Agenda item

To receive a report from the Executive Director for Finance & Corporate Services presenting budget proposals for the services covered by this committee

The Committee received a report from the Executive Director for Finance & Corporate Services and presentations from the Bi-Borough Director of Finance and the Director for Finance & Resources for ELRS and TTS. Officers presented the anticipated budget gap (expected to be £86.7m by 2021/22) and the measures taken in the Medium Term Financial Strategy to deliver a balanced budget in 2015/16.

Members of the Committee welcomed much of the proposed budget, particularly where service improvements had been delivered such as the increased opening hours for sports bookings following the outsourcing to Quadrant. However some members expressed concern at some of the increases in charges. It was argued that the announcement earlier that day that interest rates were now 0.5% should be reflected in the charges increased in line with inflation, rather than the 2.4% rise reported. The 2.4% increase was based on the Retail Price Index (RPI) in August 2014, which some members felt was now outdated. Cllr Schmid explained that the 0.5% rate was the current Consumer Price Index, which the Council had always used the RPI when determining any fee increases. He highlighted that the latest RPI rate had decreased to 1.6%, but that it was not possible to keep constantly revising the budget each month. He also reminded the Committee that the previous Council administration had followed the same practise of using the RPI in August of the preceding year as its set interest anniversary date.

Cllrs Culhane, Harcourt and Fennimore declared interests as Governors of the Phoenix School

The Committee asked for further information on what the funding from public health would be used at the Phoenix School. Officers explained that the public health money would allow the leisure centre at the school to operate for a further year while the Council reviewed options for how to get the most from the facility. In order to make the site viable in the long term, the leisure centre needed to attract more users.

Councillors asked about the Cecil French Bequest and expressed concern that council tax income was being spent on preserving an art collection worth £17.8m that was not publicly displayed. Cllr Harcourt agreed that the art should be displayed and reported that options for display were currently being considered. He did not however agree that the Council should consider selling the collection.

It was also asked whether the Council policy on debt reduction had changed, with councillors noting that the debt reduction proposed was less than under the previous administration. Officers explained that whilst the authority could pay off more debt, doing so before payment was due would incur substantial premiums. Cllr Schmid confirmed that paying debts before they were due was not seen as prudent due to the premiums involved.

The Committee also discussed the Council’s property within the ELRS portfolio such as cemetery lodges, with some members suggesting the Council explore selling them. Cllr Harcourt explained that all of the cemetery lodges were currently let to long-term stable tenants. Sale of these properties would therefore render the tenants homeless, which he would not advocate in light of the ongoing housing crisis in the capital.

It was noted that the New Homes Grant had decreased from the preceding year and it was asked whether this was a result of fewer homes being built. Officers explained that the reduction was as a result of the top-slicing of the Grant to fund the London LEP, which the Council had lobbied against.

RESOLVED –

That the report be noted.