Agenda item

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

 

The report before Cabinet outlined the context within which the 2013/14 budget was due to be set and identified the Council’s overall policy direction, statutory duties and financial strategy.

 

It was reported that the Council’s budget needed to reflect the level of funding allocated to it by the Government.  It was noted that since the 2010 General Election, the Government had made a series of announcements, with the most recent being the Autumn Budget Statement, which preceded the announcement of the provisional Local Government Settlement.  This saw the introduction of fundamental and complex changes to the funding regime for local authorities, probably the biggest in 20 years.  Whilst this reflected the localisation of responsibilities, it also brought increased financial risk, and this had to be reflected as part of a robust budget setting process.

 

In anticipation of the changes that these various announcements had brought about, and in response to the Emergency Budget announced in 2010, Cabinet had previously agreed a range of savings proposals in July 2010, and again in July 2011, designed to deliver savings approaching £36m.  These proposals were in the process of being implemented, subject to consultation where appropriate.

 

It was noted that the provisional settlement had been announced on 19 December, the details of which had been included in the previous report to Cabinet in January.  Interpretation of the impact of the settlement had been extremely difficult due to the continual flow of information from central government.  More recently, there had been speculation that the final settlement would not be available until mid-February.  Supplementary papers were issued which provided further detailed information on the final local government financial settlement and other levies. It was noted that the final settlement provided a 1.1% reduction in funding. The delay in the announcement had increased the level of uncertainty at a time when the pressure on public sector budgets continued to grow.

 

In the light of the ongoing financial climate, and with the prospects for “more of the same” for the foreseeable future, information on a small number of budget pressures and savings proposals was released for formal consultation in January and as part of this process, was submitted to the joint Overview and Scrutiny Committee.  The results of this consultation were set out in the report.  Subject to any further changes made by Cabinet arising from the consultation and scrutiny, the report set out the factors being recommended for inclusion within the 2013/14 budget.

 

It was noted that there was no proposed increase to the Havering element of the Council Tax, which would enable the Council to take advantage of the new Council Tax freeze grant on offer.

 

Final confirmation of the Greater London Authority (GLA) precept was not expected until the day on which the London Assembly was due to meet, which was two days prior to the Council budget setting meeting. It was reported that the Mayor had proposed a small reduction in the current precept, and this had been the subject of a similar consultation process.  On the assumption that this was approved by the London Assembly, there would be a small overall reduction in Council Tax.  The band D figure would reduce to £1,498.18.

 

The report provided details of the various components of the budget with appendices also included.

 

Reasons for the Decision

The Council is required to set a budget for 2013/14 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 was concerned.  However, there were options in respect of the various elements of the budget.  These were considered in preparing the budget and covered such things as alternative savings proposals, the totality of budgetary pressures and different levels of Council Tax.

 

Members praised staff for their hard work in drafting the report in difficult circumstances given the inaccuracies in the final settlement delivered by central government.

 

The Cabinet Member emphasised the challenging financial circumstances that the Council found itself in, particularly as further savings were required in the next financial year and beyond.

 

Cabinet, in view of the need to balance the Council’s policies, statutory requirements, government initiatives, inspection regimes and Council Tax levels:

 

1.            Noted the advice of the Chief Finance Officer as set out in Appendix H when recommending the Council budget.

 

2.            Noted the comments received during the consultation exercise, which are set out in the report from the joint Overview and Scrutiny Committee, which is attached as Appendix J to this report, when recommending the total Council budget.

 

3.            Approved the Council’s General Fund draft budget for 2013/14 as set out in Appendix E of the report, formulated on the basis of:

 

·      an ELWA levy based on the anticipated budget and levy increase

·      the budget itemsshown at Appendix F of the report

·      the other assumptions set out in this report.

 

4.            Approved the delegated schools’ draft budget as set out in Appendix E.

 

5.            Delegated to the Leader and the Cabinet Member for Value authority to approve spending plans for new sources of grant funding or for confirmed amounts where estimates have previously been used, as set out in paragraph 3.3.5 of the report, for both revenue and capital grant funding.

 

6.            Delegated to the Cabinet Member for Children’s Services, in conjunction with the Cabinet Member for Value, authority to take action to reduce Council spend resulting from the further transition of schools to academy status, as set out in paragraph 3.4.22 of the report.

 

7.            Delegate to the Chief Executive and Group Directors 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 as appropriate.

 

8.            Approved, with effect from 1 April 2013, that the financial assets and liabilities of the commercial properties currently held in the Housing Revenue Account be appropriated to the General Fund, the final list of properties appropriated to be agreed by the Group Director Finance & Commerce.

 

9.            Approved the schedule of Fees and Charges set out in Appendix L, with any recommended changes in year being implemented under Cabinet Member delegation.

 

10.          Approved the Capital Programme for 2013/14 as set out in Annexes 2, 3 and 4 of Appendix I of the report. 

 

11.          Delegated to the Chief Executive and Group Directors to implement the 2013/14 capital and revenue proposals once approved by Council unless further reports or Cabinet Member authorities were required as detailed.

 

12.          Agreed that if there were any changes to the GLA precept and/or levies, that the Group Director Finance & Commerce (in the absence of the Chief Executive) be authorised to amend the recommended resolutions accordingly and report these to Council on 27 February 2013.

 

13.          Agreed that information be made available to members of the public, staff, trade unions, etc. explaining the decisions made by Cabinet, and the final decision on the Council Tax setting.

 

14.          Delegated to the Cabinet Member Value and the relevant service area Cabinet Members authority to commence tender processes and accept tenders where these relate to Capital schemes within the Capital Programme.

 

15.          Delegated to the Chief Executive authority to consider the comments of the trade unions and to reflect any changes and/or comments in the recommendations to Council.

 

Cabinet:

 

16.          Recommends to Council, subject to recommendation 3 above, the General Fund budget, and 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.

 

17.          Recommends to Council the delegated schools’ budget, also as set out in Appendix E.

 

18.          Recommends to Council that a resolution be passed based on the proposals as set out in this report in order to set the Council Tax – the final text/figures to be advised to Council once the final GLA position is known.

19.          Recommends to Council to pass a resolution as set out in section 8.4 of this report to enable Council Tax discounts to be given at the existing level

 

20.          Recommends to Council the Capital Programme for 2013/14 as set out in Annexes 2, 3 and 4 of Appendix I.

 

21.          Recommends to Council to agree that the Capital Programme be expanded for schemes during the year which are funded via grant funding under the authority of the Leader and the Cabinet Member Value.

 

Cabinet Noted:

 

22.          The monitoring arrangements for 2013/14.

 

23.          The prospects for 2014/15 and beyond, which indicate a very challenging financial environment still lies ahead, with the continuation of the Government’s austerity programme, and that the need for continued financial prudence is especially important.

 

24.          The likely date for the announcement of the final settlement and the potential need for a further report, should the figures be materially different.

 

25.          That supplementary information would be provided to Cabinet where information was awaited, such as from external bodies such as the GLA and the other levying bodies, as well as the final settlement itself.

 

26.          That any further reductions in grant funding introduced by the Government subsequent to the setting of the budget would be reported back to Cabinet, together with any consequent recommendations on maintaining financial stability.

 

27.          That a further report would be brought to Cabinet setting out proposals to reduce spend associated with Early Intervention activities, in line with the reduced funding provided by Government.

 

28.          That a report would be brought to Cabinet in March setting out the Council’s proposed policy for dealing with business rates relief.

 

29.          The effect of Council Procedure Rules with regard to the moving of any amendment to the Council Tax Setting report.

 

30.          That consultation with the Trades Unions would continue in respect of any proposals within the Budget that have an impact on staff. 

 

31.          The virement and contingency rules set out in Appendix G.

 

32.          That it had previously agreed that any future underspends from the Corporate Contingency Fund, from the Transformation budget, and from any service revenue underspends, were allocated to the Strategic Reserve.

 

33.          The indicative Capital Programme for 2014/15 as set out in the report and Appendix I.

 

34.          That the Treasury Management Strategy was being presented to Cabinet concurrently with this report as a separate agenda item.

 

35.          That Midnight on Monday 18 February 2013 is the deadline for amendments to the Council Tax Setting and Budget Report.