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 inclusion of the George Green School within the General Fund Capital Programme 2021-24 totalling £51.400m.

14.To note the development of the medium term and long-term Prioritisation and Financing Delivery Plan for Infrastructure (PFDP) identifying priorities for 2023 to 2030.

15.To agree to propose the 3-year Housing Revenue Account Capital Programme 202124 as set out in Appendix 8E totalling £231.095m.

16.To agree to propose the 2021-22 Housing Revenue Account budget as set out in Appendix 7 to the report.

17.To approve the 2021-22 Management Fee payable to Tower Hamlets Homes (THH) of £32.615m as set out in paragraph 3.11.11 of the report.

18.To note that under the Management Agreement between the Council and THH, THH manages delegated HRA income and expenditure budgets on behalf of the Council.  In 2021-22, THH will manage delegated income budgets totalling £93.942m and delegated expenditure budgets totalling £61.311m.

19.To agree to propose the 2021-22 Dedicated Schools Budget. 

20.To agree that the National Schools Funding Formula (NSFF) adopted by Tower Hamlets originally in 2019-20 continues for 2021-22. The only changes included are increases to the factor values in line with the NSFF, the inclusion of pay and pension grant allocations and a minor change to the funding allocated to schools with split sites. 

21.To agree that the Minimum Funding Guarantee (the mechanism that guarantees schools a minimum uplift in per-pupil funding) is set at 2.0%, the maximum allowed.

22.To agree that the structure of the Early Years Funding Formula remains unchanged except that the two-year-old hourly rates will increase in line with the Early Years National Funding Formula.  

23.To note that the Local Council Tax Reduction Scheme will remain unchanged for 2021-22.

24.To note the Equalities Impact Assessment and specific equalities considerations as set out in Section 4 of the report.

Action by:

INTERIM CORPORATE DIRECTOR, RESOURCES (K. BARTLE)

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 for 2021-22.

12.To note the following matters:

The General Fund revenue budget for 2021-22 and MTFS 2021-22 to 2023-24

The initial budget proposals and Council Tax for 2021-22 together with the MTFS set out in Appendix 1.

Funding

The funding available for 2021-22 and the indications and forecasts for future years as set out in Sections 3.3 and 3.5.

Growth and Inflation

The risks identified from the potential growth and inflation commitments arising in 2021-22 and future years as set out in Section 3.6 & Appendix 3.

Savings

New proposed saving items to be delivered in 2021-24 as set out in Section 3.7 and Appendix 4.

Financial Risks and Opportunities

The strategic budget risks and opportunities as set out in Section 3.8.

Reserves

The reserves policy and proposed approach to the strategic use of reserves as set out in Section 3.9 and Appendix 5.

Schools’ Funding

The position for schools’ funding including the Dedicated Schools Budget as set out in Section 3.10.

Housing Revenue Account

The proposals for Housing Rent and Tenanted Service Charge Setting 2021-22 are set out in Section 3.11.

13.To note the Equalities Impact Assessment (EIA) and specific equalities considerations as set out in Section 4 of the report.

Action by:

INTERIM CORPORATE DIRECTOR, RESOURCES (K. BARTLE)

(Interim Divisional Director, Finance, Procurement and Audit (H. Jolapara)