Issue - decisions

December Financial Planning Report - 2017/18 to 2019/20

15/12/2017 - Financial Planning Report 2017/18 to 2019/20

The Leader of the Council, Cllr Lib Peck, noted that an agenda supplement had been published on Friday 8th December and circulated to members. She checked that all cabinet members had considered the additional information before proceeding with the consideration of the item.

 

The Deputy Leader of the Council (Finance and Resources), Cllr Imogen Walker, introduced the report and said the Council once again faced difficult decisions when setting the budget. The money available continued to fall as core funding from government was cut and the revenue generated through council tax and local business rates did not make up the shortfall. Generally it cost more, year on year, to deliver the same services for the people of Lambeth.

 

Cllr Walker stated that the current Budget made prudent use of the Council’s assets and local services continued to offer good value for money. Further savings had been identified which were projected to reduce the current funding gap from £8.670m to £2.037m. Members were asked to note the proposed Council Tax Support (CTS) scheme, the London Business rates Pilot Pool, and the Capital Investment Programme to 2019/20.

 

The Director of Finance and Property, Christina Thompson, remarked that while some savings had been identified, the Council needed to manage the entire funding gap. The Medium Term Financial Strategy identified the areas of continued pressure, these included Children’s Social Care staffing, the reduction in the Better Care Fund grant and Special Educational Needs transport costs. The ongoing costs of administering Subject Access Requests (SARs) and the one-off costs associated with the Independent Inquiry into Child Sexual Abuse (IICSA) were also noted. Ms Thompson then explained the governance arrangements around the London Business rates Pilot Pool and noted that the changes to the CTS would also go to Council in January 2018.

 

Cabinet members then made the following observations:

·         The report laid bare the continued financial difficulties faced by the Council. Such was the extent of previous savings, that it was no longer clear where further changes could be made without putting service users at risk. All additional social care funding was tied up in attempting to balance the budget and did not represent new investment from government.

·         The Chairman of the King’s College Hospital Foundation Trust had recently resigned citing NHS funding and unrealistic demands for savings. These pressures also impacted on the Council.

·         Adult Social Care spending represented more than a quarter of the Council’s overall budget and the services were largely demand led. Demand was increasing and so too was the cost. The Better Care Fund (BCF) was the key to ongoing provision of services.

 

In response to questions from members, Christina Thompson provided the following information:

·         The BCF funding formed part of the Council’s base budget and the additional grant funding of £13m would be received over three years. Current financial pressures in Adult Social Care of approximately £4.5m were offset by the grant received to date. In order to manage the pressures identified in 2021, when the grant was due to end, the Council had budgeted £4m on the assumption that further grant funding would not be provided by government.

·         CTS was in place to provide assistance for elderly people on pension credits, rather than all pensioners.

 

The Chair noted that 27 of 30 London Boroughs were currently dealing with overspends in Children’s Services, this demonstrated that the rising demands and cost of services was a troubling issue for councils across the region. Lambeth would need to consider a much wider package of how services would be delivered in the future.

 

Officers were thanked for the report and it was RESOLVED:

 

1)         To approve the Council’s Medium Term Financial Strategy as set out within this report;

2)         To note the continued uncertainty with regard to elements of government funding, price and demand pressures and the need to ensure that budgets set each year are sustainable during the settlement period to 2020/21 and beyond;

3)         To note the current funding gap of £8.670m for 2018/19 to 2020/21 and how we have reduced this gap by the proposed savings found to date, and to note therefore that the outstanding funding gap which will need to be closed and reported in the February 2018 Budget Report is £2.037m;

4)         To note the financial position of the Council’s budget in 2017/18 and the actions in place to balance it over the period;

5)         To approve the recommended changes to the Council’s Council Tax Support Scheme following consultation, as outlined in Appendix 1A-1D, and detailed below:

6)         Increase the baseline reduction from 15.86% to 20%

7)         Make the baseline reduction from liability instead of entitlement

8)         Reduce backdating to 13 weeks from 26 weeks

9)         Reduce the capital cut off from £16,000 to £10,000

10)      Introduce non-dependent deductions in respect of all non-dependents currently exempted from these reductions

11)      To introduce a discretionary Council Tax Support Hardship Scheme to help mitigate the potential impact of the amendments and therefore ensure those who cannot pay can receive extra help

12)      Approve and accept the designation by the Secretary of State as an authority within the London Business Rates Pilot Pool pursuant to 34(7)(1) of Schedule 7B Local Government Finance Act 1988;

13)      Participate in the London Business Rates Pilot Pool with effect from 1 April 2018 (to 31 March 2019);

14)      Delegate the authority’s administrative functions as a billing authority pursuant to the Non-Domestic Rating (Rates Retention) Regulations 2013 to the City of London Corporation (“COLC”) acting as the Lead Authority;

15)      Authorise the Lead Authority to sub-contract certain ancillary administrative functions (regarding the financial transactions [payment of tariffs and top-ups] within the Pool to the GLA as it considers expedient);

16)      Delegate authority to the Chief Finance Officer in conjunction with the Deputy Leader of the Council (Finance and Resources) to agree the operational details of the pooling arrangements with the participating authorities;

17)      Enter into such Memorandum of Understanding with the participating authorities as may be necessary to implement and/or regulate the pool and to delegate the authority to the Chief Finance Officer in consultation with the Director of Legal Services to negotiate, finalise and execute the same on behalf of the authority;

18)      To authorise Cllr Lib Peck in her official capacity as Leader to represent the authority in relation to consultations regarding the London Business Rates Pilot Pool consultative as may be undertaken by the Lead Authority pursuant to the Memorandum of Understanding.

19)      To note the revised total of £407.7m for the three year Capital Investment Programme 2017/18 to 2019/20 as described in section 5 and summarised in Appendix 3, and with how the programme is financed within Appendix 4.