Agenda item

2019 Medium Term Financial Strategy

This report sets out the budget proposals for the services covered by this Policy and Accountability Committee (PAC). An update is also provided on any proposed changes in fees and charges.

Minutes:

 

Hitesh Jolapara, Strategic Director of Finance and Governance gave a presentation outlining the Council’s budget proposals. He highlighted the scale of challenges facing local government in recent years. He showed slides that demonstrated the debt levels nationally, noting that local government expenditure and Council services were declining nationally apart from Adult Social Care.

 

It was noted that grant received from national government continued to reduce. There was a general grant funding reduction of £3.3m from 2018/19 to 2019/20 – this was after receipt of extra one-off social care funding of £1.5m and winter pressures funding of £0.9m as per the Autumn Budget Statement. An inflationary council tax increase of 2.7% was modelled for 2019/20. This increase would generate income of £6.3m over 4 years and £1.56m in the first year. The Council’s spending power reduction was 13% more than the national average and expected to deliver extra savings of £34m. In addition, there needed to be savings of £2.4m for residents’ services for 2019/20.

 

Councillor Victoria Brocklebank-Fowler asked how the additional costs relating to the disaggregation of residents’ services, would be funded and whether these had been factored into the budget for 2018/19. In response, Hitesh Jolapara explained that there might be a one-off cost for the disaggregation however the Council was in the process of concluding the new arrangements, therefore this had not been finalised. The current message was to disaggregate within existing budgets.

 

Sharon Lea, Director of Resident’s Services explained that each service area would be required to do a zero-based budgeting exercise and present a business case. This would include a breakdown of how services were currently being delivered and how these could be brought together more effectively. In addition, she added that the Council wanted to ensure that the new staffing arrangements worked cross functionally to improve efficiencies. i.e. how we can embrace change and improve the way services were delivered.

 

Councillor Victoria Brocklebank-Fowler expressed concerns around the disaggregation of resident services’ and asked if there was a wider strategy in place. She queried why the Council had decided to disaggregate, given that the existing arrangements were working well. In response, Sharon Lea explained that the current staffing arrangements were based on a traditional approach. Therefore, this was an opportunity to explore new ways of working and introducing best practice to the Council. In addition, this would be achieved using the funding already set out for resident services’.

 

Councillors Wesley Harcourt, Cabinet Member for the Environment commented that the bi-borough arrangements were not as successful as the Council had originally intended, and recommendations were made to remodel the services based on a zero-based budgeting approach.

 

Councillor Iain Cassidy asked what was the Council’s position relating to discounts and exemptions on council tax in comparison to other boroughs. Emily Hill, Assistant Director - Corporate Finance explained that the single person and student discount entitlements were likely to be relatively similar across other London boroughs. However, council tax support was provided to the elderly, and residents working for lower pay. Those on lower income would pay less council tax in comparison to other boroughs as the Council’s local scheme provided similar support to the previous council tax benefit. In addition, Councillor Wesley Harcourt noted that it was a political decision to ensure that lower paid workers were not disadvantaged.

 

The Chair asked whether the new arrangements meant that the Council had greater flexibility to make its own savings as a result of the disaggregation. In response Sharon Lea said that the Council had always been assigned its own budget, therefore had the flexibility to manage and improve its efficiencies and would continue to operate in the same way going forward.

 

Sharon Lea, explained that currently senior officers, had the responsibility of managing two sets of budgets across two boroughs. She recognised that it was a challenging task for officers to deliver different sets of priorities, whilst managing a difficult workload. The Council felt that the priorities of this borough were not always delivered to a satisfactory standard. By creating a sovereign resident services’, this would allow officers to solely focus on the Council’s vision, ensuring that this was effectively being achieved.

 

Councillor Victoria Brocklebank-Fowler asked for clarification around the risks involved in ending the use of bailiffs to collect council tax debt. Furthermore, she asked how this would be managed going forward. Hitesh Jolapara noted that the introduction of this scheme offered an ethical approach to debt management, avoiding increased challenges for residents’ and greater expense for the Council. It was noted that a 97.5% collection rate was assumed for 2018/19. The Revenue and Benefit team were currently looking at new processes that would be put into place. Reassurances were offered that this was closely being monitoring.

 

Councillor Iain Cassidy, referring to Appendix 1 of the Agenda Pack asked why cycle street furniture advertising was indicated as a high delivery risk. Councillor Wesley Harcourt explained that this was marked as high risk because this had not generated the income that the Council had anticipated.

 

RESOLVED

That the Committee considered the budget proposal and the proposed changes to fees and charges and noted the report.

 

Supporting documents: