Agenda item

Consider report by Chief Financial Officer on the estimated revenue and capital resources available for financial year 2018/19(Copy attached.)

There had been circulated copies of a report by the Chief Financial Officer on the estimated revenue and capital resources available for financial year 2018/19 following publication of the local government finance settlement on the 14 December 2017 and subsequent funding notifications from Scottish Government for 2018/19 on 23 and 31 January 2018. The report recommended the financial strategy to be followed by the Council next year, identified the financial constraints and major risks to be addressed and also outlined the process supporting the construction of the draft revenue and capital Financial Plans for 2018/19 as well as draft plans for future years.  The Corporate Management Team had worked with political groups to support Members in setting a corporate revenue and capital budget, meeting identified pressures facing the Council. These pressures had arisen from a variety of factors, the principle pressures identified were due to the anticipated continuing constraints on external revenue and capital funding from central government, the increasing pressures from demographics, particularly the increasing numbers of very elderly people requiring care services, as well as inflation and employment costs. The budget process had been conducted to ensure that the financial plans of the Council were aligned with its business and people planning objectives and the level of resources available.  Total resources of £272.665m were available to Elected Members assuming the Council accepted the 2018/19 settlement offer from Scottish Government and approved a 3% increase in the council tax rate.  The benefits, in terms of financial stability and effective change management, derived from adopting a longer term corporate approach to the revenue and capital planning process, were widely accepted.  Financial year 2018/19 provided the opportunity to prepare a new 5 year financial plan for the Council.  The estimated resources available over the following four financial years were also shown and would continue to be updated annually as the detail of the financial settlement from Scottish Government became known.  The Council’s 2016/17 statutory report from Audit Scotland highlighted the good practise previously adopted by the Council with regard to medium term 5 year financial planning and recommended that this approach be extended to encompass scenario planning over a longer period.  In considering the likely levels of resource availability in future years the Council had therefore modelled a range of scenarios with regard to Scottish Government grant, Council Tax increases and estimated future inflation.  This analysis was included at Appendix 2 to the report and it was envisaged that this approach to scenario planning would increasingly feature as part of the Council’s financial planning process.  The report also sought approval of the financial strategy for the Council covering the period 2018/19 – 2022/23.  The strategy provided the overall framework for the financial management of the Council and covered the revenue budget, capital investment plan, the Council’s treasury management arrangements and the recommended policy on reserves.  The financial plan was highly dependent on the delivery of savings and a risk based approach had once again been used to set the level of recommended balances.  These were held both as contingency against unforeseen circumstances, to facilitate the delivery of savings and to smooth the financial plan in the event of non-realisation of the savings envisaged.

DECISION

AGREED to:-

(a)       note the estimated revenue resources for 2018/19 to 2022/23;

(b)       note the estimated capital resources for 2018/19 to 2027/28 and the requirement to adhere to the prudential code for capital borrowing;

(c)       note the requirement to set a band D council tax for 2018/19;

(d)       approve the financial strategy set out in the report having considered the risk register contained in Appendix 1 to the report; and

(e)     proceed to consider the Administration’s proposed Financial Plan for 2018/19,  and approves the council taxes to be paid for 2018/19 in respect of all chargeable dwellings to fund these plans as part of the budget motion.