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 ... view the full minutes text for item 3