This report sets out for consideration those issues that have a bearing on the Council’s financial planning for the 2018-19 budget and the 2018 – 2021 Medium Term Financial Strategy (MTFS). This will include the relevant risks, uncertainties and the options for managing those issues. The Full Council is required to take final decisions on the Council’s budget including the setting of the Council tax although there are a number of individual decisions that are taken by the Cabinet as part of this overarching report or other separate detailed reports. These include agreement of the Councils approach to fees and charges, the agreement of its Local Council Tax Reduction Scheme and agreement to participate in the London-wide Business Rates Retention Scheme.

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The recommendations were amended and then agreed.

DECISION

1.    To agree a General Fund Revenue Budget of £343.703m subject to any changes arising from the Final Local Government Finance Settlement. To be presented to Council for consideration.

2.    To agree the Council Tax (Band D) at £986.14 for 2018-19 to be referred to Council for consideration.

3.    To authorise the Corporate Director, Resources after consultation with the Mayor and Lead Member of Resources to make any changes required to the budget following the final settlement announcement in February.

4.    To approve the revised Capital Programme for the period to 2027-28; as detailed in Appendix 9A-D and adopt the associated capital estimates.

5.    To approve the draft 2018-19 Housing Revenue Account budget as set out in Appendix 8A to the report.

6.    To approve the draft 2018-19 Management Fee payable to Tower Hamlets Homes (THH) of £30.979m as set out in Table 4 of the report.

7.    To note that under the Management Agreement between the Council and THH, THH manages delegated income and expenditure budgets on behalf of the Council. In 2018-19, THH will manage delegated income budgets totalling £87.101m and delegated expenditure budgets of £25.829m.

8.    To note the refreshed strategic priorities and outcomes (Paragraph 3.2.4) for the final year of the three year Strategic Plan agreed by Cabinet in April 2016.

9.    To note the following matters:

General Fund Revenue Budget for 2018-19 and Medium Term Financial

Strategy 2018-19 to 2020-21

The initial budget proposal and Council Tax for 2018-19 together with the

Medium Term Financial Strategy set out in Appendix 1A to the report.

Note the decision made by the Mayor in Cabinet to participate in the London

Wide Business Rates Retention pilot scheme and also reflecting the Mayor’s

instruction that the case for greater local retention must be vigorously pursued.

Note the decision of the Mayor in Cabinet to increase the Council Tax empty

homes premium from 50% to 100%. These changes will require primary

legislation in parliament to amend section 11b of the Local Government

Finance Act 1992 and will not be completed for the 2018-19 financial year.

Budget Consultation

The outcome of consultation so far with business ratepayers, residents and

other stakeholders is set out in Section 3.13 and Appendix 10 of the report.

Funding

The funding available for 2018-19 and the indications and forecasts for future

years as set out in Section 3.4 of the report.

Growth and Inflation

The risks identified from potential growth and inflation commitments arising in

2018-19 and future years together with new initiatives identified as Mayoral

Priority Growth as set out in Section 3.5 and Appendix 3 of the report.

Savings

New proposed saving items to be delivered in 2018-19 and 2020-21 as set out in Section 3.6 and Appendix 4 of the report.

Financial Risks: Reserves and Contingencies

The strategic budget risks and opportunities as set out in Section 3.7 and the

assessment of risk as detailed in Appendix 6 of the report.

Reserves and Balances

The proposed approach to the strategic use of reserves as set out in Section

3.8 and the projected movement in Reserves as detailed Appendix 7 of the report.

Schools Funding

The position for schools’ funding including the Dedicated Schools Grant as set

out in Section 3.9 of the report.

Housing Revenue Account

The position of the Housing Revenue Account as set out in Section 3.10 and

Appendix 8A and B of the report.

Capital Programme

The Capital Programme to 2027-28; including proposed revisions to the

current programme as set out in Section 3.11 and detailed in Appendix 9A-D of the report.

10.To agree a review of savings proposal ‘CHI 003/17-18’ relating to ‘Widening Participation in Early Years’ agreed in the 2017/18 budget and to provide further information on the impact on affordability and level of provision for under 5s.

Action by:

CORPORATE DIRECTOR, RESOURCES (Z. COOKE)

(Divisional Director, Finance, Procurement and Audit (N. Murton)