Agenda item

Further to Minute 18 (14 July 2020), the Cabinet Member for Finance, Performance and Core Services presented a report on the Budget Strategy for 2021/22 to 2024/25 and an update on the Council’s Medium Term Financial Strategy (MTFS) that was revised and approved by Cabinet in July 2020 in response partly to Covid-19 as well as other issues including the ongoing delays with the Fair Funding Review and other Government plans around the retention of business rates.

He explained that the MTFS would continue to be reviewed and revised, not least to address the Borough’s growing population and the added pressures and demands that would bring.  The financial uncertainty had also not been helped by the Government delaying the Autumn Spending Review and the likelihood that there would be a one-year only funding settlement for 2021/22, probably to be announced in December 2020.  That timetable made it incredibly difficult and challenging for the Council to plan and consult on a four-year budget strategy, albeit it was necessary to do so.

The Cabinet Member advised that the strategy included many uncertainties due to Covid-19.  Assumptions on a series of best projections over the period had, by necessity, been made including income returning to near normal levels by the start of the next financial year.  However, that would be wholly dependent on the public health situation at that time and, therefore, further Government financial support may be necessary.  The strategy also set out the planned budget public consultation process on the Council Tax levy for next year.

The Cabinet Member referred to the progress on the savings achieved through the Council’s Transformation programme which, up to the beginning of the current financial year, had achieved savings totalling £32m.  A further £12m had been projected during the current financial year but had not been realised due to Covid-19, creating further pressures on achieving a balanced budget and, therefore, further mitigating measures were required.

It was also noted that the report had been prepared before the latest tranche of Government funding had been known and the Cabinet Member confirmed that the updated position would be reflected in future budget monitoring reports.  There were also a number of other savings and improvements in practices set out in the report which had helped to improve the financial position of the Council.

Cabinet resolved to:

(i)  Note the continued commitment to delivering the savings proposed in the MTFS reports approved by Assembly in February 2017 and updated in subsequent years;

(ii)  Agree the proposed consultation process for the budget, as set out in section 9 of the report;

(iii)  Agree to consult the residents and taxpayers of the borough on the levying of a 2% General Council Tax increase and a 1% Social Care Precept to support the Borough’s most vulnerable residents, subject to those thresholds being confirmed;

(iv)  Note that London authorities were currently exploring the possibility of continuing the business rates pooling arrangement and approve, in principle, that the Council should continue to participate in such an arrangement if deemed appropriate; and

(v)  Delegate authority to the Finance Director, in consultation with the Cabinet Member for Finance, Performance and Core Services, to enter into the Memorandum of Understanding for any future London pooling arrangements.