Decision details

Financial Planning Report 2020/21 to 2024/25

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Purpose:

The December 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 2020-25 together with proposals to close the funding gap.

Decisions:

Councillor Andy Wilson, Cabinet Member for Finance and Performance, introduced the Financial Planning Report 2020/21 to 2024/25 and highlighted the way in which the Council had worked with the community in response to Covid-19. The following points were also noted:

-       Under best-case scenario modelling the Council’s Medium Term Financial Strategy faced a funding deficit of £13.4m over the next five years.

-       Due to the Council’s prudent financial management Lambeth would be able to absorb the expected deficit in the medium term, through a mixture of income generation, savings and use of reserves.

-       Uncertainties remained, including the impact of continued social distancing measures, the impact of Brexit, the lack of long term decisions on the Fair Funding Review, and no solution from the government in relation to delivering a long-term funding settlement for Adult Social Care. Collectively this represented unprecedented uncertainty and a significant challenge for all local authorities.   

-       The saving proposals, set out in the report, had been brought forward to ensure Lambeth had a balanced budget, with 80% of the necessary savings from income generation. This was to ensure that the impact on frontline services would be minimal, with the most vulnerable protected.

It was explained that costs associated with Covid-19, including protecting care homes, providing Personal Protective Equipment (PPE) and delivering tens of thousands of food and aid packages to the most vulnerable, had come at a significant cost. As a result, the Cabinet Member for Finance and Performance highlighted disappointment that the government’s pledge to reimburse local authorities had not been fully met.

 

It was explained that the Financial Planning Report 2020/21 to 2024/25 had been considered by the Overview and Scrutiny Committee, on 9 December 2020, and the Children’s Services Scrutiny Sub-Committee, on 7 December 2020.  The Leader of the Council thanked Overview and Scrutiny Members for their contribution and invited Councillor Liz Atkins, Chair of the Overview and Scrutiny Committee, to summarise the Committee’s observations and recommendations which had been set out via a supplementary agenda paper.

 

Councillor Scott Ainslie, Deputy Leader of the Opposition, also spoke on this item, with the content focusing on:

-       Praise for delivering a report which provided financial resilience, given a lack of central Government forward planning and delays, during Brexit and Covid-19.

-       Finance figures and accounts were often unnecessarily complicated and needed to be clearer and more accessible to aid transparency, as per the Sir Tony Redmond 2019 Review.

-       It was queried how the recovery of non-paid council tax and how temporary accommodation cost reductions were to be met; and whether the Council was effectively managing and financing Procurement and Contract Management teams to get the most out of its contracts.

-       A shift in the Council’s Waste Strategy, in order to lower consumption, was requested.

-       Services coming back in-house was supported, especially as this would help improve accountability. However, the Council needed more officers to ensure comprehensive services were delivered.   

 

During the discussion that followed, Cabinet considered a wide range of issues in relation to: the Chancellor of the Exchequer’s Spending Review 2020; the financial challenges facing all local authorities as a result of Covid-19 and the potential impacts of Brexit; matters concerning the adult social care precept; Lambeth’s strategic approach to applying the waste hierarchy; and changes to the Council’s Medium Term Financial Strategy since July 2020, both in relation to Covid-19 related assumptions and general budget assumptions concerning growth and pressures.     

 

RESOLVED:

 

(1)  That the change to the funding deficit, set out in Table 2 of the report, and the consequent amendment to the Council’s Medium Term Financial Strategy be approved.

 

(2)  That the current funding gap, under various scenarios for 2021/22 to 2024/25, be noted and the new proposed savings, set out within section 2 and Appendix 1, be approved.

 

(3)  That Lambeth’s participation in the London Business Rates Pool for 2021/22 be approved and the Chief Finance Officer be authorised, in conjunction with the Cabinet Member for Finance and Performance, to agree the operational details of the pooling arrangements with the participating authorities.

 

(4)  That the continued uncertainty regarding elements of government funding, price and demand pressures, and the need to ensure budgets set each year were sustainable during the settlement period to 2024/25 and beyond, be noted.

 

(5)  That the financial position of the Council’s budget in 2020/21, and the actions in place to balance it over the period, be noted.

 

(6)  That the revised total for the five year Capital Investment Programme 2020/21 to 2024/25, set out in the report from paragraph 2.23 and summarised in Appendix 2, be noted.

 

(7)  That the recommendations and observations from the Overview and Scrutiny Committee and Children’s Services Scrutiny Sub-Committee, set out in the Supplementary Paper, be noted.

Report author: Amaris Wong

Publication date: 18/12/2020

Date of decision: 14/12/2020

Decided at meeting: 14/12/2020 - Cabinet

Effective from: 30/12/2020

Accompanying Documents: