Agenda item

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 monies already received for the London housing zone, extension of the Gospel Oak line to Barking Riverside, Crossrail extension to Chadwell Heath and other projects

 

·  Expand estate regeneration and house building to enable residents to have the opportunity to live in good quality housing by identifying new ways of securing investment such as through such as securing the £89m loan from the European Investment Bank. 

 

At the invitation of the Chair to speak, the Chief Finance Officer (CFO) stated that the budget presented had been subject to significant review at both Member and Officer level as well as public consultation. He assessed that the savings proposals were challenging but sufficiently robust to be included as part of the overall budget.

 

Balances remain at the minimum recommended level of £15m. Therefore overall, the CFO stated that he was comfortable that the proposed budget was sufficiently robust and sustainable to be recommended to Members.

 

A number of questions were raised on the report and presentation as follows:

 

Councillor Gill questioned why are the Council proposing to reduce staff wages but at the same time increase senior officer pay?

 

This will be addressed later on as this relates to a question submitted with notice by Councillor Gill.

 

What benefits will residents see from the modest increase in Council Tax?

 

It is about the Council having the resources to meet the level of investment needed to support all our communities. Local residents understand that with the significant cuts being imposed by this government that we cannot provide the level of services they require now. The increase will benefit residents by the council being able to maintain to staff and services so that the cuts to the likes of the library service are minimised. The Council will ensure that a clear narrative goes out to our residents to make these points.

 

Councillor McCarthy stated that no one in this chamber wants to see cuts but he made the point that residents in neighbouring Havering pay more in Council Tax for less services. He paid particularly tribute to the Council’s street cleaning teams.

 

Councillor McCarthy asked that with the increasing number of so called “problem” families relocating to the Borough, how is the Council expected to manage the additional costs to services this inevitably brings?

 

The Leader raised the very issue when he recently met with NE London Leaders making the point that Barking and Dagenham is not a “dumping ground” for other authorities of the likes of Westminster to discharge their statutory duties. Unfortunately as things stand we are unable to seek any recourse financial or otherwise against these authorities, hence why we are lobbying London Councils about getting these authorities to provide funds to support the additional costs that such families bring. He highlighted the article that appeared in the Barking and Dagenham Post recently where he was very critical of Westminster Council’s policy of moving poorer families here. 

 

The strategy in setting a two year budget was challenged by Councillor Gill when the financial position is only clear for 2015/16?

 

The Cabinet Member for Finance explained that it was good practice to get officers to face up to the saving challenges. By setting a two year budget it creates the headroom to undertake better financial planning in the lead up to the election of a new Government, when it is clear going forward that making savings year on year will be more difficult to achieve. He added that although the settlement for 2016/17 has yet to be announced he was confident that the figures we are working are a good guide.

 

It was noted by Councillor Gill that the opening of the new Abbey Sports Centre originally scheduled for September 2014, is now scheduled to open in March 2015. Is this new date confirmed and what financial penalties will be imposed on the contractor for yet another delay?

 

The Cabinet Member for Finance is confident that the new opening date will be met. As for the contractor he confirmed that significant financial penalties are being applied in the region of £40,000 per week.

 

Councillor Young referring to the rationalisation of corporate office arrangements which forms one of the budget savings urged all members to get behind the “Save the Civic” petition and campaign being led by Jon Cruddas MP. He challenged the justification behind the Cabinet decision to delay a final decision on the future of the building until 2016/17 and the uncertainty this has brought for staff and local residents alike.

 

Councillor Twomey referred to the report that was presented to Cabinet in December 2014, when the decision was taken about the future arrangements for a number of Council office buildings. It was his view that the decision was clear in terms of timelines and the future use of the Civic Centre. 

 

Councillor Young referred to the meeting of the Assembly in September 2014 where he raised a question about maintaining the current terms and conditions and pay of front line staff to maintain morale and the answer he received at that time from the Cabinet Member for Finance.

 

Councillor Twomey stated that he believed that just looking to maintain employee terms and conditions when we should be striving to improve upon all aspects of our employees' conditions within the workplace, whether that be terms and conditions, pay, training or developmental opportunities was short sighted . As all of these things significantly impact on staff morale. The quality of our services is a result of the ongoing commitment and skill of the people who work for us. The Council is committed to ensuring that both staff and trades unions continue to play an active part in shaping future terms and conditions as they have successfully done over the last four years.

 

Councillor Twomey in summing up reassured members that as a Cabinet and a Council we will not be satisfied with the choices we have had to make and therefore we will continue to strive to identify new opportunities that can alleviate some of the difficult decisions already made as well as to avoid some that inevitably lay ahead.

 

Councillor Twomey moved the vote, seconded by Councillor Rodwell.

 

In accordance with paragraph 10.3.2 of Part 2, Chapter 3 of the Council Constitution, the budget was put to a recorded vote and was agreed as follows:

 

For:  Councillors Ahammad, Alasia, Ashraf, Aziz, Bremner, Bright, Butt, Carpenter, Channer, Chand, Doyle, Fergus, Freeborn Geddes, Ghani, Gill, Haroon, Hughes, Jamu, Jones, Kangethe, Keller, Miah, McCarthy, Miles, , Mullane, Ogungbose, Oluwole, Quadri, Rai, Ramsay, Reason, L Rice, Rodwell, Shaukat, L Smith, D Smith, Turner, Twomey, Wade, P Waker, White, Worby, Young and Zanitchkhah

 

Against:  None

 

Abstain:  None

 

The Assembly resolved 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 at Appendix C, which reflected an increase of 1.99% (rounded down) on the amount of Council Tax levied by the Council, plus the Council Tax agreed by the Greater London Assembly (1.3% reduction), as detailed in Appendix D to the report;

 

(v)  Approve the Council’s draft Capital Programme for 2014/15 to 2016/17 as detailed in Appendix E to the report; and

 

(vi)  Agree that the full economic cost be levied as a charge on fees paid by credit cards for Council Tax, as detailed in paragraph 7 of the report.