Agenda item
Budget Update
- Meeting of Online 'Virtual' Meeting, Overview & Scrutiny Committee, Monday, 14th December, 2020 6.30 p.m. (Item 8.2)
- View the background to item 8.2
The Committee will undertake a critical friend challenge to the Budget Setting process in line with the Council’s priorities – Presentation to be made available prior to the meeting.
Minutes:
The Committee received a presentation that was intended to inform discussion for the next Overview and Scrutiny Committee meeting. The presentation included (i) Introductions from Cllr Candida Ronald, Cabinet Member for Resources, and the Voluntary Sector as well as Kevin Bartle (Interim Corporate Director, Resources); (ii) Economic Outlook for Local Government; (iii) Update on the MTFS process; (iv) Spending Review 2020- main impacting factors; and (v) The Budget Consultation Process.
A summary of the discussions on the presentation is set out below:
Members:
· Noted that in February 2021 the Council will agree its budget for 2021-22. In line with previous years, the Council has carried out consultation with residents, businesses, and other key stakeholders to help inform budget decisions. This report for noting provides the results of the Council’s 2021-22 budget consultation that was carried out from October to December 2020.
· Noted that due to the impact of the Covid-19 pandemic, Tower Hamlets now finds itself in a materially changed environment from that which existed in February 2020 when the budget and medium-term financial strategy were approved by the Council.
- Noted that ongoing financial pressures, including responding to Covid-19, mean that despite saving £200m since 2010-11, the Council now must save a further £30m by 2024.
- The impact of Covid-19 has highlighted the importance of public services. However, while the Government said that local councils should do ‘whatever it will take’ to support their communities they have not fully covered the reduced income and increased costs that the Council has faced.
· Was informed that the Government’s Core Spending Power calculation makes assumptions about the level of growth in the Council Tax base and that LBTH will increase Council Tax each year up to the referendum limit.
· Was reminded that following receipt of the final settlement, the Chief Finance Officer (CFO) will then need to be assured of the robustness of estimates and adequacy of reserves and this it was noted will be covered in the report to Cabinet on 27 January 2021.
· Whilst appreciating the challenging financial situation indicated that it would be helpful to have more financial information. Accordingly, the Committee raised a question on Temporary Accommodation overspend and asked if this was directly related to Covid or for other reasons. In response it was noted that this was historical.
· Wanted to look at which services should be contributing towards savings and to have assurances that any increase in Council Tax would give consideration of the impact on those who would struggle to pay.
· Wanted details of the methodology used that had indicated the financial difficulties that the Council would face in the current economic circumstances.
· Whilst accepting that the Council faces several challenges if it is to set a balance budget concern was expressed that running the consultation when it did mean that there was not enough involvement from residents and businesses and this impacts on how informed decision-making process will be.
· Noted that next year the budget consultation would start earlier
· Also were concerned that (i) whilst LBTH had already made significant savings, since 2010-11 it would have to make difficult financial decisions if it is to balance its budget; (ii) about what might happen if LBTH cannot achieve a balanced budget; and (iii) LBTH would not deliver the budget savings that had been already agreed.
- Were reminded that whilst the Council is free to determine the level of reserves it holds they are accountable to the electorate for the decisions they make. Also whilst the Council may use its reserves to address times of uncertainty such as the impacts of coronavirus (E.g. the revaluation of business rates) but should keep sufficient sums of money in reserve so that it has a financial cushion to meet any other sudden unexpected costs (E.g. The Council maintains a range of budget provision and has earmarked reserves for specific risks and general reserves for unforeseen events and risks).
The Chair Moved and it was: -
RESOLVED to:
- ThankCllr Candida Ronald and Kevin Bartle for attending tonight’s meeting and for the information that they had provided which would help to inform further discussions by the Overview and Scrutiny Committee meeting;
- Receive any details of the methodology of economic modelling impact the Council has; and
- Receive any new financial information that might affect the budget as soon as it arises.
Supporting documents:
- OSC cover page - MTFS 2021-24, item 8.2 PDF 36 KB
- MTFS Slides for O and S Dec 2020, item 8.2 PDF 253 KB