Agenda item
First reading debate on the 2012/13 to 2015/16 budget
Full Council will be holding its first reading debate on the 2012/13 budget at its meeting on Monday 21 November. The Director of Finance and Corporate Services will set out the financial issues that will form the background to that debate.
The Leader and Lead Member for Finance and Corporate Resources will attend the meeting to answer questions from Members.
Minutes:
Mick Bowden (Deputy Director of Finance and Corporate Services) outlined the budget and medium term financial plan for the period 2012/13 to 2015/16 by means of a PowerPoint presentation. He updated the committee on the national economic conditions, pointing out that the recession was deeper than previous recessions and would take longer to recover. The gap between wages and inflation was widening which impacted on consumer confidence. He reminded the committee of what the coalition Government's objectives were and the impact this was having on local government. Mick Bowden then drew the committee's attention to the inverted relationship between efficiency savings that provided the bulk of the saving to start with but tailed off and savings from service transformation that were slow to realise but provided the bulk of the required savings later in the 5 year programme. He outlined the funding gap for the years 2011/12 to 2015/16 but pointed out that the spending review period only went up to 2014/15. Mick Bowden outlined the issues concerning the future level of the Council Tax and the risks the Council faced. He then went on to present to the committee the main points arising from the Council housing finance reforms. The actions that needed to be taken to ensure the Council spent within the resources available were presented to the committee before finally the timetable for service and budget planning was submitted.
In answer to a question about the risks attached to the Business Rate reform, Mick Bowden explained that the anticipated transitional arrangements that would be in place up to 2014/15 would mean no change to the present but the outcome of the consultation on this was still awaited. Members of the committee received a separate written briefing on how the Council needed to be sure of its processes for collecting business rates in the future.
It was pointed out to the committee that the Council had been awarded £25M for primary school investment, the third highest amount for any authority, but that the details of how this would be spent were still to be supplied. This information could be provided to the committee at a later date. Councillor John reported to the committee that the funding allocated nationally was still not considered to be sufficient to meet the demand for school places and that the pressure in London was most acute. All the London boroughs agreed that more was needed and so how the Council spent its allocation would need careful consideration.
The committee was informed that the report to full Council in support of the first reading of the budget would set out the key risks and the Council's approach to maintaining sufficient reserves. Calculations were being undertaken to assess the impact of the proposed removal of the Council Tax discount on second homes but it was felt that the impact on Brent would be low. Further discussions were taking place on the options for Council Tax benefit on empty homes.
In answer to further questions from members of the committee, Mick Bowden explained that various scenarios were being modelled for when the local administration of Council Tax benefit ended in 2012/13 and the government took on the administration of the scheme for which local authorities would have to pay. Regarding the changes to housing benefit, £1M had been budgeted for to meet the anticipated increased costs of temporary accommodation but the full impact of the changes had yet to be seen. There was still some uncertainty over the proposals for a universal credit to replace various benefits. Issues such as fraud prevention and how it would be paid were still the subject of a lot of work being undertaken by London Councils. It was suggested that some of the models being developed under these new schemes could be reported back to the committee in due course. Councillor John addressed the committee by saying that the Council faced drastic change in the way it was structured and how it delivered services with reduced resources. The impact of the changes to the benefit systems would mean many Brent residents being far worse off in the future.
The committee discussed the issues facing the Brent pension fund around the approach adopted, the funding of it and its performance.
The Chair thanked Mick Bowden for his presentation and the Leader and Deputy Leader for their attendance.
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