Agenda item

[To be introduced by the Cabinet Member for Resources and Culture. Report of the Chief Operating Officer.] This report sets out the latest position in respect of the Council’s finances with the aim of finalising the budget proposals from Cabinet for the 2016/17 year for consideration and approval by the Council on 22^nd February 2016. The report covers proposals in respect of the General Fund revenue account, the Housing Revenue Account (HRA), The Dedicated Schools Budget (DSB) and the Capital Programmes for both the General Fund and the HRA.

The Cabinet Member for Resources and Culture introduced the report which set out the latest position in respect of the Council’s Finances with the aim of finalising the budget proposals from Cabinet for the year 2016/17 or consideration and approval by the Council on the 22^nd February 2016.  The budget report had not changed significantly from the last iteration considered at Cabinet on the 19^th January. Following the final finance settlement being received by the Council this week, the budget estimations were unchanged. The Cabinet Member for Resources and Culture highlighted the public consultation results for adding a 2% precept to Council Tax to specifically fund Adult Social Care. The results reflected strong support for this decision and the Cabinet report recommended to Full Council approval of this 2% precept. There were 27% of responders asking for this additional funding to be directed to Day Care Centres. In response to this, the Council recognised the value of the Centres, but as set out in the report, the social care precept did not change the budget pressures in Adult’s Service and therefore the report was proposing that the income from the precept would be directed to support care packages for young people with complex needs, Learning Difficulties and older people.

The Cabinet Member for Resources and Culture drew Cabinet’s attention to the increased tax base and the intention to place this additional funding into a risk reserve. This was also done last year and had helped offset overspend in Adult and Children’s Services.

Councillor Wright, Chair of Overview and Scrutiny Committee was invited the by the Leader to address the meeting and highlight the Scrutiny budget recommendations that were contained at Appendix 6 of the Cabinet report.

Councillor Wright welcomed the proposed acceptance of the Scrutiny recommendations.  He reported that Overview and Scrutiny had noted that the 3 year budget assumptions were holding up and this was a tribute to officer’s good work.

Councillor Wright referred to the Overview and Scrutiny discussion on Day-Care Centres contained at page 32 and the difficulties with the pressures in the Adults budget. He recognised the huge pressures going forward on Adult’s budget.

Overview and Scrutiny recommended maintaining a high level  risk register to monitor the budget situation in Adults Services, keeping adequate levels of reserves and welcomed the £1.7m additional funding for Adult care shown in this report. The Chair of Overview and Scrutiny felt it would be important, in the next budget year, to keep a close eye on all the savings targets and make sure that they were proceeding according to plan. The Scrutiny Panels would also keep this under review, over the coming year, through the budget monitoring reports.

Overview and Scrutiny also agreed it was important for the Council to maximise income from all sources.

In response to Councillor Engert’s question on a revised Capital Strategy coming forward to Cabinet, it was noted that a 10 year Capital Strategy would come forward to Cabinet in June 2016 and then also go forward to Full Council in July 2016.

Agreed that Councillor Engert is provided with a written response to her question on the reasons for the £1.1m increase in PFI cost for 2015/16 shown at appendix 3, page 41.

Agreed that Councillor Engert is provided with an itemised list of expenditure for the Capital Programme in 2015/16.

Councillor Morton, Cabinet Member for Health and Wellbeing, welcomed the recommendation for implementing a 2% Council Tax precept specifically for funding Adult Social Care but highlighted the nationwide underfunding issue for Adult Social Care. The Council would ensure that this additional funding was made effective use of.

The Leader of the Council asked Cabinet to agree the recommendations at section 3.

RESOLVED:

1.    To approve, subject to any agreed amendments, the proposals set out in the report at appendix 1, including the 2% precept on Council Tax towards funding Adult Social Care pressures and submit them for consideration by the full Council at their meeting on 22nd February 2016 as Cabinet’s 2016/17 budget proposals;

2.    To propose approval to the Council of the 2016/17 General Fund revenue budget as set out in Appendix 1 of the report, including specifically a General Fund budget requirement of £255.627m but subject to the final decisions of the levying and precepting bodies and the final local government finance settlement;

3.    To propose approval to the Council of the 2016/17 Housing Revenue Account budget as set out in Appendix 2 of the report;

4.    To confirm and propose approval to the Council of the 2016/17 General Fund capital programme detailed in Appendix 3 of the report;

5.    To confirm and propose approval to the Council of the 2016/17 Housing Revenue Account (HRA) capital programme detailed in Appendix 4 of the report;

6.    To approve the changes to the rent levels for General Needs Homes for Haringey tenants reflecting the expected regulations requiring a 1% rent reduction in 2016/17 and subsequent years’. This will reduce the average weekly rent from £106.62 to £105.55 as set out in paragraph 9.4 and Table 2;

7.    To approve the changes to the rent levels for Sheltered/ Supported Housing tenants reflecting the expected, 1 year only, exemption from the government’s rent reduction policy. This will increase the average weekly rent from £94.49 to £95.34 as set out in paragraph 9.8 and Table 3;

8.    To approve the changes to service charges for leaseholders set out in Table 4;

9.    To approve that rents for decanted properties are set at the appropriate Local Housing Allowance rate as set out in paragraph 9.14 and 9.15 of the report;

10.  To note the recommendation of the Chief Operating Officer (S151 officer) that any additional resources , including those generated from the improved tax base identified in this report, should be initially held in a risk reserve to support the statutory review of the adequacy of reserves in the context of the 2015/16 overspend position;

11.  To propose to the Council the indicative Dedicated Schools Budget (DSB) for 2016/17 of £242.685m as set out in Appendix 5;

12.  To approve the proposed changes to the Haringey Formula for Financing Schools as recommended by the Haringey Schools Forum and set out in paragraphs 8.13 – 8.14 of the report for the secondary lump sum factor and, for the deprivation factor, option 2 set out in paragraph 8.19 of the report;

13.  To approve the responses made to the Overview and Scrutiny Committee recommendations following their consideration of the draft budget proposals and as set out in Appendix 6;

14.  To note that this report will be considered by the Council at its meeting on 22^nd February 2016 to inform their decisions on the 2016/17 budget and the associated Council Tax for that year; and

15.  To delegate to the S151 officer, in consultation with the Cabinet Member for Resources and Culture,  the power to make further changes to the 2016/17 budget proposals consequent on the publication of the final local government finance settlement or other subsequent changes up to a maximum limit of £1.0m.

Reasons for decision

In February 2015, and following extensive consultation, the Council approved its Corporate Plan and Medium Term Financial Strategy (MTFS) covering the period 2015 - 18. The Corporate Plan set out the Council’s priorities, the MTFS outlined the overall financial strategy and the Workforce Plan outlined the workforce strategy for achieving those priorities.

As a result of the significant reductions to the Council’s funding from central government grants, the MTFS required around £70m of approved saving proposals to deliver a balanced budget position in each of the three years’ covered by the MTFS (2015 – 18).

Following the publication, on 17^th December 2015, of the Provisional Local Government Finance settlement, Cabinet reviewed the impact of the settlement on the 2016/17 budget set out in the approved MTFS.

Taking all relevant factors into account, including in particular the outcomes from statutory consultation with business rate payers, further public consultation, the recommendations from the Overview and Scrutiny committee meeting held on 25^th January 2016 and any other subsequent changes, the report set out Cabinet’s final budget proposals which, if approved, will be sent for consideration at the Full Council budget setting meeting scheduled for 22^nd February 2016.

The final budget report to the Council on 22^nd February would also additionally include a number of requirements consequent on the proposals set out in this report and in particular:

1. The formal Budget Resolution required in accordance with the LGFA 1992 as amended by the Localism Act 2011, which sets the Council tax for the forthcoming financial year;

2. The Precept of the Greater London Authority (GLA) for 2016/17 in accordance with S40 of the LGFA 1992 which must be added to the Haringey Council element of the Council tax to give a total Council tax for each category (band) of dwelling in the Council’s area;

3. The formal assessment of the relevant basic amount of Council tax against the principles established by the Secretary of State for the purpose of determining whether any Council tax increase is ‘excessive’ and therefore is subject to referendum.

4. Approval of the Cash Limits for 2016/17;

5. The S151 Officers evaluation of the adequacy of the Council’s reserves and the robustness of the estimates including the council’s reserves policy;

6. Approval of the Treasury Management Strategy Statement (TMSS) which has been formulated by the Corporate Committee and subject to the scrutiny review process

Alternative options considered

The Cabinet has considered or are asked to consider the following alternative options:

1. The Overview and Scrutiny committee met on 25^th January 2016 and the formal recommendations from that meeting have been reviewed by the Cabinet Member for Resources. Cabinet are asked to further consider the recommendations and approve the proposed responses set out in Appendix 6 of the report.

2. The outcomes from all of the consultation activities and our consideration of all of the comments are summarised in this report.

3. The Cabinet have considered the extent to which further resources could be generated from an increase in the Council tax above the proposed 2% precept for Adult Social Care and, taking into account the impact on Council tax payers, the Cabinet is not proposing any further increase above the Adult Social Care precept of 2% set out in this report.