Further to my coverage LINK LINK on the Revenue Support Grant (RSG) freeze and the associated Efficiency Plan, this is the briefing note sent to Labour councillors and opposition leads by the Labour leadership. You will see that the 'minimal controversy' position is based on a 4% Council Tax rise in 2017-18 and 2018-19.
Briefing note
Summary financial position
August 2016
1.
Brent council is in a good financial
position. Compared to previous years,
the decisions required to balance the budget for the next two years may be less
difficult than previously. New savings
of £16.4m over 2017/18 and
2018/19 are required. It is recommended
that all of the proposals required to achieve this are agreed at the February
2017 budget meeting.
2.
Council tax can now be increased by up to 4%
each year. The previous financial
incentives to freeze council tax have been withdrawn. Each 1% increase in council tax yields an
extra £1m in income so
approximately half of the savings target could be met through council tax
rises.
3.
Officers propose to publish draft budget
proposals in October. It is anticipated
that proposals more than sufficient to balance the budget could be published,
provided that council tax increases of 4% in 2017/18 and 2018/19 were to be
agreed. This would enable meaningful
choices to be made through the ensuing consultation process. Most, though not all, of these proposals
would reflect efficiencies in service delivery, minimising the amount of
controversial proposals. If council tax
increases were not to be agreed then more challenging decisions about services
would have to be confronted.
4.
It will be
necessary to look at charges for services as part of the civic enterprise
strategy and the planned work on parking policy and therefore potentially
charging must also be considered.
Officers are not suggesting that the entire budget for 2017/18 and
2018/19 can be balanced with council tax rises and no other contentious
decisions about services. However, the
quantity and scale of such decisions could be minimised.
5.
To achieve this
the council must ensure that there are no structural overspends in its current
budget. Significant service pressures will
need to be managed down by the end of the financial year if this budget
strategy is to be delivered. Significant
savings for 2017/18 and 2018/19, agreed as part of the budget set in February
2016, will also need to be delivered.
Some, such as from procurement (£8m) and civic enterprise (£2.5m),
may be managerially challenging, as we have not targeted savings of this scale
in this way before.
6.
More widely,
the Chancellor has indicated that economic policy will be “reset” in the autumn
statement. It is not clear what the
implications of this may be for local government, or the wider economy, and
updates will be provided as more information becomes available.
7.
Business rates
devolution, we presume, will go ahead as planned. DCLG is currently consulting on some of the
details of this so it is not possible to provide a comprehensive update. However, it is important to stress that the
national tax take from business rates is already greater than the DCLG
settlement payments to local government.
This gap will get larger by 2020 as local government grants fall.
8.
Business rates
devolution will mean that local authorities receive more income than they do
now. Whitehall will therefore devolve
more services to local government and require us to pay for them. This could be cost neutral, with the cost of
the services devolved being equal to the extra income received. However, in practice this may lead to cost
pressures.
9.
The choice of
which services are devolved is critical.
Local government would want these to be those that could be integrated
effectively with existing services, leading to improved outcomes and financial
efficiencies. This devolution could also
be different in different parts of the country, especially as the business
rates take in London is disproportionately high.
10. Further updates will be brought as the position
becomes clearer.
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