Brent Council Tax rise of 4.99% in each of the next 2 years and no raid on reserves, recommended by Scrutiny Panel

Two main measures come up every year in the budget discussions in Brent when trying to mitigate the impact of lower government funding of local government.  One is the raising of Council Tax and the other is using some of the Council's reserves.

The Budget Scrutiny Panel has come out in favour of raising Council Tax and against using reserves to help fund services.

COUNCIL TAX

The government has give local authorties the power to bring forward the permitted Council Tax rise for social care so that the total amount is spent over the next two years (3% for 2 years then none in the third year) rather than 3 years. In addition there is the permitted, without a referendum, increase of 1.99% for other services.

The table above shows that this creates the need for almost £14m cuts in 2019-20. The next local elections are in 2018 so the incoming adminstration will have to administer those cuts.

The Panel argue:

Increasing Brent’s Council Tax by 4.99 per cent in the next couple of years could have a significant impact on the Council’s ability to continue to deliver these services as clearly demonstrated in the table above.

Of course, the Budget Scrutiny Panel was also acutely aware that it would be the ordinary residents of Brent who would have to pick up this tab.

The median income for residents of Brent is £33,482, significantly lower than both the outer London (£37,366) and inner London (£41,428) medians. We therefore have a special responsibility to ensure that the level of our Council Tax is not punitive.

Fortunately, it seems that Brent has so far met this obligation as our Council Tax is at the lower end of the spectrum in comparison to other London boroughs.

We recommend that over the long-term Brent keeps a close watch on its position in this table to ensure that our Council Tax level does not rise out of kilter with the rest of London.

However, in the short term we believe that a Council tax rise would be affordable for most of our local residents, particularly with Council Tax Support which ensures those on eligible benefits only pay 20 per cent of the tax.

To put into context:

·      A typical Band D property will currently be charged £1101.24 a year in 2016/17 (this 
is the Brent charge and excludes the GLA precept) 


A rise of 4.99 per cent would add £55.07 to this bill 


This would cost the tax pay a little over a pound per week 


This appears to presume no change in the Council Tax Support  Scheme.

RESERVES

The Panel argue:

The Council currently has unallocated reserves of around £12m. The Panel are comfortable with this level and do not propose taking money out of reserves to make up for losses in the Council’s grant.

The Council still faces many financial risks, from global factors in an uncertain political world, to local issues such as the increasing demand generated by the ageing population of Brent and the potential increase in demand for social care.

Should all of these risks to come to fruition the Council would only have reserves to cover the attendant costs for a couple of years. This is of course unlikely but reserves exist to cover the unlikely and we believe it would be imprudent to reduce them.

The Panel make a series of recommendations that will be discussed at Resources and Public Realm Sccutiny on Tuesday 10th January 7pm Civic Centre.  There is much more background discussion in the Full Report which can be found HERE

RECOMMENDATIONS

This report has presented the Budget Scrutiny Panel’s views on a wide range of topic attending to the budget. The report should be read as a whole with suggestions and ideas to be pulled out of almost every section. However, the key recommendations for reform which we would like to highlight are as follows:

1.     In future, any further proposals to reduce spending in Council budgets should be thoroughly evidence-based, with research into the likely impact on service users from any such change. The Council will need to be flexible and open-minded in looking at the most effective ways to deliver better services to Brent residents for the lowest possible cost. 


2.     The current demand-led review of Brent’s CPZ should be expanded with the aim of delivering a settlement for the whole of Brent which will be sustainable over the next twenty years to give further financial certainty to the authority. As part of this, the idea of day time visitor windows should be particularly investigated. 


3.     A report outlining all large-scale developments in the recent and upcoming years should be brought to the appropriate Scrutiny Committee in three months’ time. This would emphasise how mixed used each development was and allow scrutiny members to take a view on whether the balance is currently correct. 


4.     The Council should be forceful when dealing with TFL and seek to maximise business space in tube stations and use every development of a tube station as a potential to attract a new business to Brent. 


5.     A single “Business Attraction Manager” post, perhaps accompanied by a small team, should be set up in Brent. This would be a none-departmental role with the responsibility of attracting business to the borough and incentivised financially to achieve this without become a new financial burden to the Council. 


6.     Brent should seek to coordinate all local public sector bodies to develop a standard set of pre-qualification tests for procurement opportunities to make it easier for local firms to bid for work. 


7.     We believe that Cabinet should reconsider proceeding with proposal 1718BUD6 which would introduce charges (for) a more rapid collection of bulky waste, due to the reputational risk to Brent. Specifically, officers should model whether better signposting to other local services, including those within the authority, could deliver similar savings.