Agenda item

To receive and consider the attached report of the Director of Resources, deferred on 5^th January 2009.

The Director of Resources submitted a report updating the Board regarding the Council’s Financial Plan 2008-2011, and outlining budget pressures and considerations in preparing the Council’s 2009/2010 budget, due to be considered by the Executive Board on 13^th February and the full Council meeting on 25^th February 2009.

Alay Gay, Director of Resources, and Doug Meeson, Chief Officer (Financial Management) attended the meeting and responded to Members’ queries and comments.  In brief summary, the main points of discussion were:-

·  The efforts being made to increasingly link the budget to the Council’s three year Business Plan and the Leeds Strategic Plan so that the Council’s budget reflected the spending priorities identified in those Plans;

·  The fact that the Government’s local government financial settlement was also now a three year settlement, covering 2008-2011. This was helpful in providing a degree of certainty to local authorities in terms of the central monies which they would receive. Reference was made to the tables contained in Paragraphs 2.3 and 2.4 of the report, which showed the percentage and monetary increases in Leeds revenue support grant, and also Leeds percentage increase compared to average increases across the local authority sector.

Assurances had been received from the Government that these percentage increases would be honoured, in spite of declining inflation rates.

Reference was also made to Paragraph 3.3 of the report, which outlined the principles being applied in terms of allocation of the Council’s resources.

·  The Director of Resources explained the national formula via which the Government allocated resource to local authorities, based largely on adjusted population figures and indices of deprivation and special need.

Comparison between authorities were always relative, and a statement was made that, in respect of Core Cities, Leeds most realistic comparator, like for like, was Birmingham, rather than Manchester.

·  It was confirmed that as Leeds does not qualify for the Working Neighbourhoods Fund (NRF), transitional arrangements over the next two years would see a reduction in funding of £5.37m in 2009/10 and £3.59m in 2010/2011.  If the effect of the current recession on Leeds was to bring certain neighbourhoods back within the qualifying parameters of this scheme, it was highly unlikely that Leeds would receive any backdated payments from the Government in this respect.

·  By the same token, if Leeds’ businesses were to suffer disproportionately during the recession, this would not have a direct adverse effect on the amount of Business Rates the Council received from the Government, as this grant too was formula-based, rather than specifically linked to the number of businesses or the amount of rates generated in a particular area. The adverse effects of the recession were referred to in Paragraph 5.2 of the report.

·  Reference was made to the efforts being made to realign the Children’s Services budget over the next 5 years, so that it represented no more than 20% of the Council’s overall budget. The aim was to achieve this without any detrimental effect on front line services, in order to realign the buget and provide resources for the Council’s other identified priorities, such as adult social care and waste management.

Such considerations always involved trying to achieve the necessary balance between frontline services and back office support in order to provide a cost efficient, value for money service, how overheads could possibly be cut, and comparisons with other local authority expenditure.

The Director of Resources undertook to supply Members with figures showing the actual and proposed percentage resource allocations across the various Directorates for the period 2007/08 to 2012/13 and also with Audit Commission information showing comparative information across different local authorities;

·  The issue of levels of reserves, and their use to offset certain expenditure, was also discussed;

·  Reference was also made to ongoing discussions between the Council and the trade unions on a raft of initiatives which might save costs or increase productivity.

RESOLVED –

(a)  That subject to the requests for further information outlined above, the report be received and noted.

(b)  That Alan Gay and Doug Meeson be thanked for their attendance and the manner in which they have responded to Members’ queries and comments.

(c)  That the Director of Resources be requested to convey to his staff the Board’s thanks and appreciation for all their dedicated hard work, especially at budget time, and their excellent fiscal management.

(NB:  Councillor Bentley left the meeting at 10.45 during consideration of this item)