The Leader of the Council, Councillor Roger Ramsey presented the report to Cabinet detailing the Council’s Budget 2017/18. Attention was drawn to two supplementary agendas and the reports therein deemed crucial for the budget setting process. Cabinet agreed to receive the late reports.
The report was the latest of three reports developing those considered at Cabinet in December, 2016 and January 2017 and finalises the budget strategy and updates members on outstanding matters including the Council Tax base, Business Rates yield, levies and precepts. An increase of 1.95% in Council Tax and a precept of 2% for Adult Social Care are required to balance the budget.
The results of the public consultation exercise conducted in January, 2017 demonstrated that 60% of respondents agreed with the direction of the budget strategy. The top three priorities were highlighted as Schools and Education, Adult Social Care and Roads and Transport.
There are issues nationwide regarding the impact of a growing older population and these issues are at the forefront of the Councils decision making process at a time when resources are going down.
The final confirmation of the GLA precept is expected at the meeting of the London assembly on 20th February, 2017 and any updates will be received thereafter.
Consideration was given to the report in detail. An essential element is the Council’s vision and corporate plan and focus will continue to ensure the Council fulfils its aspirations.
Havering continues to develop working partnerships especially with Newham and Bexley which translates into significant savings as a result.
Economic factors continue to impact. It was noted that Havering will continue to experience a rapid reduction in its Government grant settlement. Over the past year £17 million in savings have been secured and the following year will also represent a robust budget. Consideration was given to the Overview and Scrutiny Board note to Cabinet included in the first supplementary agenda.
It was acknowledged that difficult decisions will be needed in future years to balance the budget.
The Government Grant settlement results in Havering receiving a much lower level of grant funding than geographical neighbours. Specific grants were detailed in the report. The Education Services Grant has been greatly reduced showing a shortfall against the initial 2016/17 grant of at least £0.086 million. The Public Health Grant has been confirmed as per last year’s provisional figures representing a £0.284 million reduction in funding.
The levy for ELWA is set to increase as the cost of waste increases nationwide.
Consideration was given to Appendix L detailing Fees and Charges and the tables representing the budget gap highlighted. The budget strategy accounts for the annual increase in council tax income. Forthcoming changes regarding temporary accommodation will impact and will need to be looked at further during 2017/18.
The Capital Programme was discussed in detail by Cabinet at the meeting in January and an extension of the Capital Strategy was approved. The Capital Programme was detailed fully at Appendix I.
Cabinet, agreed to receive the late reports set out in the two supplementary Agendas due to the need to balance the Council’s policies, statutory requirements, government initiatives, inspection regimes and Council Tax levels and:
1. Approved the new Vision set out in Appendix K of the report which will be the framework for the Council’s Corporate Plan, service planning and the context in which future financial strategies will be developed.
2. Approved the mitigating action plans referred to in paragraph 3.13 and Appendix A2.of the report.
3. Approved the income generation and savings proposals as set out in
Appendix A1 of the report.
4. Considered the advice of the Chief Finance Officer as set out in Appendix H of the report in recommending the Council budget.
5. Approved the following budgets for 2017/18:
· The Council’s General Fund budget as set out in Appendix E.
· The Delegated Schools’ draft budget set out in Appendix F
· The Capital Programme as set out in Paragraph 3.25 and Appendix I,
6. Delegated to the Chief Financial Officer, the implementation of the 2017/18
capital and revenue proposals once approved by Council unless further reports or Cabinet Member authorities are required.
7. Agreed that the Chief Financial Officer be authorised to allocate funding from the Capital Contingency included within the draft Capital Programme.
8. Delegated authority to the Chief Financial Officer in consultation with the
Cabinet Member for Financial Management to determine the projects that will
be included in the proposed £5m efficiency programme contained within the
Capital Programme.
9. Agreed that the relevant Cabinet Member, together with the Cabinet Member for Financial Management, be delegated authority to commence tender processes and accept tenders for capital schemes included within the approved under the block programme allocations or delegation arrangements set out in the report.
10. Agreed that to facilitate the usage of unringfenced resources, the Chief
Financial Officer in consultation with Service Directors will review any such new funds allocated to Havering; make proposals for their use; and obtain approval by the Cabinet Member for Financial Management.
11. Delegated to the Chief Financial Officer in consultation with Service Directors the authority to make any necessary changes to service and the associated budgets relating to any subsequent specific grant funding announcements, where delays may otherwise adversely impact on service delivery and/or budgetary control, subject to consultation with Cabinet Members as appropriate.
12. Approved the schedule of proposed Fees and Charges set out in Appendix L of the report with any recommended changes in year being implemented under Cabinet Member delegation.
13. Agreed that if there are any changes to the GLA precept and/or levies, the Chief Financial Officer is authorised to amend the recommended resolutions accordingly and report these to Council on 22 February 2017.
14. Cabinet will recommend to Council for consideration and approval:
· The General Fund budget for 2017/18
· The Council Tax for Band D properties and for other Bands of properties,
· all as set out in Appendix E, as revised and circulated for the Greater
· London Authority (GLA) Council Tax.
· The Delegated Schools’ budget for 2017/18, as set out in Appendix F.
· The Capital Programme for 2017/18 as set out in paragraph 3.25 and supported by Annexes 2, 3 and 4 of Appendix I.
15. It was also agreed that Cabinet will recommend to Council that it pass a resolution as set out in section 3.29.5 of the report to enable Council Tax discounts to be given at the 2016/17 level.
Reasons for the Decision
The Council is required to set a budget for 2017/18 and, as part of that process, undertake relevant consultation in respect of the proposals included within the budget.
Alternative Options Considered
There were no alternative options in so far as setting a budget is concerned. However, there were options in respect of the various elements of the budget. These were considered in preparing the budget and cover such things as alternative savings proposals, the totality of budgetary pressures and different levels of Council Tax.
Councillor Roger Ramsey, Leader of the Council, introduced the report.
The report before Members updated the financial strategy (Cabinet had received a report on 12th October 2016 setting out the potential funding gap in the Councils financial strategy over the next two years) and included a range of proposed actions which were intended to bridge that gap. If agreed, these proposals would be integrated within the financial model as part of the Council Tax setting report to be considered by Cabinet in January 2017 and for approval by Council in February 2017.
It was reported that the Chancellor of the Exchequer had presented his Autumn Statement to the House of Commons on 23rd November 2016. The Chancellor confirmed that the Government remained committed to the spending plans introduced in 2015 although previous plans to produce a budget surplus for 2019/20 had been abandoned.
The Local Government Financial Settlement (LGFS) had been confirmed for the four-year period ending in 2019/20. All proposals would be subject to the necessary level of consultation, before any final decisions were made.
Reasons for the decision:
It was essential that the Council’s financial strategy took due account of Government plans and any other material factors where these were likely to have an impact on the Council’s financial position. The report before Cabinet represented a further significant step in developing the Council’s budget strategy for the next three years and reflected the expected continued Government approach of reduced levels of funding.
Other options considered:
None. The Constitution required this as a step towards setting the Council’s budget.
Cabinet:
1. Noted the Government’s announcements affecting Local Government as set out in the Autumn Statement.
2. Noted the latest projection of budget gap and the assumptions upon which these have been based and the risks associated with them.
3. Note the income generation proposals identified through the budget preparation process and that fully costed proposals will be included in the January report.
4. Noted the latest projection of the draft Medium Term Financial Strategy (MTFS), covering the period from 2017/18 to 2018/19, as set out in the report.
5. Noted the action plans being developed by the Senior Leadership Team (SLT) and of their importance in delivering a balanced MTFS.
6. Noted the size and significance of the projected budgetary positon for 2019/20 to be included in the Council’s draft MTFS.
7. Agreed to receive a further report in January 2017 which considers the impact of the Local Government Financial Settlement on the MTFS and the implications for Council Tax setting, which will be referred onto the joint scrutiny board.
8. Noted the advice of the Section 151 Officer in setting a robust budget.
Cabinet:
1. Noted the Government’s announcements affecting Local Government as set out in the Autumn Statement.
2. Noted the latest projection of budget gap and the assumptions upon which these had been based and the risks associated with them.
3. Noted the income generation proposals identified through the budget preparation process and that fully costed proposals would be included in the January report.
4. Noted the latest projection of the draft Medium Term Financial Strategy (MTFS), covering the period from 2017/18 to 2018/19, as set out in the report.
5. Noted the action plans being developed by the Senior Leadership Team (SLT) and of their importance in delivering a balanced MTFS.
6. Noted the size and significance of the projected budgetary positon for 2019/20 to be included in the Council’s draft MTFS.
7. Agreed to receive a further report in January 2017 which considers the impact of the Local Government Financial Settlement on the MTFS and the implications for Council Tax setting, which will be referred onto the joint scrutiny board.
8. Noted the advice of the Section 151 Officer in setting a robust budget.