Agenda item

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

 

The report sets out details of proposed budget for 2021/22 and MTFS to 2025/26, including savings, growth and capital proposals. The report will also set out details of provisional funding for 2021/22 and if available the remainder of the planning period and highlight areas of risk. The report recommends that the budget proposals be released for public consultation and Scrutiny consideration.

 

The Cabinet Member for Finance and Strategic Regeneration introduced the report, setting out the details of the draft Budget for 2021/22 and Medium-Term Financial Strategy (MTFS) 2021/26, including budget reductions, growth and capital proposals. This included details of estimated funding for 2021/22 and the remainder of the planning period and highlighted areas of risk. The report recommended that budget proposals were released for public consultation and Scrutiny consideration.

 

The Cabinet Member outlined that the report addressed the impact that the Covid-19 pandemic had had on the financial planning process over the year and the steps that the Council had taken to respond to this challenge. It also incorporated the Council’s present best estimate of the implications of the Spending Review 2020 (SR20). The implications of expected further details from Government  were yet to be received, including the Local Government Funding Settlement,  which would  be taken into consideration before the Final Budget for 2021/22 and Medium Term Financial Strategy (MTFS) 2021/26 were considered by Cabinet – to include its response to the consultation - and Full Council for ratification in February 2021.

 

The Cabinet Member expressed that this was a progressive budget in a time of hardship where the Council needed to support the most vulnerable people in the community. COVID-19 19 had an impact on the Council finances, for this financial year, of £40m. However, the past and present sound management of finances provided confidence to provide this support despite the lack of clarity from Government about whether they would fulfil meeting the full cost of COVID-19 on Council budgets.

 

The budget savings set out in the report focused on delivering efficiencies, service redesign which was broader than departmental boundaries, involving and increasing income instead of service level costs. The Council would be reviewing all projects risks and savings programme whilst considering the budget issues that arise through demographic growth.

 

The Councils’ reserves would be utilised to bridge the budget gap for 2020/21 of £5.4m. It was important to note that COVID-19 and likely recession would have a continuing impact on finances and the Council would continue to call on the government to fund local authorities so that they can continue to serve communities.

 

The Cabinet Member continued to outline how the budget would continue to support the most vulnerable and set out:

 

• The investment in welfare assistance, the community voluntary sector, youth services, employment support, and university bursary scheme.

 

• Capital projects investment for improving school buildings, roads, pavements, empty properties, and Civic Centre.

 

• Continuing previous schemes such as the Council Tax reduction scheme, 1.99% Council tax precept for Adult Social Care.

 

• The Housing Revenue Plan supporting delivery of new Council homes at Council rents.

 

• Creating opportunities for young people and a cleaner and greener Haringey.

 

The Leader commended the budget and highlighted that the Council had managed its finances prudently and efficiently to allow this progressive budget to be put forward.

 

The Cabinet Member for Adults and Health commented, with regards to the support for Adults services, and commended the compilation of budget in a difficult circumstances.

 

The Cabinet Member for Public Realm and Transformation spoke about capital investments stimulating the economy and creating new jobs for local people. Also, importance of local welfare assistance to support people in severe strife.

 

In response to questions from Cllr Dennison and Cllr Ogiehor, the following was noted:

 

 

• With reference to the service-based budget adjustments outlined at table 7.9.1 and the significant required savings for 2022 to 2025, the Council would continue with tight monitoring of the service base budgets and re- profile these according to circumstances. Future updates would take into account any increase in the levels of income and these figures would be reprofiled if they were not able to reach required target levels.

 

• The approach taken with the business rates basis was consistent with those in previous years and reflected the projections that the Council were able to make. It was important to note that the economic actions that the Council was taking engendered further growth in the number of businesses and achievement of the business -related objectives. This would also be taken account of in future forecasts.

 

• There was an additional report on Good Growth funding, on the agenda, which set out the funding that the Council would be receiving from the Mayor and would help support businesses in Wood Green. There was a project to ensure that business continued to survive in Tottenham.

 

• Responding on a question relating to the Council’s sustainable level of debt, the Cabinet Member advised that the Council was not breaching any thresholds in relation to debt levels. When making decisions, there was a need to assess the issues of the time. The Council was audited by an External Auditor and the Council complied with the required CIPFA regulations. There was a consistent analysis of the debt situation with actions to be taken to deal with the situation.

 

• With regards to understanding the funding of the Streetspace Plan, this was an example of how parts of the capital programme were assumed to be at least part financed by external funding. The Director of Finance explained that like other capital growth items, some of which the receipt of funding was absolutely assumed and some projects where external funding was expected. This section on Streetspace was about providing members a clear idea of what grants the Council were expecting and what funding the Council may need to locate to support the project.

 

• In addition, later, it was advised that for the Streetspace plan, TFL funding of around £600k was expected. The Council were just awaiting to hear the announcements, and this was what would be expected on average. The proposal in the capital programme would help fill any gap in funding.

 

• With regards to the funding of the Climate Change Action plan and Walking and Cycling plan – it was clarified that there were external funding sources available and the Council were consistently bidding to fund climate change initiatives. The Planning service was optimistic that there was sufficient and growing external opportunities for accessing funding from the government, the GLA sources and other sources. Since the budget report had been published there was updates from these external bodies of further funds available.

 

• Assurance was provided that the issues being experienced by Crouch End and Muswell Hill High Streets was being factored and the Cabinet Member for Local Investment and Economic Growth was aware of the disproportionate dependency on the hospitality sector in Crouch End which had been affected by COVID-19 and was also awareness of a need for a nuanced based High street plan that addressed the specific needs in Muswell Hill and Highgate. The Cabinet Member asked Cllr Dennison to put forward his formulated question in writing to him and he would provide a detailed response. He provided assurance that it was recognised that Crouch End, Muswell Hill and Highgate did not have the same issues as Tottenham and Wood Green High streets, and they required tailored support.

 

The Cabinet Member further thanked the Senior Officers and Finance team for putting this budget together, in the required timescales, and in challenging times.

 

RESOLVED

 

1. To note the initial General Fund revenue and capital budget proposals and financial planning assumptions set out in the attached report and note that they will be refined and updated after the final Local Government Finance Settlement is received in January 2021 and also to incorporate further budget changes as required;

 

2. To note the Draft General Fund 2021/22 Budget and MTFS (2021/22 to 2025/26) detailed in this report and Appendix 1;

 

3. To note the Draft budget reduction proposals summarised in Section 7 and Appendix 2;

 

4. To note the Draft General Fund Capital Programme for 2021/22 to 2025/26 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 2021/22 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 2020 and January 2021 for scrutiny and comments;

 

8. To agree to commence consultation with residents, businesses, partners, staff, and other groups on the 2021/22 Budget and MTFS.

 

9. To note that an updated budget 2021/22 Budget and MTFS (2021/22 – 2025/26) will be put to Cabinet on 9th February 2021 to be recommended for approval to the Full Council meeting taking place on 22nd February 2021.

 

 

Reasons for decision

 

The Council has a statutory requirement to set a balanced budget for 2021/22 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 2021/22 Budget and sustainable MTFS over the five-year period 2021/26, to be reviewed and ultimately adopted at the meeting of Full Council on 22nd February 2021.

 

Clearly there are options available to achieve a balanced budget and the Council has developed the proposals contained in this report after determining levels of both income and service provision. These take account of the Council’s priorities, the extent of the estimated funding shortfall, estimated impact of Covid-19, Brexit, and the Council’s overall financial position.

 

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