Issue - meetings
Budget strategy update
Meeting: 19/07/2012 - Budget and Finance Overview and Scrutiny Committee (Item 5)
5 Budget Strategy 2013/14 to 2015/16 PDF 107 KB
This report was presented to the Executive on 16 July 2012. The report sets out the financial prospects for the Council for the next three years.
Additional documents:
- budgetappendix1, item 5 PDF 184 KB
- budgetapppendix2, item 5 PDF 21 KB
- budgetappendix3, item 5 PDF 43 KB
Minutes:
Mick Bowden (Deputy Director of Finance and Corporate Services) introduced the report before members which set out the financial prospects for the Council for the next three years. The report had previously been submitted to the Executive on 16 July 2012 and linked with the localisation of council tax benefit which was seen as a key risk in the budgets for future years.
The Deputy Director of Finance and Corporate Services outlined that although the £42m of savings identified in 2011/12 were achieved leaving the council in a stronger position to face the challenges ahead, the council was not yet half way through the 28% of savings that had to be made due to Government cuts. It was acknowledged that there was a permanent problem from weak GDP growth, with a 13% loss of trend output, with the economy not reverting back to trend as quickly as had been the case in previous recessions. Additionally, the gap in public spending and receipts was highlighted and, despite action being taken, there was a long way to go before the gap could be closed and debt levels may not be back to ‘normal’ until 2035. Mick Bowden highlighted the pressures placed on spending due to demographic changes in age related spending, with increased expenditure in health, long term care and pensions, resulting in the need to address the challenge of social care and long term structural changes in public spending.
The Deputy Director of Finance and Corporate Services explained that central government savings targets were lower and later than those for local government. Overall central government achieved a £5.3bn underspend in 2011/12, with the NHS delivering the biggest underspend in cash terms although relatively small compared to its overall budget. It was highlighted that Brent’s approach to managing its budget had been successful resulting in £42m savings being delivered as well as a total underspend on services of £1.2m. It was noted that the funding streams available to schools had changed with an underspend of £1m being achieved on a like for like basis. The outturn for the HRA was in line with forecast and under the new financial arrangements a 30 year business plan is being developed. In the current year emerging cost pressures had been identified by directors, in particular in relation to adult social care, children’s social care, the one council programme and changes to housing benefit and temporary accommodation, although borrowing could now be achieved at lower interest rates.
Mick Bowden drew the committee’s attention to the LGA funding model which addressed the pressures faced by councils’ nationally and how it relates to spending, with a projection that spending will be geared towards children, adult and social care as well as environment, particularly waste, resulting in reduced spending for other services. The LGA model highlighted that efficiency savings would not be enough with reform to social care being required and public services working together and potentially cutting services to meet the demanding spending costs regarding age related services ... view the full minutes text for item 5
Meeting: 16/07/2012 - Executive (Item 9)
9 Budget strategy update PDF 107 KB
This report sets out the financial prospects for the Council for the next three years. It seeks Executive approval for the overall budget strategy based on the One Council Programme and the delivery of the Borough Plan.
Additional documents:
Decision:
(i) that the latest forecast for the Council’s revenue budget for 2013/14 to 2015/16 at Appendix A and the assumptions used to derive this be noted;
(ii) that the overall budget process set out in the report from the Director of Finance and Corporate Resources be endorsed;
(iii) that the proposed budget timetable be noted.
Minutes:
The report from the Director of Finance and Corporate Services set out the financial prospects for the council for the next three years. It sought approval for the overall budget strategy based on the One Council Programme and the delivery of the Borough Plan. Councillor R Moher (Lead Member, Finance and Corporate Resources) referred to the context of the budget strategy and the central government’s spending review which was both tight and front loaded. The council had so far made £42m of spending cuts while protecting services and further reductions were anticipated. A budget gap was anticipated by 2015/16 to further increase by expected increases in homelessness, adult and children social care costs and also risks associated with waste and recycling. Other factors likely to affect the budget position arising from legislative changes were the localisation of Council Tax, housing benefit changes and the business rate retention scheme. Councillor R Moher referred to the need for further savings to be identified and the need to deliver services at lower costs while reflecting council priorities. She drew members’ attention to the budget timetable in the report.
Councillor J Moher highlighted the need for the public to understand the impact of the major spending cuts introduced by central government and the adverse impact on the council. He made specific reference to the assumed significant reductions in formula grant £152.086m in 2013/14, £138.958m in 2014/15 and £136.383m in 2015/16. The Director of Finance and Corporate Services clarified that the formula grant reduction in the current year would have been £18.9m. Councillor R Moher added that the situation was likely to worsen as the first batch of 2011 census figures showed that Brent's population had risen significantly and that there was a gap of approximately 59,000 between the population and the figure used by central government to calculate grant funding.
RESOLVED:-
(i) that the latest forecast for the Council’s revenue budget for 2013/14 to 2015/16 at Appendix A of the report from the Director of Finance and Corporate Services and the assumptions used to derive this be noted;
(ii) that the overall budget process set out in the report from the Director of Finance and Corporate Resources be endorsed;
(iii) that the proposed budget timetable be noted.