Decision details

December Finance Planning and Medium Term Strategy Report 2021 to 2026

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Purpose:

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 2021-26 together with proposals to close the funding gap. Together with a refreshed Medium Term Financial Strategy, and Financial Management Strategy.

Decisions:

The report was introduced by Councillor Andy Wilson, Cabinet Member for Finance and Performance who highlighted that:

 

  • Since last being presented to Cabinet, the Chancellor of the Exchequer’s spending review had been received
  • The spending review outlined a continued tough financial budget for London boroughs
  • Calculations made by London Council saw that London boroughs required a £2 billion increase over the spending period, but only estimate to receive £1.1 billion
  • the 3% increase in Government funding announced was based on the assumption that Council’s increased their Council Tax and adult social care precept to the maximum of 3%
  • Longer term pressures would require longer term funding solutions, increasing Council Tax for the adult social care precept would not alleviate these pressures
  • The Council had remained vigilant with the new Covid-19 variant arising
  • There was already high demand in Council services around social care and temporary accommodation, which had increased as a result of the pandemic
  • The Council would continue to take every opportunity to support vulnerable people in its community, but needed to be realistic in the face of reduced funding and rising demand
  • Despite recent pressures, the Council had delivered a balanced budget
  • The current MTFS would continue to be developed to support the Council’s priorities and provide certainty to its most vulnerable residents.

 

Councillor Scott Ainslie, from the Green Group, requested that the report was in plain English and asked if the beginning of the report could highlight additional budgeting and expenditure as a result of COVID. Cllr Ainslie asked questions which were based around local revenues which had been explored by the council, rising temporary accommodation costs, the old Waterloo library 114-118 Lower Marsh funding, affordable housing and workspace and the Community Infrastructure Levy (CIL) spend.

 

Christina Thompson, Director of Finance and Property stated that:

 

  • Additional spending on Covid-19 was mentioned in paragraph 2.30 of the report and the Council’s current forecast was a spend of £35.5million. This would be recovered from earmarked reserves and from grants from central government in this financial year
  • A deficit in expenditure due to Covid-19 was not expected this year
  • Revenue raising was identified in the savings proposals put forward last year for the 2022-23 financial year
  • The Government would have to enable tourist taxes
  • The Council were waiting to hear from the Department of Levelling Up, Housing and Communities (DLUHC) on what would happen around business rates
  • There was an increase in activity on the number of households that had moved to temporary accommodation. Properties available for temporary accommodation had decreased as landlords were pulling out of private sector renting for temporary accommodation
  • The Council would continue to ensure that they housed families wherever possible.

 

Councillor Matthew Bennet, Deputy Leader of the Council and Cabinet Member for Planning Investment and New Homes, explained that homelessness was a crisis throughout London which had been made worse over the last 11 years due to a Conservative-led Government. However, the solution was to build more homes within Lambeth as it was not ideal housing residents outside of the borough away from their children’s schools and their social and support network. In addition, the old Waterloo library site would allow for more workspace, a permanent library provision due to partnership with OASIS and more job opportunities.

 

The Leader of the Council suggested that any outstanding questions were to be submitted to the Director of Finance and Property for a more detailed response.

 

Cabinet made the following observations:

 

  • The report was positive when taking into consideration the history of Lambeth’s finances over recent years and what was happening to other Council’s across the country
  • The financial strategy was clearly still under pressure and there were still areas that required further investment
  • It was positive that there was no requirement to go to the Government for bailouts surrounding the Covid-19 crisis and Lambeth was able to manage and invest in services to provide good quality outcomes for its communities
  • The booster vaccination had been brought in very quickly and there was a number of centres offering this. It was encouraged for residents to attend and receive when possible
  • Lambeth were in a good place in terms of communities and libraries and were one of the few Councils to keep all of its libraries open
  • Lambeth were in a good financial position not having to make cuts to Council Tax.

 

Following consideration, it was resolved that Cabinet:

 

  1. Agreed and approved the change to the funding deficit as set out in Table 2 of the report and the consequent amendment to the Council’s Medium Term Financial Strategy
  2. Noted the progress on planned changes to the Council Tax Support scheme for 2022/23 as summarised in paragraphs 2.21 to 2.24
  3. Noted the previously agreed savings summarised in table 3 of the report.
  4. Noted the continued uncertainty regarding elements of government funding, price and demanded pressures and the need to ensure that budgets set each year were sustainable during the settlement period to 2025/26 and beyond.
  5. Noted the financial position of the Council’s budget in 2021/22 and the actions in place to balance it over the period, including the use of reserves as required
  6. Noted the 4-year Capital Investment Programme for the period 2021/22 to 2024/25 as set out in paragraphs 2.43 to 2.46 and summarised in Appendix 1.

Report author: Amaris Wong

Publication date: 17/12/2021

Date of decision: 13/12/2021

Decided at meeting: 13/12/2021 - Cabinet

Effective from: 25/12/2021

Accompanying Documents: