Agenda item

The Cabinet Member for Finance introduced the Council’s proposed budget framework for 2015/16 which incorporated the following:

·  The Medium Term Financial Strategy (MTFS) for 2015/16 to 2018/19;

·  The General Fund budget for 2015/16;

·  The level of Council Tax for 2015/16;

·  The financial outlook for 2016/17 onwards;

·  The Capital Programme for 2014/15 to 2016/17.

The proposed General Fund net budget for 2015/16 was £151.44m, compared to a revised net budget for 2014/15 of £165.32m.  The Cabinet Member explained that the Coalition Government’s continued cut to public sector funding meant that grant funding had reduced from £107.87m for 2014/15 to £88.3m for 2015/16, and was expected to reduce further to £79.52m for 2016/17.  As a consequence and despite the package of savings measures implemented by the Cabinet at its meeting on 16 December 2014, it was necessary to propose a Council Tax increase for the first time in seven years in order to protect essential services.  The 1.99% increase to Council Tax would be equivalent to an additional £20 per annum, or 40p per week, for the average Band D property.

The Cabinet Member referred to the proposed 1% transaction cost to be applied to Council Tax payments made by credit card and also highlighted a number of other funding issues that had impacted on the budget for 2015/16 and beyond. 

Issues which arose during the discussions included:

Ø  The ongoing budget pressures caused by the annual increase to the East London Waste Authority (ELWA) levy – The Chair advised that he would be discussing the matter with the other Borough Leaders.

Ø  Children’s Placement Pressures – The Chief Finance Officer explained that the £3m budget pressure in the MTFS only related to 2015/16 as the service budgets would be realigned next year and ongoing pressures factored in to the base budget.

Ø  Incentives for prompt payment – The Cabinet Member for Finance acknowledged that there may be scope in the future to offer discounts or other incentives but any proposals would need to be considered in the context of collection rates and other pressures.

Ø  Impact of demographic changes – The Cabinet Member for Children’s Services and Social Care reiterated the need to assess the financial and other impacts of the changing demographics in the Borough in order for the Council to effectively plan for the future.

Cabinet resolved to recommend the Assembly to:

(i)  Approve a base revenue budget for 2015/16 of £151.444m, as detailed in Appendix A to the report;

(ii)  Approve the adjusted Medium Term Financial Strategy (MTFS) position for 2015/16 to 2018/19 allowing for other known pressures and risks at this time, as detailed in Appendix B to the report;

(iii)  Delegate authority to the Chief Finance Officer, in consultation with the Cabinet Member for Finance, to finalise any contribution required from reserves in respect of the 2015/16 budget, pending confirmation of levies and further changes to Government grants prior to 1 April 2015;

(iv)  Approve the Statutory Budget Determination for 2015/16 as set out at Appendix C, which reflects an increase of 1.99% on the amount of Council Tax levied by the Council, plus the Council Tax agreed by the Greater London Assembly (1.3% reduction), as detailed in Appendix D to the report;

(v)  Approve the Council’s draft Capital Programme for 2014/15 to 2016/17 as detailed in Appendix E to the report; and

(vi)  Agree that the full economic cost be levied as a charge on fees paid by credit cards for Council Tax, as detailed in paragraph 7 of the report.