Issue - meetings

Report of the Director of Finance and Assurance.

Members received a report from the Director of Finance which set out the Council’s proposed Draft Revenue Budget for 2023/24 and the draft Medium Term Financial Strategy (MTFS) for 2023/24 to 2025/26.  In a presentation to the report, the Director of Finance provided a high-level overview of the budget consultation requirements and the process for setting the draft budget and MTFS.  The following key points were highlighted:

·                 Harrow Council’s financial position remained extremely challenging.

·                 A Council Tax increase of 4.99% for 2023/24 was being proposed.  This was expected to decrease by 1% per annum for 2024/25 and 2025/26 to 3.99% and 2.99% respectively.

·                 Despite significant inflationary pressure, the Council had an obligation to maintain investment in statutory services such as Children’s.

·                 The Council’s budget gap for 2023/24 was estimated at £10.9m.

·                 A number of actions required to achieve a legally balanced 3-year MTFS were being undertaken and would be presented to meetings of Cabinet and Full Council in February.

No questions were raised by Members on the presentation.  However, before moving on with the discussion, the Chair clarified that the increase in Council Tax would be decided at the Full Council meeting on 23 February 2023.

The meeting continued with a presentation from the Divisional Director for Collections and Benefits on the revaluation of commercial property and impact to Harrow Business.  The following key points were highlighted:

·                 Despite significant variations in valuations across London regions and business sectors, the overall Harrow rateable for 2023/24 was 8.3% which was below inflation for the year.

·                 Large package of support was available to business rates payers to support revaluations.  This included a multiplier which was frozen for 2023/24; a transitional relief scheme, which would see most of Harrow’s small and medium businesses having their business rates bills increases capped at between 5 and 15% depending on the size of the rateable value; a retail relief scheme where any in-person business will be able to receive 75% relief from the net rates payable (which will be worth £12m to businesses in Harrow on top of other support packages); supporting small business relief ensuring no eligible small business pays more than £600 in business rates extra compared to the previous year.

·                 Businesses would be able to challenge revaluations if they think their rateable value has unfairly increased by appealing to HMRC’s Valuation Office Agency.  Normal business rates would continue to apply until a decision on the appeal had been made and a new value set.

The Chair thanked officers for their presentation and invited questions from Members and Local Representatives. Following comments and questions from, the Panel was advised that:

·                 Compensation from lost business rates retention revenue was expected to be between £6-8m, as set out in the draft budget report.  Officers offered assurance that Harrow was in a good position with any funds lost from retention of business rates would be regained through Section 31 grants.

·                 Responding to a question on the Council’s energy budget and plans to decarbonise, officers advised that the Council  ...  view the full minutes text for item 9

Report of the Director of Finance and Assurance.

The Forum received a report of the Director of Finance and Assurance which set out the draft revenue budget for 2023/24 and draft Medium Term Financial Strategy (MTFS) for 2023/24 to 2025/26 and had been considered by Cabinet on 8 December 2022.  The budget and MTFS would be submitted to Cabinet in February 2023 for approval and recommendation to Council.

The Portfolio Holder for Finance and Human Resources introduced the report which showed a budget gap of £10.923m for 2023/24, a balanced budget position for 2024/25  and a budget gap of £10.964m for 2025/26.  The indicative Local Government Financial Settlement that had been announced on 19 December 2022 had been substantially worse than expected and the objective was now to optimise the resilience of the Council moving forward and to minimise the use of reserves.  The Portfolio Holder explained that the challenge was that most of the Council’s resources were from Council Tax and that whilst the Council would like to reduce Council Tax this was not currently practical and, taking advantage of the new flexibility, it was proposed to increase it by 4.99% in 2023/24.

The Portfolio Holder advised the Forum that another challenge in the budget was that the inflationary expectations had been set in February 2022 but had been much higher than had been anticipated.  The draft budget before the Forum contained reasonable assumptions in terms of salaries moving forward.  Whilst it been difficult to prepare the draft budget for the next financial year, he advised that it would even more challenging in years 2 and 3.

In response to a question from a Unison representative in relation to the £10m shortfall in the budget and service standards for residents, the Portfolio Holder advised that he hoped that they would not be impacted but that there was a delicate balance.  One of the Council’s priorities was to put residents first and therefore improve services.

The representative of Unison questioned the impact on staffing levels and the potential programme for redundancies and restructures and was advised that there was currently no programme.  The Portfolio Holder advised that approximately 23% of the Council’s staff were agency which was costly.  His preference was to have permanent staff in posts which would encourage loyalty both ways.  In response to a question in relation to long term agency staff and whether they would be offered permanent jobs, the Forum was advised that this would be subject to a number of factors but jobs would be offered if appropriate.

The Leader of the Council advised that the Administration was considering the senior management structure in terms of the spans of control and reducing duplication with a view to making savings.  There were, in his view, too many layers at the top of the organisation.  He added that he was also keen to have an apprenticeship programme and that it had been disappointing to have returned funding allocated for the apprenticeship levy.

Further to the comments made by the Portfolio Holder and Leader of  ...  view the full minutes text for item 9

Report of the Director of Finance and Assurance.

RESOLVED:  That

(1)            the draft budget for 2023/24 and the Medium-Term Financial Strategy (MTFS) 2023/24 to 2025/26 for general consultation set out in Appendices 1(A & B) and 2 to the officer report be approved, so that the budget could subsequently be considered following the consultation responses and the equality impact assessment (s) before referral to Council in February 2023;

(2)            the Autumn Settlement 2022 confirming broad plans for public spending for 2023/24 be noted, and that the draft budget be updated when the detail in the Indicative Financial Settlement, expected in the week commencing 19 December 2022 was announced followed by the Final Settlement no later than January 2023;

(3)            at draft budget stage, an estimated budget gap of £10.923m for 2023/24, £0m for 2024/25 and £10.964m for 2025/26 remained, be noted (noting the caveat regarding the Social Care Grant in Table 1of the officer report);

(4)            the proposal to increase core Council Tax by 2.99% in 2023/24 and 2024/25 and then by 1.99% in 2025/26, as set out in Table 1 and paragraph 1.17 of the officer report, be noted;

(5)            the proposal to increase Adult Social Care Precept Council Tax by 2% in 2023/24 and then by 1% per annum in 2024/25 and 2025/26 in respect of the Adult Social Care Precept, as set out in Table 1 and paragraph 1.17 of the officer report, be noted;

(6)            the draft Public Health budget for 2023/24, as set out in Appendix 3 to the officer report, be agreed;

(7)            it be noted that no structured changes to the schools funding formula for 2023/24, as set out in Appendix 4 of the officer report, were proposed;

(8)            the assumed funding for the protection of social care 2023/24 through the Better Care Fund (BCF), be noted; and

(9)            the Director of Finance and Assurance, following consultation with the Portfolio Holder for Finance and Human Resources, be authorised to agree Harrow’s 2023/24 contribution to the London Borough’s Grant Scheme, noting that final approval would be sought from Cabinet and Council in February 2023.

Reason for Decision:  To ensure that the Council published a draft budget for 2023/24 and a draft three-year MTFS to 2025/26.