Agenda item

A video highlighting the Borough’s key developments and during 2016 was shown before 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. 

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.  The Council had a growing population with more children and elderly people who needed the Councils support. 

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. 

The Cabinet Member confirmed that the Chief Executive had achieved his objective to reduce the cost of the ‘top 5%’ within the organisation by £1m from the baseline position as at May 2015, with permanent establishment costs set to be £1.036m lower on 1 April 2017.

The Assembly spoke in support of the proposals and in response to questions, the Cabinet Member advised that:

·  The proposed budget would enable enforcement officers to be more mobile and introduce mobile CCTV to help tackle fly-tipping in the Borough;

·  The Council had introduced a number of initiatives to help those on lower incomes, such as the sub-market rents for those in B&D Reside properties;

·  Any proposed redevelopment at The Heathway would be subject to public consultation;

·  The budget projected that the Councils reserves would be at £17.5m in March 2018, although future years’ reserves would not be known until the transformation programme had been completed.  The Cabinet Member commented that the Council had previously resolved that the minimum level of reserves would be £15m; and

·  The Council needed to focus on the retention of businesses, rather than increasing business rates, and was looking to encourage more businesses to come to the Borough.

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, Chand, Choudhury, Freeborn, Geddes, Ghani, Gill, Haroon, Hughes, Jamu, Jones, Kangethe, Miah, Miles, Ogungbose, Oluwole, Quadri, Ria, Ramsay, C Rice, L Rice, Rodwell, D Smith, Tarry, Twomey, Wade, L Waker, White and Worby. (35)

Against: None (0)

Abstain: None (0)

The Assembly resolved 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 this 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.