Agenda item

The Cabinet Member for Finance, Growth and Investment introduced the Council’s proposed budget framework for 2017/18 which incorporated the following:

·  the Medium Term Financial Strategy (MTFS) for 2017/18 to 2020/21;

·  the General Fund budget for 2017/18;

·  the level of Council Tax for 2017/18;

·  funding reductions to 2020/21

·  the financial outlook for 2018/19 onwards;

·  the Capital Programme for 2017/18 to 2020/21; and

·  a strategy for the Flexible Use of Capital Receipts.

The Cabinet Member explained that the budget proposals for next year and beyond moved away from the traditional ‘salami-slicing’ of service budgets and were a reflection of the Council’s new investment-led approach.  Due to historical deprivation factors, Barking and Dagenham was more reliant on Government grant than any other London Borough, with 84% of the Council’s funding coming directly from the Government.  However, the Government’s programme of austerity measures would mean that, by the end of the decade, Barking and Dagenham’s budget would have been halved since 2010.  The Cabinet Member commented that it was therefore essential for the Council to reduce its reliance on Government funding and generate new income opportunities through innovation and regeneration.  One example was the creation of Be First, which would act as the conduit between the Council and developers for all aspects of the Council’s regeneration agenda.  On that issue, the Cabinet Member clarified that the sum of £3.54m had been set aside to fund the start-up costs of the new company.

The General Fund net budget for 2017/18 would be £144.686m, compared to the net budget for 2016/17 of £150.314m.  A 1.99% increase was proposed to the Local Authority Precept element of Council Tax and a further 3% Adult Social Care Precept increase.  The Cabinet Member confirmed that the revenue received from the 3% increase would be ring-fenced for adult social care services, although he commented that the responsibility for protecting the most vulnerable should rest firmly with the Government and not passed on to local taxpayers through the Council Tax.  The Cabinet Member also acknowledged that, in hindsight, the Council should not have frozen Council Tax for seven consecutive years up to 2014/15, as a 2% year-on-year increase over that period would have strengthened the Council’s base budget position by circa £15m.

The Cabinet Member highlighted some of the other key elements of the budget proposals which included plans to invest £750m over the coming years to provide new, affordable housing in the Borough, the creation of a £250m Investment Budget and £100m Land Acquisition Budget to support the Council’s investment and regeneration plans, together with a further £1/3 billion investment in the Borough’s schools, parks and street cleaning and enforcement services.  It was also noted that a report would be presented to the next meeting of the Cabinet on new plans to improve local neighbourhoods in the Borough.

Cabinet Members spoke in support of the proposals and particular reference was made to:

Ø  The Council’s vision for the future being underpinned by a sustainable budget and clear priorities, informed by the Borough Manifesto;

Ø  On-going efforts to secure additional funding from the Department for Education and the Education Funding Agency towards improvements to the existing school stock, which included an invitation to Mike Green, Director of Capital at the EFA, to visit the Borough next month;

Ø  The Government’s tactic of hiding its own deficiencies by, in effect, forcing local authorities to apply the 3% Adult Social Care Precept to Council Tax in order to just maintain existing services to the most vulnerable in society;

Ø  The launch of the sign-up scheme for the new paid-for green garden waste collection service; and

Ø  The Lesbian Gay Bisexual Trans (LGBT) History Month celebrations that were taking place during February 2017.

The Cabinet resolved to recommend the Assembly to:

(i)  Approve a base revenue budget for 2017/18 of £144.686m, as detailed in Appendix A to the report;

(ii)  Approve the adjusted Medium Term Financial Strategy (MTFS) position for 2017/18 to 2020/21 allowing for other known pressures and risks at the time as detailed in Appendix B to the report, including the additional cost of borrowing to accommodate the capital costs associated with the implementation of the MTFS;

(iii)  Delegate authority to the Chief Operating Officer, in consultation with the Cabinet Member for Finance, Growth and Investment, to finalise any contribution required to or from reserves in respect of the 2017/18 budget, pending confirmation of levies and further changes to Government grants prior to 1 April 2017;

(iv)  Approve the Statutory Budget Determination for 2017/18 as set out at Appendix C to the report, which reflects an increase of 1.99% on the amount of Council Tax levied by the Council, a further 3% increase in relation to the Social Care Precept and the final Council Tax proposed by the Greater London Assembly (1.5% increase), as detailed in Appendix D to the report;

(v)  Approve the Council’s draft Capital Programme for 2017/18 to 2020/21 totalling £373.877m, as detailed in Appendix E to the report;

(vi)  Approve the Strategy for the Flexible Use of Capital Receipts at Appendix H to the report and, in doing so, note that the projected savings targets are subject to final business cases and confirmation at future meetings; and

(vii)  Approve the indicative 2017/18 allocation to Early Years providers (3-4 year olds) of £15.441m and the centrally retained funding, which shall be limited to £1.081 million in 2017/18 and reduce further to an estimated £0.772 million in 2018/19.