Agenda and minutes

To note the attendance at this meeting of any duly appointed Reserve Members.

RESOLVED:  To note the attendance at this meeting of the following duly appointed Reserve Member:

To receive declarations of disclosable pecuniary or non pecuniary interests, arising from business to be transacted at this meeting, from all Members present.

RESOLVED:  To note that there were none.

That the minutes of the meeting held on 18 July 2023 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 18 July 2023 be taken as read and signed as a correct record.

To note any public questions received.

Questions will be asked in the order in which they were received.  There will be a time limit of 15 minutes for the asking and answering of public questions.

[The deadline for receipt of public questions is 3.00 pm, 11 December 2023.  Questions should be sent to publicquestions@harrow.gov.uk  

No person may submit more than one question].

RESOLVED:  To note that no public questions were received at the meeting.

To receive petitions (if any) submitted by members of the public/Councillors.

RESOLVED:  To note that no petitions were received.

To receive any references from Council and/or other Committees or Panels.

RESOLVED:  To note that there were none.

Members received the Draft Revenue Budget 2024/25 and draft Medium Term Financial Strategy (MTFS) to 2026/27, which would be presented to Cabinet on 19 December 2023.  The budget and MTFS would be submitted to Cabinet in February 2024 for final approval and recommendation to Council.

The Interim Director of Finance and Assurance (S151 Officer), and Councillor David Ashton, the Portfolio Holder for Finance and Human Resources, presented the report to the Sub-Committee and responded to questions and comments made by Members.

Members were concerned that some residents would struggle to meet their Council Tax obligations given the current cost of living crisis, and queried what measures were in place to assist such residents.  On another note, clarification was sought on the impact of the pay award for staff in 2023/24 have on the Council’s budget.

It was advised that in previous years, Council Tax had been increased to just below referendum limits.  Full use had been made of the Adults Social Care Precept, both of which were in line with central Government expectations.  The impact of this was that the Council was heavily reliant on Council Tax to fund its core budget.  In 2023/24 approximately 78% of the Council’s net revenue budget of £196.3m was funded from Council Tax.  Residents having problems paying Council Tax could approach the Council and receive assistance through the Council Tax Support scheme if they were eligible.  In 2023/24, the increase in Council Tax of 4.99% raised additional revenue of £7.8m, Council Tax income increased from £146.2m to £154.0m.

The Sub-Committee were advised that the cost of the 2023/24 pay award (which was only agreed in October 2023) was £7.2m, which, therefore, left little funding available for other demand pressures that had emerged in adult services and other inflationary pressures.

Members queried what impact inflation would have on Council finances, and whether demographic changes, particularly an ageing population, would affect Council budgets in future.

It was advised that the Council did not receive specific funding to meet demographic growth and demand led pressures.  In addition, inflation had increased substantially, creating unfunded budget pressures.  Moreover, in line with the national picture, the Council was heavily impacted by inflation.

The budget provision for pay inflation was £4m (4%).  The 2023/24 pay award which had recently been announced equated to an increase of 7% (£7.2m) against the pay bill.  The bulk of this pressure of £3.2m had been funded from the general corporate budget and the non-pay inflation provision.  However, this still left an £800,000 shortfall to be carried forward into 2024/25.

Members asked if the Council’s reserves would be drawn upon to meet budget gaps, with specific reference to the budget gap of £12.446 million for 2025/26 and £6.732 million for 2026/27.

The Sub-Committee was advised that Harrow had had a good track record of robust financial management and had not reported a revenue budget overspend for many years.  The budget for 2022/23 was originally based on drawing down £14.7m of reserves to bring in a balanced  ...  view the full minutes text for item 38.