The presentation will explain the Dorset Council budget setting process for 2020/21 including an assessment of the implications for Dorset Council following the announcement of the outcome of the 2019 Spending Round by the Chancellor on 4th September 2019.
The Committee received a presentation from the Executive Director - Corporate Development and the Head of Strategic Finance on the budget for 2020/21. This provided information which would enable the Committee to scrutinise the budget proposals at their next meeting on 26 November 2019.
The presentation covered the current budget position and projected overspends for 2019/20, the Medium Term Financial Plan (MTFP) and key variables, the ambition to see a balanced budget over the next ten years, the 2020 spending round, Dorset Council's Plan and priorities, values, behaviours and principles, and the Council's budget setting process.
In response to questions it was explained that although there were projected overspends for adults and children's services, there was a projected underspend in Corporate Services and other directorates were broadly on budget; Council tax and business rates had been factored into the MTFP and there was some flexibility within the process; Council tax support was based on the assumption that it remained at the same level but financial modelling was able to be refined when more information became available; the additional national funding (£14B) for schools might provide additional support for the most vulnerable children and ease some of the financial pressure on the Council for the provision of educational health care plans; and it was not yet known what effect the additional Government funding would have on spend per pupil.
The Committee would scrutinise the budget at its meeting on 26 November 2019 with members having the opportunity to see the information prior to the meeting. The financial settlement was expected in early December and the budget would be considered by the Cabinet in January 2020 and the Council in February 2020.
One member wanted to be satisfied that the budget process was robust. The Executive Director asked members to provide him with questions they would like to ask in advance of the meeting on 26 November 2019 so that he could ensure these were addressed.
With regard to financial modelling, the Chairman asked the Executive Director to send a list of current and future variables to members following the meeting. This would help members better understand the process and their impact on the budget.
Members noted that discussions with directorates to look at options to address budget gaps were to start the following week. Adults and Children's Services had transformation plans in place but there was a need to generate options to address the budget shortfalls. Other Directorates without projected shortfalls would be expected to find efficiencies and there would be savings arising from the Tranche Two Transitional Structure review.
One member questioned whether the Council's priority for climate change had been taken seriously as the potential impact of its cost would need to be understood before the Council could make an informed decision about its impact on the budget. It was suggested that climate change should be included as one of the key variables but the Executive Director explained that this would be factored in to service plans but was not currently explicitly shown.
Reference was made to the Council's statutory obligations for service provision and the need for investment in non-statutory services in order to ease pressures on statutory spend. Some members were unclear as to what statutory services included and others were of the view that the Council should not necessarily concentrate on these but on the Council's moral obligation to deliver services that residents needed. It was important for members to understand statutory obligations in order for them to be able to assess the most effective and efficient way for their provision.
With regard to whether discussions with Directorates would include income generation, cost recovery and profit generation, it was explained that the assumption was that prices would reflect inflation modelling and would ensure full cost recovery. Members noted that benchmarking with other local authorities regarding prices was undertaken. The Chairman was keen that the Council deliver the best services possible at the best market price and members thought that commercial activity assumptions should be re-examined to ensure that prices were set at the right level for the new Council.
The Chairman thanked officers for their presentation.
That a list of current and future variables be sent to members following the meeting.