Agenda item

2017 Medium Term Financial Strategy (MTFS)

Minutes:

Hitesh Jolapara, Strategic Finance Director, presented the Council’s budget. He explained that economists were forecasting that the economy would grow less strongly than previously thought. It was predicted that public sector finances would be in a less healthy position than suggested by past forecasts. Government borrowing had already exceeded targets and whilst public sector spending had risen slightly, funding for Local Government in London had fallen significantly.

 

Hammersmith and Fulham faced growth of £7.3m, including unfunded growth from government, as well as inflation of £2.8m. Government grant funding would also fall by 20%. These pressures would be balanced by savings of £14.4m, and a balanced budget of £154.5m was proposed. The administration was not proposing to either increase council tax, or apply the Social Care Precept. Developer contributions of £2 million would again be used to fund services. The general reserve was expected to continue to be £19m, whilst 20% of the earmarked reserves would be used to fund invest to save and similar projects.

 

Hitesh Jolapara concluded his presentation by noting that if the council did not bring in more revenue or develop more efficient ways of delivering services the gap between resources and expenditure was likely to grow significantly.

 

Mark Jones, Director of Finance and Resources – Environment, explained that the majority of the Environment department’s expenditure was covered by income from fees and charges. Approximately £70 million was spent per year, with £63 million revenue being brought in. The department also had a number of high value contracts for service delivery.

 

For 2017/18 the department aimed to bring in significant amounts of extra income through increased commercialisation. It was also expected that more money would be allocated by Public Health to supporting the department’s work. There would also be modest savings in some areas. Combined the additional income and savings would lead to a total saving of £2.7 million.

 

There were also funds being held centrally for possible growth in the department, covering; additional costs of alternative methods of weed-killing; a slower implementation of the Phoenix Leisure Centre project; additional costs as a result of rent reviews of Council leased buildings, and; spending on defending planning decisions at Judicial Review.

The main risks to the departmental budget were an increased reliance on income, some of which could be affected by a downturn in the wider economy, and increasing costs of both staff and waste disposal.

 

Many Fees and Charges in the department were to be frozen, parking charges being amongst those which would not increase. The fees for trading at Lyric Square’s Thursday market had fallen significantly since the market had returned to Council control. Some fees and charges were to be reviewed either to ensure that they were both competitive and covered the council’s costs or in response to legal proceedings elsewhere. Other fees and charges in the department would rise by inflation at 1.8%.

 

The chair thanked officers for their presentation and invited questions.

 

Councillor Dewhirst asked whether there was an income strategy for moving traffic penalty charge notices (PCNs). Mark Jones explained that there was not. Councillor Max Schmid said that PCN income had dropped over the 2016/17 financial year and explained that the council had to accept that this income source was volatile.

 

Councillor Dewhirst asked what the planned changes to parking at Hurlingham Park would be. Councillor Harcourt explained that park users had complained about vehicles being parked in Hurlingham Park’s car park for extended periods of time; it was thought that much of this anti-social parking related to a nearby business. The proposal was to introduce some form of paid parking to prevent this and keep spaces available for people using the park.

 

The Chair noted that Hammersmith and Fulham Council was proposing to freeze its council tax and asked how this compared to other councils. Hitesh Jolapara explained that whilst full data was not yet available as other councils had not yet announced their proposals, it was unlikely that any council would cut council tax, although some others might also manage to freeze it.

 

The Chair asked how successful the Smarter Budgetting programme had been. Mark Jones said that the programme had delivered a significant number of ideas for savings and increased income; he thought that it might have delivered slightly higher savings than previous approaches.

 

Councillor Hamilton noted that officers had predicted that with the introduction of pay by phone technology pay and display/pay by phone income would rise whilst parking fines would fall. He understood that income from fines had not fallen as far as had been expected and asked what the difference between income in 2015/16 and 2016/17 had been. He also asked what the relationship between paid parking income and fines was now expected to be. Mark Jones agreed to provide the figures requested outside of the meeting. He explained that officers were not yet sure if the predicted drop in fines would take place. Councillor Hamilton asked whether the cost of collecting money from pay and display machines had reduced. Mark Jones said that it had not yet, although a fall in the cost was anticipated. Councillor Hamilton asked whether charges using pay by phone parking services and pay and display machines were the same. Councillor Harcourt confirmed that they were the same.

 

Councillor Hamilton asked who bought CCTV services from Hammersmith and Fulham Council. Andy Stocker explained that these were bought by other local authorities and by housing associations.

 

Councillor Dewhirst asked whether the Lyric Square market now generated less revenue for the council. Mark Jones said that income was almost the same as when the operation of the market had been outsourced; the council did not now lose the money the contractor had taken in profits.

 

Councillor Hamilton asked what the proposed changes to street naming charges would mean for residents. Councillor Harcourt explained that these changes to charges would affect developers; fees for residents wanting to rename their homes would not rise. Councillor Hamilton noted that the budget included income from a Flower Stall at Shepherds Bush Station; he asked whether the council would be employing a florist. Councillor Harcourt said that the council would let the pitch at the station, which had fallen into disuse, to a florist who could then run their business from it.

 

Councillor Hamilton asked whether the council’s proposed diesel vehicle parking permit surcharge had been included in the budget. Mark Jones said that it hadn’t been included in the budget.

 

Councillor Hamilton asked whether spending public health money on services in the department was reasonable. Mark Jones explained that the spending was on services where physicians felt that there were demonstrable health benefits. Councillor Schmid explained that the spending had to be agreed by the Director of Public Health.

 

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