Issue - meetings

Further to Minute 23 (13 July 2021), the Cabinet Member for Finance, Performance 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 2022/23 and beyond.

The Cabinet Member explained that the Council continued to face significant financial challenges despite the prudent approach that it had taken in recent years.  The Government’s three-year spending review in October had raised hopes of a three-year Local Government Finance Settlement which would help councils to plan ahead with a degree of certainty; however, it was becoming much more likely that only a one-year settlement would again be announced by Government in the coming days.

The COVID-19 pandemic continued to impact on current and future spending plans and the lack of a commitment from the Government to support councils with those extra costs and pressures meant that Barking and Dagenham faced a cumulative budget gap of £36.3m by 2025/26.  The Cabinet Member commented that there remained a great deal of uncertainty regarding the Government’s ‘Levelling Up’ agenda and other funding reforms and he highlighted the New Homes Bonus as an example, quoting the Finance Director’s assessment in the report that the potential removal of the New Homes Bonus without replacement “could have a catastrophic detrimental effect on the MTFS as it is a key element of the Be First business plan target and underpins our efforts to regenerate the Borough”. 

The Cabinet Member referred to the proposed savings and growth proposals for 2022/23, which had recently been considered by the Overview and Scrutiny Committee, and the proposals to consult with the local community on the budget preparations and a planned 3% increase to Council Tax for 2022/23.  He also drew attention to the Government’s increase of 1.25% to National Insurance contributions, which would impact the Council as an employer as well as local residents directly through their wages, and the lack of proper funding to cover local government pay awards.

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)  Note the new proposed savings and growth proposals put forward for 2022/23 onwards, as set put in Appendix 1 to the report, prior to inclusion in the Budget Report in Spring 2022;

(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 2% General Council Tax increase and a 1% Social Care Precept to support the Borough’s most vulnerable residents, subject to these thresholds being confirmed.