Agenda item

Councillor Townend introduced the item. He said that the financial context in which Council had to produce the assumptions for the proposed council budget for 2016/17 were extremely challenging. There were also substantial one off costs that Council had to meet from the earmarked reserves. One Member asked whether Cabinet would come up with changes to their current budget proposals in view of the announcements made by the Chancellor during his presentation of the Comprehensive Spending Review Statement. Tim Willis, Director of Corporate Resources said that there wasn’t anything significant arising from the government announcement that would require the need for Council to make changes to the proposed budget for 2016/17, but the detailed financial settlement for Thanet would not be known for several weeks.

In response to questions, Tim Willis said that digitalisation will achieve efficiency savings but would also be designed to improve customer experience. He said that the proposed budget strategy for 2016/17 represented headlines of the main detailed budget proposals, to be considered by Cabinet in January 2016 before going to Council in early February 2016. Council would continue to monitor and review the efficiency savings of the shared services arrangements (EK Services, EK Housing and EKHR). Matt Sanham said that the introduction of the living wage would over time impact on the lowest pay bands of the Council, but the financial impact would be minimal as a result of inflation and, if necessary, the rationalisation of pay bands.

Tim Willis said that the report under review did not make provisions for meeting the costs of maintenance of the buildings currently run by Your Leisure. Madeline Homer, CEx added that currently an asset management review was underway and the outcome would be shared with Members and any liabilities identified through this review would be considered within the context of the overall asset base.

Nicola Walker, Interim Head of Financial Services confirmed that the majority of bad debts came from previous Council tenants and were therefore historical. These were being managed by EK Housing. In addition a sum of £50K had been set aside to assist with the impact of Welfare Reform/Universal Credit to support initiatives that prevent tenants falling into arrears. The current bad debt levels compared favourably with what the other local Councils were experiencing.

Nicola Walker also said that any surplus from housing rent would be reinvested in existing housing stock to ensure the integrity of the buildings and Council had previously done so. Councils had to operate within a strict regulatory environment when setting housing rents and rent levels were set by government.

Nicola Walker acknowledged that the Government’s 1% rent reduction for social housing would have a negative impact on the Council’s ability to deliver social housing. She said that the Council would now have to revise its thirty year business plan downwards and there would be a potential loss of income of about £4.5 million over four years.

Madeline Homer advised the meeting that Council had made some advance payments as compensation for the Dreamland CPO and negotiations were still on-going.

Madeline Homer said that officers would be taking into consideration the comments made by the Panel as they finalise reports to Council.

The report was noted.