Agenda item

Councillor Roger Ramsey, Cabinet Member for Value, introduced the report.

Over the course of the last 15 months, Havering Council had agreed a package of savings to mitigate the impact of very significant cuts in central government funding to local authorities.

These savings, totalling in excess of £19 million in the first tranche, with a further £16 plus in the second tranche, had been made up of a range of measures designed to reduce back-office costs, cut bureaucracy and focus resources where they would have the most impact – while remaining fair to those local residents who most relied on the Council for day-to-day support.

Subsequent to the approval of the savings measures, the Government had issued a series of consultation papers on a variety of issues which were considered by Cabinet in October 2011.  The report included an assessment of the potential impact of the Government’s proposals, and the Council’s response to them.  The final decisions on these areas had not yet been received.  There was one further issue relating to the Local Government Pension Scheme, which was covered in the report before Cabinet members.

Although the Government announced a two year financial settlement, the figures for 2012/13 were provisional at the time the report was drafted. It had since been announced that the provisional Capital Budget settlement for the coming financial year was £54.043m, this included the Council Tax Freeze Grant.  It was reported that the settlement would be finalised after the consultation period, which was due to end on 16 January 2012.

The report contained the summary statements setting out the main principles of the Council’s Medium Term Financial Strategy, in particular the revenue strategy, the capital strategy, and the procurement strategy.  The report sought approval to recommend these to Council for adoption.

The report also set out the position in the current financial year, and a number of other relevant issues, as these needed to be taken into account in developing the detailed budget for 2012/13.

An error was contained in the table under Paragraph 6.2 of the report. The variance forecast for Development and Building Control was incorrectly expressed as £766k.  It was announced that the correct figure was £76k.

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 provided an update to Cabinet on issues relevant to the budget setting process.

Other options considered:

None.  The Constitution required consideration of the report as a step towards setting the Council’s budget.

A discussion took place concerning the redistribution of business rates.  The Cabinet Member for Value announced that no agreement on the matter had been reached at London Councils.  The final Government proposals on the issue had yet to be received.

A member commented that the formula used for the financial settlement from Government was highly biased against Havering Council.  The Cabinet Member for Value agreed that the formula was not only complex but also biased against the Council.  He added that the Council repeatedly raised this as an issue of concern in consultation responses to the Government.

It was noted that there would be a further report to the next Cabinet meeting (which would also be going to the subsequent joint meeting of all Overview & Scrutiny Committees about the budget proposals), in which the capital position would be addressed.

Cabinet AGREED:

1.         To note the Government’s consultation process for the Local Government Pension Scheme, and the assessment of the potential impact on the Council.

2.         To note that details of the Local Government Financial Settlement for 2012/13 would be reported to Cabinet in full in January.

3.                  To approve the revenue, capital and procurement strategy statements, as set out in Appendix B to the report, and recommended their adoption to Council.

4.                  To note the position in the current financial year, as set out in Section 6 of the report.

5.         To agree that financial support for the services provided by the Queens Theatre, Studio 3 Arts, HAVCO, and Motorvations as described in paragraph 7.10 of the report should be extended and incorporated into the base budget for 2012/13.