Agenda item

The Cabinet Member for Finance introduced the Council’s proposed budget framework for 2013/14 which incorporated the following:

• The Medium Term Financial Strategy (MTFS) for 2013/14 to 2014/15
• The proposed General Fund budget for 2013/14
• The proposed level of Council Tax for 2013/14
• The financial outlook for 2014/15 onwards
• The draft Capital Programme for 2012/13 to 2015/16

Providing an overview of the budget the Cabinet Member advised that difficult decisions had again had to be made by Members to ensure that the Council maintained a robust and balanced budget, which protected as far as possible front line services, at a time when local residents are demanding the most from their Council services.  Setting a two year budget has meant that it was possible for the Council to keep its Council Tax at the same level for the fifth and, subject to the prevailing financial circumstances at the time, a sixth consecutive year in 2014/15.

This year’s budget has been set against the backdrop of the most extensive consultation exercise carried out by the Council including examination by the five Select Committees, Leader and Deputy Leader question times, a separate question time with young people as well as use of Facebook, Twitter and the Council’s website.  The response to the consultation showed the Council had listened to its residents by withdrawing or amending a range of proposals including support to the voluntary sector, sheltered housing schemes, the reinstatement of green waste collections and the anti-social behaviour team, to name but a few.

The budget has been set in the context of further larger cuts in core government funding, and those cuts are much higher than the misleading headlines announced by the Coalition which, based on the funding formula imposed on local authorities, means that this Council is underfunded by approximately £2.5m.  Overall this Council has had to reduce its budgets over the four years 2010/11– 2014/15 to the order of £90m.  In addition the changes to benefits such as Council Tax, housing benefit, bedroom tax and UC will remove in the order of £50m from the local economy.

Coalition policies have led to high unemployment with record youth unemployment, the potential for a triple dip recession, downgrading of the triple A credit rating, zero growth, more borrowing and higher energy prices, all of which has led to a reduction in living standards. Add to this the cut in the rate of tax for high earners, the tripling of tuition fees, the cut in EMA, the waste of money spent on electing Police Commissioners, reforming the NHS and the train franchise debacle, means this Government should put its own house in order before attacking local authorities.

The Cabinet Member commented that rather than simply cutting budgets and services, the Council has looked to be innovative in how it provides services to deliver efficiency savings whilst still delivering the things that matter to residents, such as making better use of children’s centres, maximising the use of buildings and vehicles and income as well as exploring and implementing shared services with other Councils.  The Council gets excellent value for money by sharing its Chief Executive and Monitoring Officer.  It has also continued prioritising savings in its senior management and support functions. 

Acknowledging the importance of continuing to grow and invest in the Borough, the Cabinet Member highlighted a number of successes such as  achieving the highest number of new homes which had been rewarded with additional grant monies, additional funding to meet the education needs of a growing population, improved financial health of the Borough, allowing for a small injection of cash in 2014/15, as well as the commitment to a freeze in Council Tax in 2013/14, and the intention to do likewise in 2014/15.  This is being achieved against the backdrop of other things such as the London Mayor’s transport fares and utility prices continuing to increase.

Finally, turning to capital the Cabinet Member explained that building on previous programmes the Council is committed to continue to invest in the infrastructure of the Borough with over £300m of expenditure planned over the next three years.  Projects include a new leisure centre in Barking, improving schools and making more school places available, improving the condition of the housing stock and roads, building new affordable homes and developing new ways for residents to access services.

The Cabinet Member paid thanks to Members and officers alike for all their support and hard work to achieve a balanced budget.

The Divisional Director of Finance and Section 151Officer reported that he has a statutory duty to ensure a balanced budget.  To that extent each of the savings proposals had been analysed and he is therefore confident that the budget is sufficiently robust and sustainable to the extent that he is able to commend its adoption to the Assembly.

Accordingly the Assembly AGREED:

(i)  A base revenue budget for 2013/14 of £178.1m as detailed in Appendix A  to the report;

(ii)  The adjusted Medium Term Financial Strategy (MTFS) position for 2012/13 to 2014/15 allowing for other known pressures and risks, as detailed in Appendix B to the report;

(iii)  The Statutory Budget Determination for 2013/14 as set out in  Appendix C to the report, reflecting a freeze on the amount of Council Tax levied by the Council, plus the final precept announced by the Greater London Assembly on 25 February 2013 (1.2% reduction) as detailed in Appendix D to the report;

(iv)  The Council’s Capital Programme for 2012/13 - 2015/16 as detailed in Appendix E to the report; and

(v)  Noted the Chief Finance (Section 151) Officer’s recommendation to increase the minimum level of balances to £15m and reduce the base budget contingency held.