Agenda item

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

The report sets out details of the proposed budget for 2024-25 and MTFS to 2028-29, including savings, growth and capital proposals. The report will also set out details of provisional funding for 2024-25 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 report also includes details of the proposed HRA budget for 2024-25 and MTFS to 2028-29, including proposed 5-year capital investment and funding.

It sets out the proposed changes to the rent levels for Council tenants in General Needs and Sheltered/Supported homes, and residents in temporary accommodation

The Cabinet Member for Finance and Local Investment introduced the report which set out details of the draft General Fund (GF) Budget for 2024/25; the Medium-Term Financial Strategy (MTFS) 2024/29; the draft HRA Budget 2024/25 and it’s draft Business Plan including estimated income (funding) and expenditure adjustments, as well as the draft capital programmes for both funds. The report sought approval to:submit the detailed budget proposals to Overview and Scrutiny Committee and its Panels in December 2023 and January 2024 for scrutiny and comments; and to commence public consultation on the 2024/25 Budget and MTFS 2024- 29.

The Cabinet Member highlighted that Councils in England faced a funding gap of £4bn over the next two years. Next year’s budget was being developed against a backdrop of continued government austerity and increasing demand for the services. The recent government autumn statement, which did not provide local authorities with additional funding or the assurance that further funding, would be available in the Local Government Finance Settlement expected in January 2024.

It was noted that in the coming financial year the Council would need to fill a substantial financial gap but it was not an outlier and not at the position of issuing a section 114 notice and would be in a position to be able to put forward a budget package to Full Council for approval. Officers were working hard to put forward proposals to plug this gap.

The Cabinet Member continued to set out the stark national economic context that the Council and other Councils were working in which had manifested over a number of years of government cuts in funding, increasing in demand and cost of Adult social care, cost of living crisis, inflation rises and impact of increased interest rates as a result of the mini budget of 2022.

The Cabinet Member outlined that the budget priorities for spend responded to these economic factors and £25.5m growth has been built into this draft budget solely for the demand led services: £20.4m for Adult social care; £3.0m for Temporary Accommodation and £2.1m for Children’s.

In response to questions from Cllr das Neves, Cllr Gordon, Cllr Hakata and Cllr Cawley- Harrison, the following information was provided.

-       Recognised that Adults Services had done a lot of work on addressing the overspend and to reducing the cost of Adult social care. There was assurance that there were a number of work streams in place to continue this focus and Council had worked hard to ensure that there was a right size budget available to Adults service and this meant improved forecasting so help understand the likely expected budget pressures coming through to the service in the short, medium, and long term. An example of this was young people who were coming through from Children Services with significant needs and that would need continued support needed from Adult’s Services once they turned 18. This cohort was already recognised as a growth area and work on right sized budget would help in some way alleviate reliance on external funding and help manage growth in this budget area.

-       Noted the setting the Council’s budget was always going to be challenging because the lack of resources provided to local government by central government. The core government funding Haringey received was a £143m less in real terms this year than it was in 2010/11. Additional issues for consideration in this budget were: Inflation leading to significant rises in costs, continued high demand for Adult Social Care which makes up a significant percentage of the total budget impact of the housing crisis leading to increased homelessness and rising rents, rising interest rates leading to higher borrowing costs,  and the negative impact of the cost-of-living crisis.

-       The Assistant Director for Adults Service further emphasised the significant increase in residents needing Adult social care support from the Council and at a time of crisis in local health care services.

-       Assurance was provided that no library buildings would be closedand there would be careful analysis to inform the model of delivery for each library which would reflect its use and be informed by the footfall analysis.

-       The capital investment in leisure provision responded to around both energy requirements, dealing with dilapidations and improvements to the buildings. All of the options for future service delivery would have some capital investment. The continuation of an external contract or insourcing would have the same capital impacts. In terms of the revenue implications cost, there is an estimated £200k to £300k increased cost against current levels with a contracted service subject to a full procurement exercise and enough bids being received at the projected cost levels. However, the benefits of the insourced service were outlined in the earlier item and meeting Council priorities for health and wellbeing.

-       There had been a lot of work completed by senior officers to reduce the spend and use of agency staff. It was acknowledged that this spend and use was high. It was important to consider the factors leading to agency staff usage, which was filling in recruitment gaps and access to specialist staff and also a symptom of the recruitment and retention issues the Council and other Councils had as well. There was a drive to recruit agency staff to permanent roles and focus on this area would continue as would support the Council savings initiatives going forward.

RESOLVED

1. To note the draft 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 2024 and to incorporate further budget change as required;

2. To note the Draft General Fund 2024/25 Budget and MTFS 2024-29 detailed in this report and Appendix 1;

3. To note the Draft revenue and capital budget growth proposals summarised in Sections 7 and 8 and Appendices 2 and 5 and note the draft revenue savings proposals summarised in Section 7 and Appendix 3;

4. To note the Draft General Fund Capital Programme for 2024/25 to 2028/29 as set out in Appendix 4;

5. To note the Draft Housing Revenue Account (HRA) Revenue and Capital Programme proposals (which includes the proposed rents and service charges) and HRA Financial Plan as set out in Section 9;

6. To note the 2024/25 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 2023 and January 2024 for Scrutiny and comments;

8. To agree to commence consultation on the 2024/25 Budget and MTFS 2024- 29;

9. To note that an updated General Fund and HRA 2024/25 Budget and MTFS 2024-29 will be presented to Cabinet on 06 February 2024 to be recommended for approval to the Full Council meeting taking place on 04 March 2024;

10. To delegate the final decision on whether or not to participate in the proposed eight borough business rates pool from 1 April 2024 to the Director of Finance in conjunction with the Lead Member for Finance and Local Investment.

Reasons for decision

The Council has a statutory obligation to set a balanced budget for 2024/25 and this report forms a key part of the budget setting process by setting out the forecast funding and expenditure for that year at this point. 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. It should be noted that the final version of this will be presented to Full Council on 4 March 2024.

Alternative options considered

The Cabinet must consider how to deliver a balanced 2024-25 Budget and

Sustainable MTFS over the five-year period 2024-29, to be reviewed and

Ultimately adopted at the meeting of Full Council on 04 March 2024.

The Council has developed the proposals contained in this report in light of its current 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, interest rates, the cost of living crisis on households and, in some

Service areas, the legacy of the Covid-19 pandemic; and finally, the

Council’s overall financial position. It is this appraisal that has led to these

Options being presented in this report. These will be reviewed and, where

necessary, updated in advance of the final Budget report being presented.

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