Agenda item

To note issues associated with the policy and resources strategy and agree recommendations.

It was not possible to circulate this report five clear days in advance of the meeting. The chair agreed to accept the report as urgent as the council were committed to publishing budget proposals at the earliest possible opportunity to ensure that they were available to the public for comments and questions. The report needed to be considered by cabinet prior to presentation of budget figures to cabinet on 6 February and to council assembly on 21 February.  Also, under the council’s constitution, there is a requirement for the overview and scrutiny committee to review and challenge budget proposals and this was due to take place on 29 January 2018.

RESOLVED:

1.  That it be noted that the provisional settlement was received on 19 December 2017 and that the key headlines are set out in the report (paragraphs 36-38 of the report).

2.  That it be noted that the provisional settlement includes an increase to the council tax referendum threshold from 2% to 3%; this is in recognition of social care and inflationary pressures.

3.  That it be noted that no changes were made to the adult social care precept arrangements, which remain at a maximum of 3% in 2018-19.

4.  That it be noted that the section 151 officer has proposed to increase the Southwark element of the council tax in line with the government threshold by 2.99% in recognition of the spending pressures in services which protect and support vulnerable children and families; council tax increase will continue to remain below consumer price index (CPI) (paragraphs 56-59 of the report).

5.  That it be noted that this budget also proposes to use the full flexibility offered by the government to support social care through an increase in the adult social care precept, equivalent to 3% of council tax, on the basis that these additional funds will be used exclusively for adult social care (ASC)  (paragraphs 54-55 of the report).

6.  That the budget options proposed to achieve a balanced budget 2018-19, including new commitments, savings, efficiencies and income generation. (Appendices C to F of the report) be noted.

7.  That it be noted that the current proposed budget options include an increase in the children’s and adults’ services budgets of £17.1m, funded in part by £12.584m Better Care Fund and the £2.9m increase in the ASC precept which has been passported fully to adult social care.

8.  That it be noted that the general fund budget proposals for 2018-19 contained within the report have been updated post settlement as follows:

·  Revenue Support Grant (RSG) has been replaced by business rate baseline funding with the implementation of the London Business Rate pooling pilot in 2018-19 (paragraphs 39,65 of the report)

·  Resources arising from the provisional settlement on 19 December (Appendix A of the report) have reduced by £12.19m from 2017-18 (excluding Better Care Fund)

·  Improved Better Care Fund resources totalling £12.584m (including the supplementary allocation of £4.497m announced in the  spring 2016 budget)

·  Retained business rates growth of £20.996m (paragraphs 64-67), an increase of £12.297m over 2017-18 arising from proceeds generated by continued regeneration in the borough, plus an estimated surplus brought forward of £3.970m

·  An assumed increase in Council Tax of 2.99%, below the cap of 3% laid down by the Department for Communities and Local Government (DCLG) (paragraphs 51-53, 56-59 of the report)

·  Further resources from the adult social care precept of £2.9m, again passported in full to adult social care for 2018-19 (paragraphs 54-55 of the report)

·  Estimated council tax revenue of £104.460m (of which £2.9m is represented by the additional ASC precept and £2.9m by Southwark council tax increase); estimated collection fund surplus of £5.663m in part attributable to a review of the provision for bad debt

·  Planned contingency to be maintained at a level of £4m to mitigate underlying budget risks (paragraph 107 of the report).

9.  That it be noted that the following savings, commitments and pay and price pressures have been proposed to help ensure the delivery of a balanced budget in 2018-19 (Appendices C – F of the report):

·  Efficiency savings of £10.777m

·  Income generation of £7.281m

·  Savings impacting on services of £0.399m

·  Commitments of £32.565m

·  Pay Awards (assumed 2%) of £4.2m

·  Contractual inflation of £3.5m.

10.  That it be noted that in order to ensure that the base budget is on a secure financial footing that a number of commitments are proposed for 2018-19 totalling £32.565m, including:

·  £19.682m for ASC which are funded in the main from the £12.584m from the Better Care Fund and £2.956m through the Adult Social Care Precept

·  £5.833m for children’s social care and education services

·  £0.215m to further support spending pressures on No Recourse to Public Funds (NRPF) and £0.750m temporary accommodation

·  £2.202m for corporate facilities management and ICT in support of the council’s modernisation agenda

·  £1.600m commitment for the anticipated costs of borrowing to finance the significant capital programme.

11.  That it be noted that the current pay offer of 2% for local government employees has been incorporated into these budget options; however there is continued uncertainty regarding pay negotiations and therefore it is proposed that any further increases are met from the corporate contingency budget in 2018-19 (paragraphs 78-79 of the report).

12.  That it be noted that the current budget proposed for 2018-19 is now balanced, after the incorporation of a number of updated proposals and information following the provisional settlement.

13.  That the departmental narratives (Appendix B of the report) and the equality analyses provided for the budget proposals be noted.

14.  That the consultation that took place prior to agreeing the indicative budget options for 2017-18 and 2018-19 and that further consultation will be undertaken for new budget options where necessary or appropriate (paragraph 108 of the report) be noted.

15.  That it be noted that  this report will be considered by overview and scrutiny committee on 29 January 2018 and that any recommendations arising will be incorporated into the final report to cabinet on 6 February 2018 for recommendation to council assembly on 21 February 2018 (paragraph 110 of the report).

16.  That the proposals regarding pooling of London Business Rates (paragraphs 117-123 of the report) be noted.

17.  That under Part 3C of the constitution new fees and charges and agreement of charging levels in line with the medium term resources strategy be approved, and that the fees and charges presented in Appendix G  of the report be agreed, and that the level of those fees which cabinet is not permitted to set (paragraphs 99-101 of the report) be noted.

18.  That it be noted that cabinet will receive a refreshed outlook of the financial position for the council and especially with regard to local government financing for 2019-20 and beyond in the summer of 2018.

19.  That officers be instructed to:

·  Delete saving reference 301 “Review & realignment of community budgets” £260,000 from Appendix E of the report

·  Insert new saving “Realignment of community budget in line with savings already achieved” £151,000 in Appendix C of the report

·  Bring forward alternative proposals to compensate for £109,000 reduction of savings.