Agenda item

The Committee received a report along with the 5 year draft budget/Medium Term Financial Strategy (2019/20-2023/24), the previous year’s budget recommendations put forward in relation to Priority 3 and the 2019 (new) budget proposals. In addition to this, the proposed areas of capital spend for Priority 3 were send out as an addendum report which was circulated with the agenda pack.  The Panel also received feedback from the Housing and Regeneration Scrutiny Panel on 17^th December, in relation to the savings proposal around an additional HMO licensing scheme (PL1). David Murray, Assistant Director for Environment and Neighbourhoods introduced the report.

The Cabinet Member for Environment advised the Committee that in developing the budget proposals with officers that she was keen to ensure that the implications for any saving put forward were fully understood. The Cabinet Member advised that it was important to understand the wider costs of implementing each saving and whether there may be unintended consequences. The Cabinet Member emphasised that the proposals put forward were realistic.

In addition to making savings, the Cabinet Member outlined that there were also revenue raising opportunities within Priority 3 which, it was hoped, had been utilised in these proposals. In light of the challenging financial picture, the Cabinet Member set out that she and officers were committed to making the savings targets but were also looking to preserve core services.

The following points were raised in discussion of the report and its appendices:

a.    The Committee sought clarification around the structural funding gap in 2020/21 of £18.4m that was identified in the report. The Committee also sought clarification on how this was possible if the Council had a legal duty to set a balanced budget. In response, officers advised that there was a legal obligation to set a balanced budget for next year i.e. 2019/20 and that the budget gap for next year was £6.5m. Officers acknowledged that closing a £6.5m gap was a significant challenge. The Committee was advised that the budget as currently presented was draft and that the £6.5m gap would need to be me by the time the final budget was agreed by Full Council in February.

b.    Officers advised that the government had released the provisional settlement agreement for local government and that this suggested an additional circa £1.2m of additional grant funding which would be used to plug some of the budget gap. A robust budget challenge process was underway, involving senior officers, to identify the remaining £5m-5.5m shortfall before February.

c.    In response to a question about the impact of the proposed savings on services within Environment and Neighbourhoods, officers advised that focus had been on looking at how services could be provided in a different way whilst maintaining quality standards. One example given was around LED lighting where standards could be maintained whilst also generating savings. Another area of focus outlined by officers was looking at how to generate efficiencies from some of the big contracts. Officers reiterated that they had been robust in their attempts to ensure that the savings put forward were achievable and sustainable.

d.    The Committee commented that where the budget proposals put forward were based on income generation, such as the additional HMO Licensing, that this should be made clearer. (Action: Kaycee Ikegwu).

e.    The Committee queried why there was no income forecast in the first year for the additional HMO Licensing scheme proposal. In response, officers advised that it was a five year licence and that there was an inevitable bedding-in period during the first year. Officers had made a decision to profile the income at £400k per year starting in year two. It was envisaged that revenue levels would build during years one and two and would likely reduce in later years as compliance was achieved.

f.     In response to a question, officer conformed that revenue from HMO licensing was ring-fenced. However, there were currently staff in the Housing Improvement team being financed through the General Fund, which would be offset to allow a saving to the Council as whole.

g.    The Committee requested that any additional HMO licensing scheme be tenant focused and that the Council monitor whether this has any impact on eviction rates. In response, officers acknowledged these concerns and reassured the Panel the impact on tenants was built into the evaluation and monitoring processes.

h.    The Committee expressed concerns with the proposal to cease funding for the police partnership team (PL11). It was suggested that this seemed to be entirely contrary to priorities identified in the new Borough Plan. The Committee commented that, as part of the consultation process for the Borough Plan, fear of crime was identified as the biggest concern for residents in the east of the Borough and the second biggest concern for residents in the west of the Borough. It was suggested that this saving would have a disproportionate effect on the east of the borough as it is where the police team were mostly utilised. It was also suggested that this could be contrary to the agenda of the Fairness Commission.

i.      In relation to PL11, the Committee raised concerns that without Council funding this team would cease to exist. The mitigation stated that issues would be passed to local SNTs, however the Panel felt that the whole point of the team was to deal with issues that can’t be dealt with by local SNTs. The Committee suggested that the £200k saving would have a significant impact and would likely incur costs elsewhere.

j.      Panel members queried about Council Tax precept that goes towards the Metropolitan Police and questioned why the Council was having to contribute to further additional funding towards police resources. In response, officers acknowledged these concerns and advised that discussions in relation to how the impact on local policing resources would be mitigated were ongoing. The Committee was advised that the partnership team was funded through a BOGOF scheme announced by MOPAC and that there was some suggestion that this could be withdrawn. Officers were waiting for further confirmation on this.

k.    In response to a question around parking income, officers advised that all parking revenue was ring-fenced and could only be spent on transport related activities.

l.      The Committee raised concerns with the proposal for an additional HMO licensing scheme (PL1), questioning how feasible the income targets were year-on year. The Committee suggested a proposal should be put forward in relation to viability of the income levels proposed. 

In light of the above discussion, the following budget recommendations were agreed:

a.    The Panel recommended that Cabinet reconsider the proposed saving in relation to flexible police resources. In particular, consideration should be given to whether this would have a disproportionate impact on the east of the borough, which had a higher number of victims of crime. Cabinet should also consider whether this proposal was reflective of the fairness agenda. The Panel also felt that this saving proposal was contrary to the priorities identified in the new Borough Plan around tackling crime. Fear of crime was one of the main issues identified by residents as part of the consultation in response to the new Bough Plan. PL 11.

b.    The Panel sought firm assurances from Cabinet that the additional HMO licensing scheme would be tenant focused and that the Council would monitor whether there was any impact on tenants, such eviction rates and homelessness. PL1

c.    The Panel were concerned about how the Council would ensure that the stated income levels for the additional HMO licensing scheme were met. The Panel requested further information how the Council would meet the stated income targets, including a breakdown of the financial profiling. PL1

RESOLVED

That the Panel considered and provided recommendations to Overview and Scrutiny Committee on the 2019-20 Draft Budget/MTFS 2019/20 to 2023/24 and savings proposals in relation to Priority 3.