Agenda item

The Cabinet Member for Finance, Growth and Core Services introduced the Council’s proposed budget framework for 2023/24 which incorporated the following:

·  Proposed General Fund revenue budget for 2023/24;

·  Proposed level of Council Tax for 2023/24;

·  Medium Term Financial Strategy (MTFS) 2023/24 to 2026/27;

·  Draft capital investment programme 2023/24 to 2026/27;

·  Housing Revenue Account budget 2023/24.

The General Fund net budget for 2023/24 was £203.568m, which incorporated decisions previously approved by Members in the Medium Term Financial Strategy, including the savings approved by Assembly in previous years, together with changes in Government grants and other financial adjustments.  The Council proposed to increase Council Tax by 4.99%, made up of 2.99% for general spending and 2% that would be ringfenced as an adult social care precept.

The Cabinet Member stated that the budget framework was prepared in the context of high inflation, the cost-of-living crisis, the ongoing impacts from the Covid-19 pandemic and the continued uncertainty around public sector finances.  In addition to the volatility and complexity of delivering Council services in that economic setting, there was continued uncertainty facing the sector in light of plans to delay Fair Funding reforms and 75% business rates retention until 2025/26 at the earliest, against a backdrop of anticipated increases in demand and pressures.

The Government issued an Autumn Statement in November 2022 and the provisional Local Government Finance Settlement for 2023/24 was published on 19 December 2022. The Government had reaffirmed their ambition to ‘level-up’ funding across the country, however that had not yet been translated into the revision of funding formulae for 2023/24.  Instead, as an interim measure, an indicative two-year funding settlement had been provided for 2023/24 and 2024/25.

The Cabinet Member expressed dismay that, even in the current volatile climate, the Government had announced its political intention to reduce public spending in the next parliamentary period after 2024/25, resulting in an extremely uncertain environment within which the MTFS had been prepared.

Cabinet Members acknowledged that the pressures of the current financial climate were being felt across all local authorities.  It was emphasised, however, that the Council and its residents faced a disproportionate level of risk due to the very high levels of deprivation and disadvantage that already existed in the Borough.  It was felt that the Government had failed to acknowledge how reliant it was on the local government sector and the creative ways the sector had found to continue supporting children, young people and the most vulnerable in the community, despite years of continual underfunding.  Rather than working with local government to make holistic, system wide changes to achieve the best outcomes, the Government’s approach felt punitive and meant that the Council had to increase Council Tax in order to maintain services that supported the local community, especially those most in need.

Cabinet resolved to:

(i)  Approve the approach to updating the stock condition survey for the Council’s housing stock, as referred to in paragraphs 11.5 - 11.8 of the report, and delegate authority to the Strategic Director, My Place, as advised by the Council’s Procurement Board and in consultation with the Cabinet Member for Community Leadership and Engagement, the Strategic Director, Finance and Investment and the Chief Legal Officer, to conduct the procurement and award and enter into the contract(s) and all other necessary or ancillary agreements with the successful bidders; and

(ii)  Recommend the Assembly to:

(a)  Approve a base revenue budget for 2023/24 of £203.568m, as detailed in Appendix A to the report;

(b)  Approve the adjusted Medium Term Financial Strategy (MTFS) position for 2023/24 to 2025/26 allowing for other known pressures and risks at this time, as detailed in Appendix B to the report, including the revised cost of borrowing to accommodate the capital costs associated with the implementation of the MTFS;

(c)  Delegate authority to the Strategic Director, Finance and Investment, in consultation with the Cabinet Member for Finance, Growth and Core Services, to finalise any contribution required to or from reserves in respect of the 2023/24 budget, pending confirmation of levies and further changes to Government grants prior to 1 April 2023;

(d)  Approve the Statutory Budget Determination for 2023/24 as set out at Appendix D to the report, which reflects an increase of 2.99% on the amount of Council Tax levied by the Council, an Adult Social Care precept of 2.00% and the final Council Tax proposed by the Greater London Assembly (9.7% increase), as detailed in Appendix E to the report;

(e)  Note the update on the current projects, issues and risks in relation to Council services, as detailed in sections 8-10 of the report;

(f)   Approve the Council’s Housing Revenue Account budget for 2023-24 as set out in Section 11 to the report;

(g)  Approve the Council’s draft Capital Programme for 2023/24 totalling £388.126m, of which £43.909m are General Fund schemes, as detailed in Appendix F to the report;

(h)  Note the update on the Flexible Use of Capital Receipts Strategy as set out section 13 of the report; and

(i)  Note the Chief Financial Officer’s Statutory Finance Report as set out in section 15 of the report, which includes a recommended minimum level of reserves of £12m.