Agenda item

Report of the Director of Finance. To be introduced by the Cabinet Member for Finance and Transformation.

 

Following public consultation and Scrutiny Review, this report will set out the details of the proposed budget for 2022/23 and Medium Term Financial Strategy (MTFS) through to 2026/27, including savings, growth and capital proposals. The report will also set out details of funding for 2022/23 and, if available, the remainder of the planning period and highlight areas of risk. The report will be for onward approval by Full Council on the 01 of March when it will include the details of the council tax resolution.

The Cabinet Member for Finance and Transformation introduced the report, which finalised the Council’s General Fund and HRA 2022/23 Budgets and Medium-Term Financial Strategies for 2022-2027.

 

It was noted that the only items not confirmed at this stage were:

• Notification of final levy sums however, the Council were not forecasting any levies to be significantly different to the sums currently budgeted for;
• Confirmation of the GLA council tax element;
• The implications of the Final 2020/21 Local Government Finance Settlement announcement and any other late notifications from government departments –there were no indications that this would bring forward any / material changes to the provisional figures already received.

 

The report outlined that these final notifications were not expected to lead to any significant budget implications, but an update would be included in the Full Council report on 1st March; this would also include details of any final budget adjustments required.

 

The Cabinet Member advised that the budget was well received and the consultation dialogue had been genuinely constructive with no hidden issues.

 

There was praise for the Finance Team and other officers for compiling the report and producing good budget proposals. The Cabinet Member continued that this was the first budget that balanced without savings and allowed for substantial levels of investment in revenue and capital whilst maintaining a fiduciary approach.

 

The Cabinet Member continued to refer to alignment of the budget to the administration’s future manifesto and political priorities. This included:

• increase in council housing,
• helping the most vulnerable,
• support to the social care budget which in the past had been chronically underfunded,
• maintained commitment to the green agenda,
• support to parks, active travel,
• investment in preventing antisocial behaviour,
• significant increase in budget allocation for the prevention of violence against women and young girls , and
• investment in public participation, co- design and co-production.

 

The Cabinet Member also highlighted the following:

 

• A Council Tax rise by 1.99% for the general Council services, plus a further 1% social care precept, which added up to a total of 2.99%, (i.e. lower than the anticipated rate of inflation). In practice, this would mean that the increase for a Band D property (excluding the GLA element) would be 83 pence per household per week,
• Continuing with a comprehensive Council Tax Reduction Scheme which meant that over 16,000 residents would pay no Council Tax at all;
• Recognition that even this modest council-tax increase, at this challenging time, would be an additional ask for some. However, it was felt that without these resources, the Council would have to cut back support and services for the most vulnerable in the borough and therefore felt appropriate to put forward.

 

In conclusion, the Cabinet Member was proud to recommend this budget for Cabinet and onward full Council approval.

 

Councillor Pippa Connor, Vice Chair of the Overview and Scrutiny Committee and Chair of the budget scrutiny meetings presented the Overview and Scrutiny recommendations set out at appendix 9 of the report.

 

She thanked Finance officers and scrutiny officers for facilitating the process, also praising co-opted members for helping members maintain their community focus of what scrutiny were trying to achieve in the budget recommendations.

 

The Vice Chair of Scrutiny spoke about the format of the papers for budget Scrutiny Panel meetings and, for future years asked that, these reports were made more accessible to the public as it was helpful to ensure that these are as clearly presented as possible.

 

She asked that each of the four Scrutiny Panels have their own budget specific papers for their respective revenue and budget areas.

 

The Vice Chair for Overview and Scrutiny continued to refer to the recommendations set out at Appendix 9 - pages 191 to 231.

 

In response to questions from Cllr Dennison, and Cllr Connor the following information was provided:

 

-       With regards to the contention that the budget assumed a structural gap of £65m over the next term of the administration and would involve budget cuts of this sum, the Cabinet Member underlined that there would be no cuts to the budget. The Director for Finance further responded that the report made clear there was a balanced budget for next financial period, a pre-requisite for the budget to be considered at full Council on the 1^st of March. The Director further explained that as the MTFS moved forward in year two, and onwards, there was a significant  budget gap identified in the report. However, this was now around 50% less for 2023/24 than assumed for and reported in the draft MTFS report considered in December 2021. This helped make the closing of this budget gap more accessible over this coming year.

 

-       The ambition for the forthcoming period was to consider efficiency improvements and opportunities to fulfil the roles of the Council at a lower total cost.

 

-       The Director of Finance continued to outline that the long-term challenge for the budget had not changed for a number of years. This report was consistent with information provided in the  February 2021 reports but there were a number of factors being considered that might change the long-term budget positions in a positive way. This included potential re-establishing of the funding base for Local Authorities under the Government’s levelling up scheme and the council were waiting to find out how this will affect the longer-term funding position. This was hoped to be better known in the course of this year and would help consideration of the approach that the Council will take for year three, when the budget gap is expected to widen. The Council would also use this coming longer financial period in year one and year two, to develop the change and transformation agenda to also mitigate the budget gap which if continued at the scale described would require the Council to do things differently.

 

-       In response to Cllr Connor’s request from Scrutiny to consider the risk of additional costs to cover increased future borrowing, the Cabinet Member advised that Overview & Scrutiny Committee had put forward constructive recommendations and the responses were set out in Appendix 9. The Finance Team would continue to work on considering and accommodating them as much as possible. Overall, the long financial strategy calculations took into account projected loan charges and revenue costs.

 

-       In response to the question that there was a reduction in the Place budget area of £3.7m, it was clarified that there were no new cuts involved to this budget area. There were budgetary changes between December 2021 and February 2022 in the Place budget that looked like the budget had been reduced but this was to do with the budget forecast revised estimates concerning the concessionary fare charges and other areas outlined at paragraph 1.3.

 

-       The Director of Finance advised that the revised budget forecast areas listed in paragraph 1.3 and 1.4 would primarily fund budget growth in the social care services area. The Cabinet Member concurred and highlighted the potential accumulative positive impact of invest to save schemes on the budget.

 

 

 

 

RESOLVED

 

1. To consider the outcome of the budget consultation as set out in Appendix 8, to be included in the report to Council. Having taken this into account this report does not propose any amendment to the Budget for 2022/23 nor to the MTFS 2022/27.

 

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 9. Having taken this into account this report does not propose any amendment to the Budget for 2022/23 nor to the MTFS 2022/27.

 

3. To propose approval to the Council of the 2022/23 Budget and MTFS 2022/27 Budget Proposals as set out in Appendix 2.

 

4. To propose approval to the Council of the 2022/23 General Fund Revenue Budget as set out in Appendix 1, including specifically a General Fund budget requirement of £262.923m, 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) 2022-2027 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 2022/23 will be £1,484.13 per Band D property, which represents a 1.99% increase on the 2022/23 Haringey element and with an additional 1% 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 79,303 for the financial year 2022/23.

 

8. To propose approval to the Council of the 2022/23 Housing Revenue Account budget as set out in Table 9.4.

 

9. To propose approval to the Council of the Housing Revenue Account Medium Term Financial Strategy (MTFS) 2022-2027 as set out in Table 9.4.

 

10. To approve the changes to the rent levels for residents in temporary accommodation, Council tenants in General Needs and Sheltered/Supported 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 Table 9.3.

 

12. To propose approval to the Council of the 2022/23 – 2026/27 General Fund capital programme detailed in Appendix 4.

 

13. To propose approval to the Council of the 2022/23 – 2026/27 Housing Revenue Account (HRA) capital programme detailed in Table 9.5.

 

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 2022/23 of £282.282m as set out in Appendix 7.

 

17. To note the funding to be distributed to primary and secondary schools for 2022/23 based on the figures advised to Schools Forum and submitted to the Education Funding Agency in January 2022 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 7.

 

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 2022/23 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 2022/23 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 2022/23 Budget and sustainable MTFS over the five-year period 2022/27, to be reviewed and ultimately adopted at the meeting of Full Council on 1st March 2022.

 

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, the estimated impact of wider environmental factors such as the Covid-19 pandemic and the Council’s overall financial position.

 

These final proposals now presented take into consideration the funding allocations announced in the Provisional Local Government Finance Settlement, the responses to the consultation and the Overview & Scrutiny process.