Revenue and Capital Budget 2020-21
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
The Revenue and Capital Budget report will set
out the General Fund budget for 2020-21 and planning totals for the
following four years together with a refreshed Medium Term
Financial Strategy, Financial Management Strategy and Treasury
The Cabinet Member for Finance and Performance, Councillor Andrew Wilson, introduced the proposed Revenue and Capital Budget 2020/21 to 2023/24 for recommendation to Full Council.
It was highlighted that, despite the general election, the future for local government funding remained unclear, especially taking into account the economic outlook of low growth for the year ahead and the likelihood of Brexit impacting on both the local and wider economy. The following points, set out in the report, were noted:
- One-off funding for 2019/20 had been extended to 2020/21;
- The Comprehensive Spending review and reforms to adult social care were still to take place;
- The Fair Funding Review and Business Rates baseline reset would take place in 2021/22.
The Cabinet Member for Finance and Performance explained that Lambeth had faced a cumulative funding crisis for the best part of a decade. It was noted that funding from central government had simply not kept pace with the demand and spending required in areas including special educational needs, school funding and social care. Despite this, it was highlighted that the Council would continue to be innovative in order to fund services and to deliver on priorities set out in the Lambeth borough plan.
The Leader of the Opposition, Councillor Jonathan Bartley, highlighted a number of concerns in relation to:
- Discrepancies that had been established in January 2020 concerning reserve figures published with the Finance Planning and Medium Term Strategy 2019 to 2024 considered by both the Executive and Overview and Scrutiny Committee in November 2019.
- The Council’s reserves and balances. It was noted that the Council held General Fund balances of £21.308m as of 31 March 2019 but that in 2019/20 this represented 7.9% of net expenditure which was a percentage decrease in reserves when compared to the 8.8% that had been projected in the previous year.
- The disposal of properties, outlined in Appendix 8b of the report, especially in view of the costs associated with such transactions and the fact that since 2010 the authority had sold (excluding right-to-buy) more than 300 council homes across the borough.
In response to these issues the Cabinet Member for Finance and Performance stated that:
- Whilst it was regrettable that incorrect information had been published in relation to the Council’s reserves in the autumn it was highlighted that the timing of the November report meant that some details would always require updating ahead of decisions being made in February. For example, it was highlighted that the funding settlement wasn’t known at the time of the November report being published. It was also made clear that the Council’s reserve strategy would not have changed as a result of these discrepancies.
- The reduction of in year reserves was in part due to uncertainties across the system, some unknown pressures and unexpected demands in some areas, including those relating to Children’s Centres. However, it was noted that the Council’s reserve strategy allowed the Council to absorb unexpected reductions in resources and increases in expenditure without increasing the burden on Council Tax payers.
- As a result of assets being disposed of the Council had been able to save £36m in borrowing costs over the last ten years. It was explained that this had enabled the Council to deliver vital services to local residents across the borough.
During the discussion that followed a variety of matters were considered in relation to: the Council’s commitment to reach carbon neutrality by 2030; the increased investment to tackle youth violence; key risks associated with adult social care, public health, and children’s social care; and the potential equalities impact of various budget proposals.
In response to questions, the Director for Finance and Property confirmed that:
- The government had reduced the levy by which Council Tax could be increased before requiring a referendum from 2.99% to 1.99%. It was noted that the proposals, set out in the report presented, had been modelled on an increase of council tax by 1.99% in 2020/21, plus the 2% government adult social care precept.
- For 2020/21 to 2024/25 there was a proposed budget of £215.4m available for capital investment.
- The proposed budget was robust and the level of reserves and balances, set out in Appendix 1 to the draft budget, were adequate.
- Risks had been considered and had been appropriately budgeted for.
For clarity, the Cabinet Member for Finance and Performance highlighted that the date of the Corporate Committee meeting, included as part of recommendation 16, would be updated for accuracy ahead of the report being presented to Full Council. It was noted that the Committee had met on the 30 January rather than the 23 January.
(1) That Full Council be recommended to note or adopt the recommendations set out in the report presented; and
(2) That the disposal of properties, identified in Appendix 8b of the report presented, be approved.
Report author: Hamant Bharadia
Publication date: 07/02/2020
Date of decision: 03/02/2020
Decided at meeting: 03/02/2020 - Cabinet
- Budget Report Feb 2020 FINAL PDF 387 KB
- Appendix 1- MTFS 2020-24 PDF 318 KB
- Appendix 2 - Simplified Council Tax Model and Statutory Calculations PDF 139 KB
- Appendix 3 - Council Tax Support 2020-21 PDF 145 KB
- Appendix 4 - Fees and Charges 2020-21 PDF 1 MB
- Appendix 5 - DSG Review recommedations and actions PDF 401 KB
- Appendix 6 - CIP 19-20 to 21-22 PDF 155 KB
- Appendix 7 - Financing the CIP 19-20 to 21-22 PDF 90 KB
- Appendix 8a - Revised Asset Disposal List (for publication) PDF 65 KB
- Appendix 8b - Revised Asset Disposal List (Cabinet only) PDF 66 KB
- Appendix 9 -Treasury Management Strategy and Prudential Indicators 2020-21 to 2023-24 PDF 820 KB
- Appendix 10 - Minimum Revenue Provision Policy PDF 234 KB
- Appendix 11 - Cabinet Report OSC and CSSC budget recommendations Feb 2020 PDF 164 KB