Agenda item

J Deane apologised for the late submission of the report due to the additional detail and uncertainty that we wouldn’t normally experience. He gave a detailed presentation to the committee and welcomed questions.

Councillor Symington questioned if there was any scope to increase ours fees in certain areas. J Deane replied there could be and they would look at income streams from all areas through the budget setting process.

Councillor Townsend felt it was difficult to look at this strategy in isolation from the capital strategy and suggested it would be useful to put the information together. His understanding was that the marked reserves would impact our ability to deliver on our capital programme and if we were able to see them both alongside then we would understand the impact we’re making in terms of our future spend. J Deane explained that the call on reserves that were required from the capital programme were already factored in to this strategy and he drew attention to Appendix B. He advised that we had a fully financed capital programme at present. It was a five year programme and was approved with the budget every February. 

Councillor Tindall referred to the youth provision reserve. He said up until recently it was £100k and was set aside for the Highfield Youth Club which never happened. He asked if J Deane could look into the history and find out where £56k of the £100k had been spent as it hadn’t been spent in Highfield. J Deane agreed. Action: J Deane

Councillor Guest asked if there had been any linkage between our MTFS and Hertfordshire County Council’s Integrated Plan. J Deane advised it was linked in the extent that when HCC have something in their plan that involved taking money from us that would be factored into our MTFS. There’s a couple of areas of pressure on the alternative financial model on the waste side where some of these savings and efficiencies HCC were putting through were having a detrimental effect on us financially.

Councillor Symington queried if there was a specific target in terms of what we put in to reserves overall. She then referred to the earmarked reserves and suggested that an outsider could find it difficult to know what they were earmarked for, how they are used and if that’s the specific amount or an estimated cost. J Deane referred to Appendix B and explained there were two different kinds of reserves; the general fund reserves and the working balance. The working balance is the only one where we have a target which is 2.5%. The target there is to keep it between 5 and 15% of net cost of services and it was there as a contingency against unforeseen eventualities that require additional expenditure in year. He said every earmarked reserve is detailed within the budget report which is presented every year in February.

Councillor Symington asked if she was correct in thinking that the grants and additional funding that we have received this year haven’t been factored in to next year’s budget. J Deane confirmed that was correct although we would of course welcome additional funds if that happens. Councillor Symington asked if there was any indication that we would receive any additional funds next year. J Deane said it was impossible to know at the moment.

Councillor Symington sought clarification on the increased cost of employees in the next few years. J Deane advised it related to pension benefits that had been accrued for people no longer working and we had to make a payment for that. There is two ways we can do that; a small amount in year every month or we can pay three years’ worth every time we get a triennial valuation.

The Chairman asked if J Deane could add serial numbers to each line in the Appendix B summary in future so it was easier to refer to. J Deane agreed.

The Chairman questioned how they decided which reserve to use money from. J Deane advised it was a council decision but the benefit of doing it when it comes closer to setting the budget is that we have a clearer idea on what we might want to do or what members might want to spend on in the coming years. By knowing that we will know which reserves are likely to have a draw down on them already.

Outcome:

The report was noted.