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Agenda item

Business Plan Update 2020-2024


Members agreed to take this item and agenda item 5 together.


Caroline Holland, Director of Corporate Services, introduced the report and outlined the current assumptions on inflation, council tax collection and government grants that underpin this updated medium term financial strategy. She explained the approach that was planned to address the Dedicated Schools Grant (DSG) deficit through additional growth to be held to offset the deficit  as well as some potential additional funding from the government.


Caroline Holland drew the Commission’s attention to the predicted budget gap in future years and to the first round of savings proposals and two growth proposals that were set out in the report, as well as details of new capital bids within the capital programme. She highlighted the unprecedented level of uncertainty around the local government settlement 2020 and said that assurances had been received from the Ministry of Housing, Communities and Local Government that this would be a priority for the new government.


Medium term financial strategy(MTFS)

Caroline Holland provided additional information in response to questions:


·         the DSG deficit is the largest unknown item within the MTFS. It will be dealt with through a combination of New Burdens growth funding, departmental underspending and some additional grant built into future budgets

·         identifying funding for the climate change agenda will become an issue from 2021 onwards

·         the assumptions on the pay provision for staff have been increased from 1% to 2% in response to government announcements about awards for other groups of public sector staff. 2% is below the increase for other parts of the public sector and the private sector

·         the monies transferred from reserves to meet part of the budget gap for 2020/21 have been taken from the Balancing the Budget Reserve, which was built up for this purpose

·         the ringfenced income and expenditure from the potential 2% adult social care precept has not been included in the draft MTFS as further work is needed to identify how much of the additional income could be used for existing spending plans within the MTFS and how much will be new spending on adult social care


Corporate Services proposed savings (pages 48-55)

Commission members reviewed each of the proposed savings. Comments made by members and responses from Caroline Holland are set out below:


CS8 – Facilities Management – reduction in the repairs and maintenance budget for corporate buildings

A member noted that the reputational risk was high and asked what the impact would be. Caroline Holland said that this included the experience that visitors to the Civic Centre had of the reception area and toilets on the ground floor as well as a potential impact on staff morale.

CS9 – Facilities management – reduction in frequency of cleaning within the council’s corporate buildings

In response to a question about the impact, Caroline Holland said that the saving was being made partly as a consequence of a reduction in the number of bins in order to encourage staff to increase the level of recycling and reuse.

CS11 – Commercial Services restructure and deletion of post in 2022/23

In response to a question about the impact that this would have on the achievement of agreed corporate procurement savings, Caroline Holland said that it is anticipated that the full £14m will have been delivered before the post is deleted but there is a risk this will not happen. The majority of the large planned procurements will be completed and staff will be trained so will be less reliant on the central team.


In response to a comment on Corporate Services savings collectively, noting the increase in headcount and budget in recent years, Caroline Holland said that the increase was largely due to the transfer in of staff from other boroughs to the shared legal service – South London Legal Partnership


The Chair drew the Commission’s attention to paragraph 2.12.3 – “it is not possible to predict the council’s budget gap going forward with any certainty” and said that it was the first time that such a statement had been made and therefore underlined the difficulty of the situation. Caroline Holland said that the full picture may still not be available by the time the Commission next meets on 22 January 2020 and there may therefore be a need for an additional meeting.


Growth items (page 75)

In response to a question about what sort of emergencies the growth item CSG1 Emergency Planning would assist with, Caroline Holland said that this would include large and smaller scale emergencies such as Bishopford Bridge as well as staff training and compliance with new Londonwide standards that are currently being drawn up in response to lessons from the Grenfell fire.


Capital programme (pages 80 and 84).

In response to questions, Caroline Holland provided clarification on what some of the items were and undertook to find out what “Project General” referred to. ACTION: Director of Corporate Services


Members asked a number of questions about the relationship between the climate emergency and the use of the capital programme to ensure that sustainable solutions were found for heating and lighting of council buildings. Caroline Holland said that decisions on those capital items had been deferred so that the most energy efficient technology could be deployed but cautioned that the boilers in the Civic Centre were very old and may need to be replaced sooner. She added that a combined heat and power unit had been installed for the IT server using the latest technology.


References from the Scrutiny Panels

The Chair of the Sustainable Communities Overview and Scrutiny Panel, Councillor Natasha Irons, introduced the reference from the Panel, explaining that the Panel had endorsed the proposed saving as long as signage, layout and road markings were checked to ensure that residents would not be unfairly penalised.


The Chair of the Children and Young People Overview and Scrutiny Panel, Councillor Sally Kenny, said that although the Panel had not made a reference, it had expressed concern at the growth on Educational Health and Care Plans (EHCPs) which can be costly and therefore contribute to financial pressures.


The Commission RESOLVED to forward to Cabinet the reference from the Sustainable Communities Overview and Scrutiny Panel.


Reference to Cabinet

The Commission RESOLVED to send the following reference to Cabinet:

“The Overview and Scrutiny Commission notes the difficulties currently faced by the administration in setting a balanced budget and drafting the medium term financial strategy. The Commission therefore asks Cabinet to join the Local Government Association and London Councils in lobbying the government to release additional monies to meet the cost pressures faced by local councils and to provide a multi-year funding settlement rather than continuing with a year by year approach”.

Supporting documents: