To consider the proposals of the Mayor and Executive for the Council’s Budget and Council Tax 2021-22, as agreed at the Cabinet Meeting on 27 January 2021.

Mayor John Biggs moved, the budget and council tax proposals of the Mayor and Executive as set out in the agenda pack and the additional budget commentary motion as set out in the supplementary agenda. Councillor Candida Ronald seconded the proposals.

Councillor Peter Golds then moved and Councillor Andrew Wood seconded an amendment as set out in the supplementary agenda.

Councillor Rabina Khan then moved and Councillor Andrew Wood seconded an amendment as set out in the supplementary agenda.

Following debate, the amendment proposed by Councillor Peter Golds was put to a recorded vote and was defeated.

The amendment proposed by Councillor Rabina Khan was put to a recorded vote and was defeated.

The substantive budget and council tax proposals and additional budget commentary motion submitted by Mayor John Biggs were put to separate recorded votes and were agreed.

DECISION:

Additional Budget Commentary Motion:

The Council notes:

1.          This year’s budget has been particularly challenging . A decade of austerity, increasing demand and the coronavirus pandemic have hit our council hard and made balancing the books ever more difficult.

2.          However, despite Covid-19 and the significant uncertainty about our future funding position, the draft Budget protects frontline services and prioritises those in the greatest need including:

·         £3m to fund Free School Meals for all primary school children, one of only a small number of councils in the country to do this.

·         Additional funding for police officers and our council operated ASB service.

·         Our Tackling Poverty Fund providing financial support and advice for our most vulnerable residents.

·         Capital funding for hundreds of new council homes and three new secondary schools.

·         Protection for all of our Children’s Centres, the Brady and Kobi Nazrul centre.

·         A 100% council tax discount for the poorest in our community, one of the only places in the UK to offer this.

This Council believes:

1.          Covid19 has been a catastrophic event in the life of Tower Hamlets communities, and while much of the support people will need must come from Government, we should look at what we can do to help restore local well-being, and that we should also look to learn from our Covid-19 experiences how to create a more caring and people-centred approach to providing services and supporting people in our community. With the right focus this can be transformational.

2.          The flexibility created by increased New Homes Bonus income, plus some possible use of additional Covid-19 funds, means we can make additional one-off investment to fund an ambitious package of support to kickstart our community’s Covid-19 recovery, despite the challenges ahead and the need to resolve the problem of overspending and unfunded growth in our core budgets, requiring us  ...  view the full decision text for item 5

Mayor John Biggs moved, the budget and council tax proposals of the Mayor and Executive as set out in the agenda pack and the additional budget commentary motion as set out in the supplementary agenda. Councillor Candida Ronald seconded the proposals.

Councillor Peter Golds then moved and Councillor Andrew Wood seconded an amendment as set out in the supplementary agenda.

Councillor Rabina Khan then moved and Councillor Andrew Wood seconded an amendment as set out in the supplementary agenda.

Following debate, the amendment proposed by Councillor Peter Golds was put to a recorded vote and was defeated.

The amendment proposed by Councillor Rabina Khan was put to a recorded vote and was defeated.

The substantive budget and council tax proposals and additional budget commentary motion submitted by Mayor John Biggs were put to separate recorded votes and were agreed.

DECISION:

Additional Budget Commentary Motion:

The Council notes:

1.          This year’s budget has been particularly challenging . A decade of austerity, increasing demand and the coronavirus pandemic have hit our council hard and made balancing the books ever more difficult.

2.          However, despite Covid-19 and the significant uncertainty about our future funding position, the draft Budget protects frontline services and prioritises those in the greatest need including:

·         £3m to fund Free School Meals for all primary school children, one of only a small number of councils in the country to do this.

·         Additional funding for police officers and our council operated ASB service.

·         Our Tackling Poverty Fund providing financial support and advice for our most vulnerable residents.

·         Capital funding for hundreds of new council homes and three new secondary schools.

·         Protection for all of our Children’s Centres, the Brady and Kobi Nazrul centre.

·         A 100% council tax discount for the poorest in our community, one of the only places in the UK to offer this.

This Council believes:

1.          Covid19 has been a catastrophic event in the life of Tower Hamlets communities, and while much of the support people will need must come from Government, we should look at what we can do to help restore local well-being, and that we should also look to learn from our Covid-19 experiences how to create a more caring and people-centred approach to providing services and supporting people in our community. With the right focus this can be transformational.

2.          The flexibility created by increased New Homes Bonus income, plus some possible use of additional Covid-19 funds, means we can make additional one-off investment to fund an ambitious package of support to kickstart our community’s Covid-19 recovery, despite the challenges ahead and the need to resolve the problem of overspending and unfunded growth in our core budgets, requiring us  ...  view the full minutes text for item 5

The Pre-Decision Scrutiny Questions and officer responses were noted.

It was noted that the final Overview and Scrutiny Committee (OSC) response to the draft budget would be submitted after the final OSC meeting next week and that the Executive would consider those recommendations before submitting the final budget proposals to Council for consideration.

DECISION

1.    To agree to propose a General Fund Revenue Requirement of £386.141m subject to any remaining changes arising from the final Local Government Finance Settlement.

2.    To agree to propose a Band D Council Tax of £113.26 (Council Share) 2021-22 to full Council for approval.

3.    To agree that the Interim Corporate Director, Resources, after consultation with the Mayor and Lead Member for Resources, may make any changes required to the budget following the final settlement announcement.

4.    To agree to propose the 2021-22 transfers to and from reserves as set out in paragraph 3.9.12 of the report.

5.    To agree to proposal to continue the £1 million funding from the Public Health grant to the Key Stage Two extension of Free School Meals.

6.    To approve the proposed £2.974m one-off increase in the Social Care Support Grant for 2021-22 is allocated in full directly as budget to the services (75% to adult social care, £2.230m, and 25% to children’s social care £0.744m).

7.    To approve the proposed £0.746m increase in the Homelessness Prevention Grant is allocated in full to the Place directorate to support homelessness in the borough.

8.    To agree to propose the three-year General Fund Capital Programme 2021-24 as set out in Appendix 8 to the report, totalling £395.471m.

9.    To approve the budget allocation for the newly listed schemes in the programme, subject to sign off through the capital governance process and agreement to proceed given by the Corporate Director of Place in consultation with the Corporate Director of Resources and that schemes funded by future capital receipts, s106 and/or CIL will not go ahead until such funds have been securely received.

10.To approve delegated authority to the Corporate Director of Place in consultation with the Corporate Director of Resources for all activities required to deliver the capital programme e.g. go out to tender, appoint consultants and contractors in accordance with the Procurement Procedures, acquire land interests, appropriate land from the General Fund to the Housing Revenue Account (HRA) for the delivery of new council homes, subject to approved budget.

11.To approve the following specific recommendations subject to the agreement of the budget Council meeting if/where required:

i.               Approve the 2020-21 spend on IT projects, of which £7.020m to be funded from revenue reserve; and

ii.              Approve the disposal of assets, as set out in Appendix 8F to the report, subject to sign off through the capital governance process and agreement to proceed given by the Corporate Director of Place and Corporate Director of Resources.  

iii.              

12.To approve the principle that when capital receipts are achieved in year that they replace borrowing in future years. 

13.To approve the  ...  view the full decision text for item 6

The Mayor introduced the Administrations budget proposals and medium-term financial strategy. He noted the comments received to date in response to the draft budget proposals. In particular he highlighted how important it was to use reserves prudently as they could only be spent once. The Council was in a very challenging financial situation and the Council also had to deal with increasing demands on services especially around adult and children’s social care and related support. The Covid-19 pandemic had also impacted significantly and had to be factored into the calculations. These were problems that other Councils were also having to deal with.

However, he highlighted that the administration were committed to doing everything they could to support the vulnerable within the community and the budget set out the best way forward for the Council and its services in the circumstances.

Finally, the Mayor noted updates to the draft budget presented at an earlier meeting which were around greater detail added to the Schools and Education budget,  more information around the Housing Revenue Account and also the new details on the Capital Programme.

Councillor Candida Ronald, Cabinet Member for Resources and the Voluntary Sector, took Cabinet through the report in more detail including looking at both revenue and capital budgets and individual proposals. She spoke about the uncertainty caused by the Covid-19 pandemic and that there had already been a negative impact on the Council’s income and expenditure. She welcomed the funding the government had provided but noted that it was still uncertain in a number of areas the exact funding available. She also highlighted a number of other issues such as slippage in achieving agreed savings, use of resources and the need to tackle new challenges as they appeared.

The report was then opened up to discussion and the meeting heard from a number of participants raising a number of issues and points including:

·       Details of new proposes Capital Spending including on bridges over the River Lea.

·       The significant reduction in the Council’s revenue reserves and risks around business rate collection and office accommodation.

·       Hearing from local petitioners who were concerned about changes to specialist day centre services.

·       The issues that the Overview and Scrutiny Committee were considering including the pre-decision scrutiny questions and officer responses.

·       The Council’s capital plans including around securing social housing units.

·       Challenges around anti-social behaviour especially around Shoreditch.

It was noted that the final Overview and Scrutiny Committee (OSC) response to the draft budget would be submitted after the final OSC meeting next week and that the Executive would consider those recommendations before submitting the final budget proposals to Council for consideration. It was also noted that some housekeeping changes may be required which were delegated to the Interim Corporate Director, Resources.

The Mayor proposed that the budget proposals should be forwarded to Council without amendment at this stage. This was agreed without dissent and so it was:

RESOLVED

1.    To agree to propose a General Fund Revenue Requirement of £386.141m subject to any remaining  ...  view the full minutes text for item 6

The Committee is asked to note and comment on the Council’s Budget for 2021-22 and MTFS 2021-24

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v  Production of the Council’s budget has been challenging for several reasons mainly COVID-19, austerity, growth, and demand for statutory services particularly adults and children.

v  Impact of COVID-19 has slowed down (timescales) staffing reviews to achieve savings. Additionally, the switch by government from providing grant funding to Councils to a greater reliance on council tax.

v  In this budget, the Council is expected to increase council tax to 5% and if not the assumption by government is that the Council will make savings to cover this rather than it being additional income.

v  56 savings have been identified across most of the council areas and the expectation is that these will reduce the capacity of the Council to deliver on some service areas. 

v  There have been extensive efficiencies produced from back office savings to protect frontline services, however, there needs to be balance, as there are capacity  implications.

v  Council is implementing a dual track strategy which includes providing a wide range of service for people with particular needs including free school meals and continuing the generous council tax reduction However,  there is an increase demand for this budget that includes (i) 100% rebate for people on low incomes, (ii) tackling poverty programme (funded for the next year). In addition, (iii) providing good range comprehensive service including parks;  and (iv) street cleansing.

v  The Council has generous reserves but has had to use some of this in the past year in order to deal with some of the pressures on the budget.

v  The Capital Budget will be going to Cabinet on 27.01.2021 and not included with the budget report.

v  Extra funding from government provided but with different amounts each time and different basis for allocations and has been difficult to plan.

v  The total funding requirement for (2021-22) is £362M including new savings of £6M on top of previously agreed £14M and a small drawdown £1.2M will be required to balance the budget.

v  Next year Health, Adults and Communities set at £110M (1/3 of the total services budget and the largest area of spend, followed by Children and Culture) – These are service areas supported by residents’ feedback from the budget  consultation.

v  The MTFS suggests using £8.3M of reserves in 2022-23 specifically to get passed the pandemic although reserves are finite and cannot be used more than once.

v  The Council still has a £10M funding gap for future years.

v  Particular Issues have been identified with the budget setting process – impact of COVID-19 on collection fund and existing savings programme.

v  On the Local Government Funding Settlement, the Government has agreed to help with collection fund deficits, picking up 75% of irrecoverable losses. However difficult to determine what the final cost will be and implications for the business community.

v  Business rates are significant to the London’s economy and there could be further ramifications for LBTH’s budget further down the line.

v  On existing savings programme, the Council has tried to de-risk  ...  view the full minutes text for item 6

DECISION

1.    To note the updated draft MTFS for 2021-22 to 2023-24, taking account of draft savings and growth business cases and a revision to the income assumptions (Council Tax and Business Rates) proposed since the last MTFS report to Cabinet on 29 July 2020.  If these were all agreed at the current values proposed, the estimated budget gaps before use of one-off reserves would become £7.8m (21-22), £19.1m (22-23) and £10.9m (23-24). 

2.    To propose the use of reserves on a one-off basis to balance the budget in 21-22 in the sum of £7.8m (£6.5m of which is the pre-planned drawdown from the Council Tax smoothing reserve) and agree a further contribution from reserves in 22-23 in the sum of £8.2m to smooth the budget deficit over the medium term.

3.    To note the need to set a balanced budget for 2021-22, the aspiration to also set a balanced budget over the rest of the three year MTFS period and that prompt and decisive action is required urgently to address the challenging financial position as highlighted by the budget gaps.

4.    To agree that:

a) further review work should continue on the draft savings proposed to date, and;

b) officers should continue to identify further savings opportunities for consideration to fully meet the estimated budget gap over the next three years.

5.    To propose that the Council Tax rate for 2021-22 will be increased by 1.99% general rate increase and an additional 3.00% Adult Social Care precept, totalling 4.99%.

6.    To propose that the Key Stage Two extension to the Free School Meals programme will be funded throughout the three years of the MTFS by £2m per annum from reserves (reserves supplemented by additional New Homes Bonus in 21-22) and continuation of the £1m per annum funding through the Public Health grant.

7.    To propose the growth proposal of £771k per annum for three years’ investment in additional police officers in the borough under Section 92 of the Police Act 1996 (Grant from a Local Authority) with the Mayor’s Office for Policing and Crime (MOPAC) using the revised Met Partnership Plus scheme; and,

8.    To propose to delegate authority to the Corporate Director Health, Adults and Community, in liaison with the Corporate Director Resources, to execute the necessary agreement with MOPAC and Tower Hamlets Police – Basic Command Unit for Central East.

9.    To agree an average housing rent increase of 1.5% based on the September 2020 Consumer Price Index plus 1% to take effect from the first rent week of April 2021. This equates to an average rent increase of £1.23 per week for 2021-22.

10.To agree that the average weekly housing tenanted service charge will increase by 1.5% from the first rent week in April 2021. This is consistent with the new Social Housing rent standard rent policy and will lead to an average weekly increase in tenanted service charges of approximately £0.57.

11.To note that the Local Council Tax Reduction Scheme will remain unchanged  ...  view the full decision text for item 6

This item was taken with Agenda Item 6.1 (Mayor’s Foreword to the Council’s Budget Report) and the combined minute is presented here.

The Mayor introduced the Administration’s draft budget proposals and his own foreword to that pack. He explained that the budget would be submitted to the Overview and Scrutiny Committee for review before returning to Cabinet who would formally forward the final budget papers to Council.

Council would take the final decision on the budget and council tax. However, the papers at Cabinet also included the three-year medium-term financial plan as well as some additional decisions for Cabinet to take.

The budget proposals set out a significant number of savings that the council was required to make to meet the available budget. Some changes had been made possible by new technology and new ways of working explored during the pandemic, but other savings would result in reductions in the services provided to residents. The Mayor paid tribute to staff who had made large adjustments to how they worked whilst continuing to support the borough and its residents during the pandemic.

Introducing the report, the Mayor highlighted a number of issues that had played a part in decision making over the draft budget, including:

·       The ten-year austerity regime imposed on local authorities which had resulted in more than £200 million being removed from the Council’s budget capacity and the additional £30 million in savings required by 2024. The fight for a fair funding settlement would continue.

·       The desire to create a progressive budget supporting residents in a host of different ways with some universal services and others targeted at specific groups.

·       The continuation of funding for free school meals and provision of additional police officers.

·       Investment in Children’s Centres and other support for families.

·       The value of the tackling poverty fund.

·       Work to build and acquire new council housing.

·       Investment in three new secondary schools.

·       Work to tackle air quality.

·       The council tax discount scheme.

·       How the East End was a magical place and the Council wanted to do all it could to unlock the energy and potential of local residents.

Councillor Candida Ronald, Cabinet Member for Resources and the Voluntary Sector, highlighted the detailed sections of the report including the updated Medium Term Financial Plan, Council Tax and Adult Social Care precept proposals, rent and tenant service charge changes for agreement and the unchanged council tax support scheme amongst other points. She noted that prudent use of reserves was proposed but that further savings would also need to be identified in the coming years. She highlighted that the pandemic was creating great uncertainty as to the Council’s financial position and that, whilst extra government funding had been announced, it was short term and in many separate awards which made it difficult to plan. She thanked finance staff who had worked tirelessly to put the budget proposals together.

Councillor Peter Golds, Leader of the Conservative Group, highlighted the need to work together to determine the best budget for the  ...  view the full minutes text for item 6