The Head of Corporate Finance informed the Committee that there had been a number of reports considered by Cabinet throughout the municipal year on the progress to meeting the 2016/17 forecast deficit of £9.966m which was reported to Council in February 2015.
It was explained further that a referendum in Thurrock Council would be triggered if Council Tax increased by 4% or more above the authority’s relevant basic amount of Council Tax for 2015/16. Due to the loss of assumed freeze grant and the Council’s low budget base, a 3.99% increase was recommended as it would raise some £2.2m in 2016/17 and make some headway towards the more difficult task of balancing 2017/18 and beyond. It was explained that a 3.99% increase in Council Tax equates to £44.82 for a Band D property in Thurrock. Some 70% of properties in Thurrock are Bands A-C where the increase ranges from £29.88 - £39.84 per year or £0.57 - £0.77 per week.
All members agreed that raising Council Tax was apparent. Members understood that it was no longer possible to freeze the grant. The Committee commended Thurrock Council for maintaining Council Tax to a minimum in previous years despite budget savings.
The Head of Corporate Finance explained that Thurrock Council had one of the lowest levels of budgets in the Country for the range of services that were provided. Councillor Kerin raised concerns over those Council services that may receive further budget savings due to meeting future deficits.The Head of Corporate Finance understood members concerns and explained that the Council were taking steps towards rebuilding Thurrock Councils financial casing.
The Committee were informed that the Government’s spending power calculation for all Councils with Adult Social Care responsibilities expected an increase of 3.75% representing a general Council Tax increase of 1.75% per annum, plus the additional 2% Social Care precept. Councillor Stewart questioned the difference between 3.75% and the recommended 3.99% increase in Council Tax. The Head of Corporate Finance explained that by raising Council Tax by an extra 0.25% this would make some headway towards the more difficult task of balancing 2017/18 and beyond.
The Head of Corporate Finance explained that when setting the Council Tax and budget, the Council had a statutory obligation to consider the Responsible Financial Officer’s Section 25 Statement. The statement sets out the robustness of the budget set but also whether the S151 Officer has confidence in the future financial position of the Council. When making this judgement, the S151 Officer considers the Council’s position on Council Tax, the ability to make cost saving decisions and the robustness of plans for the future. The Committee were informed that the Corporate Overview and Scrutiny Committee and the 10 February 2016 Cabinet would inform the opinion.
The Chair of the Committee asked for clarification regarding the 2% Social Care precept. The Head of Corporate Financeexplained that the Social Care precept included the need to manage increasing demands for both Children’s and Adults’ Social Care whilst also needing to meet further pressures from the following government decisions:
· Changes to National Insurance and the introduction of the Apprentice Levy increases costs by circa £0.5m.
· The minimum wage increases had been estimated to impact Adult Social Care contract provision by £1.5m.
The Chair of the Committee requested that the Head of Corporate Finance produced a report summarising the budget review panel at the next Corporate Overview and Scrutiny Committee. The Chair requested this as he felt uneasy about defaulting to a maximum increase (without the need for a local referenda) and that there were more optimisations and efficiencies within the organisation to suggest that a 3.75% was more acceptable rate increase. Committee members argued up front for a 3.99% total rise, and therefore, the majority view of the Committee was clear.
1. That Corporate Overview and Scrutiny Committee noted and commented on the key changes to the 2016/17 base budget;
2. That Corporate Overview and Scrutiny Committee provided Cabinet with a view to the proposed 2% increase in Council Tax relating to the Social Care Precept;
3. That Corporate Overview and Scrutiny Committee provided Cabinet with a view to the proposed 1.99% increase in Council Tax relating to the overall budget; and
4. That Corporate Overview and Scrutiny Committee noted the comments regarding the Director of Finance and IT’s Section 25 considerations as set out in section 6 of this report.