Agenda item

[Report of the Director of Finance. To be introduced by the Cabinet Member for Finance and Strategic Regeneration.]

This report sets out details of the draft proposed budget for 2020/21 and MTFS to 2024/25, including budget reductions, growth and capital proposals.

The Cabinet Member for Finance and Strategic Regeneration introduced this report which provided details of the draft proposed budget for 2020/21 and MTFS to 2024/25, including budget reductions, growth and capital proposals.

The Cabinet Member highlighted the proposals set out in this report contained the initial five-year Medium-Term Financial Strategy (MTFS) for 2020-2025 that would provide a financial plan during this unprecedented period of uncertainty for Local Authority budgeting. This report still had a budget gap of £0.6m for 2020/21 and work would continue over the next two months to identify solutions to bridge this and in order for a legal, balanced budget to be presented to Cabinet in February 2020.

The Cabinet Member informed the budget monitoring reports presented this year highlighted the progress that had been made on stabilising budgets and confirms that the action taken in setting the 2019/20 Budget was appropriate. Whilst the Council were still forecasting an in year overspend at Quarter Two, the future impact of the main underlying pressures had been addressed as part of the 2020/21 Budget now proposed. The Council also taken advantage of making live budgeting decisions in year such as the approval of a suite of invest to save proposals in Children’s services which were well underway and would contribute to better outcomes for our young people and their families.

The Cabinet Member noted last year’s budget put in place additional funding for a number of priorities. The Council Tax Reduction Scheme (CTRS) was extended to a maximum of 100% for our least well-off families with children. This came into effect on 1st April 2019 and is proposed here to be continued for 2020/21. The 2019/20 Budget also provided ongoing investment into a school meals pilot and a youth services programme, alarge portion of which had been used to fund the Summer Holiday Programme which offered morethan 150 activities with 19,602 young people taking part.

The Cabinet Member highlighted that whilst resources continued to be limited, this Draft Budget proposed the introduction from April 2020 of London Living Wage (LLW) rates for Council contracted Homecare staff and also those working in Extra Care Sheltered Housing; additionally, an uplift had been applied to Social Care Direct Payments to individuals in line with LLW rates. Further, an additional sum had also been built in to provide ongoing extra capacity to increase apprenticeship numbers within the Council and across other organisations within the Borough.

The Cabinet Member updated that the £0.6m gap currently forecast for 2020/21 was a much-improved position to that presented a year ago when we still had £6.5m gap to resolve (£7.5m in 17/18). The Cabinet Member believed the Council was in a stronger position as a result of the significant work put into the last budget process to write off unachievable savings targets, improved savings delivery and aligning our resources more effectively to reflect the real pressures and growth felt in our two People services. It must also be recognised the impact that the additional funding included in the Spending Round 2019 announcement has had, particularly on next year’s Budget.

The Cabinet Member recognised that it would become ever harder to find solutions to balance the budget while seeking to manage the impact on those with the greatest need of support. That was why the new budget reductions proposed in this report focus as much as possible on delivering efficiencies and service re-design or increasing income instead of service cuts.

The Cabinet Member highlighted that the capital strategy recognises the role that local investment had in changing our locality and the lives of our residents. The new proposals included within this report provided a number of examples as set out at page 81.

In closing, the Cabinet Member stated that the draft Budget proposed for the General Fund and HRA had been built on solid ground and directs the Council’s resources to make the greatest difference to residents, businesses and other organisations operating in and with Haringey and move us closer to delivering the Borough Plan outcomes. The Cabinet Member was confident that between now and February, the Council could bridge the remaining General Fund gap.

Councillor James thanked the Cabinet Member for his work in introducing LLW for care workers.

In response to questions from Councillor Dennison, the following information was provided:

• The Cabinet Member stressed that the Council was not looking to cut services but redesign them in a way that promoted efficiency and created savings.
• Officers highlighted that the enhanced (LLW) rates would be implemented in conjunction with the introduction of alternative delivery models including electronic call monitoring, assistive technology, reablement and the associated changes to care plans. These changes were planned to make this programme cost neutral over a number of years except for the enhancement of Extra Care rates, where the cost cannot be mitigated down.
• Officers informed that there had been analysis carried out on what the likely demands on the adult services and the number of people who might need access to those services were in the coming years and cost predictions were made on the basis of those figures. The budget also reflected the current cost pressures the Adults Social Care service was facing.
• Regarding the budget reductions proposals outlined at table 7.5, Officers noted these figures reflected that services could be provided in alternative ways and by more cost-effective means.
• The Cabinet Member was confident that the savings proposed at table 7.5 could be achieved.
• Officers noted the actions proposed to achieve the Strategic Acquisitions budget reduction were not only savings driven.
• The Leader noted that with regard to Fortismere Secondary School’s inclusion in Appendix 4 (Scheme Ref 115), no decision had been taken to move forward with any planned changes to the School.

RESOLVED

1. To note the initial General Fund revenue and capital budget proposals and financial planning assumptions set out in this report and note that they will be refined and updated after the final Local Government Finance Settlement is received in January 2020 and also to incorporate further budget changes as required;
2. To note the Draft General Fund 2020/21 Budget and MTFS (2020/21 to 2024/25) detailed in this report and Appendix 1;
3. To note the Draft budget reduction proposals summarised in Section 8 and Appendix 2;
4. To note the Draft General Fund Capital Programme for 2020/21 to 2024/25 as set out in Appendix 4;
5. To note the Draft Housing Revenue Account (HRA) revenue and Capital Programme proposals and HRA business plan as set out in Section 9;
6. To note the 2020/21 Draft Dedicated Schools Budget (DSB) and update on the DSG reserve position set out in section 10;
7. To note that the detailed proposals will be submitted to Overview and Scrutiny Committee / Panels in December 2019 and January 2020 for scrutiny and comments;
8. To agree to commence consultations with residents, businesses, partners, staff and other groups on the 2020/21 Budget and MTFS,
9. To note that an updated budget 2020/21 Budget and MTFS (2020/21 - 2024/25) will be put to Cabinet on 11th February 2020 to be recommended for approval to the Full Council meeting taking place on 24th February 2020.

Reason for decision

The Council has a statutory requirement to set a balanced budget for 2020/21 and this report forms a key part of the budget setting process by setting out the forecast funding and expenditure for that year. Additionally, in order to ensure the Council’s finances for the medium term are maintained on a sound basis, this report also sets out the funding and expenditure assumptions for the following four years in the form of a Medium-Term Financial Strategy.

Alternative options considered

The Cabinet must consider how to deliver a balanced 2020/21 Budget and sustainable MTFS over the five-year period 2020/25, to be reviewed and ultimately adopted at the meeting of Full Council on 24th February 2020.

Clearly there are options available to achieve a balanced budget and the Council has developed the proposals contained in this report for determining levels of both income and service provision in this report. These take account of the Council's priorities, the extent of the estimated funding shortfall and the Council's overall financial position.

These proposals are subject to consultation both externally and through Overview and Scrutiny process and the outcomes of these will inform the final budget proposals.