury Management Strategy Statement 2019/20, subject to the amendments outlined in Annex 6, for endorsement by County Council on 15 February 2019.

The call-in deadline is 7 February 2019.

4.    The Cabinet considered a report by the Director of Finance, Procurement and Performance setting out the Medium Term Financial Strategy 2019/20 to 2022/23, Revenue Budget 2019/20, Capital Strategy 2019/20 to 2023/24 and Treasury Management Strategy Statement 2019/20 (copy appended to the signed version of the minutes).  The report was introduced by Louise Goldsmith, Leader, who highlighted that this was a strong budget set in a difficult financial climate.  Proposed savings adjustments were set out in Annex 6 in response to the issues raised by the service Select Committees.

5.  Jeremy Hunt, Cabinet Member for Finance and Resources highlighted that the aim of the budget was to deliver the key priorities as set out in the West Sussex Plan.  Mr Hunt highlighted the key points in the report including the following:

·         The additional one off funding announced in the Autumn Budget was welcomed, however it did not address the long term funding issues. 

·         The removal of the Revenue Support Grant deficit and the confirmation of the 75% Business Rate Retention scheme for 2019/20 were welcome news. 

·         The increase in the referendum limit for Council Tax by a further 1% was a key component to help achieve a balanced budget for 2019/20. 

·         The report confirmed further investment in the Adults and Health and Children and Young People budgets.

·         Thanked the Performance and Finance Select Committee for their review and endorsement of the Budget and the Service Select Committees for reviewing the proposals.  Adjustments to the savings had been presented in Annex 6 as a direct response to the concern raised by the Select Committees. 

·         The Capital Strategy set out how the Capital Programme supported the West Sussex priorities, and confirmed that the borrowing envelope remained the same as the previous year. 

·         Despite the current challenges, the County Council was in a sound financial position and was still providing quality services and increasing funding in critical services for the benefit of residents. 

·         Highlighted the need for the government to provide adequate and fair funding in the future. 

6.  Katharine Eberhart, Director Finance, Procurement and Performance highlighted the robust levels of reserves, and that the County Council continued to be in a strong position compared to other County Councils.  It was important to retain financial resilience by maintaining this level of reserves and not use them to sustain the budget. The report was presenting a forward looking, affordable Capital Programme.  The amendments as outlined in Annex 6 included the introduction of a 750k Transitional Fund to support joint initiatives to support the homeless. 

7.   Pieter Montyn, Chairman of Performance and Finance Select Committee, highlighted the following points from the feedback from the Select Committee on 17 January 2019 and the all Member Day on 9 January 2019:

·         Members raised concern of the unintended consequences of savings and requested further visibility of the impact assessments for the saving proposals.

·         Welcomed the continuing lobbying of government for fairer funding.

·         Welcomed the additional proposals as set out in Annex 6 and that these would be well received by the Select Committee. 

8.   Mr Montyn also sought clarity on the Whole Council Design investment as outlined in paragraph 5.18 of the report, recognising the addition of £3m for early severance costs that had not been outlined in the papers reviewed by the Performance and Finance Select Committee.  Ms Eberhart confirmed that the £3m had been presented differently in the Select Committee papers and therefore would be adjusted for the final County Council papers to ensure it was clear. 

9.  The Cabinet supported the proposed savings amendments as outlined in Annex 6, welcoming the opportunity to reform and reshape

the Fire and Rescue Prevention services to offer them in a more dynamic and externally funded way.  Ms Goldsmith highlighted that time was needed to seek alternative funding and the progress on this would be reported back to the Select Committee. Amanda Jupp, Cabinet Member for Adults and Health welcomed the addition of the £750k Transitional Fund to help support charities through the transitional period of Housing Related Support.  Ms Goldsmith added that the funding had been put aside for District and Borough initiatives in 2018/19, however the fund had remained largely unused. 

10.   Richard Burrett, Cabinet Member for Education and Skills highlighted the ongoing work to look to diversify the range of provision for Home to School Transport.  The introduction of the Special Support Centres would help provide education closer to home and therefore reduce the pressure on the Home to School budget.  Mr Burrett also welcomed the addition of rebuild of Woodlands Meed School to the Capital Programme.  The project was in early stages, but was expected that the new school would open in September 2021. 

11.   Mr Lanzer, Cabinet Member for Corporate Relations supported the increased visibility of the Whole Council Design programme and welcomed the interest of the Performance and Finance Select Committee.

12.  Paul Marshall, Cabinet Member for Children and Young People, highlighted that the Early Help Review was aimed to better target resources and further increase the effectiveness of the service.  The Social Work Recruitment and Retention scheme had been very well received with 90% of social workers taking up the retention package and committing to staying with the County Council. 

13.  Deborah Urquhart, Cabinet Member for Environment, highlighted the complexity of public sector budgets and the importance of continuing to lobby government for fairer funding.  The investment in Solar Farms provided various benefits to the County, including the generation of profit after borrowing and therefore assisting in reducing the need to cut front line services, and providing future energy security to the community. 

14.   Debbie Kennard, Cabinet Member for Safer Stronger Communities, highlighted the investment being made in the Community Hubs project which aimed to reshape and reform the offer provided to communities and help strengthen and create vibrant communities. 

15.   Ms Goldsmith welcomed the budget and thanked officers and the Chief Executive for their dedication and work to produce a sound and robust budget. 

16.  Resolved -  that the Cabinet endorses the Medium Term Financial 

               Strategy 2019/20 to 2022/23, Revenue Budget 2019/20,

               Capital Strategy 2019/20 to 2023/24 and Treasury

               Management Strategy Statement 2019/20, subject to the

               amendments outlined in Annex 6, for endorsement by County

               Council on 15 February 2019.