Issue - meetings

To receive a briefing on effective scrutiny of local government finances and budget proposals.

The Committee received a briefing, set out in agenda pages 5 to 148, which gave an overview of the Council’s budget setting process, timelines and figures from the 2018/19 financial year.

Bob Watson, Lead Finance Specialist, stated that the Council’s budget was a financial representation of the Council’s strategy and priorities. He added that the budget was the way that the Council could facilitate providing its services to residents. Bob explained the difference between revenue (day to day expenditure, for example Officer salaries) and capital (capital asset creation and enhancement etc.) expenditure, and added that revenue could be used to contribute to the capital budget, but not vice versa. 

Bob stated that with revenue budget setting, it was important to work out what the Council could afford to provide, taking into account statutory services including refuse collection and providing a safe environment for adults and children. Graham Ebers, Deputy Chief Executive, highlighted that one of the key differences between a private company and a Local Authority was that a Local Authority has to provide a range of statutory services (from their revenue budget), which left them with mush less flexibility within their revenue budget. Graham added that there was, comparatively, much more room within a Local Authorities capital budget.

Bob Watson described the two forms of budget, incremental and zero based. Bob explained that an incremental budget adjusted the previous years’ budget for costs such as inflation, growth and efficiencies as well as for one off payments. He added that a zero based budget rebased the budget to meet the specific service needs. Bob stated that Wokingham Borough Council’s (WBC) planned approach was to use an incremental budget, of which 85% was used to provide statutory services. Bob stated that the service budgets belonged to service heads (for example, the Executive Member and Director of the relevant service) who delivered the frontline services to residents.

Bob outlined an approximate timetable for the budget setting process which read as follows:

May – Start to think about growth, efficiencies and income generation;

September - Staffing, fees & charges;

November – Non-staffing, finalise staffing and fees & charges;

December – Complete the medium term financial plan (MTFP), work out the Council Tax base and agree the draft settlement;

January – Finalise the MTFP, seek agreement from the relevant committees;

February – Final settlement, seek agreement at budget Council, Council tax set.

Bob outlined that fees and charges were set to:

·           Recover costs where possible;

·           Manage supply and demand;

·           Cover inflationary increases;

·           Cover some statutory/overrides.

Bob Watson explained the process for revenue monitoring was to send regular ‘hot off the press’ revenue monitoring updates to the Corporate Leadership Team (CLT) and the Joint Board for evaluation. Bob added that these meetings gave the opportunity to identify early warning signs within service budgets, such as overspend or underspend.

Rachel Burgess queried (with relation to agenda page 164) whether the general fund balance was indicative of issues within the overall sustainability of the Council’s finances. In response,  ...  view the full minutes text for item 49