Agenda item

2016 Medium Term Financial Strategy


Hitesh Jolapara introduced the Corporate Budget. He explained that the squeeze on public sector finances continued in the Government’s attempt to reduce the deficit. Local Government funding had reduced significantly, by about 20% since 2010, as other areas such as Policing, the NHS and Education were protected from funding cuts. He explained that the Government now allowed Councils to introduce a 2% Social Care Precept, however, the amount this might raise in Hammersmith and Fulham was low as existing levels of Council Tax were low. Proposals for the devolution of Non Domestic Rates was expected, but new responsibilities were expected to come with this extra money; no detail was yet available from the Government. Mr Jolapara explained that there were two large items of corporate growth, resulting from reform of Local Government Pensions to remove the National Insurance rebate, and from increased costs in Children’s Services owing to new legislation and reduced funding. The administration was proposing that Council Tax be frozen, and that the Social Care Precept not be applied in Hammersmith and Fulham. Fees and charges for Adult Social Care, Children’s Services, Adult Learning and Skills, Libraries and Housing would be frozen. Parking Charges would also be frozen, whilst some fees in Environmental Services would rise by inflation (1.1%). Commercial fees and charges would be reviewed on a case by case basis, to ensure that services were both maximising income and remaining competitive. The budget would not draw upon general fund reserves, although 20% of the £90 million earmarked reserves were committed for 2016/17. Mr Jolapara explained that looking forward the Council would face an increasing budget gap, which if the Council did nothing, would rise to £55.8 million in 2019/20.


Mark Jones introduced the Environmental Services Budget. He explained that Environmental Services brought in a significant amount of income and that this was used to provide the wide range of universal services it delivered. There were some large contracts in the service, covering waste, street cleaning, facilities management, grounds maintenance and enhanced policing. The service had tried to protect front-line services through increased commercialisation and further efficiencies. Part of the variance in parking income had also been included in the 2016/17 budget which had helped to reduce the level of savings needed. There were a few small items of growth relating to: anticipated licensing fee increases not taking place; the delayed implementation of the Wi-Fi concession leading to income being delayed, and; additional spending on improving access to sports facilities for residents. There was likely to be budget growth in 2017/18 of about £500,000 owing to increasing waste disposal costs.


Mark Jones highlighted the key risks to the service budget, which were a fall in parking revenue, additional facilities management costs and a failure to meet income targets, especially in Adult Learning and Skills and Commercial Services. Fees and charges would rise by a maximum of 1.1%, the rate of inflation, with parking and a range of other charges frozen. The Bulky Waste Collection charge would drop by a further 2.2% to encourage residents to use it, whilst some registrars charges were being cut to make them more competitive.


Councillor Hamilton referred to paragraph 3.4 of the report and asked why the business rates tax base would not be confirmed until February. Andrew Lord explained that this was because of a number of pending appeals, and because the impact of an expanded Westfield shopping centre had not yet been modelled.


Councillor Hamilton asked why the budget was not presented using the zero based methodology. Councillor Schmid explained that the Council was adopting a zero based approach to find savings, but that the budget would continue to be presented in the usual way.

Councillor Hamilton asked why the Wi-Fi project had been delayed. Mark Jones explained that the concession had been given to a private company which had been slow to implement its service. The service had now launched in town centres.


Councillor Hamilton asked whether it was prudent to include the positive parking variance in the 2016/17 budget. Mark Jones explained that less than half of the existing variance had been included in the budget for 2016/17. Councillor Hamilton sought assurances that this change would not motivate officers to fine residents more readily than they would otherwise have done, especially for moving vehicle offences. The Chair explained that officers were not set targets around how many residents to fine, whilst Councillor Schmid noted that the proposals allowed for more than half of the existing variance to not be collected without impacting on the budget. Councillor Harcourt explained that no new cameras had been introduced, and that the administration were trying to deal with a number of issues with signage that the previous administration had introduced. Changes were being delayed by the Information Commissioner’s Office and the new signage guidance from the Department for Transport.


The Chair asked what approach other councils had taken to setting their Council Tax. Mark Jones said that there were other London Boroughs which were seeking to increase Council Tax.


Councillor Dewhirst referred to paragraph 7.7 of the report and asked how spending money on installing new LED lighting would reduce costs. Mark Jones explained that whilst capital would be invested the Council would benefit from lower electricity charges as LEDs were more efficient than existing luminaries whilst repair costs would also fall due to the equipment being newer and more reliable.


Councillor Dewhirst asked whether there would be any changes to the opening times or maintenance of parks. Councillor Schmid confirmed that no savings which would impact on front line services were proposed in this area.


A resident asked whether the roll out of pay by phone was a good opportunity to raise parking charges. Councillor Schmid explained that increasing parking charges was likely to have an impact on businesses and so was not supported by the administration. Increasing charges also pushed people to look at alternative parking options which might lead to reduced revenue.


Councillor Hamilton asked whether the budget proposal for increased income generation through offering new Adult Learning and Skills classes, which had been classified as being part of the Housing Options, Skills and Economic Development Service was the same as the risk identified in paragraph 4.11 of the report. Mark Jones confirmed that this was and apologised if the report was unclear on this point.


Councillor Hamilton asked whether the proposed sponsorship of assets target of £10,000 was unambitious. Councillor Schmid felt that it was realistic, as this was a new scheme; it would be imprudent to include a larger amount without evidence of the scheme’s ability to raise it.


Councillor Hamilton queried how the £42,000 extra income from filming, hall lettings and events would be raised and where additional market stalls would be accommodated . Mark Jones explained that better marketing was expected to increase filming, hall lettings and events income significantly whilst additional markets at North End Road, and changes to the operation of the market at Lyric Square were also expected to raise additional income. Councillor Hamilton asked whether the increase in the hall fee supplements were accurate, as if the hall fees were increasing, 15% of the fee would also be higher. Councillor Schmid noted that as there was no proposed increase in the supplement percentage this fee did not need to be listed in the exceptional fees and charges, felling that its inclusion made the document less clear.


Councillor Hamilton queried the inclusion of a growth item on Waste Disposal of £0 and the interchangeable use of the words competitive and reasonable. Mark Jones explained that the growth item of £0 had been included to highlight that for the first year in a very long time there was no growth for Waste Disposal. He explained that the fees and charges justifications, where the inconsistent wording appeared, were written by service managers and so the different wording was simply the result of different choices being made by them rather than anything more fundamental.


Councillor Hamilton said that he had not received a notification to say that the delayed budget papers had been published. The Clerk agreed to look into this, whilst Councillor Schmid apologised that the papers were not available for the original agenda despatch owing to the late receipt of information from the Government.  

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