Agenda and minutes

None declared.

The minutes are attached.

RESOLVED:-

that the minutes of the previous meeting held on 12 October 2010 be approved as an accurate record.

None.

The Director of Finance and Corporate Services will provide a presentation to Members on the outcome of the Comprehensive Spending Review.

With the agreement of the Chair, the order of business was amended so that the Comprehensive Spending Review (CSR) was considered before the first reading debate on the 2011/12 to 2014/15 budget.

Clive Heaphy gave a presentation to Members on the outcome of the Government’s CSR announcement made on 19 October.  He began by outlining the economic situation.  Whilst markets had reacted relatively favourably, there was an expectation that growth would slow or stall by the third and fourth quarters.  Concerns that a double dip recession may occur remained.  The UK’s national debt of 68.1% of GBP was not as large in comparison with a number of other EU members, however the main problem was it was presently spending more than it was receiving to pay off the debt.  Members heard that public sector employment had risen steadily between 1999 to 2009 and salaries had also risen more in comparison with the private sector. 

Clive Heaphy confirmed that the Government announcement on 10 June in respect of grants had meant that the council had lost £6.85m in grants overall in-year.  The CSR announcement represented a shift in cuts from Government departments to welfare, whilst the NHS, schools and infrastructure had been identified as priorities. The purpose of the CSR was to eliminate the structural deficit over five years.  However, Clive Heaphy advised that there may be a number of hidden and unintended consequences, for example reducing spending in one area could result in increased spending in other areas.  For Local Government, there was a 7.1% reduction in real terms for the formula grant for 2011/12 and a 39% reduction over the four years up to 2015, whilst Council Tax Benefit would be reduced by around 10% once rates were localised from 2013/14.  Although the Schools budget had increased by 0.1% per annum, in real terms this would be negated by inflation and increases in pupil numbers.  The increases in support social care overall represented an additional £2.9m funding in this area for Brent.  Members noted that the tightening of the budget had lessened in the CSR compared to the June 2010 budget.  In terms of the impact upon the community, Clive Heaphy advised that research by the Institute of Fiscal Studies suggested that the poorest would be hit the hardest, along with families with children.

Mick Bowden (Deputy Director, Finance and Corporate Services) then focused on the council’s financial situation.  He reported that forecast overspend had risen from £5.6m to £7.1m, however he stressed the need to bring finances back in line before the end of 2011/12 as there was no intention to use the council’s reserves.  The reserves currently held were the very least that should be maintained as next year would be even more challenging.   The overspends were mainly in Children and Families, which had an overspend of £3.041m and in Adult Social Care, of £3.5m.  Members noted that the £404,000 overspend in Environment and Culture was in the process of being bought back in.  The £500,000 overspend  ...  view the full minutes text for item 4.

Full Council will be holding its first reading debate on the 2011/12 budget

at its meeting on Monday 22 November. This report sets out the financial

issues that will form the background of that debate.

The report is to follow.

The Leader of the Council and the Lead Member for Finance and Resources will attend the meeting to answer questions from Members.

Clive Heaphy introduced this item and drew Members’ attention to the report circulated in the supplementary agenda.  He advised that because of the economic circumstances, it was much more difficult to make forecasts and therefore the report would still be subject to a number of revisions before and after the First Reading Debate at the Council meeting on 22 November.  The final details of the council’s funding would not be known until the Local Government Settlement announcement in December. 

Councillor John added that this was the most challenging budget that the council had faced and circumstances would continue to be difficult for the years ahead.  She advised that the council could not afford to deliver some services in the same ways it did now.  There had already been a transformation programme in respect of Adult Social Care and it was expected that this would deliver some savings.  Members heard that it was not anticipated that there would be any growth items for the report to go to Council on 22 November and a number of important details would not be known until after the Local Government Settlement.  However, protection of frontline services was a priority and all service areas were being considered in respect of making savings. 

With the agreement of the Chair, Robert Dunwell addressed the committee.  Robert Dunwell enquired what strategy was in place in respect of the council considering tendering services to other providers where they could do better, could any service be tendered for and would the council take a flexible approach in respect of this.

With the agreement of the Chair, Councillor S Choudhary addressed the committee.  Councillor S Choudhary suggested that libraries could be improved by providing i books to users.

Members then discussed this item.  Councillor Long asked if details of spending for each item would be provided as in previous first reading debate reports.  Councillor Van Kalwala enquired how the council intended to build upon its reserves and how had the inescapable growth figures been calculated.  Councillor A Choudry asked whether unexpected and exceptional events and circumstances would be factored in to the report to go to the Council meeting on 22 November.  He stressed the need to inform the community of the need for the council to make tough decisions and that some services would need to be changed in the way that they were delivered or even stopped altogether.

The Chair sought views on the possibility of achieving the increased savings target from the One Council Programme.  He asked if there was a vision of how the council would operate two years from now and commented that difficult situations often presented opportunities too.  He expressed concern that the council may become too remote from residents if there was an over-reliance on communicating through technology.  The Chair also sought assurances that decisions taken did not disadvantage those living in the less privileged parts of the borough.

In reply to the issues raised, Clive Heaphy advised that he was confident that the  ...  view the full minutes text for item 5.

The next meeting is scheduled to take place on Tuesday, 7 December 2010 at 7.30 pm.

It was noted that the next meeting of the Budget and Finance Overview and Scrutiny Committee was scheduled for Tuesday, 7 December 2010 at 7.30 pm.

Notice of items to be raised under this heading must be given in writing to the Democratic Services Manager or his representative before the meeting in accordance with Standing Order 64.

None.