Agenda item

Further to Minute 15 (12 July 2022), the Cabinet Member for Finance, Growth and Core Services presented a report on the updated position regarding the Council’s Medium Term Financial Strategy (MTFS) and the proposed Budget Strategy for 2023/24 and beyond.

The Cabinet Member advised that the Department for Levelling Up, Housing and Communities (DLUHC) was not expected to announce the Provisional Local Government Finance Settlement for 2023/24 until 21 December, which would be the fifth consecutive one-year settlement.  The failure of the Government to provide longer-term settlements and to introduce the Fair Funding and other reforms that had been promised for several years now meant that local authorities continued to struggle to plan ahead with any degree of certainty.

The Government’s austerity measures that had been introduced since 2010 meant that the Council continued to face significant financial challenges despite the prudent and innovative approach that it had taken in recent years.  Those challenges had been made even worse by the COVID-19 pandemic and the current cost-of-living crisis which had led to an increase in demand for many Council services.  The combined effect of those challenges and pressures meant that, once growth bids and other measures to deal with on-going budget pressures had been taken into account, Barking and Dagenham faced a projected budget gap of £17.767m for 2023/24 and a cumulative budget gap of £64.855m by 2026/27.

The Cabinet Member alluded to the savings exercise that was underway and other issues that would assist the Council in setting a balanced budget at the Assembly meeting on 1 March 2023.  One of those issues related to raising the level of Council Tax which had previously been capped by the Government at 2% on General Council Tax and 1% for the Social Care Precept.  The Government was raising those caps to 3% on General Council Tax and 2% for the Social Care Precept for the next two years and while the Cabinet Member welcomed the additional flexibility, he stressed that the Government’s tactic of pushing the onus on to local authorities and local taxpayers to compensate for the Government’s underfunding of public services should not go unnoticed. 

In view of the Council’s projected budget gap for 2023/24, the Cabinet Member advised on plans to consult with the local community and businesses early in the New Year on savings proposals and a potential increase to the Council Tax in line with the new maximum thresholds.  He also referred to the Council’s commitment to exploring new investment and regeneration initiatives that would bring in much needed revenue and improve the lives of local residents, especially the most vulnerable.

Cabinet resolved to:

(i)  Note the continued commitment to delivering the savings proposed in the MTFS reports approved by Assembly in March 2022;

(ii)  Note the approach to mitigate the funding gap put forward for 2023/24 onwards prior to inclusion in the Budget Report in Spring 2023;

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

(iv)  Agree to consult Borough residents and taxpayers on the levying of a 3% General Council Tax increase and a 2% Social Care Precept to support the Borough’s most vulnerable residents, subject to these thresholds being confirmed.