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  ...  view the full decision text for item 5

Councillor David Edgar, Cabinet Member for Resources, introduced the report on the proposed Budget and Council Tax for 2018/19 and associated items. He explained that the report contained some minor amendments from the draft version presented at Cabinet on 9 January but that there were no material changes. In addition, the report presented the feedback from the consultation exercise that had been undertaken.

He also highlighted that the report contained a number of other items including the Housing Revenue Account and Capital Programme.

Councillor Dave Chesterton, Chair of the Overview and Scrutiny Committee (OSC) then took Cabinet through the main points of the Committee’s formal response to the draft budget proposals.

During discussion Members noted the OSC response and also raised a number of points including:

·         The pressures on Children’s Services and the need to invest in improvements following the OFSTED investigation.

·         The general levels of service provision for the under 5s.

·         Welcoming the additional provision for early years in Victoria Park.

The Mayor thanked everyone for their comments. He welcomed the report and highlighted that the budget was the raw data behind which many good council services were being delivered. However, he did agree with the comments that more work was needed to review service provision for the under 5s and so he would like to see further work on service impact of the savings proposed in that area. Subject to that amendment the Mayor agreed the recommendations as set out in the report.

RESOLVED

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  ...  view the full minutes text for item 5

The Committee is asked to consider the Mayor’s initial budget proposals to be agreed at Cabinet on Tuesday, 9th January, 2018

The Committee was reminded that in February 2017 the Council had agreed a 3 year budget and Medium Term Financial Strategy (MTFS) for the period 2017-2020; including savings of £52m that would need to be delivered to if LBTH was to achieve a balanced budget over the period until 2020.

Accordingly, as part of the Council’s annual budget cycle, the Committee was informed that the report sets out to provide a review and to update the assumptions made in that report for the years 2018-2020 and incorporates a new year, 2020-21, to maintain the Council’s three year MTFS. It was noted that the assumptions as set out in last year’s MTFS for 2018-19 have been specifically reviewed so as to allow Members to agree a balanced budget and Council tax requirement for that year.

The Committee was advised that although 2018-19 is the third year of the government’s four year guaranteed funding settlement, the introduction of a London-wide business rates retention pilot scheme and the Councils decision to participate will have an impact on those resources the Council receives from Revenue Support Grant and Business Rates and this change for 2018-19 has therefore been considered in this report. In additional, the Committee did note that demographic and inflationary budget pressures together with mayoral priority growth proposals have also been identified and the action that is needed to meet these additional commitments over the existing MTFS assumptions have been outlined within this report.

Finally, the Committee was advised that the impact on the Council’s MTFS of the Chancellors Autumn Statement that was announced on the 22nd November 2017 and the 2018-19 provisional local government finance settlement which followed on the 19th December 2017 had also been considered within the report.  The questions and comments from Members on the report may be summarised as follows:

The Committee:

• Noted that Cabinet, 9th January 2018 had formally proposes the draft Budget. Then on 10th January 2018 formal notification had been sent to the Chair of Overview and Scrutiny Committee confirming that the Mayor’s initial budget proposals had been circulated to all Members, and that any response of the Overview and Scrutiny Committee to these must be submitted to the Mayor by noon on Friday 26th January 2018. Accordingly, tonight’s meeting was specifically to discuss the Mayor’s proposals and then formally consider scrutiny comments to be reported to the Mayor by the deadline above;
• Queried that should not the statutory consultations e.g. persons or bodies including those payers of business rates (National Non-Domestic Rates – NNDR) have been finalised prior to tonight’s meeting;
• In response it was noted that on 30th January 2018 Cabinet will meet to consider all the feedback (Including from Scrutiny; the Public and those paying NNDR) and then to formally propose the budget to Council.  Whilst, on Monday 5th February 2018 the Committee will if needed have the opportunity to meet to specifically to discuss any material changes to the Mayor’s proposals announced on 30th January;
• Noted that that the report  ...  view the full minutes text for item 4

The Council is under a duty to set a balanced and sustainable budget and maintain adequate reserves such that it can deliver its statutory responsibilities and priorities.

A Medium Term Financial Strategy (MTFS) covering the entirety of the resources available to the Council is considered to be the best way that resource prioritisation and allocation decisions can be considered and agreed in a way that provides a stable and considered approach to service delivery and takes into account relevant risks and uncertainty.

The Committee noted that in February 2017 the Council agreed its budget for 2017/18 and set out a Medium Term Financial Strategy (MTFS) covering the period to 2020. Savings of £52m were identified and approved to be delivered over the MTFS period thereby setting a balanced budget for 3 years with a requirement of £2.8m from general fund reserves. The Council’s Capital programme was also reviewed and updated taking into account the current programme and decisions made during the year and new schemes added on and extended to 2021/22.

Also in 2016/17, the Council had adopted an Outcomes Based Budgeting approach to its revenue budget setting thereby putting the Council’s Strategic Priorities and outcomes for its residents at the heart of financial planning and decision making. This aims to directly link how resources are allocated to the strategic priorities of the Council. An outcomes based approach considers the efficiency and effectiveness of the Council’s services by evaluating comparable information such as financial benchmarking and outcome performance measures. This information provides the starting point for critically reviewing the Council’s relative performance and provides the basis and evidence for its budget decisions.

Furthermore, it was noted that the Council has published a revised Capital Strategy which marks a fundamental review of the Council’s capital priorities that will begin to reshape the capital programme and decision making going forward, focusing on an outcomes based approach and aligning it more explicitly to the Council’s strategic priorities . Further work has been undertaken in 2017 to review the current programme, its links to other key strategies such as the Housing Strategy, ICT Strategy, Leisure Strategy, Asset Management Strategy and Parks and Open Spaces Strategy and the capital investment needs arising from them and consider Members’ capital aspirations over the longer term to refresh the capital programme and develop a funding strategy that supports the implementation of that vision.

The questions and comments from Members on this report may be summarised as follows:

The Committee:

·         Noted that the Council’s Treasury Management Advisers are looking at best practice elsewhere where councils have looked at ways to maximise their investments;

·         Commented that they would have wished to have seen more progress on the way in which the strategic investment programme has been and will be undertaken.  In reply it was noted that the Council has already identified monies for children and social care and are addressing how the Council will respond the resource implications of the Ofsted inspection.

·         Noted that in overall terms this will be feed into the Base Budget and in terms of one off measures using reserves from the Transformation Fund;

·         Requested details of the action points arising from Ofsted report and how the available monies will be allocated;

·         Noted that with regard to questions on business rates LBTH will have greater control and influence over the business rate growth and get earlier access to increase benefits;

·         Noted that concerning the amounts that the Government has put into Adult and Social Care it is not  ...  view the full minutes text for item 7