Members of the Committee are requested to bring their copy of the agenda for the Executive meeting on 15th January 2020.
Minutes:
The Committee considered the following reports on the Part 1 agenda for the meeting of the Executive on 15 January 2020
(6) DRAFT 2020/21 BUDGET AND UPDATE ON THE COUNCIL’S FINANCIAL STRATEGY 2021/22 TO 2023/24
Report FSD20008
The Committee considered a report setting out the initial draft 2020/21 Budget, including the full-year effect of changes agreed as part of the 2019/20 Council Tax report and 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 for the next few years by forecasting the level of available resources and the budget pressures. The views of PDS Committees would be sought prior to the next meeting, when the Executive would make recommendations to full Council on the 2020/21 Council tax and Adult Social Care precept levels.
The report provided details of the Provisional Local Government Finance Settlement 2020/21 (published on 20th December 2019) which represented a one year settlement, the longer term spending review having been postponed until 2020. The outcome of the Fair Funding Review and Devolution of Business Rates had been delayed by one year until 2021/22.
There were still outstanding issues and areas of uncertainty with any further updates included in the Council Tax report to the next meeting.
In opening the discussion the Chairman noted the big jump in the anticipated budget deficit in 2023/24.
In reviewing the draft revenue budget for the Resources, Commissioning and Contracts Management Portfolio, the Chairman would be writing to the chief Executive asking for an explanation of the 10% increase in his budget.
In response to a question, the Director of Finance explained that the reference to salary vacancies throughout the draft budget related a report presented earlier in the year concerning the Chief Executive’s restructure and resultant savings for the Council. The Director of Finance acknowledged that services would have to manage within a tighter financial envelope but the challenge for this budget was managing the deficit and identifying options for addressing the deficit.
Members congratulated Officers on delivering a balanced budget in light of the range of issues associated with fairer funding. The Director of Finance confirmed that the Council was in an enviable position but Officers were not complacent and were aware of the financial challenges on the horizon. The Council continued to be very active on the issue of fairer funding at both Officer and Member level with previous lobbying resulting in transitional funding.
The Chairman emphasised that individual PDS Committee should look at the draft budget in detail and consider ways to mitigate unfunded growth and reduce pressure on growth.
RESOLVED: That the Executive be recommended to
1. Agree the initial draft 2020/21 Budget as detailed in Appendix 7 to the report, including the provision for an Education Funding Risk Reserve, IBCF hospital discharge funding reserve, Carbon Neutral Initiatives Fund and setting aside New Homes Bonus funding for housing investment.
2. Refer the initial draft 2020/21 Budget for each portfolio to the relevant PDS Committees for consideration.
3. Note the financial projections for 2021/22 to 2023/24.
4. Note that there are still areas of financial uncertainty which will impact on the final 2020/21 Budget.
5. Delegate the setting of the schools budget, mainly met through Dedicated Schools Grant, to the Children, Education and Families Portfolio Holder, allowing for consultation with the Schools Forum (section 11 of the report).
6. Note that the outcome of consultation with PDS Committees will be reported to the next meeting of the Executive.
7. Note the outcome of the consultation meetings (Appendix 9 to the report).
8. Agree the proposed contribution of £247,844 in 2020/21 to the London Boroughs Grants Committee (section 10 to the report.)
9. Note the outcome of the Provisional Local Government Finance Settlement 2020/21, as detailed in the report.
10. Note the budget gap remaining of an estimated £16.9m per annum by 2023/24 and that any decisions made for the 2020/21 Budget will have an impact on the future year projections.
11. Note that any final decision by the Executive on recommended Council Tax and Adult Social Care Precept levels to Council will normally be undertaken at the next meeting of the Executive.
(7) BIGGIN HILL AIRPORT LIMITED (BHAL) – LANDLORD’S CONSENT TO NEW HOTWL AND AVIATION COLLEGE
Report DRR19/062
Biggin Hill Airport Limited (BHAL) had requested that the Council gives Landlord’s Consent under the terms of the lease between BHAL and the Council for the development of a new hotel and a separate aviation college at the airport.
In response to a question, the Director of Corporate Services confirmed that there was some scope for negotiation and the Assistant Director for Strategic Property in consultation with the Portfolio Holder could agree final contractual terms.
The Chairman expressed concern at the possibility of only a peppercorn rent being charged in the event of a change of use from an Aeronautical College and therefore proposed that an additional recommendation be made to the Executive to the effect that market rent be charge, reduced to zero whilst the site was used for the purpose of an Aeronautical College. The proposal was seconded by Councillor Allatt and the Committee agreed the additional recommendation.
The Committee noted that the lease also included a turnover rent calculation and this was a significant benefit to the Council.
RESOLVED that the Executive be recommended to
1. Grant Landlord’s consent for the hotel development.
2. Vary the terms of the lease to permit the development of the aviation college and delegate authority to the Assistant Director, Strategic Property, to finalise the conditions subject to which consent is given, subject to the agreement of the Resources, Commissioning and Contract Management Portfolio Holder.
3. Agree that market rent be charge, reduced to zero whilst the site is used for the purpose of an Aeronautical College
(8) CENTRAL DEPOT WALL RECONSTRUCTION: REQUEST FOR ADDITONAL FUNDING
At its meeting on 28th March 2018 the Executive had approved that an additional sum of £500k be added to the £216k already available for the reconstruction of a retaining wall at the Central Depot. Additional enabling works were required and tenders had been sought on the basis of an amended specification, for which additional funding was required.
The proposed works involved the demolition of some outbuildings, construction of a new retaining wall, formation of a concrete hardstanding area to replace the ground floor slab and external hardstanding and remedial repairs to the boundary wall.
In response to a question concerning why costs had increased, the Senior Property Manager explained that this was an inherently higher risk site and there had been a need to change the contract specification and there had been more enabling work that initially anticipated. In addition there was now a need to provide some container accommodation.
In response to a question from the Chairman, the Senior Property Manager confirmed that £65,000 was for contingency. The budget for the work was for the whole scheme including the consultancy service.
RESOLVED that the Executive be recommended to
1. Approve funding of £115k from the earmarked reserve for the Infrastructure Investment Fund to undertake the works.
2. Delegate authority to the Director of Environment and Public Protection to authorise any variations against the contract within the contingency sum.