November Finance Planning and Medium Term Strategy Report 2018 to 2023
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
The November Financial Planning and Medium Term Strategy Report will provide an update on the economic outlook, pressures, risk areas and set out the revenue funding deficit for 2018-23 together with proposals to close the funding gap.
The Cabinet Member for Finance, Councillor Andy Wilson, introduced the report and advised that the Council’s budget had been cut by £238m since 2010, one of the highest cuts of any council in the country. Over the next four years, rising demand and further government cuts meant the Council had to find a further £43m. He also stated that the in determining the saving proposals, focus was on how to protect frontline services. The Council had launched a six-week public consultation on the plans, asking residents for their views.
The Director of Finance and Property, Christina Thompson, advised Cabinet that the purpose of the report was to provide an update on the Medium Term Financial Strategy (MTFS) and the savings proposals to ensure that the gaps in funding were addressed. Despite the scale of the challenge, the Council’s MTFS focused on protecting most front-line services from major cuts and identified the bulk of savings from back-office efficiencies, new income and reducing demand. She also advised that, the future of local government finance had fundamentally shifted away from direct government grant to self-sufficiency. Where previously the majority of council funding came directly from central Government it was now generated locally.
In summary the Leader of the Council, Councillor Lib Peck, said that:
· the reality of the cuts imposed by central Government meant that 60p on every pound was lost on what we can spend on services. That meant it was difficult to invest in preventative services and local government was the hardest hit by the cuts;
· the Administration had campaigned very hard in opposing the reduction in funding and was working with London councils in making central Government Ministers aware of the impact. The Leader also advised that she had met with key Treasury Ministers as part of her role with the Local Government Association. There was also support for the “breaking point” campaign which looked at highlighting the effects of cuts to local government, urging central Government to truly end austerity in local government; and,
· no matter how unfair and disproportionate the cuts were, it was Cabinet’s responsibility to manage the budget and continue to look at innovative ways to protect frontline services.
Medium Term Financial Strategy
1) To approve the Council’s Medium Term Financial Strategy as set out within this report.
2) To note the continued uncertainty with regard to elements of government funding, price and demand pressures and the need to ensure that budgets set each year are sustainable during the settlement period to 2022/23 and beyond.
3) To note the current funding gap of £43.232m for 2019/20 to 2022/23 and how we have reduced this gap through brought forward savings and new proposed savings, which are detailed within section 2.
4) To note the financial position of the Council’s budget in 2018/19 and the actions in place to balance it over the period.
London Business Rates Pilot Pool
Establishment of Governance Arrangement
5) Approve and accept the designation by the Secretary of State as an authority within the London Business Rates Pilot Pool pursuant to 34(7)(1) of Schedule 7B Local Government Finance Act 1988.
6) Participate in the London Business Rates Pilot Pool with effect from 1 April 2019 (to 31 March 2020).
7) Delegate the authority’s administrative functions as a billing authority pursuant to the Non-Domestic Rating (Rates Retention) Regulations 2013 to the City of London Corporation (“COLC”) acting as the Lead Authority.
8) Authorise the Lead Authority to sub-contract certain ancillary administrative functions (regarding the financial transactions [payment of tariffs and top-ups] within the Pool to the GLA as it considers expedient).
Entry into the Memorandum of Understanding
9) Delegate authority to the Chief Finance Officer in conjunction with the Cabinet Member for Finance to agree the operational details of the pooling arrangements with the participating authorities.
10) Enter into such Memorandum of Understanding with the participating authorities as may be necessary to implement and/or regulate the pool and to delegate the authority to the Chief Finance Officer in consultation with the Director of Legal Services to negotiate, finalise and execute the same on behalf of the authority.
Operation of the Pool
11) To authorise Cllr Lib Peck in her official capacity as Leader to represent the authority in relation to consultations regarding the London Business Rates Pilot Pool consultative as may be undertaken by the Lead Authority pursuant to the memorandum of Understanding.
12) To note the revised total of £313m for the three year Capital Investment Programme 2018/19 to 2020/21 as described in section 4 and summarised in Appendix 3, and with how the programme is financed within Appendix 4.
Report author: Christina Thompson
Publication date: 21/12/2018
Date of decision: 17/12/2018
Decided at meeting: 17/12/2018 - Cabinet
Effective from: 03/01/2019
- Dec FPR - FINAL 071218 PDF 553 KB
- Appendix 1- Consolidated Proposed Savings 2019-2023 Final PDF 146 KB
- Appendix 2- 2019-20 London BRR pilot MOU - FINAL signed PDF 1 MB
- Appendix 3- CIP 1819 to 2021 PDF 95 KB
- Appendix 4 - Financing the CIP 1819 to 2021 PDF 31 KB
- CABINET REPORT MTFS EQUALITIES ANALYSIS 051218 FINAL DRAFT 061218 PDF 310 KB
- Appendix 6- Council Pillars PDF 54 KB