DECISION

1.      Propose a draft General Fund Revenue Funding Requirement of £458.661m for 2024-25 subject to remaining changes arising from the final Local Government Finance Settlement and any other necessary adjustments.

2.      Propose to levy a 2% Adult Social Care precept for 2024-25.

3.      Approve that the Corporate Director Resources, in consultation with the mayor and Cabinet Member for Resources & Cost of living, be authorised to make any changes required to the draft budget following receipt of the Local Government Finance Settlement (LGFS) for further consideration at Cabinet on 31 January 2024.

4.      Note the latest draft position of the Council’s reserves, subject to final audit of the statements of accounts.

5.      Approve the HRA housing rent and service charge increases as outlined in section 3.11 of the report.  This includes increasing housing rents for all properties by 7.7% for 2024-25 (CPI +1%), which will also enable updated modelling of the HRA for consideration at Cabinet on 31^st January 2024.

6.      To note this report incorporates the fees & charges changes proposed in another report to Cabinet and they are included in the draft budget and medium-term financial strategy.

7.      Agree that the National Schools Funding Formula (NSFF) adopted by Tower Hamlets originally in 2019-20 continues for 2024-25. The only changes included are increases to the factor values in line with the NSFF.

8.      Agree that the Minimum Funding Guarantee (the mechanism that guarantees schools a minimum uplift in per-pupil funding) is set as close to 0.5% as affordable, the maximum allowed after consideration for growth and factor changes in School allocations.

9.      Agree that the structure of the Early Years Funding Formula remains unchanged except for the introduction of the expanded two-year-old entitlement and new provision from 9 months from September 2024 with revised hourly rates increases in line with the Early Years National Funding Formula.

10.   Note that the Local Council Tax Reduction Scheme will remain unchanged for 2024-25.

11.   Note the School funding position set out at Section 3.10 of the report, in particular the overall Dedicated Schools Grant (DSG) deficit.

12.   Note the Equalities Implications as set out in Section 5 of the report.

13.   Note the Council Taxbase calculations in Appendix 4 to the report.

Action by:

CORPORATE DIRECTOR RESOURCES (J. LORRAINE)

Interim Director of Finance, Procurement and Audit (J. Harrison)

The Mayor introduced the report. He explained that he was proud of the proposed budget, that reaffirmed the Council’s commitment to protect and empower the people of the borough, including:

·         building on the investment made in last year’s budget;

·         building fiscal sustainability into the Council’s collective long-term future;

·         delivering sizeable savings and efficiencies across the council, whilst ensuring ongoing investment in frontline services such as housing and helping residents in the cost-of-living crisis;

·         an additional £5million investment into the Council’s waste-management services for new frontline workers and investment in vehicles and service improvements.

He offered his thanks to the Lead Member, Councillor Saied Ahmed, the Chief Executive, Stephen Halsey, the Section 151 officer, Julie Lorraine, and all the Officers who worked to prepare the draft budget.

Councillor Saied Ahmed, Cabinet Member for Cabinet Member for Resources and the Cost of Living provided further detail. He explained some of the key aspects of the budget, including:

• reducing previously budgeted use of reserves by £4m over the life of the MTFS, demonstrating progress the Council is making in guaranteeing its long-term financial security;
• new investment in services of £18m for next year;
• how clear criteria for savings ensured the budget would protect frontline services to residents, avoid compulsory redundancies where possible and increase permanent employment opportunities by reducing reliance on temporary and interim resources. There would be no reduction in frontline staffing or services;
• how a robust approach had been adopted to manage unavoidable growth.

Councillor Ahmed asked Cabinet to note that a further MTFS report will be presented to Cabinet on 31 January which would build on the position in the report. He offered his thanks to the Chief Executive, Section 151 Officer and the finance team, for their work and support in preparing the draft budget.

The Cabinet welcomed the proposed report. Lead Members briefly explained how the budget would protect and improve services in their portfolios.

Julie Lorraine, Corporate Director Resources and Section 151 Officer provided commentary on the draft budget. She explained:

• The Council was in a strong financial position and at no risk of a section 114  notice.

• There remained some risks associated with the budget such as continuing pressures in demand led services in particular temporary accommodation. There were some mitigations to address these risks. For example, rent increases which would help fund additional housing alongside investment in current stock.

• A reliance on income generation. Risk profiling, and stress testing would be undertaken and financial ensuring resilience would be the best mitigation.
• Future of business rates. Whilst there had been a delay in national changes, there was at present no decision to abandon the proposals. As home to strong business rates base, the borough was more vulnerable to such potential changes than many.

Julie explained that the next iteration of the report to Cabinet on 31 January would further explore risks and additional mitigations.

RESOLVED that the Mayor in Cabinet:

1.      Proposes a draft General Fund Revenue Funding Requirement of £458.661m for 2024-25 subject to remaining changes arising from the final Local Government Finance Settlement and any other necessary adjustments.

2.      Proposes to levy a 2% Adult Social Care precept for 2024-25.

3.      Authorises the Corporate Director Resources, in consultation with the mayor and Cabinet Member for Resources & Cost of living, to make any changes required to the draft budget following receipt of the Local Government Finance Settlement (LGFS) for further consideration at Cabinet on 31 January 2024.

4.      Notes the latest draft position of the Council’s reserves, subject to final audit of the statements of accounts.

5.      Approves the HRA housing rent and service charge increases as outlined in section 3.11 of the report.  This includes increasing housing rents for all properties by 7.7% for 2024-25 (CPI +1%), which will also enable updated modelling of the HRA for consideration at Cabinet on 31^st January 2024.

6.      Notes the report incorporates the fees & charges changes proposed in another report to Cabinet and they are included in the draft budget and medium-term financial strategy.

7.      Agrees that the National Schools Funding Formula (NSFF) adopted by Tower Hamlets originally in 2019-20 continues for 2024-25. The only changes included are increases to the factor values in line with the NSFF.

8.      Agrees that the Minimum Funding Guarantee (the mechanism that guarantees schools a minimum uplift in per-pupil funding) is set as close to 0.5% as affordable, the maximum allowed after consideration for growth and factor changes in School allocations.

9.      Agrees that the structure of the Early Years Funding Formula remains unchanged except for the introduction of the expanded two-year-old entitlement and new provision from 9 months from September 2024 with revised hourly rates increases in line with the Early Years National Funding Formula.

10.   Notes that the Local Council Tax Reduction Scheme will remain unchanged for 2024-25.

11.   Notes the School funding position set out at Section 3.10 of the report, in particular the overall Dedicated Schools Grant (DSG) deficit.

12.   Notes the Equalities Implications as set out in Section 5 of the report.

13.   Notes the Council Taxbase calculations in Appendix 4 to the report.