Caroline Holland, Director of Corporate Services, introduced the report and highlighted the changes that had been made to assumptions in the Medium Term Financial Strategy since it was last reported to Council in March 2017.

Revenue budget

In response to a question about the impact of the pooled arrangement for the retention of business rates that is currently being negotiated by the London boroughs, Caroline Holland said that the figures were still being modelled but that the council is likely to receive more than it would otherwise have received. However, all of the boroughs have to sign up to the deal for it to proceed.

Caroline Holland provided additional information in response to other questions about the revenue budget:

·         the projected income figures from council tax on page 29 assume a year on year increase in the council tax base of at least 0.5% and a 2% increase in council tax charged  from 2019/20 onwards

·         the balancing the budget reserve will be used in 2018/19 and 2019/20, after which point there will be no money left in that reserve

·         all Directors have been asked to review and regularly monitor the delivery of previously agreed savings.

The Chair noted that there had been no reference to the Commission from any of the Scrutiny Panels on the business plan this year.

Capital Budget

Members commented on the large size of the capital budget given that it had been underspent in previous years. Caroline Holland said that she was continuing to challenge officers on the capital bids put forward. Caroline Holland undertook to provide an explanation for the mismatch between figures given on pages 30 and 31 that are inconsistent with those on page 14. ACTION: Director of Corporate Services

In response to a question about the ongoing revenue implications of the cost of servicing the capital programme, Caroline Holland said that the council has tried to use capital receipts to minimise the cost of borrowing and has not needed to borrow since 2006.

Reference to Cabinet

The Chair presented the referral made to the Commission by the financial monitoring task group at its meeting on 14 November 2017 and sought the Commission’s agreement to forward this to Cabinet for consideration at its meeting on 11 December.

The Commission RESOLVED to make a reference to Cabinet asking Cabinet to be mindful of the financial monitoring task group’s discussion when reviewing the draft  Business Plan 2018-22. In particular, Cabinet is asked to note:

1.                    The proposed use of £2.9million from the earmarked reserves to balance the budget;

2.                    That there is just £0.5million head room left on the General Fund; before it reaches the minimum prudent level set for 2017/18 

3.                    That the predicted shortfall of savings to be carried forward from previous years will be £860,000 for 2018/19;

4.                    That some of the problems experienced in achieving savings are longstanding and persistent, including demographic pressures in Adult Social Care and the unfunded costs of supporting unaccompanied asylum seeking children and those with no recourse to public funds; and intensifying price competition where council services compete with the private sector eg. building control

5.                    The vacancy rate and use of agency staff and number of unfilled vacancies, after allowing for brought forward savings