Agenda item

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.

Emily Hill (Assistant Director of Finance), provided a presentation outlining the Council’s budget proposals and also set out the challenges facing local government in recent years.

It was noted that the gross General Fund budget was £525m, of which the net budget requirement of £154.3mwas funded from Council resources (such as council tax and business rates) and general Government grant. It was noted the Government grant funding would increase by £3.6m from 2019/20 to 2020/21 as a result of the Government’s pre-election spending round in September 2019.

Emily explained that the Council faced further pressures to manage any additional costs that might arise outside of the budget forecast. The budget recommended a 1.99% increase in Council Tax and 2% adult social care precept levy. Each would raise £4.8m over 4 years and £1.2m in the first year. This would support investment in key services for residents and improve future financial resilience. Additionally, it was noted that the business rates system was changing for a fourth successive year.

It was assumed that the budget gap would increase in each of the next three years if no action was taken to reduce overall expenditure. It was  noted the Government would undertake a ‘fair funding review’ in 2020/21. This would reconsider how the Grant was distributed between authorities.

Concluding Corporate Finance’s initial remarks, Hitesh Jolapara (Strategic Director, Finance and Governance) explained that in accordance with the administration’s policy, the Authority sought to keep the council tax low while protecting and improving services.

Departmental Budget

Danny Rochford (Head of Finance, The Economy Department) provided a presentation of the Economy general fund budget for 2020/21, highlighting the following key points:

•       The main challenge was the constraints on the Department’s ability to collect income (pressures of Welfare reform, the Homelessness Reduction Act and the general state of the wider economy i.e. difficulties in generating Planning income)

•       The proposed budget for the specific sectors within the Economy Department  were Building and Property Management, Economic Development, Learning and Skills, Growth, Housing Solutions, Operations, Planning and Property Service and Compliance

•       £800k savings had been identified through: Placing homeless residents in to better, longer-term private rented sector housing to reduce the use of Temporary Accommodation (£196,000), Reduction in Temporary Accommodation voids (£115,000),Improved debt management (£286,000), Consolidation of management & workforce and reduction in the use of agency staff (£100,000),Review and restructure of Economic Development (£61,000)

•       An overview of the risks as set out in Appendix 2

•       An overview of the Fees and Charges as set out in Appendix 4

The Chair thanked officers for the strong overview of the Corporate and Housing budgets, as well as the savings proposals. Cllr Lisa Homan was invited to speak before questions were taken from the Committee.

Cllr Lisa Homan explained that the budget had sought to avoid affecting front line services and considerable efforts had been made to find efficiencies. The Housing Solutions budget had been particularly challenging, given the Council’s track record of not having any families in B&B accommodation in the last 3 years, gradually reducing the number of families in temporary accommodation.

In relation to business rates, Cllr Rowan Ree asked about the London Pool and how this differed from previous years. In response, Emily explained how the pool of London Boroughs (business rates) operated (spreading any losses or gains) and reduced volatility in the market place. The Committee noted that the agreed Pilot Pooling arrangements meant that any growth would be retained by Hammersmith and Fulham and the GLA. New regulations now meant that the government would take its share of the pool.

Cllr Rowan Ree asked about the income for the Economy Department and, in particular, how much scope there was to control Planning fees or whether they were controlled centrally . In response, Danny Rochford (Head of Finance, The Economy Department) explained that planning fees could be split between statutory and non-statutory. The statutory fees were beyond the Council’s control as they were set by central government who  chose when and if they wished to increase them. However, the non-statutory ones could be influenced and indeed benchmarking exercises (against other London Boroughs) had been conducted. Danny confirmed that non-statutory fees would be increased by 2.8% which was in-line with  the Council’s expectations for all charges.

Cllr Rowan Ree asked whether there was scope to charge a higher proportion of fees for larger developments rather than household developments. In response, Danny explained that he would need to seek expert advice from the service and report back.

Action: That Danny Rochford contact the Planning Department to establish whether there was any scope to charge developers higher planning fees (than those for residential development) for large scale developments.

Cllr Adronie Alford acknowledged that as the Council had lost the fee from the temporary management fee, she asked whether this would be a substantial risk to the Council. In response, Danny explained that it had been listed on the Departments’ risk schedule, but it was dependant on the decisions central government made in  relation to grants. It was noted that after 20/21 there was no certainty whether it would be continued, reduced or removed.

With regards to the Homeless Reduction Act Cllr Adronie Alford asked what was meant by the previously ineligible client group. In response, Mark Meehan (Chief Housing Officer)  provided details of recent legislative changes and what the implications of these were including the new prevention duty which had been placed on the Council. Mark explained that since the Homelessness Act had been introduced in 2018, the Council had seen a 130% increase in the number of people the Council was assisting.

Cllr Ann Rosenberg asked that in those cases where a business was waiting for business rates to be clarified, were Chartered Surveyors used and what impact did this practice have. In response, Hitesh explained that the Council did receive a large number of appeals which were considered by the Valuation Agency which did result in rates fluctuating. Hitesh explained that trends data could be provided and this could be circulated by email.

Action: That trend data on business rates Appeals be circulated by email.

The Chair asked about the long-standing backlog of appeals, especially in relation to Westfield and whether these had reduced in number. In response, Hitesh explained that large appeals such as Westfield’s and the BBC had been through the system but there were a number of appeals which still required action by the Valuation Office.

Residents were invited to ask questions through the Chair. Officers were asked how the Council could incentivise landlords to turn some of the empty premises surrounding the market into accommodation and perhaps transform larger retail spaces into smaller shops. In response, Mark Meehan explained that the Council had Local Plan as well as a Private Sector Housing Team that worked with Private Sector landlords to try and bring properties back into use for rented accommodation. Asking a follow up question, the resident asked whether there was scope to conduct further publicity and marketing to bring more vacant properties back into housing stock.

Mark Meehan explained how the Council used the CAPITAL Letters scheme which incentivised landlords to work with the Council to bring properties into circulation and highlighted that a new pan-London initiative was just about to be launched.

Cllr Lisa Homan also highlighted the action being taken to encourage absentee leaseholders of properties on the estates to get in contact with the Council so that further accommodation could be offered to tenants. Cllr Rowan Ree asked if the Council was also in  contact with local estate agents. Mark Meehan commented that officers were in  contact with a variety of housing providers and a competitive housing market was currently operating.

With regards to Council tax levies, Cllr Rowan Ree noted that 53% of dwellings were liable for 100% Council Tax, which struck him as very low. This also meant that 47% of dwellings received some form of discount. Cllr Rowan Ree asked how this compared with other areas (boroughs). In response, Emily explained that the support available was dependent on the characteristics of the local population. It was noted that the Council tax support was a local scheme. There were national requirements for the support of older people, but the provisions in relation to those of working age for those on low incomes was determined locally. The Committee noted that the Authority provided high levels of support to individuals and families on lower incomes, as agreed by Full Council.

The Chair commented that the large single cohort of people with single person discount (30%) seemed higher to him than it might be elsewhere, which he thought might reflect the housing stock in that there were far more 1- bedroom studio flats or as a reflection of the local demographics. In response, Emily explained that some level of assurance could be provided, as the Council did undertake data matching exercises to ensure those people claiming single person discount were indeed eligible for the benefit.

The Chair asked officers if they thought the savings which had been outlined could be achieved. Further questions included, how officers went about challenging the budget to deliver the savings and how this pressure / scrutiny was maintained throughout the year. Placing homeless residents in better long-term accommodation, to reduce the use of temporary accommodation was an aim the Committee supported. The issue here was, reassuring people on the housing register that if they used the private rented sector, they were not disadvantaged from their place on the social housing register.

Responding to the last point, Cllr Lisa Homan explained that it was important to stress that using temporary accommodation was an expensive option / less suitable and it was far more cost effective to use properties within the private rented sector (PRS) for a limited time. Mark Meehan confirmed that one of the roles of officers was to reassure tenants that they would remain on the housing register, despite using the PRS. Mark explained that temporary accommodation was somewhat of a misnomer as most of the temporary properties were in the PRS. As a final remark, he reiterated that residents place in the queue for Council housing would remain unchanged by using the PRS.

Action: that the Committee examine the operation of the Housing Register in relation to temporary accommodation at a future meeting and before changes to the Register are considered at Cabinet.

The Chair asked what monitoring was conducted on the housing budget. In response, Mark Meehan confirmed that every Housing budget manager met with his Finance counterpart on a monthly basis, so there was an ability to assess current and on target performance at every Departmental budget level.

Resolved –

That the Committee reviewed and commented on the report.

That the Committee examine housing allocations and the use of temporary accommodation prior to its consideration at Cabinet.