Members agreed to take agenda items 5,6 and 8 together.

New savings proposals for Corporate Services

(set out on pages 23-28 of the consultation pack)

The Director of Corporate Services, Caroline Holland, introduced and described each proposal. At the request of the Chair, she identified which of the proposals could be brought forward, either completely or in part. In response to a question, she confirmed that no equality impact assessment had been provided for those savings proposals that had no impact on service users or staff.

In response to a question about CS2016-08 – potential income from letting out two floors of vacant office space in the Civic Centre - Caroline Holland said that the Central London Community Healthcare NHS Trust (CLCH) are planning to rent space in the Civic Centre from the end of March.

The Commission agreed to ask Cabinet to bring forward savings proposals wherever possible in order to help to address the predicted funding gap for 2017/18 onwards.

Medium term financial strategy

The Chair asked Caroline Holland to introduce and to draw the Commission’s attention in particular to the growth proposals, how these could be funded and the options for council tax.

Caroline Holland explained that the year by year forecast of the adult social care budget (set out on page 75) demonstrated the need for growth due to increased costs and that this would be adjusted if there was a change to the level of the Better Care Fund received. She said that departments were still expected to find the savings that had been identified previously as well as the new savings proposals set out in the budget consultation pack.

Caroline Holland said that the proposed growth would initially be funded through the Balancing the Budget Reserve. The medium term financial strategy makes no provision for an increase in council tax in 2017/18 or 2018/19 so the business plan report includes exemplars on the impact that different levels of council tax increase would have, as well as the statement received from the Clinical Commissioning Group about withholding the discretionary element of the Better Care Fund unless the council levied an adult social care precept. She said that the report to December Cabinet had been prepared prior to the government announcement that the Council could choose to levy an adult social care precept at 3% for each of the next two years (but with no increase in the third year) subject to demonstrating improvement in care (details of which are awaited), rather than at 2% per annum as currently permitted.

In response to questions Caroline Holland said that there were still some aspects of the MTFS where there was a level of uncertainty, including on corporate provisions, the Education Services Grant and on the impact that different levels of adult social care precept and council tax increase would have on the predicted budget gap in each year. The latest details will be modelled and reported to Cabinet on 13 February. The report will also include detail on balances and reserves.

Caroline Holland drew the Commission’s attention to the capital programme, in particular the revenue implications of around £12m per year that would persist despite the predicted decline in the size of the capital budget because of interest payments incurred by capital projects many years ago.

The Commission RESOLVED to forward the following comments and recommendations to Cabinet:

1.The Commission recognises that Cabinet  has acknowledged that the growing cost of adult social care is not temporary and is something for which the Council must make provision.

2.The Commission urges Cabinet to look at the budget situation beyond 2017/18 and askes Cabinet to consider a number of options including, but not limited to

a) an increase in council tax;

b) review earmarked reserves to see whether they meet the purpose for which they were originally intended and, where this is not the case, to release them for use to partially address the predicted budget gap

c) continue to focus on the savings that will still have to be made, and to bring forward savings where it has been identified that these could be achieved sooner;

d) recognise that this still won’t be enough to meet the growing burden of adult social care, as set out in the following statement from the Local Government Association (12 January 2017):

“Council tax raising powers announced by government will not bring in enough money to fully protect the services which care for elderly and vulnerable people today and in the future.

Genuinely new government money is now the only way to protect the services caring for our elderly and disabled people and ensure they can enjoy dignified, healthy and independent lives, live in their own community and stay out of hospital for longer”

The Commission urges Cabinet to give its full support to the LGA and London Councils in their efforts to secure a properly funded settlement from government.