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 in the budget.

Corporate Budget Context

Emily Hill (Director of Finance) provided a corporate overview of the Council’s budget.

In terms of the Government Spending Review 2021, it was noted that over the past few years there had been an increase in funding to local government, but historically, looking back to 2010/11, there had been a 20% decrease in core spending power amongst London Boroughs. Details were provided on how core spending power was calculated, and it was highlighted that London had been hit harder than the rest of England in its funding cuts.

Looking forwards, Emily Hill provided an overview of public spending by Governmental Department (2021-22 to 2024-25), and it was noted that when social care reform costs were excluded, Local Government budgets will see a 1.8% increase (compared to 4.1% for health and social care over the same period).

Details were provided on recent savings and growth in Hammersmith and Fulham. It was noted that the level of savings to balance the budget had decreased over time and a significant proportion of growth had been allocated to health and social care as demand and pressures had increased.

The budget proposals for 2022/23 were summarised, noting that the Economy Department was one of the lower spending departments in the general fund and that due to Covid and health and social care pressures, most of the growth had been allocated for social care demand and inflation costs. Emily Hill explained that provisions had been made for inflation and contractual / pay inflation, but these remained a concern and inflation was a significant risk. Details were provided on the Government grant to Hammersmith and Fulham which had increased by £6.174 million and covered the employer’s national insurance increase of 1.75%. However, it was highlighted that the future of the services grant of £4.2 million was uncertain with no guaranteed protection.

Summing up Emily Hill (Director of Finance) provided an overview of the corporate risks facing the Council.

2022 MTFS

Danny Rochford (Head of Finance, Economy & Housing Revenue Account) provided a presentation on the proposed Economy general fund budget for 2022/23, highlighting the following key points:

• The plan for the next financial year included a combination of inflation and temporary growth requirements, as well as savings.
• It delivered a diverse range of services (mostly statutory), continuing to prevent homelessness and eliminating rough sleeping, maximising income generation opportunities, ensuring Covid safety, as well as delivering the Civic Campus programme and the delivery of new homes and support for local businesses.
• The proposed budget for the Economy department includes the following services: Housing Solutions, Operations, Economic Development, Learning and Skills, Planning, Regeneration and Development and Place.
• £0.235m savings had been identified through: The consolidation of management and workforce, and the reduction in the use of agency staff (£200,000) - the final year of implementation of a three-year phased delivery programme, as well as a review of senior management posts funding  and section 106 funding (£35,000).
• Permanent growth of £350,000 – Planning fees income, temporary growth (for one year) of £300,000 – Planning fees income, growth funded from reserves: Regeneration & Development feasibility costs (£150,000) and inflation – Temporary Accommodation landlords (£0.5m).
• Housing Solution trends and the work to reduce temporary accommodation costs by using the private rented sector.
• An overview of the risks as set out in Appendix 2.

The Chair, Councillor Rory Vaughan, invited Councillor Lisa Homan, Cabinet Member for Housing to comment. Councillor Lisa Homan explained that in relation to Housing Solutions, the Council was unsure what the future held. However, there were risks, including those persons that were getting evicted as Covid restrictions had ended. Councillor Lisa Homan commended the work which had been done by Housing officers to contain costs and ameliorate the budget. Councillor Lisa Homan confirmed the Council’s record on homelessness and rough sleeping was very good and the Authority had performed well in looking after vulnerable persons during a time of fiscal constraints.

The Chair, Councillor Rory Vaughan echoed Councillor Homan’s remarks and stated it was evident a considerable amount of work had been conducted to keep the budget in check in relation to temporary accommodation and a number of associated housing pressures.

In relation to the Homelessness Reduction Act, Councillor Adronie Alford asked for clarification as to whether the risks relating to accepting another 70 people presenting as homeless and a further 70 presenting under the Domestic Abuse Act were separate. In response, Danny Rochford confirmed the figures were for separate items and were correct in being 70 each under the different Acts.

Looking at the changing mix of accommodation from short term monthly, to longer term, Councillor Adronie Alford sought clarification as to whether the report was referring to tenancies or how this was paid for. In response, Danny Rochford confirmed that when the Council procured temporary accommodation, it was far more expensive if this was for a short term, rather than on a long term basis with Private Sector landlords which could offer more affordable long term lets.

Where the report mentioned weather conditions with regard to the volatility in Planning income, Councillor Adronie Alford asked if this related to climate change or seasonal bad weather. In response, Danny Rochford confirmed that when adverse weather struck it would have a negative impact on developers, as bad weather would slow development progress.

The Chair, Councillor Rory Vaughan noted the cost pressures which had arisen in Planning, cost cycles and the structural gaps which the report had alluded to which required shoring up in the medium term. In response, Danny Rochford confirmed that in future years it was anticipated that future planning income would help cover costs (to possibly pre-pandemic levels). Danny explained that the permanent growth allocation recognised the structural issues and that Planning required support in the medium term to balance its budget. However, there was still an expectation that Planning income would recover.

The Chair thanked officers for their work on the budget and acknowledged that finding savings was a challenging task given the level of savings which had been achieved over the past few years. The Chair noted all the work which had been conducted on temporary accommodation and the cost savings which had been achieved.

RESOLVED

That the Policy and Accountability Committee (PAC) considers the budget proposals and makes recommendations to Cabinet as appropriate.

That the PAC considers the proposed changes to fees and charges and makes recommendations as appropriate