Agenda item

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

Following public consultation and Scrutiny Review, this report will set out the details of the proposed budget for 2023/24 and MTFS through to 2027/28, including savings, growth and capital proposals. The report will also set out details of funding for 2023/24 and, if available, the remainder of the planning period and highlight areas of risk.

*Table 9.2 was updated on the 31.1.2023.

The Cabinet Member for Finance and Local Investment introduced the report which set out details of the final proposed General Fund (GF) Budget for 2023/24; the Medium Term Financial Strategy (MTFS) 2023/28; the draft HRA Budget 2023/24 and it’s draft Business Plan including estimated income (funding) and expenditure adjustments, as well as the final proposed capital programmes for both funds.

The Cabinet Member commented that despite a very challenging year, the Council were able to present a balanced budget, alongside improving the reserve position.  She noted however that there were still some very difficult decisions ahead before the Council would become financially sustainable in the long term.

The Cabinet Member also pointed out an error in the first recommendation which should read:

“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 2023/24 nor to the MTFS 2023/28.”

Councillor Connor, Vice-Chair of Overview and Scrutiny Committee, presented the budget scrutiny recommendations as set out in appendix 9 of the report.  The Cabinet acknowledged the recommendations made, and had no questions for Councillor Connor.

In response to questions from Councillor Cawley-Harrison, the following was noted:

-       With regard to the increase in interest rates in relation to the Public Works Loan Board, the assumptions made when setting the budget for next year and future forecasts are based on both officer understanding of the market, and external advice from treasury advisors.  In giving their advice, they are not only considering interest rates at the time, but also looking to what is expected to happen in the market over the forthcoming period.  The Council would continue to review market conditions and adjust forecasts based on the information available at the time.

-       The savings predicted to be made following the waste services review would be from a combination of different elements, some of which would be contracts and the opportunity to negotiate better terms.

-       The total of Haringey’s remaining reserves would be included in the report to Full Council.

RESOLVED to

1.         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 2023/24 nor to the MTFS 2023/28.

2.         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.

3.         Propose approval to the Council of the 2023/24 Budget and MTFS 2023/28 Budget new growth and savings proposals as set out in appendices 2 and 3.

4.         Propose approval to the Council of the 2023/24 General Fund Revenue Budget as set out in Appendix 1, including specifically a General Fund budget requirement of £279.517m, but subject to final decisions of the levying and precepting bodies and the final local government finance Settlement.

5.         Propose approval to the Council of the General Fund Medium Term Financial Strategy (MTFS) 2023/2028 as set out in Appendix 1.

6.         Propose approval to the Council that the overall Haringey element of Council Tax to be set by London Borough of Haringey for 2023/24 will be £1,558.0 per Band D property, which represents a 2.99% increase on the 2022/23 Haringey element and with an additional 2% for the Adult Social Care Precept amount.

7.         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 79,718 for the financial year 2023/24 (Appendix 11).

8.         Propose approval to the Council of the 2023/24 Housing Revenue Account budget as set out in Table 9.3.

9.         Propose approval to the Council of the Housing Revenue Account Medium Term Financial Strategy (MTFS) 2023/2028 as set out in Table 9.3.

10.      Approve the changes to the rent levels for residents in temporary accommodation, Council tenants in General Needs and Sheltered/Supported homes reflecting the temporary amendment to the government’s policy on maximum annual increases for social housing rents which set a 7% ceiling on rent increases for 2023/24 only. This will increase the average weekly rents as set out in Tables 9.1. 

11.      Agree the changes to service charges to tenants as set out in Table 9.2.

12.      Propose approval to the Council of the 2023/24 – 2027/28 General Fund capital programme detailed in Appendix 4.

13.      Propose approval to the Council of the 2023/24 – 2027/28 Housing Revenue Account (HRA) capital programme detailed in Table 9.4.

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

15.      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.      Propose to the Council the Dedicated Schools Budget (DSB) allocations for 2023/24 of £298.163m as set out in Appendix 7.

17.      Note the funding to be distributed to primary and secondary schools for 2023/24 based on the figures advised to Schools Forum and submitted to the Education Funding Agency in January 2022 set out in Section 10.

18.      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.      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.      Delegate to the Section 151 officer, in consultation with the Cabinet Member for Finance, the power to make further changes to the 2023/24 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 2023/24 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.  If agreed by Cabinet, it will then be presented to Full Council on 2 March 2023 for review and ultimate adoption.

Alternative options considered.

The Cabinet must consider how to deliver a balanced 2023/24 Budget and sustainable MTFS over the five-year period 2023-28, to be reviewed and ultimately adopted at the meeting of Full Council on 02 March 2023.

The Council has developed the proposals contained in this report in light of its forecasts for future income levels and service demand.  These take account of the Council’s priorities, the extent of the estimated funding shortfall, the estimated impact of wider environmental factors such as inflation and legacy Covid-19 pandemic, and the Council’s overall financial position. It is this appraisal that has led to these options being presented in this report.

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

The Housing Revenue Account section of the report includes a consideration of the challenges presented by adverse economic changes on the HRA, including the increased cost of borrowing and inflation, meaning that the Council has had to consider how best to be able to maintain financial sustainability and continue a strong new build programme. A number of options have been modelled, including for some new homes, changing from formula rent to Shared Ownership or London Living Rent or London Affordable Rent. The option which best ensures the long-term sustainability of the HRA is to use London Affordable Rent for some homes.