Issue - meetings

Purpose of Report

To update the Executive on the likely challenges ahead in preparing for the 2019/20 and future years budget, to set out the parameters within which the Council would prepare these budgets and to confirm the Council’s approach to development of the budget and the Medium Term Financial Strategy.

Decision

The Executive:

(1)       Noted the significant financial challenges that the Council faced.

(2)       Noted the projected budget parameters for 2019/20 and future years and noted the planning assumptions, as set out in Appendix A.

(3)       Noted the budget, strategic and service planning preparation programme, as set out in Appendix B.

Alternative Options Considered and Rejected

None.

Reason for Decision

The financial landscape for local government over the medium term period posed a significant challenge to the Council due to the volatility, complexity and uncertainty about future funding. Significant national decisions were still to be made by the government about future departmental spending through the spending review, the allocation of this funding to local government through the fair funding review and the implementation of the 75% business rates scheme, all of which impacted the Council’s Medium Term Financial Strategy.

The Council’s financial positon needed to be viewed in the wider context of continued public sector austerity and the impact this was having upon the financial resilience and sustainability of local authorities. A number of local authorities were taking measures to restrict expenditure to core, statutory services.

Although the potential increase in savings required would be substantial, it was not unprecedented and the Council should have some confidence that it had a track record of delivering strong financial discipline and that it could rise to the challenge once again. This successful financial planning to date had enabled the protection of core services for the people of Lincoln, whilst at the same time allowing for significant investment in the city, its economy and delivery of the Council’s Vision 2020. The Council would continue to adopt this approach, carefully balancing the allocation of resources to its strategic priorities whilst ensuring it maintained a sustainable financial position.

Further information relating to the spending review, the fair funding review, the 75% business rates retention scheme and business rates retention pilots, local government financial resilience and the social housing green paper and right to buy consultation was set out in the body of the report.

In terms of the Council’s financial monitoring for the current year, the following updates were noted:

General Fund

The financial monitoring report for the first quarter of 2018/19 forecast a significant overspend for the general fund at the year-end of £717,343. The key variance was the shortfall of car parking income against its budget target of £1,141,000.

The shortfall in car parking income was the continuation of a trend that began to emerge towards the end of 2017/18 and reflected a reduction in demand for shopper car parking spaces. This was in line with a reduction in footfall in the city centre and the general decline in high street shopping  ...  view the full minutes text for item 56