Decision details

Councillor Roger Ramsey, Leader of the Council, introduced the report

Cabinet was reminded that it had received reports on the 4 November 2015 and the 16 December 2015 which had provided an update on developments at the national level and the consequential impact on local government funding and set out information on the financial position within Havering.

The November report had set out the Council’s financial strategy to manage the implications of funding reductions and cost pressures over the following three years. It had contained specific proposals which would enable the Council to set a balanced budget for 2016/17 and 2017/18 but would leave a shortfall of £2.4 m in 2018/19.

The December report had provided some initial feedback on the Government’s Autumn Statement and in particular had sought the Cabinet’s views on the proposal to give Councils the power to raise an additional 2% in the Council Tax precept for the sole purposes of funding Adult Social Care.

This report updated Members on the Local Government Financial Settlement and the significant implications for the corporate budget and the proposed financial strategy for the coming year, the latest in-year financial monitor and the proposed capital programme as well as updating Members on the outcome of the original budget consultation.

The provisional Local Government Financial Settlement had now been announced and the relevant details were included in the report before Cabinet, together with a summary of the key elements of the Autumn Budget Statement.  Havering’s financial strategy included provision for an expected reduction in the Revenue Support Grant (RSG) over the next three years however, the proposed reductions in Havering’s grant settlement were much deeper than expected.  The estimated shortfall in the three year financial strategy had increased from £2.4m to approximately £12.5m.  Further changes in the strategy were therefore required and would be considered as part of the current and subsequent reports.

The report also set out the Council’s capital spending position and the Leader provided those present with a detailed synopsis of the implications of the reductions, the options available to the Council and the strategies by which the Council was seeking to minimise the impact of the current and future Government fiscal policies on the residents of the borough.  The Leader also informed Cabinet that there was a change of wording to recommendation 14 in respect of Voluntary Grants.

Reasons for the Decision

This would enable the Council to develop its budget as set out in the constitution. 

Other options considered:

None.  The Constitution required this as a step towards setting the Council’s budget.

Cabinet:

1.         Noted the progress made to date with the development of the Council’s budget for 2016/17 and the Council’s likely intention to increase Council Tax by 1.97%, although no decisions would be taken until the February Cabinet meeting.

2.         Noted that an additional 2% increase in the Council Tax precept might be levied for the sole purpose of funding Adult Social Care pressures.

3.         Noted the outcome of the Autumn Budget Statement and the likely impact on local authorities.

4.         Noted the provisional local government financial settlement announcement and that arising from the settlement, there were reductions in mainstream Government funding in 2016/17 of £10.8 m for Havering.

5.         Delegated authority to the Cabinet Member for Adult Social Services and Health and the Leader to approve an annual spend plan for the Public Health Grant.

6.         Delegated to the Deputy Chief Executive - Children Adults and Housing to agree inflation rates with social care providers for 2016/17.

7.         Noted the financial position of the Council in the current year.

8.         Agreed the adjustments to the budget assumptions as set out in the table at paragraph 8 in the report which gave rise to an increase in the funding gap over a three year period 2016/17 to 2018/19.

9.         Noted the implications for the draft Capital programme for 2016/17.

10.      Agreed that any underspends from the Corporate Contingency Fund, the Transformation budget and from any service revenue underspends, should be allocated to the Strategic Reserve

11.      Noted the summary of the GLA’s consultation budget and the expected date for the publication of the final proposals.

12.      Noted the outcome of the public consultation on the budget process.

13.      Recommended to Full Council that the CTS Scheme 2016 should be approved. (appendices D, E, F to the report)

14.      Delegated to the relevant Deputy Chief Executive, authority to deliver the Voluntary Grants reduction (Appendix G to the report), with careful consideration given to the impact of those reductions on relevant stakeholders.