Agenda item

The Cabinet Member for Finance, Performance and Core Services introduced the Council’s proposed budget framework for 2019/20 which incorporated the following:

·  the Medium Term Financial Strategy (MTFS) for 2019/20 to 2020/21;

·  the General Fund budget for 2019/20;

·  the level of Council Tax for 2019/20;

·  the draft Capital Programme for 2019/20 to 2022/23;

·  an update on the Dedicated Schools Grant and Local Funding Formula for Schools; and

·  the Flexible Use of Capital Receipts Strategy to support the Council’s transformation agenda.

The Cabinet Member referred to the unprecedented financial challenges faced by local authorities as a result of the year-on-year funding cuts by Central Government, which had coincided with increasing demand for services.  The Council had chosen to take a bold and ambitious approach in response to those challenges, focussing on investing in services, maximising economic growth and transforming the way the Council was run.  In that respect, the Cabinet Member referred to the proposed Capital Programme for the next four years which would see over £740m of investment in the Borough.

With regard to revenue funding, the Cabinet Member explained that the abolition by the Government of the Revenue Support Grant (RSG) system meant that the Council’s main source of revenue funding now came from business rates, which was lower than the funding received under the former RSG.  As a consequence, a 2.99% increase to the level of Council Tax that applied to Council services was proposed which would raise an additional £1.974m, of which £0.6m would be specifically ring-fenced for Care and Support services.  The Cabinet Member commented on the 2019/20 budget consultation that had taken place between November 2018 - January 2019, which included several face-to-face events with the local community, and the key projects, issues and risks associated with Council services in the years ahead.

The Cabinet Member also referred to the statutory Chief Finance Officer’s statement regarding the robustness of the overall Budget proposals for 2019/20 and the paper appended to the report setting out the potential local implications relating to Brexit.

In respect of schools’ funding for 2019/20, the Cabinet Member for Educational Attainment and School Improvement elaborated on changes required to the funding formula approved by the Cabinet under Minute 62 (11 December 2018) as a consequence of the recent announcement by the Department for Education of the final funding allocations.

The Cabinet resolved to recommend the Assembly to:

(i)  Approve a base revenue budget for 2019/20 of £148.820m, as detailed in Appendix A to the report;

(ii)  Approve the adjusted Medium Term Financial Strategy (MTFS) position for 2019/20 to 2020/21 allowing for other known pressures and risks at the current 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, Performance and Core Services, to finalise any contribution required to or from reserves in respect of the 2019/20 budget, pending confirmation of levies and further changes to Government grants prior to 1 April 2019;

(iv)  Approve the Statutory Budget Determination for 2019/20 as set out at Appendix C to the report, reflecting an increase of 2.99% on the amount of Council Tax levied by the Council and the final Council Tax proposed by the Greater London Assembly (8.9% increase), as detailed in Appendix D to the report;

(v)  Note the update on the current projects, issues and risks in relation to Council services, as detailed in section 4 of the report;

(vi)  Approve the Council’s draft Capital Programme for 2019/20 to 2022/23 totalling £744.323m, of which £498.473m was General Fund schemes, as detailed in Appendix E to the report;

(vii)  Approve the Flexible Use of Capital Receipts Strategy as set out in Appendix F to the report;

(viii)  Note the briefing on the potential implications of Brexit for the Council as set out in Appendix G to the report;

(ix)  Note the Chief Finance Officer’s statutory finance report as set out in section 10 of the report, which included a recommended minimum level of reserves of £12m; and

(x)  Approve the updated Dedicated Schools Budget for 2019/20 including the hourly rate payable to Early Years providers (3-4 year olds) as set out in section 11 and Appendix H to the report.