Agenda item

The Chair invited the Lead Member for Finance, Customer Services and Net Zero Council, Cllr Thalassites, supported by the Director for Financial Management, Lisa Taylor and Head of Financial Management, Liam McCusker, to introduce the report to the Committee.

The Committee:

6.1Clarified that point 1.2 on the Budget Proposals Cover Report should refer to A8 rather than A9 as the initial report earmarked for A9 had been pulled before agenda publication.

6.2Sought clarity for future years over central government funding and the future of Integrated Care Board grants. The Lead Member indicated there was no clarity at present. Officers noted that the Autumn Statement was next week and there may be more news available around Christmas, but there was no clarity yet; the assumption was that funding would fall away and why the budget gap was as large as predicted.

6.3Considered if £3.6 million allocation remaining from pandemic recovery money was obliged to be continued to be used in that direction. The Lead Member indicated it had been repurposed toward cost-of-living pressures as the pandemic receded. Cost of living pressures still existed, and it was useful the Council still had such a lever. Plans were in development to ease cost of living pressures.

6.4Discussed redistribution of Council money and how money was used for services. The Lead Member indicated that a lot of redistribution was done, the Council Tax Reduction Scheme of around £40m a year, being an example and while inflation metrics had improved, it was still early to draw conclusions; inflation forecasted in the next financial year was still twice the Bank of England’s recommended rate.

6.5Questioned whether there was any ability to revisit agreement with the London Borough of Wandsworth with a view toward requesting contributions toward the maintenance of Chelsea Bridge and considered who maintained the bridges. The Lead Member indicated that the Council could approach whoever made the arrangement and seek to modify it to reflect changed circumstances. Officers indicated they would provide more information on responsibility for maintenance of the bridges.

Action by: Director of Financial Management

6.6Queried whether the budget gap of £9m and the proposed savings of £12m were for contingency savings pending the results of consultation and feasibility of proposed reductions or to generate a surplus. The Lead Member suggested that the intention was not to generate surpluses but provide outstanding services. There was some contingency as this stage of the cycle. Officers confirmed that if all options were taken forward, a surplus would be inadvertently generated.

6.7Raised concerns about how a saving of £2.5m could be generated if the Grenfell Recovery Programme was ringfenced and if there had been an impairment of the original £50m to be spent on other areas it was not allocated to be spent on. Officers assured they would provide more information on this following the meeting.

Action by: Director of Financial Management

6.8Contemplated whether it may be worth summarising key points and growth areas as part of the budget consultation to maximise accessibility to those not experienced in reading budgets. Officers noted that the website allowed for the searching of each service area. However, other ideas were welcomed. Officers informed they would be consulting with the Youth Council and work was being done with Communities to improve outreach.

6.9Requested more information on Temporary Accommodation problems, in terms of revenue and capital, and considered what the opportunities were and how it could be addressed. Officers revealed that the rising costs of accommodation was the driver behind the problems, especially as accommodation was expensive in the borough. The Capital Programme had got spending in it for temporary accommodation units and affordable housing and Officers were continuing to try to increase supply and units and look for alternatives to hotel accommodation. The Lead Member emphasised that it was the biggest challenge in the revenue budget and the biggest component of the overspend the Council had. If it became a chronic pressure, there would be difficult choices ahead.

6.10   Welcomed the fall in inflation but acknowledged that it could be a while before interest rates fell and sought information on what implications would be for the Capital Programme. Officers notified that there was a fundamental review of the Capital Programme taking place to ensure borrowing monies was occurring at the right time as borrowing was costing money. As not a lot of money being held, not much interest was being earned; Officers were working with closely with Treasury team on this. The Lead Member highlighted that high interest made it harder to carry out big Council projects and, while Treasury Management had performed well last year, it had not performed as well this year.

6.11   Discussed what the obstacles were to Council Tax collection rates being at 100%. Officers indicated that the Council did not know where everyone was all the time, residents moved away and sometimes it was necessary to collect through the courts; those struggling with Council Tax did not always make it priority and Officers were working with those struggling to pay it.

6.12   Queried whether figures relating to Carbon Net Zero on point 14.15 had changed because of inflation and if thought had been given to pushing back the Net Zero target. The Lead Member confirmed that construction costs had increased, and it had made it materially harder to deliver Net Zero. However, some Phase 1 schools were already on the way in terms of retrofitting. The Lead Member emphasised that while the Council would not spend money it did not have, the declaration had driven a quicker process on greening and the borough had managed to cut emission fasters than any other in London over the last 5 years. The aim was to spend as much money on Net Zero as available, there was a need for it to be balanced against order considerations, but it was a priority for the Council.

6.13   Highlighted the importance of strategic change regarding the budget and suggested it would be useful to have a paper come before OSC to discuss the approach going forward. The Committee also indicated that it may be useful to have a report on spend to save projects and as the Council was struggling to get on top of slippage in the Capital Budget, it may also be useful to have a report on what the cost of this is to the Council.

Action: Scrutiny Manager & Director of Financial Management

6.14   Indicated that Appendix A of the Budget Proposals was vague, especially on Adult Social Care with reference to the demand pressures of £2 million where there was no detail on what proportion was complexity or an increase in numbers, and it was felt that there were some detailed numbers with brief descriptions throughout the document.

The Committee RECOMMENDED:

6.15   the wording of the report under point 2.1 be amended so that Paper A6 and Paper A8 be referred to the Select Committees. Officers confirmed that the whole A6 report, including the appendices, would be going to the Select Committees.

6.16   that Officers draw up a paper on transformational change in the Budget.

The Chair thanked the Lead Member and Officers for the report.