Agenda item

Report FSD18001

The Executive considered the initial draft 2018/19 Budget including the full year effect of changes agreed as part of the 2017/18 Council Tax report including savings approved during the year with the resultant impact on the Council’s medium term budget gap. A key part of the financial strategy was to highlight the budget issues that would need to be addressed by the Council over the coming financial years, by forecasting the level of available resources from all sources and budget pressures relating to revenue spending. Details of the capital programme would be reported to the Executive separately.

The report provided details of the third year of the four year local government finance settlement (2018/19 to 2019/20), the impact of the Chancellor’s Autumn budget 2017 and the provisional local Government Financial Settlement 2018/19. There were still outstanding issues and areas of uncertainty remaining. Any further updates would be reported to the Executive’s next meeting. 

The views of all PDS Committees would be sought prior to the Executive making recommendations to Council on the 2018/19 Council Tax and Adult Social Care precept levels.

The report had been scrutinised by the Executive and Resources PDS Committee on 4^th January 2018. The Committee had supported the recommendations with two additional suggestions – that the Council should consider raising the empty homes premium to 100% of Council Tax, and to note that action will need to be taken by Chief Officers to fund increasing costs through alternative savings in the event that inflation exceeds the budget assumptions. It was accepted that raising the empty homes premium could not be implemented for 2018/19 but Members agreed that this should be fully investigated for possible implementation for 2019/20.

The Portfolio Holder for Resources drew attention to the benefits of a four year financial settlement, and emphasised how the Council was now looking for opportunities and innovations, rather than just efficiencies. He confirmed that he was assuming a 2% pay increase for staff in 2018/19 – he would make a full statement on this to Council.

In view of the reservations about the London Business Rates pilot pooling arrangements it was suggested that the Executive should only agree to the proposals “in principle.” However, officers advised that this would not provide sufficient authority, and would require a further meeting of the Executive to provide final approval. Members were reassured that the delegation arrangements provided sufficient protection and the Leader accepted that advice.  It was also confirmed that the arrangement committed the Council for one year only. 

RESOLVED that

(1) The initial draft 2018/19 Budget as detailed in Appendix 7 of the report be agreed.

(2) The initial draft 2018/19 budget for each portfolio be referred to the relevant PDS Committees for their consideration.

(3) The financial projections for 2019/20 to 2021/22 be noted.

(4) It is noted that there are still areas of financial uncertainty which will impact on the final 2018/19 Budget and future year forecasts.

(5)The setting of the School Budget, mainly met through Dedicated Schools Grant, be delegated to the Education, Children and Families Portfolio Holder, allowing for consultation with head teachers, governors and the Schools Forum (section 12 of the report).

(6) It is noted that the outcome of consultation with PDS Committees will be reported to the next meeting of the Executive.

(7) The outcome of the public consultation meetings detailed in Appendix 10 be noted.

(8) The proposed contribution of £248,033 in 2018/19 to the London Boroughs Grants Committee (as in section 11 of the report) be agreed. 

(9) The outcome of the Provisional Local Government Financial Settlement 2018/19 as detailed in the report be noted.

(10) The significant budget gap remaining of an estimated £38.7m per annum by 2021/22 be noted, and that any decisions made for the 2018/19 Budget will have an impact on the future year projections.

(11) It is noted that any final decision by the Executive on recommended Council Tax and Social Care Precept levels will normally be undertaken at the next meeting of the Executive.

(12) Authority be delegated to the Director of Finance in consultation with the Director of Corporate Services, the Leader of the Council and the Resources Portfolio Holder in relation to the operational details of the London Business Rates pilot pooling arrangements with the participating authorities.

(13) It is agreed that the Council enters into a Memorandum of Understanding with the participating authorities as may be necessary to implement and/or regulate the pool and to delegate authority to the Director of Finance in consultation the Resources Portfolio Holder and with the agreement of the Leader of the Council to finalise the arrangement on behalf of the Council.

(14) It is noted that action will need to be taken by Chief Officers to fund increasing costs through alternative savings in the event that inflation exceeds the budget assumptions.

(15) The option of raising the empty homes premium to 100% of Council Tax be investigated for possible implementation in 2019/20.