Agenda item
Budget Scrutiny Task Group Report
This report set out the findings and recommendations of the recent budget scrutiny task group.
Minutes:
The Chair introduced the report of the Task Group, highlighting that it had been finalised prior to the provisional Local Government Finance Settlement announced on 19 December 2017. The Settlement provided an option to certain councils to increase council tax by a further one per cent, over and above the existing maximum increase of 3.99 per cent per year. Councillor McLennan (Deputy Leader), Althea Loderick (Strategic Director, Resources) and Ravinder Jassar (Head of Finance) were present to address members’ queries.
Councillor McLennan reminded the committee that the Council had set a two year budget in 2017/18 and acknowledged that this was reflected in the approach taken by the Budget Scrutiny Task Group. A decision had not yet been made regarding the option to add a further one per cent to the planned level of Council Tax increase for 2018/19. At the invitation of the Deputy Leader, Ravinder Jassar provided a brief commentary on the 12 recommendations of the Budget Scrutiny Task Group, confirming that there was broad agreement to all of the recommendations and that a number were already in place. With reference to Recommendation 1, Ravinder Jassar explained that the council’s medium term financial planning encompassed planning, as far as reasonably possible, for the consequences of Britain’s exit from the European Union (EU) by holding an adequate level of reserves and building contingencies into the base budget for known and measurable impacts such as inflation. Recommendation 2 had also been met, as London Councils had agreed to a sub-regional veto with regard to the Strategic Investment pot produced via the London business rates pool. In response to a query, it was clarified that the decisions regarding these funds would require a two thirds majority vote to be carried. The Government had not yet confirmed whether any restrictions would be placed on funds drawn from the London business rates pool.
Members subsequently questioned the implications of bringing procurement back in-house for the 2017/18 and 2018/19 budgets, with particular comment sought on the challenging savings in place for the department. Further detail was sought regarding the risks that Britain’s exit from the EU posed for Brent’s local economy and the mitigating actions identified. Concern was expressed regarding the council’s level of preparation for these risks and it was queried how Brent’s planning compared with that of other councils, whether the council undertook scenario planning and if the local economy was prepared for related shocks. It was noted that the Economic Prosperity Board had undertaken an impact assessment on the implications of Britain’s exit from the EU on the workforce. A query was raised regarding whether the implications of the role out of Universal Credit had been factored into the budget.
Several queries were raised regarding the option to further increase council tax. Members questioned what process would be undertaken if the option was to be pursued, whether the Localism Act provided any powers to place a one-off levy on those in the highest council tax banding and how the impact on Brent’s resident’s would be considered.
Responding to the queries raised Althea Loderick advised that the savings targets for the Procurement team remained unchanged and as with any savings target across all departments, any shortfall had to be reallocated. The proposal to bring the Procurement team back in-house was based on identified support requirements and the desire for the council to be able to steer any additional investment needed. It was confirmed that the final Budget report that would be presented to Full Council in February 2018 would include details on the Council’s savings targets, including procurement savings.
Addressing the committee’s questions regarding Britain’s exit from the EU, Ravinder Jassar advised that the impact of this on the local or national economy or on Local Government funding was not yet known. All it was possible to do at this time was to plan in response to known factors, such as the Local Government Finance Settlement, and to ensure sufficient contingencies were in place to address any disruption in funding. A key, measurable risk of Britain leaving the EU could be the impact on interest rates and inflation. When the decision to leave the EU was announced the value of the pound fell which has led to an increase in inflation and in recognition of this, the council, as part of the its budget planning process, set aside monies to ensure that there are sufficient funds to meet this additional cost.. Ravinder Jassar advised that he understood that other boroughs were taking similar approaches to planning for risks associated with Britain leaving the EU. The council took part in a London wide exercise to stress test financial plans to ensure it was robust. Councillor McLennan emphasised that it would be possible to undertake more informed planning once the negotiations for the post-leave settlement/agreement had begun. Althea Loderick added that scenario planning was undertaken as part of the work in building the corporate risk register and emergency planning, which were reviewed via the Audit Committee. It was agreed that the risk register would be shared with the committee for members’ consideration.
Ravinder Jassar confirmed that the impact of the roll out of Universal Credit had been factored in to the Customer Services budget.
Speaking to members’ questions regarding council tax, Councillor McLennan reiterated that no decision had yet been taken and advised that consultation was due to begin via the Brent Connects forums. Work was also underway with the Partnership and Engagement team to explore other mechanisms for consultation. It was anticipated that most London Councils would take up the option of the additional increase. Ravinder Jassar added that the Government’s financial modelling plans had assumed that all councils would take the option to increase council tax by the further one per cent. Peter Gadsdon advised this would equate to approximately £1.1million. Althea Loderick confirmed that the council did not have any powers to implement a one-off levy.
The committee welcomed the report of the Budget Scrutiny Panel and RESOLVED:
i) That the report of the Budget Scrutiny Panel and the 12 recommendations detailed therein, attached as appendix A to the report from the Director of Performance, Policy and Partnerships, be endorsed and referred to Cabinet for consideration;
ii) That the Strategic Director of Resources and Deputy Leader provide an update to the committee on the implementation of the recommendations of the Budget Scrutiny Panel, six month’s following Cabinet’s consideration of the Budget Scrutiny Panel’s report.
iii) That the Strategic Director of Resources and Deputy Leader ensure that an impact assessment is undertaken with regard to the option to increase council tax by a further one per cent and to quantify the financial impact on Brent Resident’s.
Supporting documents:
- 06. Budget Scrutiny Task Group - cover report, item 6. PDF 88 KB
- 6a. Appendix - Budget Scrutiny Task Group Report, item 6. PDF 948 KB