Agenda item

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

 

Cabinet received a report on the Draft Budget on 10th December 2019 which highlighted an outstanding budget gap to be resolved between then and now and also proposed that Cabinet agree to start consultation. The 2020/21 Budget and 2020-2025 Medium Term Financial Strategy (MTFS) now proposed have due regard to the corporate Equalities Impact Assessment, consultation feedback and recommendations from the Council’s Overview and Scrutiny Committee.

The Cabinet Member for Finance and Strategic Regeneration introduced the report which sought approval to the proposals concerning the 2020/21 Budget and five-year Medium-Term Financial Strategy (MTFS). The budget aimed to provide a clear financial plan during this unprecedented period of uncertainty for Local Authority budgeting.

 

The Cabinet Member was pleased to announce that the budget gap of £0.6m, highlighted in the last budget report to Cabinet, had been bridged without needing to make any further reductions to Service budgets.

 

The Cabinet Member outlined two transposition errors within table 8.6 of the budget report for Cabinet to note

• In column 5 (31/3/23), the first line should read £1,270,764, not £12,709,764. The subtotal should read £1,285,516 not £12,724,516.
• In column 7 (31/3/25), the second line should read £8,221 not £82,211. The subtotal should read £1,525,796 not £1,599,786.

 

These errors were purely presentational, and the underlying figures which have been used throughout the Council’s MTFS model were correct. They would be corrected in the final version of the report to Full Council. It was also noted that they were portrayed correctly in the Treasury Management Strategy Statement that had been considered at Overview and Scrutiny and has just been approved by Corporate Committee.

 

The Cabinet Member continued to outline how the budget was continuing to support the manifesto commitments and the progress made in relation to:

 

• The Council Tax Reduction Scheme (CTRS) which was extended to a maximum of 100% for least well-off families with children.

 

• Ongoing investment into a school meal pilot and a youth services programme, a large portion of which has been used to fund the Summer Holiday Programme which offered more than 150 activities with 19,602 young people taking part.

 

• A funding commitment of more than £4m to ensure that staff providing care services to adults through our partner organisations are paid at least the London Living Wage.

 

• Increasing apprenticeship numbers within the Council and across other organisations within the Borough.

 

• To invest £50m in our school buildings over the next 5 years.

 

• Secured more than £60m funding from the Mayor of London to support this housing programme.
• 750 additional trees to be planted in the next couple of years and are investing more than £6m in a School Streets programme aimed at reducing pollution around our schools.

 

The Cabinet Member was pleased to be able to propose a balanced Budget for 2020/21 which did not utilise any balances and enabled the Council to invest funds to continue to deliver the shared Borough Plan outcomes and make the Borough a place to be proud to live and work in.

The Leader invited Councillor Connor, Vice Chair of Overview and Scrutiny to further present the Scrutiny budget recommendations which were included at appendix 11 of the attached report.

Cllr Connor outlined that the specific budget scrutiny recommendations were mainly around risk of delivery and further noted the Cabinet’s response to these concerns.

 

Cllr Connor was pleased that last year’s recommendation to provide more detailed information on the capital programme was acted upon and it had enabled a clearer and more structured scrutiny process.

 

There were specific recommendations from Overview and Scrutiny Committee around the budget scrutiny process as a whole, including future Budget Scrutiny sessions being provided with information on the year-on-year position for savings proposals across the current MTFS period as well as the year-on-year ongoing position of the implementation of capital projects across each of the priority areas. This would allow Overview and Scrutiny to track the rolling budget positions rather than just the new proposals. The Committee also requested to receive the MTFS savings tracker that was submitted to Cabinet as part of future budget scrutiny papers.

 

It was also requested that future budget scrutiny reports to both Panels and the main Committee include the following information:

 

• Comment by finance officers on MTFS savings over 5 years
• Pressure on the Councils budget
• Also total growth
• Actual savings both new and ongoing for each of the five Scrutiny panel areas
• Information on Budget reserves both earmarked and un-earmarked
• An account of the position of the Housing Revenue Account
• Any particular pressures on the Councils position – for instance DSG
• Comment by finance officers on overall Capital budget over the five year MTFS
• Actual capital budget spend within each of the Scrutiny panel areas, both new and ongoing high level information
• Capital budget information already provided within the Treasury management report.
• Revenue Budget Implications already stated within TMR

 

 

Cllr Connor felt that having the above information was an important part of the budget scrutiny process as the scrutiny panels needed to be able to scrutinise their budgets in the wider context of the budget implications in their area. This context then allowed the savings proposed to be clearly set out and scrutinised. This would include both new and ongoing savings within the MTFS.

 

In understanding both sets of savings, meaningful recommendations from the panels to Overview and Scrutiny could be made. Also in having all the capital and revenue proposals clearly laid out supported compilation of the final recommendations to Cabinet.

 

Cllr Connor thanked finance officers for their support during this process and their agreement to these measures and the more detailed section under the heading ‘General’ on pages 153- 155 of the attached report pack, which would ensure both the capital and revenue budget scrutiny process continued to be strengthened.

In response to questions from Councillor Brabazon, and Barnes the following information was noted:

• The report was forecasting that there could be a lower number of residents eligible for Council tax reduction scheme due to changes to the benefit system. - Cllr Brabazon recommended looking at the implications of this.
• In relation to service charge increases for conversions and landscaping works outside properties, the Cabinet Member was concerned if Homes for Haringey were charging tenants for work not completed and would make enquiries to find out, if the case. If tenants and lessees did not want this work done, as outlined by Cllr Barnes, then it seemed unfair for them to pay for this. However, this issue required further examination and there would likely be contractual tenancy issues and leaseholder agreements, in order to ascertain if they contained maintenance obligations. Also when these types of works were carried out the charges would be set out and section 20 notice issued to leaseholders. Therefore, this was not an issue to be resolved at this meeting.
• With regards to the financial benefits of the commitment to provide London Living wage to staff providing care services to adults through the Council’s partner organisations, essentially the costs were more initially but there were subsequent cost mitigations as it secured stable provision and supply of care which were essential to authority. Also, this facilitated a different relationship between Council and care suppliers. The report set out some of the service changes that were expected to be put in place such as better use of technology.

 

RESOLVED

 

 

1. To consider the outcome of the budget consultation as set out in Appendix 10, to be included in the report to Council. Having taken this into account this report does not propose any amendment to the Budget for 2020/21 nor to the MTFS 2020/25.

 

2. To approve the responses made to the Overview and Scrutiny Committee recommendations following their consideration of the draft budget proposals as set out in Appendix 11. Having taken this into account this report does not propose any amendment to the Budget for 2020/21 nor to the MTFS 2020/25.

 

 

3. To propose approval to the Council of the 2020/21 Budget and MTFS 2020/25 Budget Reduction Proposals as set out in Appendix 2.

 

4. To propose approval to the Council of the 2020/21 General Fund Revenue Budget as set out in Appendix 1, including specifically a General Fund budget requirement of £242,292m, but subject to final decisions of the levying and `precepting bodies and the final local government finance Settlement.

 

 

5. To propose approval to the Council of the General Fund Medium Term Financial Strategy (MTFS) 2020-2025 as set out in Appendix 1.

 

6. To propose approval to the Council that the overall Haringey element of Council Tax to be set by London Borough of Haringey for 2020/21 will be £1,372.55 per Band D property, which represents a 1.99% increase on the 2019/20 Haringey element and with an additional 2% for the Adult Social Care Precept amount.

 

 

7. To note the Council Tax Base of the London Borough of Haringey, as agreed by the Section 151 Officer under delegated authority (Article 4.01(b), Part 2, of the Constitution), as 78,543 for the financial year 2020/21.

 

8. To propose approval to the Council of the 2020/21 Housing Revenue Account budget as set out in Table 9.3.

 

 

9. To propose approval to the Council of the Housing Revenue Account Medium Term Financial Strategy (MTFS) 2020-2025 as set out in Section 9.6 and Table 9.3.

 

10. To approve the changes to the rent levels for residents in temporary accommodation, Council tenants in General Needs, Sheltered/Supported, and Affordable homes reflecting the recent rent guideline requiring Councils in England to increase rent by no more than the Consumer Price Index (CPI) at September of the previous year plus 1% This will increase the average weekly rents as set out in Tables 9.1 and 9.2.

 

 

11. To agree the changes to service charges to tenants as set out in Appendix 8.

 

12. To propose approval to the Council of the 2020/21 – 2024/25 General Fund capital programme detailed in Appendix 4.

 

 

13. To propose approval to the Council of the 2020/21 – 2024/25 Housing Revenue Account (HRA) capital programme detailed in Appendix 7.

 

14.  To propose approval to the Council of the Capital Strategy detailed in Section 8 of this report.

 

 

15. To propose approval to Council of the strategy on the use of flexible capital receipts to facilitate the delivery of efficiency savings including capitalisation of redundancy costs (Appendix 6).

 

16. To propose to the Council the Dedicated Schools Budget (DSB) allocations for 2020/21 of £261.9m as set out in Appendix 9.

 

 

17. To note the funding to be distributed to primary and secondary schools for 2020/21 based on the figures advised to Schools Forum and submitted to the Education Funding Agency in January 2019 set out in Section 10.

 

18. To note the budgets (including the use of brought forward DSG) for the Schools Block, Central Services Block, High Needs Block and Early Years Block as per Appendix 9.

 

 

19. To delegate to the Director of Children Services, in consultation with the Cabinet Member for Children, Education and Families, the power to amend the Delegated Schools Budget to take account of any changes to Haringey’s total schools funding allocation by the Education and Skills Funding Agency.

 

20. To delegate to the Section 151 officer, in consultation with the Cabinet Member for Finance, the power to make further changes to the 2020/21 budget proposals to Full Council up to a maximum limit of £1.0m.

 

 

 

Reasons 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 have been subject to consultation both externally and through the Overview & Scrutiny process. The outcomes from these consultations, which are expanded on in Section 11 and Appendices 10 & 11 to this report, have been considered by Cabinet. After due consideration, Cabinet considers that the issues raised are addressed in the budget put forward in this report.