Agenda item

To note the local government settlement for 2012/13 and consider the proposed budget for that year. If agreed, the proposed budget will be considered by council assembly in February 2012.

This item had not been circulated five clear days in advance of the meeting. The chair agreed to accept this item as urgent as the council had an obligation to set a lawful budget by the statutory deadlines and ensure all the necessary preparatory administrative and financial arrangements were in place prior to the next financial year. The council also required sufficient time to consider the implications of the government settlement on the budget proposals. Cabinet was also required to recommend a budget to council assembly for approval on 29 February 2012.  All local authorities are required to set their council tax by 11 March 2012. Any delay to this date would mean the council would have to move its instalment date beyond 1 April 2012 resulting in loss of income to the council.

RESOLVED:

1.  That it be noted that the budget principles agreed by cabinet on 21 September 2010, supported by the ten fairer future promises agreed by council assembly on 6 July 2011, have guided and underpinned the process for budget setting.

2.  That it be noted that the final local government grant settlement for 2012/13 was announced on 31 January 2012 by the Department of Communities and Local Government (DCLG) with no changes from the provisional settlement.

3.  That it be noted that the budget consultation on the three year budget 2011/12-2013/14 took place place with residents and community groups from September 2010 to February 2011 and that the feedback from that consultation was given due consideration by cabinet for proposals for 2011/12 and indicative proposals for 2012/13.

4.  That it be noted that subject to agreement by council assembly to the budget recommendations, there will be a need to complete and invoke both statutory consultation procedures where necessary and the council’s own policies and procedures as appropriate, in order to implement the savings and income generation proposals detailed in Appendices C to E of the report.

5.  That it be noted that the Greater London Assembly will set its precept on 9 February 2012, as described in paragraphs 218 to 220 of the report . It is expected that a 1% reduction will be announced, reducing a band D property from £309.82 to £306.72.

6.  That it be noted that because government funding beyond 2012/13 is not known, and is unlikely to be announced until November 2012, the finance director proposes that a single year budget for 2012/13 only will be set. The report sets out changes that are likely to impact on 2013/14 and beyond, but at this stage cannot be quantified. Officers will report back at the earliest opportunity once any announcements are made.

7.  That it be noted that the recommendations from the overview and scrutiny committee of 9 January 2012 are included as appendix F to the report.

8.  That the need to use balances of £4.4m in order to support service delivery and deliver a balanced budget in 2012/13 be noted.

9.  That the confirmation of the payment of New Homes Bonus to the Council in 2012/13, and that £1.5m is allocated to support General Fund services within the revenue budget proposals be noted.

10.  That the need to absorb the impact of inflation within the cash limited budgets proposed within the report (with the exception of that which is contractually committed) as described in paragraphs 51 to 55 of the report be noted.

11.  That the it be noted that new commitments and growth of £10.865m is allocated in 2012/13 to support local needs and priorities.

12.  That it be noted that the budget proposals include accepting the government’s further council tax freeze grant for 2012/13.

13.  That the medium and long term impact of accepting the council tax freeze grant on the council tax base, especially in the context of the grant being removed from 2013/14 be noted.

14.  That it be noted that the finance director recommends the retention of contingency and maintenance of balances to mitigate the funding risks and risks inherent in achieving the high savings targets outlined in the report.

15.  That a £1m community restoration fund be established for 2012/13 only, subject to the council assembly agreeing the revenue budget on 29 February 2011. Details of the fund are set out in paragraphs 145 to 171 of the report.

16.  That the proposals in the report for a balanced budget based on a nil council tax increase for 2012/13 be agreed for recommendation to council assembly on 29 February 2012. Budget schedules are set out in Appendices A to E of the report.