Agenda item
Strategic Overview of the Council's Funding
The committee will receive a presentation providing a strategic overview of the council’s funding. A copy of this presentation is attached for members’ consideration.
Minutes:
Andrew Ward (Head of Finance) delivered a presentation to the committee outlining the council’s funding position, highlighting key risks and obligations, and noting the current level of uncertainty resulting from the absence of the Local Government Finance Bill from the Queen’s Speech on 21 June 2017. The main sources of local government funding were set out and the year on year reduction of local government core funding was illustrated to the committee. Noting the legal budgeting responsibilities of the council, Andrew Ward reminded members that balanced budget had been set for 2017/18 and proposals had been agreed in February 2017 detailing how a balanced budget for 2018/19 would be achieved. These proposals included a council tax increase of 4 per cent, procurement savings of £4.5m and additional income of £1.25m generated through civic enterprise. A budget gap of circa £13m remained to be bridged for 2019/20. In concluding the presentation, Andrew Ward outlined a number of key developments in local government finance including: business rates devolution and the potential to join a London pool if devolution of the rates was to proceed; school funding and the national funding formula; Adult Social Care and NHS integration; and, the Homelessness Reduction Act.
Councillor McLennan (Deputy Leader of the Council) emphasised that the Local Government Association had undertaken a peer review of Brent’s budgetary management and had concluded that the way the council was progressing was good. As the situation regarding the Local Government Finance Bill and devolution of business rates was still evolving, the committee would be updated as soon as clarity was obtained.
In the subsequent discussion, the committee questioned how the council was responding to the current uncertainty. Clarity was sought regarding the reported figure of £4.5m procurement savings and the challenges that this target had presented. Further comment was sought on the £1.25m income to be generated via civic enterprise. It was queried how the council would capitalise on the increased use of Wembley Stadium and particularly, what the revenue benefit was for the council of the use of Wembley Stadium by Tottenham Hotspurs. Questions were raised regarding the anticipated level of revenue from the in-house litter enforcement team, whether this could be maximised by a more aggressive deployment of the team and how this had been accounted for in the budgeting process. The committee questioned what work had been undertaken to identify how the council would meet the £13m funding gap for 2019/2020. A member highlighted the need to safeguard pensions and meet any percentage increase in staff pay and questioned how prepared the council was to meet these eventualities. Members sought information on Brent’s comparative position to other local authorities with regard to per capita cost of services and business rates generated in the borough.
Responding to the queries raised, Andrew Ward advised that officers were monitoring the position regarding the Local Government Funding Bill and clarified that the procurement savings of £4.5m were for the financial year 2017/2018, with further savings to follow in the subsequent year. Althea Loderick explained that the procurement savings sometimes exceeded or fell below the target of 10 per cent per contract but the overall deficit was proportionately redistributed across departmental budgets. Discussing income generated via civic enterprise, Althea Loderick (Strategic Director Resources) emphasised that this would provide a yearly contribution of £1.25m to the council’s budget. There had been a shortfall against this target in the first year of operation and lessons had been learned during this period. More sophisticated market modelling had been undertaken by the council with regard to fees and charges. This had underlined that increasing fees did not always lead to increased income due to the impact on demand. There was also a heightened focus on the council’s strengths, such as delivery of digital services and maximising use of the Civic Centre. The opportunity to market the Civic Centre as a venue for tie-in events for larger Arena or Stadium events was recognised and would be pursued by the new Head of Conference and Events. The projected income for the uniformed litter patrol team had been accounted for within the budget for the Regeneration and Environment department. The Chair highlighted that the committee would receive an update on the working of this new team at its next meeting in September.
Althea Loderick assured the committee that the council’s pension contributions were sufficient and were based upon regular actuarial reviews. The council was also planning for a potential increase of staff salaries beyond the current 1 per cent cap.
During the discussion, officers advised that the following information was not available to share at the current meeting but could be circulated subsequently: an assessment of the revenue benefit and any costs incurred for Brent Council as a result of Tottenham Hotspurs use of Wembley Stadium; a comparative analysis of income from Business Rates across London’s 33 boroughs; and, details of the CIPFA analysis of spend on services per capita for Brent if available.
The committee thanked officers for their contribution to the meeting.
Supporting documents: