Agenda item
First Reading Debate
The council will be holding its first reading debate for 2013/14 at its meeting on 19 November 2012. The Deputy Director of Finance will set out the budget and finance issues that will form the background to the debate. The Leader and Lead Member for Finance and Corporate Resources will attend the meeting to answer questions from Members.
Minutes:
The Deputy Director of Finance, Mick Bowden gave a presentation providing an update on the current economic situation and the budget. It was highlighted that the initial economic projections and revised projections in 2012 provided by OBR were optimistic. At the end of quarter one, a projected overspend of £2m was forecast but following actions undertaken by departments, a £0.1m underspend was expected. This was partially due to one off savings and grants being released however departments continued to face budget pressures. It was highlighted that audit had remarked on the improved financial resilience of the Council due to the increased reserves which were to be increased at a risk assessed level. Mick Bowden highlighted the budget gap and pressures facing the Council based on the assumptions of the medium term financial strategy showed a £7.5m gap in 2015/16. These assumptions included an increase in council tax of 3.5%, savings through the One Council programme and existing planned savings.
The Deputy Director of Finance informed the Committee that the Autumn Statement will take place later than usual with the announcement expected on 5 December 2012 and the provisional local government settlement by the 20 December 2012. The council tax freeze grants were highlighted as one off funding streams however the details of the freeze grant for 2013/14 (around £800,000 for the next two financial years) were still awaited. Mick Bowden also identified several changes to funding including; top-slicing of the Early Intervention Grant - £4m Academies - £7m, the census - £4m and council tax surplus – £1.8m (one off). It was noted that government’s assessment of Brent’s population rose from around 250,000 to 311,000 and depending on the figures used by central government, would have a great impact on the budget.
Various uncertainties and risks were highlighted to the 2013/14 budget including further changes to central government, housing benefit subsidy regime/temporary accommodation and one council savings. The Deputy Director of Finance highlighted the timescale in the decision making process and in particular decisions to be taken by the Council and Executive prior to the settlement announcement and those to be taken after, including the council tax base and council tax level. He concluded that the focus and consideration needed to be given to the long term challenges facing the Council as well as a flexible approach to address the pressures facing the budget for 2013/14.
During queries from the members it was clarified that Adult Social Services and Children and Families had faced large overspends in quarter one but due to management action, including one off savings and funding streams, the overspend had been reduced. It was explained that although it appeared to have been reduced in a short space of time, the figures were projected end of year figures against actions being undertaken and that were still being implemented. Members requested that a similar monthly update on the budget was provided and that all items were reported accurately, as well as accruals and exceptional items being relevant to the current financial year to ensure a robust budget setting. It was noted that council tax was collected on behalf of the GLA and the Council and an assumption was made during the budget setting process on the collection rate which may or may not create a deficit for the next financial year. It was noted that a surplus of council tax had been collected and the 2013/14 budget would start with a surplus. It was noted that it was still unclear the level of income to be achieved due to the introduction of the new community infrastructure levy but it was anticipated that this would become clearer as the new arrangements bedded down.
RESOLVED:-
(i)
that the presentation be noted
(ii) that a monthly budget update presentation be given