Agenda item

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

 

•  Medium Term Financial Strategy (MTFS) for 2014/15 to 2017/18;

•  Proposed General Fund budget for 2014/15;

•  Proposed level of Council Tax for 2014/15;

•  Financial outlook for 2015/16 onwards;

•  Three year draft capital investment programme.

 

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

 

·  Council Tax freeze for the sixth year in a row

·  Protection of front line services as much as possible and a budget that listened to residents

·  An ambitious capital programme investing in the future of the Borough

 

and that in setting the budget, the emphasis throughout had been, as far as possible, on protecting front line services and, in particular, prioritising the retention of those services most important to the residents and the future of Barking & Dagenham. 

 

Despite the financial challenges, the Council had taken the lead in supporting its lowest paid staff, many of whom are local residents, by introducing a £9 per hour minimum wage, and for the sixth consecutive year, as a further means of helping local residents, the Council would again be freezing Council Tax.  However, the Council's success in achieving the highest number of new homes built had resulted in the receipt of additional grant monies, and additional income would also be achieved through increasing the Council Tax base as a result of these new homes.

 

The budget had been set in the context of further large cuts in core funding from central government and the Council remains underfunded by approximately £2.5 million, due to the way in which central government calculates the funding formula.

 

The Cabinet Member went on to say that savings in support functions and corporate costs continued to be a priority for the Council, and this was reflected in sharing a Strategy and Policy Team with Thurrock Council, the joint venture with Elevate and by reducing the number of buildings used by the Council for the delivery of services.

 

The Council would continue to make significant capital investment in the Borough with over £300m of expenditure planned over the next three years.  However, it was important to note that these decisions had not been made without considering their affordability and leaving the Council with unaffordable financing costs to pay in the future.

 

Significant work has been done at both Member and officer level to lobby central government for more resources and this has been hugely successful and wherever possible, external funding was sought and bidding for additional monies encouraged at every opportunity.

 

The Council’s asset register is regularly reviewed to identify any surplus items which can then be sold for a fair price in order to reduce the authority’s level of debt and in addition to Council resources, innovative solutions had been implemented such as the use of private sector finance to build 477 new homes at King William Street Quarter and Eastern End Thames View, many of which had now been let with the majority going to Barking & Dagenham residents.

 

The Council remains ambitious with the next three years seeing:

o  A new Leisure Centre in Barking

o  Continuing to improve our schools and provide more school places

o  Addressing the condition of our housing stock

o  Building new affordable homes within the Borough

o  Improving the condition of our roads and pavements

o  Developing new ways for residents to access Council services

 

In closing, the Cabinet Member said that the outlook for the future was for more of the same and that in addition to continued cuts in funding from the coalition government, the Council also faced pressure from:

 

o  Additional costs as a result of government legislation such as the Care Bill and Children and Families Bill

o  Threats to income sources such as parking fines which provide funding for the investment in the highways

o  An increase in National Insurance costs

 

all of which pressures mean the Council faces having to make savings of approximately £70m between 2015 and 2018, which will mean more difficult decisions in the future with a need to focus on key priorities and those services most important to residents.

 

At the invitation of the Chair to speak, the Chief Finance Officer stated that:

 

·  The budget presented had been subject to significant review at both Member and Officer level and therefore each savings proposal was considered sufficiently robust to be included

·  The savings had been approved by Assembly twelve months ago and the positive progress on implementing those savings was reported to PAASC last month

·  The report included his minimum recommended level of balances of £15m and current estimates forecast the year end position as being in excess of that position providing options for the future

·  The draft budget for 2014/15 included the use of balances, which would need to be addressed with ongoing savings in the setting of the 2015/16 budget

 

Overall, the Chief Finance Officer stated that he was comfortable that the proposed budget was sufficiently robust and sustainable to be recommended to Members.

 

In response to a question concerning the ELWA levy increase, the Cabinet Member for Housing, who is also Chair of ELWA, advised that ELWA's current contract was negotiated eleven years ago.  He said that the maximum landfill tax was now £80 per ton and that as more houses had been built, more waste was being produced.  There is diversion of general waste to Frog Island with a market to take that waste away and ELWA is looking to raise the diversion rate.

 

He went on to say that the ELWA board has been restructured, is continually looking for improvement, and works closely with the Department for Environment, Food and Rural Affairs.  He was confident that the right decisions were being made going forward and this year they would be coming in under budget.

 

Councillor Gill moved that the budget be put to the vote, seconded by Cllr Carpenter.

 

In accordance with paragraph 9.5 of Article 1, Part B of the Council Constitution Councillor Carpenter moved that the budget be put to a recorded vote and this was supported by Councillors Alexander, Gill and Rai.

 

The budget was then put to the vote and was agreed as follows:

 

For:  Councillors Ahammad, Alexander, Baldwin, Bremner, Butt, Carpenter, Channer, Clee, Douglas, Gafoor Aziz, Geddes, Gill, A S Jamu, Kangethe, McCarthy, McDermott, McKenzie, Miles, Mullane, Obasohan, Poulton, Rai, Ramsay, Reason, L Rice, Rodwell, Saeed, Salam, P Waker, White, Worby

 

Against:  None

 

Abstain:  Councillor Barratt

 

The Assembly therefore agreed to:

 

(i)  Approve a base revenue budget for 2014/15 of £165.3m, as detailed in Appendix A;

 

(ii)  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;

 

(iii)  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)  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;

 

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

 

(vi)  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.