Agenda item

Budget Framework 2019/20 and Medium Term Financial Strategy 2019/20 - 2020/21


A video highlighting the Borough’s key developments and initiatives during the year was shown before 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 advised that a revised Appendix C for the statutory budget determinations setting out the amount of Council Tax, had been tabled to the Assembly, which was a slight adjustment on “rounding” but which made no difference to the Council Tax valuation bands.


With regard to revenue funding, the Cabinet Member outlined the grant funding available to the Council. He explained that the abolition  of the Revenue Support Grant (RSG) system meant that the Council’s main source of revenue funding now came from business rates, which will see the Council no worse off than previous with an estimated £79.16m coming from new pooling arrangements, representing a small increase of  £0.5m, albeit this is dependant on business rates growth in London which in the current economic climate is not guaranteed.  As a consequence, it was proposed to increase Council Tax by 2.99%. this included 1.99% for general Council services raising an additional £1.2m, plus an additional 1% specifically ring-fenced for Social Care and Support services, raising an additional £0.6m.


The Cabinet Member commented on the 2019/20 budget consultation that had taken place between November 2018 and 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. He added that the Council sought to keep the Council Tax as low as possible and the higher amount raised would be ringfenced for social care and disabilities.


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 and a growing population. The Council had chosen in 2014 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 by pursuing new and innovative transformation solutions to the delivery of services and as an alternative to outsourcing, ensuring that no one was left behind. He outlined examples of this innovative approach including Community Solutions, (the Service set up to work with people and families in need of early help and support to get back on track), Be First (the Council’s Regeneration Company), Reside (Council owned Affordable Landlord) and Beam (Council Energy Supplier). The Cabinet Member also referred to the proposed Capital Programme for the next four years which would see over £740m of investment in the Borough.


The Cabinet Member advised that the Council’s budget had been under sustained pressure since 2010 and local authorities overall had lost 40% of their budgets since that time, which equated to the Council saving £153m since that time.  However, owing to the Council’s Transformation Programme, no new specific savings would be required in 2019/20.

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 Achilleos, Akwaboah, Ashraf, Aziz, Bankole, Princess Bright, Sade Bright, Butt, Carpenter, Chand, Channer, Dulwich, Fergus, Freeborn, Geddes, Ghani, Haroon, Jamu, Jones, Kangethe, Keller, Khan, Lumsden, McCarthy, Miah, Mullane, Oluwole, Paddle, Perry, Quadri, Rahman, Ramsay, Chris Rice, Ingrid Robinson, Paul Robinson, Darren Rodwell, Saleem, Shaukat, Turner, Twomey, Lee Waker and Worby (42)


Against: None (0)


Abstain: None (0)


The Assembly resolved 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 in the revised Appendix C to the report as tabled at the meeting, 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 A to the report.






Supporting documents: