Agenda item
First reading debate on the 2010/11 to 2013/14 budget
Full Council will be holding its first reading debate on the 2010/11 budget at its meeting on Monday 23 November. This report sets out the financial issues that will form the background of that debate.
(a) Priorities of the administration – this report will follow
(b) The 2010/11 budget.
The Leader of the Council will attend the meeting to answer questions from the Panel on the reports.
Minutes:
The Chair welcomed Councillor Lorber, Leader of the Council, who introduced the Executive’s draft report Priorities of the Executive. Councillor Lorber informed the Panel that the budget was always a challenge, with work starting as soon as the previous one was approved. The Council faced internal and external challenges, but the underlying principle was to achieve continuous improvement, provide better value and ensure that services to local residents were the best they could be. The Council’s improvement and efficiency agenda, including the planned move to a new Civic Centre, was an opportunity for positive work on efficiency and the creation of one Council. The administration had set itself the objective of helping local residents by freezing council tax, and efficiency was also focussed on this.
Duncan McLeod (Director, Finance and Corporate Resources) introduced the draft budget report setting out the financial forecasts for the next four years. The budget gap for 2010/11 had decreased since the July 2009 meeting of the Executive, mainly because the assumptions around inflation had changed. The reduced level of inflation also affected the Council’s projected pay award and the medium-term financial strategy. It was hoped to achieve a surplus from the 2009/10 budget, although this would be difficult. Services were already identifying savings as part of the managing the current budget, and where these were permanent changes, ongoing benefits for future years would be provided. The greatest scope for closing the remainder of the budget gap lay in the implementation of the improvement and efficiency strategy. This was the type of approach being followed by every public and private sector company in the country, given the economic conditions. There were particular budget pressures on Children and Families as a consequence of the continuation of the recession, and there had been an increase in demand for housing benefit. Officers would be looking to verify figures and take a view on any additional resources that needed to be put into the budget. This would take place in the next two to three months.
Duncan McLeod added that an additional pressure would be caused by the government’s proposed change in funding of concessionary fares, and the report would need to be amended to reflect this. While there was a relatively large increase in the amount schools in Brent would receive, this did not appear as part of the Council’s overall budget requirement, and was treated separately from spending on other services. An announcement was expected in relation to the Housing Revenue Account, and the report would be updated when this was known. The proposed level of capital spending was at a level similar to that in the current budget, but it was a question of how it would be allocated. The Council was awaiting a decision on Building Schools for the Future (BSF), which would be key to the formation of a long-term programme to address school capital needs.
Duncan McLeod drew members’ attention to the timetable for finalising the budget, pointing out that there would be three further Budget Panel meetings before the Executive made its decisions on the budget on 15 February 2010.
Asked about the current assumption that there would be no increases in fees and charges under the Council’s control, Duncan McLeod informed the Panel that some charges would increase because they were statutory. There were options for members to increase charges and a report on this would go to the Executive in February 2010.
In answer to a question on the effect of the upturn in the housing market on income from land charges, Duncan McLeod reported that the Information Commissioner had recently ruled that requests for information around land charges could not be charged for under the Environmental Information Regulations, but that the Council was nevertheless required to provide the service. Duncan McLeod reported that the Local Government Association (LGA) was seeking a ruling on this, but that the issue was unlikely to be resolved before the budget was set.
In response to comments that some of the festivals organised by the Council, for example, the Eid Festival and Black History Month, were not providing good value for money, Councillor Lorber agreed that the Eid Festival needed improving, and informed the Panel that the possibility of a month of celebration of Eid, as opposed to a single festival, was currently being explored.
Asked whether there was anything with which he was dissatisfied since coming to power in 2006, Councillor Lorber informed the Panel that the recession had clearly not been helpful, and the initial shock of the dispute with the PCT had had a devastating impact on health services to local people, as well as an ongoing financial impact. However, nothing had diverted the administration from its overriding strategy of focussing on the environment and young people. He looked forward to the future and the challenges and opportunities to improve the way the Council provided services. The financial environment was frustrating and would not be easy in the future, whoever won the next General Election. The improvement and efficiency strategy was therefore crucial. Councillor Lorber pointed out that the budget gap did not differ greatly from those in the recent past, and that the Council needed to be ambitious in making the organisation as efficient as possible. The move to the Civic Centre would not only save up to £2m as a result of the move from 14 leased properties, but also act as a catalyst to generate substantial efficiency savings beyond the property costs. In addition, the West London Partnership was in the process of tendering to seek to make existing contracts as productive as possible and improve services to residents. There were also a number of other projects in the Council’s improvement and efficiency action plan, which was a four-year programme.
Responding to a question of whether there was disappointment at the level of savings achieved by the invest to save strategy, Phil Newby (Director, Policy and Regeneration), informed the Panel that some of the invest to save programmes in Children and Families had achieved planned savings, but he acknowledged that in some areas there had been problems. However, the concept would be pursued. Indeed, the whole improvement and efficiency strategy was predicated on it, and the Council was already getting better at managing this process.
Asked whether the current method of drawing up budgets was fit for purpose, Councillor Lorber told the Panel that the current approach, in line with the improvement and efficiency strategy, was to look at and improve services, while in the past there had been the option of either cuts or growth, without a full understanding of the implications. A prime example of the approach of looking at services and improving them at a lower cost was the meals on wheels service, which was now providing a better choice of good quality meals and costing £250,000 less than previously.
Duncan McLeod added that setting budgets had become more straightforward since the introduction of three-year settlements, but that a situation had arisen where issues were being considered at the margin, with savings targets having been set and offset against growth. The Panel itself had noted that most of the budget was not being scrutisined, and this was perhaps why it had become difficult to achieve savings targets. A fundamental analysis needed to be carried out of exactly what money was being spent on, and the recession had provided the driver to do this.
Responding to a question about staff morale in the context of the structure and staffing review, Councillor Lorber informed the Panel that a series of roadshows had been organised to explain the improvement and efficiency strategy to staff. Staff understood the situation in which the Council found itself. They could see what was happening in the wider world and understood the need for improvement and efficiency. The proposed reduction of around 300 full-time posts – 10% of the workforce – was to be carried out over four years. With staff turnover currently at 16%, it should be possible to achieve the reduction without recourse to large-scale compulsory redundancies. Duncan McLeod added that he had attended two sessions with staff in Finance and Corporate Resources the previous week, and that staff accepted the need for change. While there was some concern about jobs, it was believed that the reduction could be implemented without compulsory redundancy. Staff would be involved in the changes and their skills would be expanded as a result. In general, the mood was upbeat. Asked about the level of staff morale in streetcare, Duncan McLeod reported that he did not have this information currently, but would be attending a service planning day the following week.
Asked about the impact on the 2010/11 budget of a possible income shortfall in the current year, Duncan McLeod informed the Panel that one of the main areas of shortfall was the parking account, which was around £1m down on the budgeted figure, partly as a result of a reduction in illegal parking and possibly also as a result of increased charges. Another area of likely shortfall was that of planning fees. The overall gaps would need to be calculated and assessments made nearer the time.
Answering a question about the level of balances, Councillor Lorber reported that the level was similar to that reported at a similar stage in previous years. It was likely that the various departments and units charged with getting overspends under control would emerge with balances similar to or better than those budgeted. Duncan McLeod added that he believed this would happen, but that if there were any overspends, they would indeed have an impact on the level of balances for next year.
The Chair thanked Councillor Lorber for attending the meeting and answering questions from members.
RESOLVED:
that the draft reports to Council on the 2010/11 budget first reading debate be noted.
Supporting documents:
- First Reading Debate Covering Report, item 5. PDF 54 KB
- First Reading Debate - Priorities of the Administration, item 5. PDF 179 KB
- First reading debate report, item 5. PDF 257 KB
- INDEX OF APPENDICES, item 5. PDF 38 KB
- Appendix A - 2009-10 Council Budget, item 5. PDF 59 KB
- Appendix B - Financial Forecast 2010-11 - 2013-14, item 5. PDF 51 KB
- Appendix C - Central Items 2010-11 - 2013-14, item 5. PDF 41 KB
- Appendix D - Inescapable Growth, item 5. PDF 61 KB
- Appendix E - New Growth Pressures, item 5. PDF 56 KB
- Appendix F - Growth Funded by Reward Grant, item 5. PDF 66 KB
- Appendix G - Capital Programme, item 5. PDF 79 KB
- Appendix H - Service and Budget Planning Timetable, item 5. PDF 49 KB