Agenda item

The Cabinet Member for Finance introduced the Council’s proposed budget framework for 2014/15 which incorporated the following:

·  The Medium Term Financial Strategy (MTFS) for 2014/15 to 2017/18

·  The General Fund budget for 2014/15

·  The level of Council Tax for 2014/15

·  The financial outlook for 2015/16 onwards

·  The Capital Programme for 2013/14 to 2015/16

The proposed General Fund net budget for 2014/15 was £165.3m, compared to a revised net budget for 2013/14 of £178.3m.  The Cabinet Member advised that a range of budget savings for 2013/14 and 2014/15 had been approved by the Cabinet on 19 December 2012 (Minute 64) in anticipation of continued Government cuts in public service expenditure.  As a consequence and following confirmation by the Department for Communities and Local Government of the grant allocation for 2014/15, there was an overall budget gap of £1.1m for 2014/15 which, it was proposed, would be met from a one-off contribution from reserves.  A Capital Programme of £250.2m for 2014/15 and 2015/16 was proposed, which included £134m for HRA-related schemes.

The Cabinet Member commented that the prudent approach that had been taken meant that it was possible for the Council to keep its Council Tax at the same level for the sixth consecutive year, as a means of helping local residents during these difficult times.  However, further savings in excess of £70m would need to be found over the next few years against the backdrop of increasing pressures such as the Care Bill which was currently progressing through Parliament.  The Cabinet Member confirmed that detailed reports on children and adult care funding would be presented to future meetings of the Cabinet.

Issues which arose during the discussions included:

·  Children’s placement costs - the Cabinet Member for Children’s Services referred to improvements to the referral processes that were being discussed with the Police and the vital role of the Borough’s Children’s Centres in improving outcomes for families, particularly through early intervention.  It was noted that while early intervention was considered crucial from both a moral and financial perspective, the non-statutory nature of much of this work would have to be balanced against the pressures arising from other statutory functions;

·  Section 106 Funding - it was noted that the projected reduction in future years’ revenue was partly due to the new Community Infrastructure Levy arrangements which would typically replace Section 106 agreements as the principal source of funding relating to new planning applications;

·  Reduction in the GLA precept - the Mayor of London’s budget for 2014/15 meant a reduction in the GLA precept of 1.3%, which equated to a reduction of £4 per year for Barking and Dagenham residents.  The Cabinet Member for Housing suggested that the Mayor’s budget should have reduced further now that the ‘top up’ funding to support the 2012 Olympics was no longer required and he also questioned the use of public money to subsidise the sale of the Olympic Park.  It was noted that the Crossrail project could be one reason for the minimal reduction in the GLA precept.

The Cabinet Member for Finance also advised on the opportunity for the Council to offer discretionary rate relief of up to £1,000 during 2014/15 for premises with a rateable value is less than £50,000.  Approximately 1,400 businesses in the Borough could benefit from the arrangement which would be at no cost to the Council.

Cabinet resolved to recommend the Assembly:

(i)  To approve a base revenue budget for 2014/15 of £165.3m, as detailed in Appendix A to the report;

(ii)  To approve the adjusted Medium Term Financial Strategy (MTFS) position for 2014/15 to 2017/18 allowing for other known pressures and risks at this time, as detailed in Appendix B to the report;

(iii)  To delegate authority to the Chief Finance Officer, in consultation with the Cabinet Member for Finance, to vary the contribution required from reserves in respect of the 2014/15 budget gap, pending confirmation of levies and further changes to Government grants prior to 1 April 2014;

(iv)  To approve the Statutory Budget Determination for 2014/15 as set out at Appendix C, which reflects a freeze on the amount of Council Tax levied by the Council, plus the final Council Tax announced by the Greater London Assembly on 14 February 2014 (1.3% reduction), as detailed in Appendix D to the report;

(v)  To approve the Council’s Capital Programme for 2013/14 to 2015/16 as detailed in Appendix E to the report; and

(vi)  To approve the grant of business rate relief of £1,000 to all eligible retail premises with a rateable value of less than £50,000 in 2014/15 and 2015/16, as detailed in paragraph 7 of the report.