Agenda item

The Cabinet Member for Finance, Growth and Investment introduced a report on the Council’s capital and revenue position for the 2016/17 financial year, as at 31 October 2016.

The General Fund showed a projected end of year spend of £155.8m against the approved budget of £150.3m, which represented another slight improvement on the previous month’s position.  The main budget pressures continued to be within the Children’s Social Care and Homelessness services and the Cabinet Member acknowledged that the Homelessness service would be overspent at the year-end owing to the issues discussed in detail at the last meeting (Minute 63, 15 November 2016 refers).  The Cabinet Member called on his colleagues and officers to continue their efforts to find additional in-year savings to mitigate the current pressures and to maintain the £15m minimum level of reserves.

The Housing Revenue Account (HRA) showed a projected year end underspend which would result in a contribution of £1.8m to the HRA reserve although it was noted that there were two potential calls on that reserve, one linked to a court case involving Southwark Council and the other to the Government’s plans regarding the sale of higher value void properties and an associated levy. 

Expenditure on the Capital Programme was forecast to be in line with the revised budget of £197.712m.  The Cabinet Member for Educational Attainment and School Improvement advised that the Education Funding Agency continued to be lobbied for additional funding to support much-needed improvement works at the Borough’s schools. 

In response to other points, the Cabinet Member for Finance, Growth and Investment confirmed that the projected surplus of £0.5m in respect of B&D Reside had arisen from the improvements to operations and a current rent collection rate of over 99%.  The Strategic Director of Finance and Investment also explained that the £0.5m of procurement savings were over and above the target levels set within the contract with Elevate East London, although it was noted that some of those savings would impact on other areas of spend.

The Leader referred to the recent announcement by the Government that it was proposing to ‘allow’ local authorities to increase the rate of the social care precept on Council Tax, currently set at 2%, to reduce the shortfall in social care funding.  The Cabinet Member for Finance, Growth and Investment advised that further details were expected later in the week and any issues would be fed into the Council’s current public consultation on its budget and Council Tax arrangements for 2017/18.  The Cabinet Member for Social Care and Health Integration concurred with the view that the Government was failing to meet its responsibilities by passing the onus on to local Council Tax payers to meet rising social care costs.  Reference was also made to the disparity created by the 2% social care precept arrangement which generated several millions of pounds for wealthy Councils with a high Council Tax Base, while Barking and Dagenham received less than £1m under the arrangement.

The Cabinet resolved to:

(i)  Note the projected outturn position for 2016/17 of the Council’s General Fund revenue budget at 31 October 2016, as detailed in section 4 and Appendix A to the report;

(ii)  Note the overall position for the Housing Revenue Account at 31 October 2016, as detailed in section 5 of the report;

(iii)  Note the progress made on budgeted savings to date, as detailed in section 6 and Appendix B to the report

(iv)  Note the projected outturn position for 2016/17 of the Council’s capital budget as at 31 October 2016, as detailed in section 7 and Appendix C to the report;

(v)  Approve the final Transformation Programme design phase budget for 2016/17 of £4.315m, to be funded from capital receipts in line with the approach approved by Cabinet under Minute 37(ii) (20 September 2016);

(vi)  Note the projected expenditure on the Transformation Programme as set out in section 4.9 and Appendix D; and

(vii)  Approve the additions and amendments to fees and charges for 2017 approved by Cabinet under Minute 68 (15 November 2016), as detailed in section 8 and Appendix E to the report.