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(With the concurrence of the Chairman under Section 100 (B) (4) (b) of the Local Government Act 1972, this matter was included on the agenda to enable provisional budget and capital programme guidelines to be set at this meeting)

1. Summary

1.1 This report recommends provisional service budget and capital programme guidelines to enable policy review committees and executive members to consider their budget proposals in January for submission to the Cabinet in February.

1.2 When the Cabinet considered the provisional budget strategy in September it was anticipated that the Government would announce the details of the 2005/06 grant settlement in mid-November so that its implications could be reflected in the setting of the provisional budget guidelines. However the grant announcement was made on the day that the agenda for this meeting was circulated. There was insufficient time to assess fully the impact of the settlement prior to setting provisional guidelines in advance of scheduled meetings in January to consider service budget proposals. Consequently it is proposed to set provisional guidelines in accordance with the budget strategy agreed in September. This will mean that there will be some alternative options about service spending levels and about the level and use made of efficiency savings, which will need to be resolved in February, prior to the setting of the budget.

1.3 The following decisions were taken:

i) that the County Treasurer in consultation with the Leader, be authorised to submit a written response to The Office of the Deputy Prime Minister on behalf of the County Council to the provisional settlement

ii) that in accordance with the provisional budget strategy agreed in September, service budgets be prepared in conjunction with executive members within the provisional guidelines set out in paragraph 2.3 of the report for consideration by policy review committees

iii) that following consideration by policy review committees, that executive members approve service budgets within the budget guidelines for submission to the Leader and Cabinet in February 2005.

iv) that the Secretary of State for Education and Skills be notified by 31 December 2004 of the County Council's intention to passport fully the increase in the Schools Block for 2005/06

v) that the Social Care Executive member be asked to prepare budget proposals within separate guidelines for children's and other adult client groups

vi) that all executive members identify cashable efficiency savings of at least 1.25% (including the firm plans already made for SAP benefit realisation savings) on the basis that these savings could be used in final decisions to absorb pressures within the service or elsewhere, or to reduce the council tax (or any combination of these)

vii) that any proposals for additional spending above the base budget to be met from redeployments or proposed efficiency savings, or in the case of Schools Budget within the passported sum, should be accompanied by a summary business case containing clear financial and performance data setting out how performance will be improved and value for money achieved, and its links to the key aims of the Corporate Strategy

viii) that all executive members meet their inescapable budget pressures and legislative requirements within the provisional budget guidelines with proposals for efficiency savings or redeployment of resources to offset any new spending priorities (excluding Schools)

ix) to confirm that the Social Care Executive member be asked to ensure that separate efficiency savings targets set by Government for Supporting People be achieved without additional cross subsidy elsewhere within older people and other adults, or additional council tax support

x) that all executive members report back on their annual review of charges and maximisation of income

xi) that executive members also report back on the workforce implications of their proposed budgets as part of the process of linking workforce and financial planning

xii) that further budget consultations with the public and others be considered in January 2005

xiii) that executive members are asked to prepare proposals for a locally resourced four year capital programme within the current programme limits, adjusted for inflation

xiv) that in addition, executive members be asked to submit:

· capital schemes supported by Government grants and scheme or programme specific supported borrowing for 2005/06 and those expected to be supported in 2006/07, 2007/08 and 2008/09

· proposals for the use of unsupported borrowing in accordance with the County Council's policy on prudential borrowing

· proposals for supported credits for Private Finance Initiative Scheme.

2. Reason

2.1 The Leader and Cabinet need to determine the basis on which service budgets and capital programmes are prepared for consideration by executive member and policy review committees in January, as the next step in the preparation for final budget and council tax decisions for 2005/06 to be taken in February 2005.

2.2 These decisions support all of the aims of the corporate strategy as it provides the financial resources for:

Aim 1 - maximising life opportunities

Aim 2 - stewardship of the environment

Aim 3 - achieving economic prosperity

Aim 4 - building strong and safe communities

Aim 5 - improving services

Aim 6 - developing councillors and staff

3. Other options considered and rejected

3.1 Not applicable.

4. Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5. Dispensation granted by the Standards Committee

5.1 Not applicable.

6. Reason for the matter being dealt with if urgent

6.1 To enable provisional budget and capital programme guidelines to be set as the basis for service budgets and capital programme proposals to be considered in January.

Approved by: Date:

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Councillor T K Thornber