Agenda item

To receive information on the council’s current budget delivery and the future strategy.

The committee heard from Councillor Stephanie Cryan, Cabinet Member for Equalities, Democracy and Finance, Clive Palfreyman, Strategic Director of Resources, and Tim Jones, Director of Corporate Finance on the latest financial position in respect of budget delivery and the future strategy.

Councillor Stephanie Cryan advised that the budget scrutiny would be different this year in light of the council agreeing a three-year budget in the previous year. Councillor Cryan advised that there would be no new lines in the budget for this year in terms of scrutinisation of line-by-line items, as there was not going to be any new lines in the budget for this year.

Councillor Cryan reported that at the current moment, for 2025/26 there was a projected budget gap of circa £5m. It was not yet known what the local government provisional settlement would be until December 2024. Based on the autumn statement core spending power would go up by 3.2%, but the councils share of this was not yet known. The committee would be updated once figures were available.

There would be significant funding for homelessness prevention, special education needs and disabilities, and alternative provision, affordable homes programme. Right to Buy reforms were being looked at, with a significant reduction in the right to buy discount – reduce to £16,000 in Southwark. Whilst this was not an abolition of right to buy it was expected that this would stem the numbers of right to buy applications. In relation to employees and National Insurance contributions, the council would need to work through what the annual threshold change would mean within the budget.

Councillor Cryan was confident that the budget gap would be reduced.

Clive Palfreyman, Strategic Director of Resources, informed the committee that the presentation slides circulated to members was an evolved version of the information discussed informally with the committee, and with the main change being the Chancellors statement of the previous week. Clive expressed that the new money set aside for local government was welcomed. He explained that the 1.3% increase in national insurance contributions, and the reduction in threshold would impact on the council quite a bit and departments were yet to define how they will allocate out a small amount of money to cover the public service costs of that.

The policy statement which would set out how monies will be allocated was expected at the end of November, and the local government settlement for Southwark was expected to be received in the week before Christmas. Finalisation of budget plans would take place after Christmas, and a report outlining in a bit more detail where things had got to in relation to financial planning would be submitted to the December cabinet. This year’s budget would be less about savings and more about mitigation activities against areas that are struggling to deliver against their revenue budgets this year, and around the corporate transformation programme which would be the main route for obtaining savings from the organisation into the future.

The chair opened the meeting to questions and discussions which were around the following:

·  Housing Revenue Account savings

·  Right to buy reforms - impact on receipts, and monitoring of applications received before and after the 21 November deadline

·  National insurance contributions rise – whether council has done initial assessments and work being undertaken with private sector partners about impact on them (particularly in the care sector) and work around reviewing staff who the council employs through agencies [individuals employed through umbrella companies having to cover the additional national insurance costs].