Issue - meetings

Assembly received this report presented by Councillor Twomey, Cabinet Member for Finance, which set out the:

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

·   Proposed General Fund budget for 2015/16;

·   Proposed level of Council Tax for 2015/16;

·   Financial outlook for 2016/17 onwards;

·   Draft capital investment programme for 2014/15 to 2016/17.

The Cabinet Member announced that the key messages from this budget were:

·  This budget is made out of necessity and not choice with decisions made against the backdrop of the draconian austerity cuts imposed by the current, but hopefully by 7 May former Tory lead coalition government

·  £90m of savings have been taken out of the budgets over the past four years with the prospect of another £39m in the next two years and a further £14m in 2017/18. Going forward this will be increasingly harder to achieve not least that the government has only set a one year settlement and so years two and three could prove even more challenging.

Whatever the future holds the Council will need to manage budgets even more closely and ensure that reserves are used as sparingly but as effective as possible.

·  The reduction in government grant and the unfairness of the government funding formula consistently works against this authority at a time of significant demographic growth.

·  The disproportionate affect for local residents of the government’s welfare reforms.

·  Protection as far as possible to the staff, our most valuable asset, through retaining jobs and services, and in so doing continue to pay above the London Living Wage of £9.25 per hour for the lowest paid staff.

·  To achieve this to impose a small increase in Council Tax of 1.994%, the first increase in seven years of approximately £20 per year in a band D property for those that pay full Council Tax, and

·  An ambitious capital programme to attract business and new housing and transport links alongside school improvements.

The Cabinet Member explained that given the significant level of savings required it was decided early on that alongside the usual budget scrutiny by the Select Committees the Council would embark on the most extensive consultation with residents, trade unions and wider groups in the Borough to ensure that everybody has an understanding of the difficult times ahead and more importantly where possible to shape budget decisions around their views and needs.

Moving forward whilst central government cuts will continue it is hoped that under a new Labour government the funding formulas will be revised and that the allocation of grant funding will be carried out in a more proportionate way to the benefit of the Council and NE London Boroughs who are adversely affected at present. 

As a Council we will continue to :

·  Look wherever possible for new ways of raising additional income and moving towards more efficient ways of working in terms of online service provision and ongoing reviews of management tiers and business support.

·  Lobby government, GLA, TfL and other organisations for new funding and investment on top of the  ...  view the full minutes text for item 52

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  ...  view the full minutes text for item 95