Agenda item

Cheshire Fire Authority was required to approve its budget and set the Council Tax precept for the financial year commencing 1^st April 2017.  In determining a budget that it considered reasonable, the Authority was required to have regard to all relevant factors, including the likely impact of policy options on the achievement of the Authority’s objectives and uncertainties associated with the economic scenario.

The Head of Finance presented the report which sought Members’ approval for the Authority’s budget for 2017-18, the Council Tax precept level for 2017-18 and its Medium Term Financial Plan (MTFP) for 2017-18 to 2020-21.  This was the final budget report of two; the first was considered by the Fire Authority on 7^th December 2016.  Members had also met to develop the Authority’s financial plans at Members Planning Days throughout the year.   

The report asked Members to consider two budget proposals, based on:

a)    Increasing the Council Tax precept by 1.99% (£73.29 for a Band D property); or

b)    Maintaining the Council Tax precept at its 2016-17 level (£71.86 for a Band D property).

The two budget proposals were detailed in Table 4 of the report.  Appendices 1 and 2 of the report presented the MTFP modelled on the effect of existing assumptions and showed how the Authority would produce a balanced budget in 2017-18 based on the two budget proposals. 

Members were also asked to consider two options concerning how to pay its employer pension contribution over the next three years (2017-18 to 2019-20).  One option was to set a rate which increased by half of one percent over each of the next three years, from 21.3% to 22.3%.  The second option was to set a core rate of 18.3% and pay the LGPS a lump sum of £574k in April 2017.  The second option would save the Authority £36k over the three year period and the budget and reserve movements assume that this option would be followed.

The Head of Finance confirmed that, at the time of writing the report, the settlement had not had final parliamentary approval.  Whilst it was not anticipated that the settlement would change, it was important for Members to understand how any changed might be accommodated.  It was essential that the precept was approved on 14^th February so that the necessary notifications could be provided to the collection authorities.  This would not alter as a result of any changes in the settlement.  However, it would lead to a change in the budget and have a knock on effect on the MTFP. This would be accommodated by:

-       A reduction or increase in Settlement Funding Assessment (SFA) or Section 31 Grant in 2017-18

-       An equal and opposite change in the movement of IRMP/Capital reserve in 2017-18

The Head of Finance informed Members that this would be reported to Members as appropriate and that an announcement from the Government was expected week commencing 20^th February 2017.  He also advised Members that this would not affect the Council Tax precept.

Members discussed the information provided in respect of the budget proposals for 2017-18 and there were a number of comments/queries.

A Member asked the Head of Finance to clarify the position with regard to the costs in the budget for apprentices.  The Head of Finance explained that the levy payable to the Government, which was equivalent to 0.5% of the Authority’s salary budget was included in the base budget.  The costs to the Authority of running the Authority’s own apprenticeship scheme was to be funded from reserves and not included in the base budget.

Councillor Nelson, Member Champion for Finance, thanked the Head of Finance for his comprehensive report and supported the proposal to increase the Council Tax precept by 1.99% and the approval of recommendations [2] to [7].

The Chair concluded that Members had expressed their views and Members were asked to vote on the two proposals.  The proposal to increase the Council Tax precept by 1.99% was carried with 13 Members voting in support of the increase. 7 Members abstained.  Members also voted on the option in respect of employer pension contributions. The proposal to set a core rate of 18.3% and pay the LGPS a lump sum of £574k in April 2017 was carried with 14 Members voting in support and 6 abstaining.

RESOLVED: That

[1]       proposal 1, to increase the Council Tax precept by 1.99%, be approved, leading to the precepts on billing authorities’ collection funds set out in Table 5 and the MTFP set out in Appendix 1;

[2]       the revenue growth proposals for 2017-18 as set out in Appendix 3 be approved;

[3]       the savings proposals for 2017-18 as set out in Appendix 4 be approved;

[4]       the 2017-18 Capital Programme as set out in Appendix 5 be approved, and the items shown as part of the Capital Programme for  2018-19 (also set out in Appendix 5) be approved;

[5]       the Reserves Strategy as set out in paragraphs 28-50 be approved (including a payment of £574k to LGPS as detailed in paragraph 48);

[6]       the statement on robustness of estimates and adequacy of reserves (paragraphs 76-77) be noted; and

[7]       the Financial Health Targets (paragraph 75) be adopted for 2017-18.