Issue - meetings

Joint report of the Corporate Director of Resources and Assistant Chief Executive (to follow)

The Panel received a report setting out the Council’s proposals for the budget and Medium Term Financial Strategy 2013-14 to 2016-17 and also the Draft Capital Programme 2013-14 to 2016-17 for consultation.

The Corporate Director of Resources conducted a presentation which consisted of several themes.

Revenue Budget

The Corporate Director of Resources reported that:

·                     the Comprehensive Spending Review in 2010 had been the most challenging funding settlement in decades;

·                     the Council had been required to make a 28% cut in its controllable budget over 4 years;

·                     several more years of reductions to the Council’s budget were expected;

·                     the Council were experiencing growth pressures including demographic changes impacting on social care and school places;

·                     there was a historically low level of grant funding provided to the Council;

·                     under funded services had recently  been transferred to the Council including Council Tax Support and Social Funds, adding further pressure to the Council’s budget;

·                     the proposed budget had been guided by the Corporate Priorities.  In addition to this the budget reflected 5 key principles which included continuing to make savings in the civic centre and ensuring the services residents cared about were protected from drastic cuts;

·                     as it currently stood, the Council had a funding gap of £5.2 million for 2013-14 and £3.3 million for 2014-15.  However for the following 2 years after this, the funding gap increased significantly;

·                     the draft Budget requirement for 2013-14 was approximately £181 million.  This figure took into account budget pressures, technical changes and an increase in Council Tax;

·                     some of the budget pressures included a reduction in Government Grants by £8.5 million, a contingency of £1 million and an extra £1 million to deal with anticipated homelessness;

·                     some of the budget reductions included a reduction in Adults Contract Management by £1.3million and a reduction as part of the PRISM project by £1.5 million;

·                     the impacts for businesses arising from the budget included an aspiration for discounted on street parking and a linked Harrow Card which also offered promotions with local traders.  The impacts also included further town centre regeneration, investment in highways and  continued employment programmes.

During the discussion on this item, Members of the Panel elaborated on the proposal to introduce the Harrow Card.  The Chair explained that following consultation, a large number of businesses in the borough had expressed their concern at unequal on-street parking regimes in the Council.  These businesses had expressed that a fairer system was required and that shoppers should be able to park for an initial period of 15-20 minutes without charge.  The card could also offer promotions for shoppers from traders.  The Harrow Card would operate using smart card technology and parking meters within the borough would need to be upgraded.  The Harrow Card could be sold and priced between £5 to £10.  A Card could last for 3 years.  It was expected that 20 to 30,000 residents would initially sign up to obtain a Harrow Card.  The London Borough of Hillingdon had successfully implemented this scheme and the Council’s  ...  view the full minutes text for item 22

Joint report of the Corporate Director of Resources and Assistant Chief Executive.

RESOLVED:  That

(1)               the draft budget for 2013/14 and the Medium Term Financial Strategy be approved for consultation;

(2)               the remaining budget gaps of £5.2m in 2013/14, £3.3m in 2014/15, £16.9m in 2015/16 and £14.3m in 2016/17 and the plans to close the gap be noted;

(3)               the planned investment in services and efficiency programme be noted;

(4)               the statutory changes to school funding be noted and the proposed changes to the school funding formula at Appendix 4 to the report be approved;

(5)               the proposed level of contribution to the London Boroughs Grant Scheme of £263,831 for Harrow be agreed.

Reason for Decision:  To publish a draft budget for 2013/14.

Alternative Options considered and rejected:  As set out in the officer report.

Conflict of Interest relating to the matter declared by Cabinet Member/Dispensation granted:  None.

The Portfolio Holder for Finance introduced the draft revenue budget for 2013/14 and Medium Term Financial Strategy (MTFS) for 2013/14 to 2016/17 report to Cabinet and reported that the final budget would be presented to Cabinet in February 2013 prior to its submission to full Council.

The Portfolio Holder set out the context in which the report had been prepared, such as the government’s austerity measures, at a time when local authorities continue to take huge cuts from the government and the historically low grant received by Harrow, particularly when compared to its neighbouring borough Brent.  He added that there was a funding gap of £24m over the next two years due to demographic changes as shown in the recent census results.  These were as follows:

·                     an increase in the number of children, resulting in a school expansion programme;

·                     an increase in the number of elderly people in the borough which would impact on the budget;

·                     cuts in welfare by the government, which would place an additional strain on the Council’s budget;

·                     additional cuts from the government in the form of various grants, such as the Early Intervention and Children Centre grants;

·                     shunting of costs onto local authorities resulting from the cuts in government departments.

The Portfolio Holder outlined the challenging decisions facing the Council, which would inevitably impact on services provided.  The draft budget sought to realign expenditure to key outcomes and reflected the five key principles:  making savings in the Civic Centre; ensuring that the services residents cared about were protected from drastic cuts; protecting the vulnerable of Harrow; encouraging growth and investment in Harrow; and working with partners and listening to residents to make sure that the right decisions were made.

The Portfolio Holder outlined some of the actions that the Council was taking, as follows:

·                     making provision to invest in house building, employment programmes, more social workers, and a Harrow Help Scheme to help those affected by welfare reforms;

·                     some of the recommendations from the Harrow Youth Parliament would be implemented;

·                     a reduction in the number of senior managers from 30 to 20 was continuing and there would be a payment of a living minimum wage to staff;

·                     supporting partners, including the voluntary sector which had endorsed the five principles;

·                     supporting local businesses and district centres by delivering on regeneration investment;

·                     taking a commercial approach to service delivery to drive down costs, thereby protecting front line services by driving down costs associated with back office functions;

·                     keeping open the borough’s libraries but merging the Civic Centre and the Town Centre libraries;

·                     invest in the Xcite Project to support people to get back to work.

Cabinet was informed that the government’s welfare reforms would have a huge impact on all households and the homelessness figures were expected to increase.  Moreover, since the report was written, the government had lowered its projections on growth and a further cut in the government settlement for Harrow was expected.  All of these issues added to an uncertain future and he  ...  view the full minutes text for item 559