Agenda item

The Deputy Director of Finance will present information on the financial prospects of the council over the next few years and provide an update on the council’s financial position.

The Deputy Director of Finance, Mick Bowden, gave a presentation covering the medium term financial strategy, national developments and areas for consideration as part of the Autumn budget process. The 2013/14 budget was characterised by changes in local government funding, reduced ring-fencing of grants and the total budget savings of £7.3m most of which was pre-planned through the One Council Programme. He outlined the impact of the 2014/15 settlement and the outlook for 2016/17 which included a 27% decrease in government funding, increases in local business rates and the New Homes Bonus the latter of which would be considered in greater detail at the next meeting.  A net reduction in funding of £37m was anticipated.  The outlook to 2016/17 assumed continued cost pressures and inflation totally approximately £18m, which with existing savings at 9% gave rise to a predicted gap of £55m. The key messages were that uncertain times remained, savings would be required across all years and the ability to increase savings was becoming increasingly difficult as the base budget decreased in size. Mick Bowden referred to the central government spending review announced on 26 June 2013, the detail of which and implications for Brent were largely unknown, however Local Government spending would be cut by 10% in 2015/15 and overall spending cuts across all government departments were likely to be greater in 2016/2017 and 2017/2018. The new central government would decide on how these would be distributed. He reminded members that any proposal to increase Council Tax by more than 2% would require a Referendum. National announcements had been made regarding the transfer of funding to adult social care from the NHS and £400m of New Homes Bonus to the Single Local Growth Fund however, again, the implications for Brent were unknown.

In response to a question, Mick Bowden clarified that the budget was concerned with better ways of delivery statutory services for example in social care, the extent to which the services should be reactive or preventative (which had significant cost implications) efficiencies and priorities. The Chair, referred to the decision taken at the previous meeting to receive regular updates on radical ideas being considered under the One Council Programme. Liz Jones (Assistant Director Finance, Adult Social Care) contributed that service hours could not be reduced because of budget constraints but were to do with the meeting client needs at an appropriate level. Councillor Jones suggested that consideration could be given to increasing council income through the re-assessment or re-valuation of those houses converted into flats without planning permission and consequently not accurately reflected on the property database. The committee agreed that this would be a suitable One Council project for investigation and Mick Bowden commented that this would be more easily facilitated that now that Revenues and Benefits and The Planning Service were in the same service department. The committee noted with regret the absence of a team or funding to carry out enforcement activity noting that there were other areas in which income could be maximise without invoking excessive levels of public disquiet. Members questioned whether any assessment had been conducted on the impact of cuts on service delivery.

Questions were also raised on the medium term priorities and assumptions, the likelihood for further budget cuts and whether the council would have to increase reserves in order to cover the risk.  The Deputy Director of Finance responded that it was for the Administration to take a view on priorities: budget cuts, increasing efficiency or increasing income, taking into account views from officers and contributions from this committee. The council was now working from a smaller base budget and radical thinking was required. The current level of reserves recognised the scale of savings to be made and was based on inherent risks which were unlikely to decrease however, the funding gap remained.

The budget update was noted.