Agenda item

Consider report by Chief Financial Officer on the financial strategy for the Council covering the period 2016/17 – 2020/21.  (Copy attached.)

There had been circulated copies of a report by the Chief Financial Officer seeking approval for the financial strategy for the Council covering the period 2016/17 – 2020/21.  The strategy provided the context for the overall financial management of the Council and covered the revenue budget, capital investment plans, the Council’s treasury management arrangements and reserves policy.  The report explained that the Council, in common with other public sector organisations, continued to face significant and on-going financial challenges as it aimed to provide the best possible services within the resources available. To deliver this plan the Council adopted a 5 year timeframe for revenue financial planning and had embarked upon an ambitious programme of transformation which aimed to modernise services and restructure the organisation.  The corporate transformation programme required the Council to make best use of its people and its resources, focus efforts to look after the Borders and improve both efficiency and effectiveness.  The plan had been amended and updated each year and despite the resource challenges facing the Council and wider public services had so far delivered underspends in in 2013/14 and 2014/15.  In the current year (2015/16) the latest monitoring projection indicated, despite pressures in a number of areas that a balanced out turn position would be achieved.  Since inception in 2013/14 the corporate transformation programme had supported the Council in delivering savings of £15.6m (this included the 2015/16 savings which were on track to be delivered).  Firm figures had been published via the Local Government Finance Settlement for 2016/17 only and consequently it was recognised that beyond the next financial year the financial strategy could only be based on estimated resources.  The updated 5 year plan was therefore based on the best information currently available and it would continue to be adapted over time to respond to changing circumstances.  The strategy used an approach based on a quantified financial risk register to set ensure the Council retained sufficient reserves and the level of unallocated balances underpinning the 5 year plan. It was also highlighted that on 1^st April 2016 the Integration Joint Board set up with NHS Borders would go live and this would have a major impact on financial planning and service delivery within the Borders going forward.  The prudent approach which had been taken was highlighted and a copy of the Risk Register was appended to the report.

DECISION

AGREED to approve the financial strategy for 2016/17 – 2020/21 as set out below:-

(a)     continue to freeze council tax in 2016/17;

(b)     set a prudent, sustainable budget in line with available resources;

(c)     continue to invest in infrastructure through a sustainable capital programme financed by up to £20.485m loans charges per annum;

(d)     maximise income while keeping fees charged to service users at an affordable level;

(e)     continue to invest in corporate transformation and efficiency projects to deliver long term financial savings and service benefits;

(f)      focus on preventative revenue and capital spend; and,

(g)     maintain unallocated reserves of £5.64m for 2016/17 in line with the assessed risk register in contained in Appendix 1 to the report.