Agenda item

This report sets out the budget proposals for the services covered by the Economy, Arts, Sports and Public Realm Policy and Accountability Committee. An update is also provided on any proposed changes in fees and charges in the budget (updated 25 January 2023).

Councillor Rowan Ree (Cabinet Member for Finance and Reform) introduced the item. He noted the challenges of finding further efficiencies given the dual pressures of high inflation and high interest rates. Despite this, he was proud of the budget which protected the Council’s key front-line services / priorities and included an investment of almost £1m to support residents through the ongoing cost-of-living crisis. He thanked Cabinet Members and officers for their hard work.

Andre Mark (Head of Finance –Strategic Planning and Investment) gave an overview of the financial context and the corporate budget. The key principles of the proposed Budget Strategy 2023/24 were:

•        Pay & Price Inflation (5%)

•        Investment for the Delivery of Council Priorities

•        Council Tax Increase of 3% plus 2% for Social Care Precept

•        Provisional Revenue Grant Settlement 

•        Some Savings Proposed (£2.9m)

•        Maintaining Resilience (Retaining Contingencies)

•       Costs of Planned Borrowing (to fund Capital Programme)

Councillor Adam Peter Lang and the Chair congratulated officers and Councillor Rowan Ree for leading on the difficult task of setting a balanced budget which protected front line services.

Bram Kainth (Strategic Director of Environment) gave a presentation of the budget for the Environment Directorate. Key budget changes that were highlighted included:

·       Additional investment in the new waste collection and street cleansing contract (£1.7m). Protects current service standards including at least weekly waste collections. Allows for the addition of new services (such as food waste collections), inflationary pressures, and growth in the number of properties in the borough.

·       Additional 5% investment for inflationary increases on both major contracts and council staff pay.

·       Thorough review of fees and charges to generate increased income (£133k). General inflationary uplift, alignment with other boroughs and full cost recovery.

·       Sustained reductions in waste disposal tonnages and continuation of discounted rate for processing recycling (£150k budgetary saving).

Councillor Jackie Borland congratulated officers for their work on parks and noted the borough was awarded fifth place in Parks for London. In relation to the Parking Business turnover, she asked what elements were included in the £50 million and if this was just on-street parking. In response, Bram Kainth confirmed this included all parking income, such as pay and display tickets, permits and suspensions.

Councillor Adam Peter Lang commended the work which had been conducted by the LET (Law Enforcement Team) to make neighbourhoods feel safer for residents and commented that this was money very well spent. Turning to the new waste collection contract which had been recently signed, he asked if this was a continuation of contractor or if there had been a change. In response, Bram Kainth confirmed that the old contractor was Serco which had been replaced by Veolia.

Councillor Adam Peter Lang asked for further clarification on the food waste collection and if this is included within the new contract. Bram Kainth confirmed that food waste was included in the new contract and funded, but discussions were ongoing with the new contractor as to when and how exactly this would be rolled out.

Councillor Ashok Patel commented it was reassuring to learn that the Council had a healthy cash balance. Noting that interest rates had recently increased, he asked officers what plans there were to increase these funds. In response, Andre Mark confirmed that cash balances were held across a number of areas as part of the wider treasury management strategy, including a mixture of cash funds and reserves. Councillor Rowan Ree thanked the Treasury Management Team for their work in ensuring Council funds were in the most appropriate places to maximise income. He confirmed that the Authority had not undertaken any new prudential borrowing this year which meant the Council was in a strong position and had an additional £5 million for next year’s budget which stemmed from rising interest rates.

Councillor Ashok Patel thanked the Cabinet Member for providing these details and commented that locking this money away in long term investments was an option that could be considered in due course. Councillor Rowan Ree provided details on the wider treasury management strategy and confirmed that maximising returns was an important ongoing element of this.

The Chair, Councillor Rory Vaughan, commented he was pleased there would be additional investment in waste management in the forthcoming year, and that he was keen to revisit the new contract in due course to assess how it was performing (new initiatives such as bins, food waste collection and potentially garden waste).

The Chair asked officers to provided further details on the Resident Experience and Access Programme. Bram Kainth confirmed that officers were continuing to make savings from the programme and the goal of the programme is to improve the experience of residents when they access Council services. A key part of this is managing all the contacts residents make with the Council in the most effective way and ensuring there is a seamless digital experience from the initial contact to service delivery. He explained that officers are investigating channel shift, so by using resources wisely, the Council is in a better position to provide face to face contact to those residents which need the most help. At the same time, the programme also seeks to increase the number of residents accessing services online. The Chair thanked officers for the overview and confirmed that, if the programme was within the Committee’s remit, he would like to revisit the topic in the future.

Councillor Rowan Ree explained the aim of the programme is to reduce siloed thinking across departments and create efficiencies within the Council. Turning to waste management, Bram Kainth commented that the pilot studies had demonstrated there had been a marked increase in recycling in those areas and the schemes had become very popular. One of the added benefits of the scheme was that increased recycling lowered waste disposal costs, as it is cheaper to process recycling compared to general waste.

Following an introduction from Jon Pickstone, Strategic Director of Economy, Daniel Rochford (Head of Finance) gave a presentation on the budget for the Economy Directorate. It was noted that the overarching aim of the Economy Department was to deliver excellent services, whilst minimising the need for budget growth by:

·       Continuing to support income generation Council-wide through Planning Gain, Planning Fees, Adult Learning & Skills, Business Rates, rental income from corporate property and through limiting the call on the General Fund.

·       Supporting economic growth and development to generate new business rates and council tax income and to reduce Temporary Accommodation and other costs of poverty.

·       Reviewing the Council General Fund asset base to maximise efficiency, create new development opportunities and reduce existing debt TA costs.

·       Managing inflationary and demand pressures within existing budgets.

·       Continuing to mitigate financial risks of £1.3m through maximising income through Planning Performance Agreements and Pre-Application fees.

In relation to Section 106 money, Councillor Jackie Borland asked whether developers could renegotiate with the Council if a contribution had been agreed, but market conditions had affected their margins. In response, Joanne Woodward, Director of Planning and Property, confirmed that technically Developers could, but explained these were voluntary agreements which were entered into by the Developer and the Council, and so every party with an interest in the land would need to agree to renegotiate. It was noted that Developers would also incur the Council’s costs to renegotiate, so these instances were very rare.

Adding a supplementary question, Councillor Jackie Borland asked if this also applied to Community Infrastructure Levey (CIL). Joanne Woodward explained that CIL was different, as this is a levy which is set in advance by the Council across the borough and paid on the commencement of a development. It was noted that the Mayor of London also collects CIL to pay for large pan-London developments such as Crossrail. Cllr Jackie Borland asked if the £98 million which had been negotiated over the last three years was a source of concern or a material worry to officers if this figure changed. Joanne Woodward provided details of how the S106 pipeline worked and reassured the committee that these were carefully monitored as finance only became available as set phases or milestones within a development project were met.

Councillor Adam Peter Lang commented that approximately £100 million of Section 106 monies over three years appeared a high figure in relation to what other boroughs might achieve. Joanne Woodward confirmed this was a result of Hammersmith being an attractive West London location for Developers.  Councillor Adam Peter Lang asked (officers) if the Council did enough to highlight to residents the success arising from developments within the borough, such as how S106 had impacted on Council tax, schools etc and to translate what £100 million over three years meant.

In response, Joanne Woodward confirmed that £100 million over three years was what the Council had negotiated through planning applications, but the Council would not see most of this funding for a number of years as the funding was tied to the start of the development. However, what the Council did have was money in the pipeline from negotiations which had been conducted 4 or 5 years ago. She confirmed that the Council did publish how S106 monies were spent via a brochure to Cabinet (affordable housing, improving parks, funding the LET Team as well as highways improvements) but there was scope to improve how this good news was shared and publicised.

Councillor Ashok Patel asked for clarification on the income generated by Council properties and secondly, what the risk factors were, in relation to business rates (especially the impact of homeworking). Adding a further question, he noted that while the borough had the third lowest council tax in the country, almost half of residents were not paying the full amount due, with the least able paying no charge. In view of the current economic climate, Councillor Ashok Patel asked if this should be reviewed.

In relation to business rates, Jon Pickstone explained that the Council received approximately a third of the income. As set out in the manifesto, the Council was actively seeking to attract as many high growth jobs to the borough as possible, thereby generating additional business rates. Officers agreed that the under-occupation of office space stemming from Covid was a short-term risk, but that in the longer term, anticipated a growth in business rates.

Daniel Rochford confirmed there was £1 million of commercial property income in the (Economy) budget, and he could provide a schedule outside the meeting which broke this figure down into individual properties. However, also explained there was other commercial income from other Economy Departments, such as the Housing Revenue Account which generated a further £1.3 million income from commercial properties. Daniel Rochford also provided details of the Property Transformation Team and the income opportunities which were envisaged (from this growth item) in the next 12 months to medium term. Jon Pickstone commented that income maximisation was always a goal associated with commercial property.

Councillor Ashok Patel asked what the collection rate was for business rates (and domestic rates). In response, Councillor Rowan Ree confirmed he was proud of the Council Tax Support Scheme and that Councillor Ashok Patel was right, that half of residents did not pay the full amount (of Council Tax) as a result of exemptions or discounts. The Council Tax Support Scheme protected the most vulnerable and the least able to pay and there were no plans to dilute the scheme.

The Chair noted the £95k for High Street Strategies and Management Plans and asked for further details on this (and which secondary High Streets this might involve). In response, Joanne Woodward provided details of the plans which are in place to regenerate local high streets given their increased importance since Covid. She explained that the High Street Strategies was linked with Planning Policy as well as the Economic Development Programme / Industrial Strategy. The Chair thanked officers for these details and highlighted that the Industrial Strategy was on the agenda for the next meeting, and this could be explored further then.

The Chair thanked the officers present for their clear presentations and summarised those areas such as waste management, the industrial strategy and the civic campus which had been identified as future agenda items. Echoing the comments which had been made by Councillor Rowan Ree, the Chair thanked officers for their work on such a challenging topic

RESOLVED

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

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