The Committee received a presentation of the Corporate Director for Finance and Systems providing information in relation to the budget challenges and assumptions for 2019/20, as well as an update on the 2018/19 savings programme. The presentation was considered under the ‘Overview Report’ item, as it had been omitted from the original agenda in error.

The gross budget gap for 2019/20 was approximately £12m, and the Corporate Leadership Team and other Senior Officers had been tasked with submitting proposals to identify possible efficiency savings and income generation opportunities to address the shortfall. The 2019/20 Draft Budget Proposals would be presented to the Executive on 15 October 2018 before being presented to the Scrutiny Committee on 7 November 2018. Following the autumn statement and the Budget Scrutiny process, the final proposals would be presented to full Council at their meeting in February 2019.

Members discussed the 100% business rates retention scheme, which had replaced the revenue support grant previously provided by central Government. Although Trafford currently benefited from the scheme, a reset of the formula was scheduled for 2021, which could significantly reduce the amount of income Trafford receives for their business rates growth. It was also noted that a substantial amount of funds were set aside to cover ongoing business rates appeals, roughly 50% of which were lodged by businesses located at the Trafford Centre and Trafford Park. If an appeal was unsuccessful, the funds set aside for this could be released from the reserves for use in the wider budget.

Page 17 of the second supplementary agenda listed the savings programme proposed for the 2018/19 budget. Members were advised that the savings attributed with a red ‘RAG’ rating related to some savings at Sale Waterside which may not being achieved, as well as some potentially missed savings targets in the Adults budget. These were regularly reported in the budget monitor reports presented to the Executive and the Accounts & Audit Committee.

The Chair asked for more detailed information in relation to the reserves listed on page 18 of the second supplementary agenda, and how the decisions were made on how these were allocated. The Corporate Director for Finance and Systems advised that the reserves were regularly reviewed, but more detailed information could be provided if required. It was agreed that the Chair would meet with the Corporate Director for Finance and Systems following the meeting to review aspects of the reserves, and would report back to the Committee with any relevant information.

Members discussed the Investment Fund and Strategy. The strategy aimed to provide the Council with more capital growth, which would in turn provide better returns on investments. The figures listed on page 19 on the second supplementary agenda were the net additional income expected from these investments, taking interest and the Minimum Revenue Provision (MRP) into account. The Council was required to set aside funds to ensure any borrowing for investments could be paid back. At the end of the period, the funds built up in the MRP would be used to pay back the loan, with the Authority then owning the asset.

Members asked whether fees and charges could be considered for additional income generation. The Committee were advised that these were treated as ‘negative costs’, with most services only allowed to cover their own costs and could not legally make a profit (e.g. licencing fees). Also, the fees for some services were set at a level to ensure they were affordable and used by residents, with the Council only recovering the cost associated with providing these services (e.g. pest control).

The Committee thanked the Corporate Director for Finance and Systems for the report and looked forward to the presenting of the 2019/20 Draft Budget Proposals at the Scrutiny Committee meeting on 7 November 2018.

RESOLVED:

1)    That the update be noted.

2)    That the Chair meets with the Corporate Director for Finance and Systems following the meeting to discuss aspects of the budget reserves in more detail.