northlincs.gov.uk

Present

THE MAYOR – Councillor Jawaid

Councillors Ali, Appleyard, Armitage, Bainbridge, Barker, Barkworth, Berry, B Briggs, J Briggs, Mrs Bromby, Bunyan, Carlile, Cawsey, Clark, Collinson, Davison, Eckhardt, Ellerby, England, L Foster, T Foster, Glover, Gosling, Grant, Kirk, O’Sullivan, Poole, Mrs Redfern, Regan, C Sherwood, N Sherwood, Mrs Sidell, Mrs Simpson, Smith, Stewart, Swift, Vickers, Waltham, Wardle, Wells, Whiteley and Wilson.

The Council met at Pittwood House, Ashby Road, Scunthorpe.

1688 MAYOR’S REMARKS – The Mayor welcomed everyone to the council’s budget meeting. He then report that he had now completed 280 mayoral engagements since May 2008.

1689 DECLARATIONS OF PERSONAL OR PERSONAL AND PREJUDICIAL INTERESTS – Declarations of personal interests were indicated as follows –

1690 (13) FINANCIAL STRATEGY 2009/2012 – AN INTRODUCTION – REVENUE BUDGET 2009/2010 AND FINANCIAL STRATEGY 2009/2012, CAPITAL PROGRAMME 2008/2013 AND TREASURY MANAGEMENT AND INVESTMENT STRATEGY 2009/2010 – The Service Director Finance submitted reports relating to the financial strategy 2009/2012, the revenue budget for 2009/2010 the capital programme 2008/2013 and the treasury management and investment strategy 2009/2010. Each year the council decides its spending plans for the next financial year. This started in April and the plans included

• A revenue budget to cover the day to day running costs of council services.
• A capital programme of investment in buildings and infrastructure.
• A treasury management and investment strategy which says how the council will invest its cash, borrow for investment in assets or to help its cash flow
• and manage its debt.

To pay for the planned spending, the council takes account of the amount of government grant it will receive and sets a local council tax to meet the balance of costs. The budget was part of a long term financial strategy because the council needed to be sure that spending on services was sustainable. This year the council would set a financial strategy for 2009/2012 and consider prospects for the years to 2015/2016. As part of the strategy it had to ensure that its resources were deployed in the most effective way to deliver improved public services and to do so with increased efficiency. These were currently embodied in –

• A new Local Area Agreement (LAA) and community strategy
• Efficiency targets of 3% cashable savings per year

A key consideration this year was the current and long term impact of the recession on public finances and on the funding of local government in particular. The paper considered how this affects the council’s options, but the main effects are a considerable increase in risk and uncertainty.

The report also explained the legal framework within which the council determined its financial strategy and referred to the consultation which had taken place with the public, business ratepayers and other key stakeholders. Detailed proposals for revenue, capital and treasury management were included in three separate papers.

There was a legal requirement to set the revenue budget each year. The council had to decide the level of spending it could afford and had to take account of how much government grant it would receive and the level of council tax it wished to set. The council had to set a balanced budget and that it had identified adequate finance to pay for its spending plans.

The government had reserve powers to cap increases in council tax and the revenue budget which it considered excessive. The Minister for Local Government had made clear that in “tough economic times he expects councils to put the interests of residents first by making efficiencies, protecting service and keeping council tax down.” He expected the trend of lower council tax increases to continue, “substantially below 5%.” Councils had set a 3.9% average increase in 2008/2009 the lowest for 14 years. The council also had to set a separate capital programme for longer term investment in services. This was spending on the construction and improvement of assets such as schools, roads and other council run facilities. The rules which governed this investment changed in 2004. There was now a prudential code which governed investment. The council had to ensure the scale of investment was affordable and prudent over a long term. It was explicitly required to calculate the costs for the next three years, but a longer view was often necessary to ensure the full costs of investments were made clear.

The council had also adopted the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for Treasury Management, the standard of best practice. The council had set a strategy for the investment of cash surpluses, the management of its debt portfolio, and had to define how and in what circumstances it would borrow. The current difficulties in financial markets made the need for careful planning even more crucial and professional advice had been commissioned to inform the strategy.

Revenue, capital and treasury issues were considered in each of the three papers that followed. However, each of these were inter-related and decisions on the revenue budget, council tax, capital programme and treasury management had to be taken in the context of the council’s overall financial strategy. This makes resource allocation decisions to underpin the council’s key priorities expressed in its strategic plan and in the community strategy and local area agreement which it shared with the local strategic partnership.

An exercise had been undertaken during 2008 to identify the resources within existing budgets which the council and its partners were committed to shared objectives. The council’s budget process identified areas where additional resources might be required over the planned period to achieve target outcomes. In addition, council planning had to take account of the impact of the current economic situation on council finances with an understanding of the impact on partners. The developing recession had introduced a greater degree of uncertainty than was usual for financial planning. Scenario planning helped to determine the degree of risk associated with key variables and this had been used in preparing financial projections up to 2015/2016.

The recession was a key factor in determining what options the council was likely to have when setting its financial strategy. The world economic situation had deteriorated fast in the last quarter of 2008. Global output and trade had plummeted and advanced world economies including the US, UK, Japan and Europe were now in recession with the UK economy shrinking by 1.5% in the last three months of 2008. A range of economic commentators expected 2009 to be worse with weak recovery in 2010 at best. The report commented further on the impact of the recession on the council’s financial planning.

With regard to the revenue budget, the report referred to the need to determine the council’s revenue budget for 2009/2010, the setting of the council tax for 2009/2010, the financial strategy for 2009/2012 and indicative council tax levels, together with the approval of items required by the Local Government Act 2003. The council’s strategic plan set the direction of the council’s services. This strategy was underpinned by a three year financial plan which matched resources to spending needs and priorities. The plan translated into an annual revenue budget for the day to day running of council services and a separate programme of capital investment.

In relation to the finance settlement, the report indicated that it was an established principle that the costs of running local authority services were met partly from local taxation and partly from government grants. The components changed over time so there was a balance between local and central funding. Currently the only local tax was the council tax. Business rates were set nationally, collected locally and paid over to government and re-distributed as grants. The total of government grant support was called Aggregate External Finance (AEF). This comes in three ways – Formula Grant, Specific Grants and Area Based Grant (ABG). The area based grant was a relatively new funding stream which had started in 2008/2009, but not new money. A number ofspecific grants which were previously paid separately were now pooled. The government argued that this would give local authorities more flexibility to determine their own priorities. In theory, therefore, it was a general grant like formula grant which could be used for any purpose.

This was the second year of the three year local government grant settlement which was part of the government’s comprehensive spending review 2008/2011. It gave local authorities the ability to plan for the medium term with greater certainty. Authorities were expected to make full use of this certainty to project council tax levels for later years. The report indicated that grant increases for 2008/2011 were lower than for the previous comprehensive spending review period 2005/2008. The details were contained in paragraphs 2.6 onwards.

The report then referred to current financial resilience, performance, strategic direction and partnerships, value for money, the financial plan for 2009/2012, the need to set a balanced budget for 2009/2010, ensuring estimates were robust and ensuring the adequacy of reserves.

The report also referred to the council tax and precepts for 2009/2010. North Lincolnshire Council was the billing authority for the area and this meant it was responsible for setting the council tax to meet its own demands and meet the precepts of lower and higher tier authorities in the area. The precepting authorities were –

• Parish and Town Councils in North Lincolnshire
• Humberside Police Authority
• Humberside Fire Authority

In addition, special expenses for Scunthorpe, equivalent to a parish precept had to be set by the council. Each precepting body decided its own budget and council tax requirements. Parish precepts were set by parish councils but were required to be part of the budget requirement set by the council. Special expenses were for the council to decide. The Police Authority set its precept on 17 February and the Fire Authority on 16 February 2009. Parish details were contained in Appendix C to the report.

In relation to the capital programme, the report indicated that the council had to decide its capital programme for 2008/2013 and approve the prudential indicators for council borrowing to meet the requirements of the Local Government Act 2003. The building of assets such as schools, roads, housing and other council owned facilities was covered by the council’s capital programme. Grants to other organisations and individuals for capital purposes were also included. The Local Government Act 2003 required capital spending to be accounted for separately. The council had to fund capital expenditure in certain ways these included –

• Grants and other external funding
• Borrowing
• Capital Receipts from the sale of council assets
• Direct contributions from the council’s general fund revenue budget

There were some restrictions attached to each type of funding and these were detailed in paragraph 2.3 of the report.

The council had to take into account the advice of the Chief Financial Officer on the affordability of the capital programme being proposed. This advice was contained in sections 3, 4 and 5 of the report at 2(c) and in paragraphs 3.32 onwards of the revenue report at 2(b). It set a limit on the size of the potential capital programme and priorities therefore had to be determined. His advice had to take account of the prudential code, produced by CIPFA. This set out the key principles that had to be followed, details of which were contained in paragraph 2.5 of the report. A series of indicators and limits also had to be agreed by the council to meet prudential rules and these would help to decide what was affordable and what was prudent. They were specific to the council. No national guidelines had been set. The key indicators and limits set for a rolling three year period were detailed in paragraph 2.6 of the report. The prudential code also required two further indicators as follows –

• An upper limit on the council’s fixed interest and variable interest rate exposures (a limit of what can be borrowed at fixed and variable interest rates)
• Upper and lower limits for the maturity structure of borrowings (the term of the debt)

The indicators had to be regularly reviewed and revised where necessary. Details were shown in Appendix D to the report or in the report on Treasury Management at 2(d). In addition, the council was expected to have adopted the CIPFA Code of Practice for Treasury Management in the public service. This had been approved by Cabinet on 15 October 2002.

The report contained further detailed information about the proposed capital programme which was detailed in various appendices.

With regard to the treasury management and investment strategy, the report detailed the rules for councils when they borrowed to pay for investment. The report at 2(d) – appendix 4 outlined the treasury management and investment strategy for 2009/2010. It had been prepared in line with –

• The CIPFA Code of Practice for Treasury Management
• The Prudential Code
• The Local Government Finance Act 2003
• Guidance on Local Government Investments from the former Office of the Deputy Prime Minister (ODPM)

The treasury management and investment strategy had been extensively reviewed after commissioning professional advice from a recognised firm of brokers, Serling Consultancy Services. The events of recent months had had a significant impact on financial markets and it was essential that public bodies including this council reconsidered their treasury policies. In the new circumstances of heightened risks it needed to determine how it would manage its treasury operations. The investment strategy for 2009/2010 aimed to reduce risks as detailed in paragraph 1.3 of the report at 2(d) and the borrowing strategy for 2009/2010 aimed to work to a number of principles detailed in paragraph 1.4. The background to the strategy also included a commentary on the current economic context, treasury policy for 2008/2009 and treasury policy requirements for 2009/2010. Prospects for short to medium term interest rates and longer term interest rates were also considered.

The report also detailed the current portfolio position, borrowing, the proposed investment and borrowing strategies, and other detailed information. Attached as appendices were details of the prospects for interest rates for 2009/2010, a list of financial institutions, and the prudential indicators for 2009/2012.

Moved by Councillor Kirk and seconded by Councillor L Foster –

(a) That the capital programme for 2008/13 be set in line with revised Appendix A of report 2(c) attached;

(b) That any further capital projects fully funded by external sources or which are self-financing be added to the capital programme once known;

(c) That vehicles and equipment be financed from operating leases or borrowing as appropriate, and that costs be met from within approved revenue budgets;

(d) That the prudential indicators be approved in line with revised Appendix D of report 2(c) attached;

(e) That the Service Director Finance be authorised to determine the methods of capital financing within the available funding (revenue budget, capital receipts, borrowing, specific external funding and operating leases);

(f) That the Service Director Finance be authorised, within the total authorised limit for external debt for any individual year, to effect movement between the separately agreed figures for borrowing and long term liabilities, in accordance with option appraisal and best value for money for the council. Any such changes made to be reported to the council at its next meeting following the change;

(g) That the Service Director Finance be authorised, within the total operational boundary for external debt for any individual year, to effect movement between the separately agreed figures above for borrowing and long term liabilities, in accordance with option appraisal and best value for money for the council. Any such changes made to be reported to the council at it its next meeting following the change;

(h) That the Service Director Finance report back on any amendments required to Prudential indicators during 2009/2010;

(i) That the revenue budget for 2009/2010 be set in total and for each service as follows (with detailed adjustments to the budgets for 2009/2012 being shown in Appendix B1 and B2 attached);

(j) That all budgets be strictly cash – limited to the figures set by council;

(k) That the following growth items in 2009/2010 require matching efficiency savings to be identified and approved by the relevant cabinet member and the cabinet member for corporate services prior to expenditure taking place –

Technology solutions in people’s homes
Expansion of street sport project by 3 teams
Additional revenue support to CHAMP
Restructure of tourism and town centre management
Direct magazine improvements
Local Strategic Partnership marketing
Increase in Crowle opening hours
Expansion of kerbside recycling to other public bodies
Housing register

(l) That services contain the following recessionary pressures within budget. Where this is not possible cabinet be asked to approve a call on the recession contingency of £0.5m in 2009/2010 as part of the quarterly budget review reports –

Income at Normanby Hall, Plowright, 20-21 café
Planning income shortfall
Loss of licensing income
School meals income
Homelessness bed and breakfast payments

(m) That it be noted that at its meeting held on 21 January 2009 the council calculated the following amounts for the year 2009/2010. These are as required by regulations made under Section 33(5) of the Local Government Finance Act 1992:-

(a) 50,641.3 as its Council Tax Base for the year (regulation 3)

(b) the Council Tax Base for each part of the area as shown in Appendix C, column 2 (regulation 6);

(n) That the following amounts for 2009/2010, as required by Sections 32 to 36 of the Local government Finance Act 1992 be approved –

(a) £319,946,807 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (2) (a) to (e) of the Act (gross expenditure including parish precepts and special expenses).

(b) £195,169,644 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (3) (a) to (c) of the Act(income).

(c) £124,777,163 being the amount by which the aggregate at (a) above exceeds the aggregate at (b) above, calculated by the Council, in accordance with Section 32(4) of the Act as its budget requirement for the year (net budget).

(d) £60,314,810 being the aggregate of the sums which the Council estimates will be payable for the year into its general fund in respect of redistributed business rates and revenue support grant, increased by the amounts of the sums which the Council estimates will be transferred in the year from the collection fund to its general fund in accordance with Section 22 of part III of the Act (external support and collection fund surplus).

(e) £1,272,92 being the amount at (c) above less the amount at (d) above all divided by the amount at (m) – (a) above calculated by the Council, in accordance with Section 33 (1) of the Act as the basic amount of its council tax for the year (Band D council tax including parish precepts and special expenses).

(f) £1,793,744 being the aggregate amount of all special items referred to in Section 34(1) of the Act (total of Parish precepts and special expenses).

(g) £1,237.50 being the amount at (e) above less the result given by dividing the amount at (f) above by the amount at (m) – (a) above calculated by the Council in accordance with Section 34 (2) of the Act as the basic amount of its council tax for the year for dwellings in those parts of its area to which no special items relates (Band D council tax excluding parish precepts or special expenses).

(h) The amounts given by adding the amount given at (g) above to the amounts of the special items relating to dwellings in those parts of the Council’s area mentioned above, divided in each case by the amount at (m) – (b) above as calculated by the Council in accordance with Section 34 92) of the Act as the basic amount of its council tax for the year for dwellings in those parts of its area to which one or more special items relate (Band D council tax including parish precepts for each parish).

(i) The amounts given by multiplying the amounts given at (g) and (h) above by the number which in the proportion set out in Section 5 (1) of the Act is applicable to dwellings listed in a particular valuation band divided by the number in which that proportion is applicable to dwellings listed in valuation band D is calculated in accordance with Section 36(1) of the Act as the amounts to be taken into account in respect of categories of dwellings listed in different valuation bands. (Council tax including parish precepts for each council tax band and each parish).

(o) That it be noted that for the year 2009/2010 the major precepting authorities have stated the amounts in precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act, 1992 (police and fire precepts);

(p) That the amounts of council tax for the year 2009/2010 for each of the categories of dwellings be as specified in Appendices C1 and C2. Having calculated the aggregate in each case of the amounts at (n) (i) and (o) in accordance with Section 32 (2) of the Local Government Finance Act, 1992(council tax including police, fire and parish precept for each band and each parish);

(q) That the robustness of the estimates used in setting the level of council tax in accordance with the Local Government Act, 2003 requirements (Part 2 Section 25 (1)(a) of the Act) be confirmed;

(r) That the adequacy of reserves included in the budget in accordance with the Local Government Act, 2003 requirements (Part 2 Section 25 (1) (b) of the Act), and the policy for use of reserves as set out in Section 3 of the report and at appendix A be confirmed;

(s) That the financial strategy for 2009/2012 be approved in line with revised Appendices B1 and B2 and indicative council tax levels be set at 3.9% in 2010/2011 and 3.9% in 2011/2012;

(t) That the efficiencies in revised Appendix D attached be confirmed as interim targets for 2009/2010 and 2010/2011 and that further work be commissioned to deliver the full target for 2008/2011, a cumulative 3% saving per year;

(u) That the Service Director Finance be authorised to produce the necessary taxpayer information.

(v) That the Treasury Management and Investment Strategy for 2009/2010 be approved;

(w) That the list of approved financial institutions at appendix 2 to the report at 2(d) be approved;

(x) That the prudential indicators for 2009/2012 be approved in line with the revised Appendix 3 attached, and

(y) That the policy on the minimum revenue provision as detailed in paragraph 4.22 of the report at 2(d) be approved.

Prudential Indicators for 2009/10 to 2011/12 Revised Appendix 3 of report 2(d)

Adoption of the CIPFA Code of Practice

The first prudential indicator is that the Council has adopted the CIPFA Code of Practice for Treasury Management in the Public Service. It was adopted by the Council in October 2002.

Authorised Limit

The Council is asked to approve authorised limits for its total external debt gross of investments for the next three financial years.

These authorised limits are consistent with the Council’s current commitments and Capital strategy. They are based on estimates of the most likely, prudent, but not worst case scenario, with in addition sufficient margin for contingencies to allow for operational management in the event of unusual cash movements.

Risk analysis and risk management strategies have been taken into account, as have plans for capital expenditure, estimates of the capital financing requirement and estimates of cash flow requirements for all purposes.

Operational Boundary

The proposed operational boundary for external debt is based on the same estimates as the authorised limit. This reflects the Council’s estimate of the most likely, prudent but not worst case scenario, without the margin for contingencies

included in the authorised limit and equates to the maximum external debt projected by this estimate.

Actual External Debt

The prudential indicator for actual external debt will not be directly comparable to the authorised limit and operational boundary, since the actual external debt will reflect the actual position at one point in time. This prudential indicator will be the closing balance for actual gross borrowing plus other long term liabilities taken directly from the balance sheet. Actual external debt at 31 March 2008 was £121.7m.

Interest Rate Exposure

The Council will set an upper limit on its fixed interest rate exposures and an upper limit on its variable rate exposures.

Maturity Structure of Borrowing

The Council will set for the forthcoming financial year both upper and lower limits with respect to the maturity structure of its borrowing.

Total principal sums invested for periods longer than 364 days.

The Council does not plan to invest, for periods longer than 364 days.

Moved by Councillor Mrs Redfern and seconded by Councillor J Briggs as an amendment –

(a) That the capital programme for 2008/2013 be set in line with revised Appendix A of report 2(c) attached;

(b) That any further capital projects fully funded by external sources or which are self-financing be added to the capital programme once known;

(c) That vehicles and equipment be financed from operating leases or borrowing as appropriate, and that costs met from within approved revenue budgets;

(d) That the prudential indicators be approved in line with revised Appendix D of report 2(c) attached;

(e) That the Service Director Finance be authorised to determine the methods of capital financing within the available funding (revenue budget, capital receipts, borrowing, specific external funding and operating leases);

(f) That the Service Director Finance be authorised, within the total authorised limit for external debt for any individual year, to effect movement between the separately agreed figures for borrowing and long term liabilities, in accordance with option appraisal and best value for money for the council. Any such changes made to be reported to the council at its next meeting following the change;

(g) That the Service Director Finance be authorised, within the total operational boundary for external debt for any individual year, to effect movement between the separately agreed figures above for borrowing and long term liabilities, in accordance with option appraisal and best value for money for the council. Any such changes made to be reported to the council at its next meeting following the change;

(h) That the Service Director Finance report back on any amendments required to Prudential Indicators during 2009/2010;

(i) That the revenue budget for 2009/2010 be set in total and for each service as follows (with detailed adjustments to the budgets for 2009/2012 being shown in Appendix B attached)

(j) That all budgets be strictly cash-limited to the figures set by council;

(k) That services contain the following recessionary pressures within budget. Where this is not possible cabinet be asked to approve a call on the recession contingency of £0.5m in 2009/2010 as part of the quarterly budget review report.

Income at Normanby Hall, Plowright, 20-21 café
Planning income shortfall
Loss of licensing income
School meals income
Homelessness bed and breakfast payments

(l) That it be noted that at its meeting held on 21 January 2009 the council calculated the following amounts for the year 2009/2010. These are as required by regulations made under Section 33(5) of the Local Government Finance Act 1992:-

(a) 50,641.3 as its Council Tax Base for the year (regulation 3)

(b) the Council Tax Base for each part of the area as shown in Appendix C, column 2 (regulation 6);

(m) That the following amounts for 2009/2010, as required by Sections 32 to 36 of the Local Government Finance Act 1992 be approved –

(a) £318,864,503 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (2) (a) to (e) of the Act (gross expenditure including parish precepts and special expenses).

(b) £195,009,644 being the aggregate of the amounts which the Council estimates for the items set out in Section 32 (3) (a) to (c) of the Act (income)

(c) £123,854,859 being the amount by which the aggregate at (a) above exceeds the aggregate at (b) above, calculated by the Council, in accordance with Section 32(4) of the Act as its budget requirement for the year (net budget).

(d) £60,314,810 being the aggregate of the sums which the Council estimates will be payable for the year into its general fund in respect of redistributed business rates and revenue support grant, increased by the amounts of the sums which the Council estimates will be transferred in the year from the collection fund to its general fund in accordance with Section 22 of part III of the Act (external support and collection fund surplus).

(e) £1,254,71 being the amount at (c) above less the amount at (d) above all divided by the amount at (l) – (a) above calculated by the Council, in accordance with Section 33 (1) of the Act as the basic amount of its council tax for the year (Band D council tax including parish precepts and special expenses).

(f) £1,779,734 being the aggregate amount of all special items referred to in Section 34(1) of the Act (total of parish precepts and special expenses).

(g) £1,219,56 being the amount at (e) above less the result given by dividing the amount at (f) above by the amount at (l) – (a) above calculated by the Council in accordance with Section 34 (2) of the Act as the basic amount of its council tax for the year for dwellings in those parts of its area to which no special items relates (Band D council tax excluding parish precepts or special expenses).

(h) The amounts given by adding the amount given at (g) above to the amounts of the special items relating to dwellings in those parts of the Council’s area mentioned above, divided in each case by the amount at (l) – (b) above as calculated by the Council in accordance with Section 34 (2) of the Act as the basic amount of its council tax for the year for dwellings in those parts of its area to which one or more special items relate (Band D council tax including parish precepts for each parish).

(i) The amounts given by multiplying the amounts given at (g) and (h) above by the number which in the proportion set out in Section 5 (1) of the Act is applicable to dwellings listed in a particular valuation band divided by the number in which that proportion is applicable to dwellings listed in valuation band D is calculated in accordance with Section 36(1) of the Act as the amounts to be taken into account in respect of categories of dwellings listed in different valuation bands. (Council tax including parish precepts for each council tax band and each parish).

(n) That it be noted that for the year 2009/2010 the major precepting authorities have stated the amounts in precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act, 1992 (police and fire precepts).

(o) That the amounts of council tax for the year 2009/2010 for each of the categories of dwellings be as specified in Appendices C1 and C2. Having calculated the aggregate in each case of the amounts at (m) – (i) and (n) above in accordance with Section 32 (2) of the Local Government Finance Act, 1992 (council tax including police, fire and parish precept for each band and each parish).

(p) That the robustness of the estimates used in setting the level of council tax in accordance with the Local Government Act, 2003 requirements (Part 2 Section 25 (1)(a) of the Act) be confirmed.

(q) That the adequacy of reserves included in the budget in accordance with the Local Government Act, 2003 requirements (Part 2 Section 25 91) (B) of the Act), and the policy for use of reserves as set out in Section 3 of the report and at Appendix A be confirmed.

(r) That the financial strategy for 2009/2012 be approved in line with revised Appendices B1 and B2 and indicative council tax levels be set at 2.3% in 2010/2011 and 2.3% in 2011/2012.

(s) That the efficiencies in Appendix D be confirmed as interim targets for 2009/2010 and 2010/2011 and that further work be commissioned to deliver the full target for 2008/2011, a cumulative 3% saving per year.

(t) That the Service Director Finance be authorised to produce the necessary taxpayer information.

(u) That the Treasury Management and Investment Strategy for 2009/2010 be approved;

(v) That the list of approved financial institutions at appendix 2 to the report at 2 (d) be approved;

(w) That the prudential indicators for 2009/2012 be approved in line with the revised Appendix 3 attached, and

(x) That the policy on the minimum revenue provision as detailed in paragraph 4.22 of the report at 2(d) be approved.

Prudential Indicators for 2009/10 to 2011/12 Revised Appendix 3 of report 2(d)

Adoption of the CIPFA Code of Practice

The first prudential indicator is that the Council has adopted the CIPFA Code of Practice for Treasury Management in the Public Service. It was adopted by the Council in October 2002.

Authorised Limit

The Council is asked to approve authorised limits for its total external debt gross of investments for the next three financial years.

These authorised limits are consistent with the Council’s current commitments and Capital strategy. They are based on estimates of the most likely, prudent, but not worst case scenario, with in addition sufficient margin for contingencies to allow for operational management in the event of unusual cash movements.

Risk analysis and risk management strategies have been taken into account, as have plans for capital expenditure, estimates of the capital financing requirement and estimates of cash flow requirements for all purposes.

Operational Boundary

The proposed operational boundary for external debt is based on the same estimates as the authorised limit. This reflects the Council’s estimate of the most likely, prudent but not worst case scenario, without the margin for contingencies

included in the authorised limit and equates to the maximum external debt projected by this estimate.

Actual External Debt

The prudential indicator for actual external debt will not be directly comparable to the authorised limit and operational boundary, since the actual external debt will reflect the actual position at one point in time. This prudential indicator will be the closing balance for actual gross borrowing plus other long term liabilities taken directly from the balance sheet. Actual external debt at 31 March 2008 was £121.7m.

Interest Rate Exposure

The Council will set an upper limit on its fixed interest rate exposures and an upper limit on its variable rate exposures.

Maturity Structure of Borrowing

The Council will set for the forthcoming financial year both upper and lower limits with respect to the maturity structure of its borrowing.

Total principal sums invested for periods longer than 364 days.

The Council does not plan to invest, for periods longer than 364 days.

At the request of members and in accordance with Procedure Rule 23(d) the names of members voting for, against and abstaining from the amendment are as follows –

FOR: Councillors Appleyard, Berry, J Briggs, Mrs Bromby, Clark, Eckhardt, England, T Foster, Glover, Mrs Redfern, C Sherwood, N Sherwood, Mrs Sidell, Vickers, Waltham, Wardle and Wells.

AGAINST: Councillors Ali, Armitage, Bainbridge, Barker, Barkworth, Carlile, Cawsey, Collinson, Davison, Ellerby, L Foster, Gosling, Grant, Jawaid, Kirk, O’Sullivan, Regan, Simpson, Smith, Stewart, Swift, Whiteley and Wilson.

ABSTAINING: Councillors B Briggs and Poole

Amendment Lost

At the request of members and in accordance with procedure rule 23(d) the names of members voting for, against and abstaining from the motion are as follows –

FOR: Councillors Ali, Armitage, Bainbridge, Barker, Barkworth, Carlile, Cawsey, Collinson, Davison, Ellerby, L Foster, Gosling, Grant, Jawaid, Kirk, O’Sullivan, Regan, Simpson, Smith, Swift, Whiteley and Wilson.

AGAINST: Councillors Appleyard, Berry, J Briggs, Mrs Bromby, Clark, Eckhardt, England, T Foster, Glover, Mrs Redfern, C Sherwood, N Sherwood, Mrs Sidell, Stewart, Vickers, Waltham, Wardle and Wells.

ABSTAINING: Councillors B Briggs and Poole

Motion Carried