Agenda item

Jonathan Gratte, Strategic Finance Manager, introduced the report which set out the key Budget assumptions and indicative budget ahead of consideration of the 2019/20 final proposed Budget at the next meeting in March. Members noted that it was expected that the 2019/20 Budget would propose a net cost position, but that the LG group would be able to Budget a net income position from 2020/21 onwards.

In the discussion which followed Members raised a number of questions about the level of confidence in the projected financial position, the degree of dependence on reduced costs of the pension deficit and about how the search for tenants for 18 Smith Square was progressing. The also asked for regular updates.  Officers responded with the following points:

·         The level of confidence in the return to a net income position was based on a number of issues, including income generated by the Local Government Mutual, rents from 18 Smith Square and Layden House, and generally managing costs going forward. While there were a number of sensitivities, the level of confidence was high. Actions underway are based on the financial strategy agreed by leadership board which has a number of strands including generating income from our properties and seeking additional sources of income including though commercial activity. Whilst there is a delay in the return to a net income position, all parts of the strategy are still progressing well. 

·         There was expected to be a drop-off in pension deficit repayments under the current plan after 2020/21, but this was not a primary factor in the current positive budget outlook for that year. The Leadership Board, Audit Committee and Strategic Management Team would continue to receive regular updates on the budget and financial strategy as appropriate.

·         Regarding tenancies in 18 Smith Square and Layden House, Members noted that the income from commercial events had been better than projected and the LGA was currently discussing tenancies for 18 Smith Square with potential tenants. The marketing of Layden House has also received a very positive response so far. It was confirmed that tenancies for 18 Smith Square would be of varying lengths.

Decision

The LGA Leadership Board noted the 2019/20 Budget key assumptions and issues, and the financial direction of travel over the course of the Medium Term Financial Plan.

Action

Final proposed Budget to be considered by the LGA leadership Board at the next meeting. (Jonathan Gratte).