Decision details

Finance Planning and Medium Term Strategy Report 2018 to 2022/23

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Purpose:

The July 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 as well as the timetable for setting the Council’s budget in February 2019.

Decisions:

The Cabinet Member for Finance, Councillor Andy Wilson, introduced the report and noted that the Medium Term Financial Strategy (MTFS) had been extended to 2022/23 in order to enhance financial resilience of the Council over the whole of the current administration. He also stated the following:

 

·         Lambeth would continue to see reductions in funding from government over the next four years. Ultimately, central government grant funding would diminish to zero.

·         The overall funding gap (2019/20 to 2022/23) was £43.23m, with £16.8m savings previously identified and a further £26.5m yet to be identified.

·         The extent of uncertainty surrounding local government finance had reached unprecedented levels. Forthcoming changes to the retention of business rates and the UK’s impending exit from the European Union would both impact on Council finances.

·         The National Audit Office had warned that many Councils would be unable to provide basic services under the current funding arrangements. Some councils had already experienced severe financial difficulty, with Northamptonshire County Council having been served a Section 114 notice.

·         Lambeth would need to become self-sufficient and fortunately local circumstances meant there were opportunities for future growth. Any benefits of growth would need to be shared in order to tackle inequality in the borough.

 

The Director of Finance and Property, Christina Thompson, noted that the report included assumptions about the Council’s medium term financial position. Officers would set out the budget gap and present further saving proposals to Cabinet in December 2018 to deliver a balanced budget across the whole administration period.

 

The Cabinet Member for the Voluntary Sector, Partnerships and Community Safety (job share), Councillor Jim Dickson, noted that there was no overall overspend on the underlying budget and that the Council had demonstrated good financial management under testing circumstances. However, the government continued to cut grant funding and put local services at risk. Fundamental organisational change be crucial to the delivery of future savings and every effort would be made to protect front line services.

 

It was RESOLVED

 

1.         To re-affirm the Council’s commitment to delivering the agreed revenue savings planned for 2018/19 (£18.437m) and 2019/20 to 2020/21 of (£16.802m), as set out in Table 3 of the report.

 

2.         To approve the revised cash limit for 2018/19 as set out in Table 1 paragraph 2.2 of the report.

 

3.         To approve the recommended saving targets by directorate as confirmed in Table 4 of the report.

 

4.         To note the key risks set out in paragraphs 2.32 to 2.46 of the report.

 

5.         To approve the change to the funding deficit as set out in Table 3 and the consequent amendment to the Council’s Medium Term Financial Strategy.

 

6.         To note the 2017/18 General Fund outturn underspend of £0.327m as confirmed in Table 6 paragraph 2.47 of the report.

 

7.         To note the 2017/18 Housing Revenue Account outturn underspend of £0.022m as confirmed in Table 7 paragraph 2.55 of the report.

 

8.         To note the capital investment outturn of £218.7m against the 2017/18 budget of £301m as detailed in paragraphs 3.1 to 3.2 and Appendix 3 of the report.

 

9.         To note the changes to the three year Capital Investment Programme for the period 2018/19 to 2020/21 as set out in paragraphs 3.6 to 3.10 and summarised in Appendix 1 of the report.

 

Report author: Christina Thompson

Publication date: 27/07/2018

Date of decision: 23/07/2018

Decided at meeting: 23/07/2018 - Cabinet

Effective from: 04/08/2018

Accompanying Documents: