1.       PURPOSE OF REPORT AND EXECUTIVE SUMMARY

1.1     The remit of the Audit Governance and Standards Committee includes consideration of risk.  Accordingly, as part of the process of setting a budget for 2017/18, the Committee considered a risk analysis produced by the Finance Service for the Budget Strategy at its meeting on 16 January 2017.

1.2     Members requested that the Budget Risk Matrix and Risk Register be updated and reported to each meeting of the Committee, so that it continues to be fully briefed on factors likely to affect the Council’s budget position.

2.       INTRODUCTION AND BACKGROUND

2.1     The key element in the Council’s budget strategy is its rolling five year Medium Term Financial Strategy (MTFS).  The current MTFS also fulfils the government’s requirement that the Council prepare and publish an Efficiency Plan.  The MTFS 2017/18 – 2012/22 and Efficiency Plan were approved by Council in September 2016.  Subsequently Council approved a budget for 2017/18 at its meeting on 1^st March 2017.

2.2     Performance so far in 2017/18 has been broadly in line with budget, although there are potential overspends in the areas of (a) temporary accommodation and (b) planning appeals.

2.3     The five year MTFS has been updated and will be submitted to Council for approval at its meeting on 27th September.  The financial projections in the MTFS 2017/18 – 2012/22 have been updated and rolled forward, taking account of:

-              An assessment of external opportunities and threats

-              Evaluation of existing budget savings in the five year plan

-              Latest emerging information about economic developments and government policy.

2.4     Given the uncertainty about the future, various potential scenarios have been modelled, representing (a) favourable, (b) neutral and (c) adverse sets of circumstances.  Projections have been prepared for each of the scenarios modelled and work is currently under way to prepare budget proposals that respond to the different scenarios.

2.5     The risks included in the Budget Risk Register have been reviewed in light of the above developments.  A summary of the changes to the risk register are set out below.  Appendix A sets out the budget risks in the form of a Risk Matrix and Risk Register. 

3.       AVAILABLE OPTIONS

3.1    The Committee may wish to consider further risks not detailed in Appendix A or vary the impact or likelihood of any risks.  This may impact the Finance Section’s service planning and/or be reflected in the developing Medium Term Financial Strategy. 

3.2    There is no constitutional requirement for Policy and Resources Committee to consult with the Audit Governance and Standards Committee on this matter, and it is open to the Committee to make no comments or recommendations.

4.      CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

4.1    Each year the council as part of the development of the MTFS and budget carries out consultation on the priorities and spending of the council.

4.2    Public consultation on the budget last year took the form of a short survey. Residents were asked to prioritise ten areas of spending and then to consider whether the spending for those ten areas should remain the same, be reduced or cut altogether.  The results of the consultation were set out in reports to the Service Committees on the budget proposals.

4.3    A Residents’ Survey was undertaken during the Summer and will inform how the Council responds to the financial projections in the updated MTFS.  Detailed budget proposals for next year will be subject to public consultation and review by the Service Committees.

5.      NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

5.1              The Audit, Governance and Standards Committee plans to continue keeping the budget risk profile under review at subsequent meetings.

6.      CROSS-CUTTING ISSUES AND IMPLICATIONS

7.      BACKGROUND PAPERS

None.