Agenda item

LIST OF BACKGROUND PAPERS AS REQUIRED BY LAW

(Papers relied on to write the report, which do not contain exempt information, and which are not published elsewhere)

Decision

RESOLVED

To recommend to Full Council that any outturn deficit is funded from a contribution from the use of the General Reserve

Cllr L Shires presented the report in Cllr E Seward’s absence. She explained that it covered the period up until the end of September and reflected the increases in inflationary costs that has not been envisaged when the Budget was set in February. Higher interest rates were also an issue. However, it was a forecast and could change. She said that the Council’s strong finances ensured that it was in a good position to deal with such financial pressures, unlike many local authorities. She concluded by saying that the Administration was not complacent about the challenges ahead and there would be regular reports and updates to Members outlining how the situation could be mitigated.

The Chairman said that the forecast deficit was significantly higher than anticipated as a result of inflationary pressures and it was likely to get worse in the coming months.

The Chairman invited members to speak:

Cllr N Dixon commented that if the outturn figure was as forecast, it would be an unusual outcome and if this was the case, he would be looking to understand why and whether it was a one-off reason or an indication of a more challenging trend. He added that it was the outturn figure that would be relevant.

The Chairman replied that it was set out in the report where inflationary pressures were impacting. The figures showed that staffing costs, fuel prices and energy costs had all increased substantially. There was a risk that inflation strain would continue to increase and although he shared Cllr Dixon’s concerns, it was clear what the cause was.

Cllr Shires said that no-one could have predicted this in February when the Budget was agreed. The financial situation across the country was so volatile that it was almost impossible to deal with. The only possible solution at the current time, was for the Government to step in and bring stability at local level. It must be acknowledged that it was unlikely that this was a short-term issue. It was nationwide and could go on for some time.

Cllr C Cushing referred to page 25 and the projected overspend of £909k. The reasons for this were listed and he wondered how solid these estimates were and if there was anything else that could come into play that had not been anticipated. The Chairman replied that as far as energy costs were concerned, the Council was working hard to address this and limit any further increase. Employee costs were considered to be pretty accurate, however, other areas such as the waste contract, were less clear and costs could rise. He added that this was why members would receive regular updates on the financial situation going forwards.

Cllr J Rest commented that all service areas were under pressure, budget wise. He asked if there were any priority areas that must be focussed on and whether other areas could be dropped if necessary. The Chairman replied that the Council was not yet in that situation. Other local authorities had been forced to close leisure centres and NNDC was certainly not at that point, adding that they brought in income for the Council. He added that some operational services took priority over others – such as housing and People Services.

Cllr L Shires said that the Administration was not looking at any service cuts for the current year at least. Staff were used to working to achieve the best value for money for residents. The Chairman added that job vacancies were being reviewed as they arose, to ascertain whether they needed to be filled.

Cllr J Toye commented that he would like some assurance that the Council was taking a holistic approach as making cuts in one service area could impact elsewhere. The Chairman agreed.

Cllr N Dixon referred to his earlier question and said that it was accepted that the wider national financial situation was impacting on all local authorities. What was different, however, was that NNDC had been in a comfortable financial position for many years compared to other district councils, which is why the forecast overspend could be considered to be a matter of concern. He said that this should prompt the Council to look more carefully at factors that could be peculiar to North Norfolk. The Chairman said that he shared Cllr Dixon’s concerns but it must be acknowledged that the Council did not have any debt which contrasted to other authorities.

Cllr V Gay agreed that the Council had a reputation for sound finances and its lack of debt meant that it was not having to pay rising interest costs. In response to Cllr Toye’s concerns about the impact of cuts on non-statutory services, she said that health was a new responsibility for the District Council and the provision of discretionary services was key to supporting wider health objectives. The Council must not lose sight of the benefit of such services to residents.

It was proposed by Cllr L Shires, seconded by Cllr T Adams and

RESOLVED to

1)    Note the contents of the report and the current budget monitoring position.

2)    Recommend to Council that any outturn deficit is funded from a contribution from the use of the General Reserve

3)    Agree that a regular update should be provided to Members on the measures being undertaken to mitigate and reduce the current forecast deficit

Reason for the Decision:

To update Members on the current budget monitoring position for the Council.