Homelessness applications in Brent could reach 8,200 this year - the highest ever as South Kilburn regeneration faces viability risk

The Quarter 3 Financial Report LINK going to Brent Cabinet on Monday repeats the Quarter 2 warning that the seriousness of the Council's financial position cannot be understated.  The £13m overspend if sustained will require a transfer from unallocated reserves. Any overspending not dealt with will transfer to 2024-25 requiring more cuts in spending as the ability to use reserves will be reduced.

The scale of the financial challenge for 2023-24 and 24-25 us sucj that in addition to work currently underway to implement savings in 2023-24 and toidentify new savings proposals for 2024-25 and 2025-26, the Council will need to implement further measures to control expnditure in order to address the underlying issues that the Council's net expenditure is significantyl greater that available sources of in-year funding.

The main financial pressure continues to be on housing where there is an overspend of £13.2m:

The forecast overspend of £13.2m is made up of the following pressures:

• £4.2m overspend associated with the cost of providing temporary accommodation

• £8.9m attributable to a loss of housing benefit subsidy from the Department of Work and Pensions as a result of the type of accommodation being used to house those that are homeless

• £0.6m is a result of additional Council Tax liability on empty properties that are being considered for temporary accommodation use

• (£0.4m) is a saving attributable to spending controls, mainly staffing related

 Homeless presentations at the Civic Centre  have increased by 38% compared to this time last year, households in temporary accommodation in Brent are up by 13% and people in Bed and Breakast hotels has inreased to 639 (377 families and 262 single people):

This is an increase of 16% when compared to the previous quarter. If demand continues at the same rate, the service will received a total of 8,200 applications this financial year, an average of 158 applications every week, which is the highest it has ever seen.

Adding to the housing financial pressure is housing benefit subsidy loss for payments made. Where a family occupies more than one room in a hotel and the rooms are not connected only one room will be eligible for subsidy.  The loss of subsidy is forecast to rise to £8.9m in 2023-24 (£3.7m in 2022-23). 

As previously reported the Council is consulting on ending the South Kilburn Promise (Landlord Offer) for new temporary accommodation households and the use of void properties on the South Kilburn Estate for temporary accommodation. At present the Council incurs a £0.6m charge on South Kilburn void properties.

The South Kilburn regeneration itself is threatened by a viability crisis:

Viability is a key challenge for the remaining developments within the South Kilburn programme. The Single Delivery Partner approach is being explored to help provide certainty for the programme and provide economies of scale for the delivery partner.

South Kilburn is due to deliver 2,400 homes of which 50% are supposed to be 'affordable'. The reports says the programme is about halfway through with 10 sites delivered or on site and 7 sites remaining to be delivered.

Given what has transpired in the Wembley Housing Zone Cecil Avenue development (see Philip Grant's article) we might expect some tenure changes increasing the proportion of private housing. 

If that becomes the case there will be a big question mark over whether South Kilburn council tenants promised a place in the new housing when their blocks were demolished, or are due to be demolished, will actually get one.

Elsewhere the Council has announced a decision  for the Corporate Director for Comminities and Regeneration to make an offer to Londonnewcastle to acquire the Falcon pub site, previously seen as a key site forming a gateway to South Kilburn.  Its acquisition along with the car park opposite led to the HS2 vent being controversially located within the estate next to a primary school.

There is just one sentence on the Bridge Park Regeneration which was featured recently on Wembley Matters LINK:

The Bridge Park Regeneration project is still in the early stages of developing options for delivery and is forecasting £0.8m of slippage.

That sounds rather like 'back to the drawing board'.

Other 'slippages' where expenditure goes into next financial year or beyond are in the Public Realm and total £7.7m:

The Public Realm is forecasting a variance for the overall programme of £7.7m, the majority of this is being slipped into future years (£7.5m). There are circa 135 Public Realm live Capital projects. Some of the bigger re- profiling includes Highways, where there is a £2.6m budget slippage. The key projects in Highways are Wembley High Street [sic] and Church End, which have experienced delays due to ongoing contractor disputes with FM Conway (£1.5m), the hostile vehicle mitigation has slipped by (£0.4m) as the works are reactive, and Highway Structures (£0.4m) where a new consultant is being appointed to take the programme forward. The parks programme is forecasting slippage of £1.6m which has been pushed out partly due to the pitch improvement project (£0.4m). Delivery is dependent on Thames Water's agreement to increase the drainage system and discussions are ongoing. Healthy Streets has had some scheme delays resulting in a £1.1m slippage, including (£0.5m) slippage on North End Road. Landscaping is forecasting a slippage of £0.7m, primarily due to procurement challenges. The new waste bin trial has been scheduled for 2024/25 resulting in £1.5m being reprofiled into FY24/25. 

The dispute with FM Conway deserves further investigation.

There is more slippage in the  Housing General Fund:

At Q3, the Housing General Fund is forecast to spend £30.6m below the current year budget. This position is due to slippage, i.e. expenditure originally targeted this financial year now moved to future periods. This quarter is reporting significant slippage at: Church End, £8.0; Clock Cottages, £1.7m; Edgware Road, £6.8m and Fulton Road, £14.1m. The underlying theme for this level of slippage is the viability challenges due to changing regulatory requirements (additional staircases and fire safety measures) and a generally worsening economic environment

In her foreword to the Financial Report Cllr Shama Tatler writes:

It is important to recognise that over a decade of austerity on Local Government has reduced the ability of councils to withstand issues like the increased pressures on Temporary Accommodation. The impact of the disastrous mini-budget last year on interest rates and inflation has significantly impacted the supply of housing and on delivering council services. Brent will continue to take decisions to ensure a sustainable budget can be delivered while safeguarding key services.

It is also worth noting that Brent will receive the second lowest Local Government Finance Settlement in London for 2024/25. Despite the significant challenges Brent faces, the Government has not allocated any support for homelessness pressures. Pressures on Local Government finances are going to continue to be difficult as a result of the decisions of this Government. 

 

The full report lists all the measurea that have been or are being taken to tackle the financial shortfall and includes changes in services, attempts to reduce service costs via procurement measures, restructures and cuts in staffing. LINK

S.O.S. goes out to Labour backbenchers as debate threatens to rock the sleepy Brent Cabinet

 Let's face it, we all know Brent Cabinet is a rubber-stamping body whose calm waters are seldom disturbed by so much as a ripple of discussion, or (Lord Preserve Us!), dissent.

All the decisions are  made at a private pre-meeting of officers and Cabinet members (See LINK) so the meeting, despite an often huge agenda, is over in half an hour or so.   The format after the preliminaries is the Lead Member, in an address often written by their officers, reads out a short introduction to an agenda item. Another Cabinet member then says a few words of praise for a great policy, hard work etc.  Cllr Butt as Chair then says what a wonderful job Labour ia doing for Brent and it is approved.

There is no debate.

The meetings are held at 10am on a Monday morning which prevents working local residents (and working backbenchers) from attending.   A move to have Cabinet meetings out in community centres to enable more public participation was quietly dropped long ago.

But word has gone out that some opposition members have dared to give notice that they are to enter the mutual grooming sanctuary and actually disagree.

Despite Labour's massive majority this has appeared to have freaked out the Labour leadership. 

I understand that  a message has gone out urgently to backbenchers from the Deputy Leader of the Council that some opposition members have requested to a speak on the Council's (fait accompli) Budget Proposal for 2023-24.  Labour Group members are asked to contact 'Mo' (Muhammed Butt, Leader of the Council) if they would like to speak to 'balance the debate and 'particularly to highlight the impact of austerity started by the Conservatives and Liberal Democrats on council finances.'

Just to let you know what Mo knows!

Watch the Cabinet meeting HERE

Adult Social Care in the firing line as Brent Council seeks £18m cuts/savings and increases Council Tax by 2.99%

With its budget under pressure Brent Council is proposing £18m in 'savings' (which are often actually cuts) and raising Council Tax by 2.99%:

  The key features of the 2023/24 budget are:

· A Council Tax increase of 2.99% (consisting of a 1.99% general increase plus 1% for the Adult Social Care Precept), making a Band D Council Tax of £1,461.96 (for the Brent element). The GLA precept is unknown at this stage and is subject to their own decision making and consultation processes.
· New budget savings proposals of £18m to be delivered in 2023/24

Summary

Adult and Social Care -£4.3m

Children & Young People -£2.4m

Communities and Regeneration -£0.6m

Residents' Services -£4.2m

Finance & Resources  -£1.8m

Governance -£0.4m

Corporate -£4.1m

I have embedded fuller details below and as you read it you will see that it is likely that extensive job losses are likely to be involved, and many of those low paid workers. ethnic minority and women.

Adult Social Care

Adult social care  costs are rising across all councils but it is likely that some of the justifications made for the cuts by Brent Council, under a general argument that they will increase the independence of recipients, will be challenged.  There will be no general public consultation on the changes because of the 'personalised aspects; of the proposal. This limits the opportunity to campaign and narrows implentation to individual negotiations with recipients, family and advocate. The final paragraph on key risks is important.

 Extract from Report

There is some evidence that Brent provides more homecare hours in community care packages than other London boroughs –potentially around 1 hour per week extra per client over the age of 75 than expected.

There are a number of interventions that need to be delivered both in response to the pandemic and because they are good practice, which should reduce the overall levels of homecare. These include:

Double handed care reviews – partly as a result of the pandemic, and the reduced access to care homes for discharge we have seen a significant increase in double handed care packages (where 2 carers are needed to carry out care). Reducingdouble handed care packages, means fewer people entering someone’s home, better use of community equipment and, therefore, more independence and less intrusive care.

Reablement – the new and redesigned dedicated reablement service goes live inFebruary 2023. The new service has been designed after a full review and brings a range of new features, which have been successful in other Local Authorities,therefore, we expect to see a significant increase in the number of people supported to maximise independence and so require lower or no care packages.

High and Low costing care Packages – the purpose of social care is to assist people to live as independent a life as is possible outside the formal care system. For these cohort of service users focused reviews will be undertaken with a stronger attention on Personalisation and promoting Personal Budgets/ Personal Assistants as a means of receiving their services. For very low costing support packagers the aim will be to Promoting Independence. Looking at housing adjustment / equipment’s, telecare and digital solutions to support individual’s so that they will no longer require funded support.

How would this affect users of this service?

We carry out reviews at the end of the reablement process and on an annual basis. We will ensure that these reviews are strength bases reviews and with a focus on independence. This will also be true of double handed calls because although the person will not be full independent with activities of daily living, they may only require a single carer, which should be seen as a positive as it will reduce the number of carers and should improve the relationships.

Key milestones

The nature of this proposal means it will be part of all reviews on an ongoing basis. Individual reviews will be done with the person who receives the care, their family or advocates and the care agency. The only specific milestone is the implementation of the new reablement service in February 2023.

Key consultations

Service users and families will be consulted on a case by case basis – there will not be a wider consultation given the personalised aspect of this proposal.

Key risks and mitigations 

Reducing packages becomes harder to achieve in practice than in principle, because of a reliance on the care provided – social workers use their experience and understanding of the Care Act to promote a strength based approached to care, to mitigate these issues.

Outline of the proposals are below and fuller details are available in a 200 page document available HERE.  

Click bottom right for full page.

 

 

 

 

Brent Council announces it has to cut a further £28 million from its budget

 In a press release published today, just fefore Full Council, Brent Council warns that it has to cut an additional £28 million from its budget:

Rising costs aren’t only hurting ordinary people. Most organisations are also feeling the strain of inflation, especially after the financial shock of the pandemic and Brexit.

 

The things that Brent Council needs to deliver – from building new council homes and maintaining the borough’s roads to statutory services like adult’s and children’s social care – are all becoming more expensive.

 

With the prices of basics, from food to fuel, rapidly increasing – many more families are also being pushed into poverty, meaning there are more people asking for both financial help and other forms of support from the council.

 

At the same time that demand for council services is rising, the money Brent receives directly from central government has been falling. 

 

In the 12 years since April 2010, Brent Council has needed to save £196million from its budget – as the money the council receives directly from central Government has been cut by 78%. 

 

Now, to make matters worse, the Government has said it will only confirm the money it plans to give local authorities for the next two years in December 2022, which makes it difficult for councils to plan. 

 

All of this means Brent now needs to save even more money in order to balance its budget. It is estimated that an extra £28million needs to be saved by 2025, according to a report that went to the council’s Cabinet in July.

 

 

Muhammed Butt, Leader of Brent Council, said:

 

The problems with the UK economy and the cost of living crisis are hitting hardworking people in the pocket and councils are no different.

Massively rising costs, increasing demand for what we do and less money from central government means we now need to make cuts. There is no doubt that finding £28million in savings on top of the £196million we have already saved will not be easy.

 

We are in a better position than many councils thanks to the massive strides we have taken over recent years to modernise and transform the council. We have recently saved money by streamlining senior management but there is more to do.

 

We will need to change how we work in many areas while trying to protect the frontline services that you or your mum, dad, grandparents or children rely on as much as possible.

 

In the autumn we will be launching a full budget consultation and we will need residents to be active participants in helping us to make the tough choices facing us.

 

Greens put forward a radical new solution to strengthen local government via a fairer funding system

This is the first of a series of guest posts by Emma Wallance, Brent  & Harrow Green Party GLA candidate.

Harrow Council have announced that they are increasing the 2021/22 council tax by the maximum legal limit amount allowed to 4.99%.  This means that the council has increased Harrow’s council tax rates by their maximum amount year on year, for the last ten years.  In 2011/12 the average council tax rate in Harrow for band D (there are 8 bands, A-H) was £1186.55, in comparison to this year’s 2020/21 rate of £1522.72 for a band D property  LINK .  That is a £336.17 or +28.33% increase in ten years.  In comparison, neighbouring boroughs Ealing and Brent current council tax rates for 2020/21 band D properties are £1239.15 and £1312.74 respectively.  If we look London wide, Harrow residents are paying the third highest council tax out of the 32 London boroughs, with only Kingston and Richmond charging more.  In addition, Sadiq Khan has announced an increase to the Greater London Authority (GLA) council tax precept by 1.99%, or £363.66 for an average Band D property LINK .  This tax is collected by the 32 London councils on behalf of the GLA and consequently means that Harrow’s Council Tax will see a total overall increase of 5.9% next year.

 

This huge increase in council tax next year will come as a devastating blow to Harrow residents, many of whom are struggling with job losses and the increased pressures brought on by the Covid19 pandemic.  

 

Withdrawal of Central Government Funding

 

The increase in council tax must be seen in relation to the withdrawal of central government funding to local authorities that the Conservative government have presided over for the last ten years, reducing funding support in London by £4 billion   LINK  .  Evidence shows that a decade of imposed austerity from central government has resulted in core funding to local authorities being cut by 63% in real terms  LINK . Harrow Council was already one of the lowest funded councils in both London and nationally, with funding being reduced from £52.1 million to £1.6 million in the last ten years – a reduction of 97%  LINK .

 

This decimation in central government funding has left the current Labour administration in Harrow council in an untenable situation, having to bridge next year’s funding gap by almost £31 million LINK .  This has resulted in ever increasing costs being pushed on to local residents, whilst the council provide fewer and fewer services.  As Councillor Adam Swersky, responsible for finance at Harrow Council has stated, council tax has effectively become a ‘national stealth tax’ “with the Government shifting responsibility to local authorities to compensate for a lack of financial support.” LINK      

Lost Local Public Services

 

We have seen savage cuts to our public services in Harrow over the last ten years, from housing, education, public health, as well as both environmental and community services.  Street cleaning has seen repeated cutbacks, with, for example £172 000 cut from its budget in 2014, reducing the frequency of our street cleaning  LINK .  The Council’s waste collection services have also diminished over the last ten years, seeing in 2015 the introduction of the very unpopular £75 garden waste charge, a service that used to be included in our council tax.  It has since been revealed as one of the highest garden waste charges in England LINK    This lack of investment in street cleaning and waste services has continued for many years, with the now infamous 2017 footage, capturing rats swarming around bin bags in a Harrow car park LINK . 

 

We have also seen the closure of four of our ten public libraries in 2015 (the Bob Lawrence, Hatch End, North Harrow and Rayners Lane libraries), cutting a local service that provided a lifeline to many who are isolated or in need of library services.  In 2018, our two local Harrow MPs debated the issue in Parliament, with Harrow West’s Labour MP Gareth Thomas highlighting the unrelenting cuts and calling for the council to be “better funded”.  Mr Thomas highlighted the rise in violent crime in the borough and how youth services had been cut by more than 75% since 2010.  Conservative Bob Blackman, MP for Harrow East, responded by accusing the council of not being business friendly enough and needing to work together to apply for additional grants. LINK

 

The Impact of Demographic Changes and Covid

 

The reduction in central government funding, can also be seen in relation to a demographic change in London over the last ten years, with Harrow’s population increasing by 7.6%  LINK . The increase in residents, coupled with an aging population, has resulted in ever greater pressures being placed on our local services.  This can be seen most acutely on our social care services, where demand has increased across all age groups.  Social care is an area which must be ring fenced by 3% in the councils’ budgets every year, with the council this year applying for an additional social care grant to help with the increased pressures on brought on by COVID-19.  Indeed, the unprecedented situation caused by the pandemic has placed a huge strain on council budgets, with increased demand on an array of services LINK  .  Whilst the Tory government assured councils’ that they should do ‘whatever it takes’ to support residents through the pandemic, promising ‘Emergency Funding’ to councils, this has not been fully realised and the amounts have not been enough to cover all costs incurred.  As a result, there is now an even bigger funding shortfall than there was before the pandemic started  LINK  .

 

Harrow Council consequently is in a situation of ongoing funding reduction from central government, changes in demographics and the resultant increased pressure on services, whilst also dealing with the impacts of Covid.  This is tragically resulting in an even bigger reduction in the services provided by the council at a time when we need them more than ever.  

 

The Green Party’s Vision for the Future

 

The pandemic has revealed how years of under investment have resulted in local communities being exposed and vulnerable to the health and social realities brought on by this crisis.   Whilst we have seen incredible local voluntary initiatives over the last year, with people coming together to help and support each other, it is not a long term sustainable solution.  Local government needs to be properly financed to ensure Harrow is a healthy and safe place for residents to live and thrive in.  The Green Party have progressive plans to invest in local communities and our vital local services, believing that Council Tax needs to be radically overhauled.  We would like to see council tax and business rates replaced with a Land Value Tax (LVT) or ‘developers’ duty’, which will capture the value of the land not the property.   The current council tax band system is out of date and unfair, based on property prices from when the tax first emerged in 1991.  It favours wealthy home owners and landlords, with costs often bypassing the owners of rented properties, passing instead to tenants.   As joint leader of the Green Party, Jonathan Bartley states, “Council tax is regressive and it’s the past”  LINK    .  The LVT will be a proportionate and locally controlled property tax – “a single tax (replacing the multiple taxes that currently exist) which will capture the real value of land, and the increased value arising from improvements to it.”  LINK    

 

Green Party Sian Berry has also just pledged to set up a People’s Land Commission if she becomes London Mayor in May, helping to restore and revive local communities.  It is local communities who best understand the areas they live in, and they are the ones who should be consulted “to transform their own high streets, plan a low carbon future, and create community infrastructure and new homes.”  Read more HERE. 

Auditor: Brent better placed than most London councils to survive the financial challenges of the Covid-19 pandemic

The Audit Findings for the London Borough of Brent, to be considered by the Audit and Standards Committee on Tuesday September 8th are rather better than might be expected. LINK

The report by Grant Thornton  states:

 

.....To put this in further context, Brent Council could receive no RSG, council tax or business rates in 2020/21 and still balance the books using reserves. This is a much stronger position than virtually all other councils, however it must be noted that the reserves are earmarked to support strategic projects outlined in the Council’s capital programme and many of these reserves cannot be used to support revenue costs.

 

The report looks forward to 2020/21 and the impact of the Covid19 measures taken by the Council during lockdown and the impact on income.  Having had shaky reserves in the past the Council has been reluctant to eat into reserves but may have to as a consquence of a £29m funding gap, as well as reducing demand for services and 'efficiency'  cuts:

If there is a shortfall the Council has contingency plans to keep it on a sound financial footing. The Council will use the full range of options available, including (but not limited to) taking steps to reduce demand for services, implementing further efficiency savings, streamlining processes, and as a last resort re-diverting earmarked cash reserves as a one-off measure. The Council holds general reserves of £15.1m and £146m in earmarked reserves (excluding Community Infrastructure Levy funds and other ring-fenced reserves) which are held to meet specific identified purposes or future expenditure commitments, a large proportion of which are for financing the capital programme.

A review of the capital expenditure plan seems inevitable. Budget planning and consultation will take place soon.  One of the key issues will be what happens to Council Taxat a time when many residents will be strapped for cash as a result of unemployment resulting from the economic downturn.

 

EXTRACT FROM THE AUDITOR'S REPORT

2019/20 Financial Return

 

In a year where March saw the outbreak of the Covid-19 pandemic, the Council has performed well to achieve a breakeven position for its service area budgets. The Council responded to the pandemic situation quickly, making critical decisions in response to constantly moving government guidance. With only 2 weeks remaining of the 2019/20 financial year with the outbreak of the pandemic, impact on the financial outturn was minimised for 2019/20 but will be a larger impact on 2020/21.

 

The outturn for 2019/20 highlights the effective management action taken to address the pressures throughout the year. The £1.5m overspend in Children and Young Persons (CYP) (in part offset by contingency funds within CYP reserves) and £0.6m overspend in Community Well Being were offset by underspends within Regeneration and Environment.

 

The use of CYP earmarked reserves illustrates that the Council does have ongoing financial pressures which need to be addressed. However, this needs to be put in the context of income growth opportunities the Council’s reserves position. Brent has over £134.8m of usable reserves, excluding capital reserves, which can ultimately be deployed to address in-year shortfall. To put this in further context, Brent Council could receive no RSG, council tax or business rates in 2020/21 and still balance the books using reserves. This is a much stronger position than virtually all other councils, however it must be noted that the reserves are earmarked to support strategic projects outlined in the Council’s capital programme and many of these reserves cannot be used to support revenue costs. It is also worth noting that the Council is very clear about finding solutions in CYP going forwards.

 

The Council’s MTFS set in 2019/20 identified £11.4m savings required for 2020/21 and a best estimate budget gap of £20m for 2021/22-2022/23. In the November 2019 MTFS update a comprehensive review of technical budget assumptions took place, including a review of the 2020/21 savings plans and estimated savings of £4.28m to be delivered in 2021/22 and £1.77m to be delivered in 2022/23.

 

As a result of the pandemic it is expected that service departments will experience income and expenditure pressures in 2020/21. The magnitude of the pressures will depend on the severity and length of the pandemic. The Council has modelled the financial impact based on lockdown periods of 3 and 6 months and has a cost tracker to estimate and record the additional pressures relating to additional expenditure, loss of income, impact on savings and capital programmes, and treasury management issues. The Council estimates the 2019/20 impact to be £0.4m while for 2020/21, a 3-month lockdown period has an estimated lost income impact of £19.8m, with another £14.9m on top of that for a 6-month lockdown. The Council reports these figures to MHCLG fortnightly.

 

The net cost of Covid-19 to the Council is expected to be £47.6m (£42.7m of additional income and expenditure pressures and £4.9m of slippage in savings plans), which is far in excess of the £21.2m funding to be received from central government. The cost estimates are considerable, and the Council has been working to the assumption that costs will be fully reimbursed. Central government recently announced a new package of support which includes provision for some income losses to be reimbursed where losses are more than 5% of a council’s planned income from sales, fees and charges, with central government covering up to 75% of the remainder. Also, any deficits on council tax and business rates income will be allowed to be spread over 3 years rather than 1 year. Detailed workings of the scheme will be confirmed as central government drafts the statutory instrument that will effect the changes. This leaves the Council with an estimated gap of £26.4m before support for income losses is taken into account. If there is a shortfall the Council has contingency plans to keep it on a sound financial footing. The Council will use the full range of options available, including (but not limited to) taking steps to reduce demand for services, implementing further efficiency savings, streamlining processes, and as a last resort re-diverting earmarked cash reserves as a one-off measure. The Council holds general reserves of £15.1m and £146m in earmarked reserves (excluding Community Infrastructure Levy funds and other ring-fenced reserves) which are held to meet specific identified purposes or future expenditure commitments, a large proportion of which are for financing the capital programme.

 

The Council has modelled indicative forecasts of the council tax base and business rates income going forward. Modelling is challenging for the Council given that the Council receives c£50m (approx. 40% of net rates payable) of additional relief from central government to further discount the bills of businesses in retail, leisure and hospitality sectors, as well as small businesses:

• the Council received c£64m from central government to provide grants (between £10k-£25k) to support the above businesses; and

• all other business rate payers having difficulty in paying were offered payment deferrals in line with central government guidance.

Due to the above, the amount of NDR income collected to date compared to budget has changed significantly, and forecasting future collection is dependent on how long different business sectors take to recover, if at all. The Council has modelled business rates collection forecast for 2020/21 for the amounts collected and to be collected over a revised collection profile, against a reduced collectible debit, to support future business rates income projections. However, the amount of business rates the Council is allowed to retain is largely dependent on the future business rates regime and the amount of section 31 grant for certain business sectors. Also, the Council is part of the London business rates pool in 2020/21. London Councils will be modelling the potential impact of a deficit on the pool and individual boroughs and the results are expected later in the year. This exercise along with other intelligence and data gathering exercises on collection rates will be critical to better understand the potential impact on the 2020/21 budget and future budget assumptions for business rates income.

 

Over the past 2 years, the Council has been addressing historic overspends and undertook a comprehensive review of demographic pressures and other expenditure pressures, ensuring the Council could move to a more sustainable financial position. Following the Covid-19 outbreak the Council’s financial position has changed significantly. The impact of the loss of fees and charges, and emergency costs have had an immediate effect on all local authorities. In the longer term there is likely to be further squeeze on public spending, which could impact future funding settlement allocations.

 

The 2020/21 budget agreed in February 2020 included savings of £7.4m to deliver a balanced budget. Analysis shows that £0.3m of the planned savings are at risk of not being delivered at all, £2.5m of the planned savings have already been delivered, and £4.6m of the planned savings will not be delivered in 2020/21 (the Council will look to make these savings in 2021/22 instead). The 2020/21 budget also agreed business plans which included savings of £4.3m. Along with review and tracking of Covid-19 cost pressures, the savings position is being monitored daily and monthly monitoring reports and forecasts are reported to the Departmental Management Team. At this stage, all indications are that the 2021/22 savings (including the £4.6m of planned savings for 2019/20) will be achieved. Looking ahead, the savings forecasts will be reported quarterly and challenged and CMT and Cabinet, as well as the Resources and Public Realm Scrutiny Committee. As well as reporting progress of savings delivery the update reports will include mitigating actions or other interventions if there are delays in implementation or risk of delivery.

 

Proposed budget setting for 2021/22

 

Based on information available to date, the Council estimates that ongoing and recurring pressures will be in the region of £11m to £29m from 2021/22 across all service areas and council tax collection. At this stage, the estimates excludes future losses on business rates whilst further modelling is undertaken. Therefore, without additional funding or relives from central government the budget gap is likely to increase further. The Council’s estimates will be refined over the summer and are a major factor in the construction of the 2021/22 budget. Robust and credible plans will need to be developed and agreed in February 2021 to deliver a legally required balanced budget. At this stage, it is not clear when the Spending Review will be announced, or what the LG Finance Settlement for Brent in 2021/22 will be. The lack of clarity means that the Council will need to continue to plan with little or no funding certainty over the medium term. The Council expects to need to take difficult decisions about which services to prioritise and protect, and which to reduce in order to continue to deliver affordable and sustainable budgets.

 

To close a gap of this magnitude and in a relatively short space of time there are 3 main options:

 

• Further savings – options are limited given the current savings programme already includes a significant number of efficiencies and new income generation options are likely to be limited.

• Reduce growth assumptions – the current MTFS includes £13m of annual growth but there is a risk that reducing growth assumptions will store up pressures in future years.

• Scale back the capital programme – pausing or stopping specific capital schemes funded by borrowing would free up corporate revenue budgets set aside to provide capital financing.

 

A further consideration is if central government introduces new interventions specifically for long term Covid-19 related pressures, such as a multi-year minimum funding guarantee to compensate local authorities for income losses beyond their control. Another option may be to allow the capitalisation of losses, which would ultimately be funded by increased borrowing. The options will be further examined to ensure their consequences are properly understood and set out for members and the outcome of the review will be presented to Cabinet as part of the draft 2021/22 budget in October 2020.

 

The Council continues to maintain reserve levels much above those of its peers, but it is recognised that of the £398.4m total usable reserves and capital receipts reserve, £249.3m relates to reserves built up to help to finance the Council’s £1bn capital expenditure plans. 

 

Excluding the capital reserves, HRA and schools’ reserves leaves general fund reserves of £134.8m, which is close to the average level of reserves for London boroughs. However, the Council must carefully consider the use of its reserves to support revenue shortfalls as it is a non-recurrent source of funding, and use of reserves on a large-scale risks creating structural overspends if the Council’s finances do not recover quickly and income is reduced long term. 

 

From an audit point of view, the Council has managed its revenue reserves in a way that makes it better placed than most London councils to survive the challenges of the Covid-19 pandemic from a financial perspective. This prudent approach to reserves must be continued to address the risk of future pandemics, recessions and other issues or events that may impact on the Council’s financial sustainability.

 

 

UPDATE: Cuts of £7m and Council Tax rise of 3.99% approved by Brent Council

UPDATE: Budget and Council Tax rise approved with 4 against and 2 abstentions

In the early days of austerity and government cuts to local authorities there were protests at Brent Town Hall and later at the £100m Civic Centre.  These days 'savings' (which are often direct cuts in services or reconfiguration of existing services to save money) go through with little protest.

Tonight £7m will be wiped off the budget with Community and Wellbeing facing 'savings' of £4.2m  and Children and Young People £1.6m).  The latter includes £1.5m saved by closing some Children's Centre and creating hubs instead.  Savings are to be made in Adult Social Care and Day Care commissioning although there are questions over whether this can be delivered without providers withdrawing from the market.

Council Tax will be raised by 3.99%.

The Council Tax Setting and Budget Setting meeting started at 6pm and is live-streamed
 

Clarity needed on Adult Day Care 'savings' and the impact on providers and users

The proposed Council Budget includes 'savings' (rather than 'cuts') in Adult Day Care which as usual are said to have no impact on users.

The reported approved by Brent Cabinet that will go to the Full Council Budget Seeting Meeting states LINK:

Proposed savings

Current externally commissioned day care in Brent is commissioned according to an old fashioned and out of date model. The majority of provision is expensive, building based and does not offer choice and control to service users. Additionally, there is an over provision of traditional day care in Brent, meaning that providers are not transforming their services, and often wish to increase their costs to the Council to make up for low take up of their services.

The commissioning service are working with providers to redesign the service into a new model, that supports more choice and control and promotes less building based provision. Public Health outcomes will be built into the recommissioned service.

How would this affect users of this service?

The proposal is not to cut services or to reduce the amount of provision that individuals receive, but rather to transform the existing provision so that it is more efficient and cost effective. Users may be impacted through having to move to a different service provider, or adapting to a different form of non-building based provision, but the overall level of service individuals receive should stay the same in most cases. Although some people may find that transition challenging, a more innovative approach to day service should deliver better outcomes.

John Healy of Brent Advocacy Concerns, thought that this would lead to some existing Day Care Centres having to close but on Friday evening was told by a Council officer that 'there are no plans to close any Day Centres.'

John had emailed Brent officers and Cllr Neal Nerva earlier to request further information and having had at the time no reply contacted Wembley Matters:

I have been emailing the officer in charge of Commissioning and Cllr. Nerva, who chairs The Disability Forum for more information about this new model but neither of them have replied..

Maybe you could ask the council Martin about the plans for this new model, as this affects hundreds of the most vulnerable Brent residents.  The council say the big risk is not to current users but to the market providers, as they may not wish to deliver services away from the current building based model, or to continue to deliver services with £1M. less than current contracts give them, while at the same time having to meet the extra costs of paying the London Living wage to their workforce in any new contract.

So what might the council do if no providers come forward, as they set out a tender last year but no one expressed interest and now this is a re-commissioning of services. The previous contract was to save £1.5M. over 2 years (£750K in 2019/20 & £750K in 2020/21).