Chief Finance Officer's Briefing Note on RSG Four Year Funding Settlement

Following postings on this blog and thr Brent Conservative Group's attempt to get the issue debated, Conrad Hall, Brent Council's Chief Finance Officer has issued this briefing note:

Four year funding settlement

1.     As part of last year's local government finance settlement DCLG allowed local authorities to fix their revenue support grant (RSG) settlement until 2019/20 and set a deadline of 14 October by when local authorities had to decide whether or not to accept the offer.  After this date any councils which have not responded would be considered to have rejected the offer.

2.     To accept the offer councils merely need to write to DCLG confirming their decision and submit an efficiency plan.  There is little or no guidance on the efficiency plan, except that it should be brief, no more than four pages.  Most councils that have accepted the offer to date merely seem to have submitted their existing MTFS or a version of it, which has been acceptable.

3.     The option to fix RSG through to 2019/20 has therefore been known about for almost a year.  It has been referenced in update reports on the budget and financial position during this period.  The budget report to council on 22 February 2016, for example, set out what was known at that time and commented that "officers have assumed that funding from 2017/18 to 2019/20 will be as set out in the draft four year settlement".

4.     It is therefore clear that the financial strategy already agreed was based on an assumption that the option to fix RSG would be accepted.  Of course, Members could decide otherwise.

5.     However, the arguments for fixing the settlement are as strong now as they were seven months ago when the current budget was set.  Certainty in financial planning is always advantageous and it is undoubtedly the case that the local government sector has persistently argued for longer-term funding settlements than the single year normally allocated by DCLG.  Arguably this makes it rather perverse then to reject an offer to provide that very certainty.

6.     Given this, the argument to reject the settlement only makes logical sense if one believes that more resources might be allocated in later years than currently planned, and that councils that had fixed their settlements would therefore lose out.  For this to stack up one must believe that government's net revenue spending will increase over the next three years and that at least some of that additional expenditure would be allocated to local government, rather than say to the NHS or to fund tax cuts.

7.     Neither of these appears likely.  Furthermore, one would also have to believe that additional resources allocated to local government would flow through to London for Brent to benefit by rejecting the fix.  As other changes to aspects of the overall funding system are tending to move resources away from London this would be an optimistic assumption.

8.     Of course, accepting the fix guarantees that RSG will continue to fall sharply until 2019/20.  However, the decision is about whether to guarantee future funding levels and accepting the fix does not imply agreement with the actual amount allocated.  It is merely a pragmatic way of managing a very challenging financial settlement by reducing future volatility and risk.

9.     Legally, Parliament cannot bind a future Parliament, and so DCLG retains the right to vary future settlements even for those councils that accept the fix.  However, officials have made it clear that they would be very reluctant to do so and it is reasonable to assume that the fix would be honoured in any but the most extreme economic circumstances.

10.  Within London officers know of no councils rejecting the opportunity to fix RSG.  Decision making has usually been managed at Cabinet.  A few councils have formally taken the decision at a council meeting or as a delegated decision.  Where the matter has been decided at Council officers understand that there has apparently been no significant debate, on the item.

Conrad Hall

Chief Finance Officer

Brent Council's Financial Position Briefing Note

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.

Brent Council challenged on pavements policy

 

Extract from Brent Council document

Following the 'pavement' meeting of Council officres, councillors and residents LINK to discuss the repaving of Brent streets with asphalt rather than paving slabs, local resident Simon Campbell has written to councillors:

Thank you for taking the time last week to meet with residents regarding Brent Councils new tarmac policy.

When the meeting had finished, rather than being left re-assured as was promised by Chris Whyte, I (along with many other residents) was left with the distinct impression that this policy seems to have been adopted with little or no consideration to either the planning or environmental impact and Transport seems to operate in isolation from the rest of the Council.

I found it quite incredible that Chris Whyte would attempt to portray Geary Road as a positive example to the residents of Chandos and Cranhurst, given that Dawn Butler MP has already been involved because of the anger many residents there have expressed with what has been done by the Transport Department and their contractors.

I am still waiting to hear what precisely this new lighter material is that Brent Council are supposed to be using on Geary Road, perhaps you will have more success in getting this specific information?

As councillors, you are supposed to represent constituency representatives and it was very apparent how disconnected your standpoint on this issue was, when compared to the views expressed by the majority of residents in both of the streets that were consulted. Please find attached the stats for both Chandos and Cranhurst.

Instead of Tony Kennedy repeating his obviously biased views, I would like to hear from the department heads of both Planning and the Environment about the basis on which this policy was decided and approved.

I have noted that Brent Council likes to portray itself as a “green” Council, but I along with many other residents found it impossible to reconcile quotes from Brent Councils own website regarding its supposed green credentials and its responsibility to protect and enhance the local character of Brent.

Unfortunately, Brent Council have proven form on this subject, the original plan to demolish the old Library and destroy the adjacent Plane tree touted by the Council made all the more outrageous by the fact that it is supposed to be at the centre of a conservation area.

Many locals actually do care about their area, their history and local character – something the Council soon found out. It should have been promoting and enhancing – not undermining this important aspect. This casual disregard for the areas architectural heritage seems to have surfaced again with this policy.

Both Local and Central government are supposed to be working together to reducing the amount of rain water being channelled into the sewers and maximising the amount of runoff absorbed at a local level.

This important responsibility is not going to be answered by applying a huge amount of water impermeable, petroleum based product (that continually leaches solvent and oils into the earth and onto people and animal’s feet) and decreasing further the amount of moisture onto the clay subsoil on which most of London is built - thereby increasing issues of subsidence as the clay is further isolated from moisture.

You may wish to reflect on one of Brent Councils own policies as regards water impermeable surfaces and the negative impact they have and the reason this measure has been put in place by virtually every local authority in the UK.

I have also noted that there will be a substantial increase in solar gain by installing a huge amount of matt black surface that will attract the heat, whereas the concrete pavers because of their colour/finish, help to reflect much of this solar energy and that this important negative aspect seems to have been ignored.

I look forward to your detailed responses to the above.

Regards,

Simon Campbell.

Jeremy Corbyn - the reboot: First priority is construction of a broad political alliance

'Concrete alliances on issues where we have agreement can be formed'

This article by two members of Labour Briefing Editorial Board is reprinted with the authors' permission.

Mike Phipps (Brent Central CLP) and Sue Lukes (Islington North CLP) suggest five priorities for the Labour leader following his re-election

The 2016 campaign for re-election may have added new members to the Labour Party and helped popularise some of our key ideas, but ultimately it was always an unnecessary distraction. The reality is that Britain and all of its key political institutions are in deep crisis. The priority now for the Corbyn leadership is to address the country, not the Party. We must now prepare to win the next General Election.

To do this, firstly, a broad political alliance needs to be constructed. Current electoral geography is against us, in particular the dominance of the SNP in Scotland, but also the expected loss of safe Labour seats resulting from the government’s  gerrymandered redrawing of constituency boundaries. Labour is going to need to work with community groups, trade unions, tenants, single issue campaigns and other parties from the bottom up on key fronts - health, education, civil liberties, housing, migrant rights.

Party patriotism cannot be allowed to get in the way of building the broadest possible unity around campaigns on these issues, on many of which there will be stronger supporters among Greens, Nationalists and even some Lib Dems than among some of Labour’s right wing. Concrete alliances on issues where we have agreement can be forged, as some members of the Shadow Cabinet are already doing. These will be popular and can isolate and expose those right wing leadership elements in all parties that reject mutual co-operation against the Tory government’s offensive.

Two institutional flaws in Britain’s inadequate democracy need to be put back on the table. The idea that this Tory government be allowed to claim a democratic mandate on just 36% of those who voted in the 2015 General Election is a scandal. To say that Labour too got away with this in the past is not good enough. The fact that Caroline Lucas, the newly elected joint leader of the Greens, has made proportional representation a “red line” in any discussion with Labour on electoral pacts makes this debate an unavoidable one for us.

Likewise, if real progress is to be made in Scotland and Wales, this could mean strategic alliances with nationalist forces if that’s what it takes to get Labour into government. For that to happen, Labour will have to stop playing “catch-up” on the national question and commit to the broadest possible devolution across the UK’s regions.

Our second big challenge: whatever problems the Party continues to face at national level, we must build on our base in local government and work with councillors to help define the agenda they need to deliver services. The work that Jon Trickett did on regional devolution in the 2015 leadership election can be taken forward, drawing on some of the new mayors, for example in Bristol, and mayoral candidates, in the North West, who are not hostile to Corbyn’s leadership.

Thirdly, we need to introduce some mechanisms for popular consultation on policy. These could be citizens’ assemblies or Podemos-style online circles to refine and develop policy ideas. While this is a radical departure in Labour policymaking, it fits in with Jeremy Corbyn’s own proposals, announced in August, to lead a digital revolution and strengthen online democracy. The aim would be to ensure that not just the leader but every policy has a mandate. Local party branches could play a key role in reaching out to ensure these frameworks have a real place in local political activity.

Fourthly, we have to have a clear idea of what kind of Brexit we want. By prioritising the removal of Jeremy Corbyn, many on Labour’s right who claim the Party did too little in the referendum campaign squandered a real opportunity to take the offensive on this issue against a Tory government that was - is - clueless on how to deal with Brexit. We must provide leadership on this: full integration into the single market must be a central goal. Bilateral trade agreements, let alone service agreements, are just unserious - the government has so little expertise on this, it is hiring expensive outside consultants to do the work. Seeking bilateral solutions can lead only to a further enfeebling of Britain’s declining industrial base. We also need to resolutely defend EU social entitlements and European Convention human rights for all citizens and residents from impending Tory attack.

Fifthly, our Party is in a mess at all levels, with the exception of the grassroots where the phenomenal increase in membership, trebling what it was 18 months ago, poses new challenges. We have to continue to encourage and listen to these new members if we are to retain them and make them active ingredients in a Labour victory. To this end, the full-time apparatus must be reshaped to ensure it is at the service of the members, helping them to play a full role in the Party, rather than playing a factional role, even excluding members from activity, as we have seen in recent months.

Jeremy Corbyn’s re-election is also an opportunity to strengthen the team around the leadership. Last year’s unexpected win necessitated a hasty pulling together from scratch of a new team, with all its inevitable teething troubles. This year’s long-expected victory should provide the impetus to recruit some of the finest experts who want to serve. We need a focused, efficient operation, outward-looking and responsive to the electorate, strategic in its vision and clear and concise in its core messages.

What about the MPs? The war in the PLP has to end. It’s appalling that Labour MPs who claim to care so passionately about EU membership have dragged us into these internal squabbles at a time of national crisis. The plotting has to stop. But if we get all these other things right, then probably some who resigned from Shadow Cabinet positions, as well as some who didn’t come on board before, will be prepared to work with us. If we are magnanimous in victory and reach out to them, then the diehards whose sole aim is to bring down Jeremy Corbyn can be isolated from the broader middle ground of the PLP.

Nothing succeeds like success. If we can go beyond the internal contest to address the concerns and win the trust of voters who didn’t vote Labour last time and now feel betrayed by the other parties, we can change the political landscape.

Brent: Full Council barred from discussing RSG freeze and Efficiency Plan

Cllr John Warren's request LINK to the Mayor for discussion of the possibility of an Extraordinary Brent Council Meeting to discuss the freezing of Brent Council's Revenue Support Grant (RSG) for four years  and the consequent Efficiency Plan has been turned down by Council Officers.

The Revenue Support Grant is the main source of funding for local councils but is gradually being phased out

This will mean that both decisions will be made by Brent's CEO and Muhammed Butt, and will not be discussed by the Council or any further by the Cabinet.

In a letter to Warren, Fiona Alderman, Brent Council's Chief Legal Officer stated:

The Mayor has considered your request and has confirmed the his response set out below after having taken advice from officers.

"There are no special circumstances justifying the consideration of this item at this meeting as a matter of urgency. I cannot therefore allow it to be added to the agenda. I would also add that the decision on the Financial Position 2017/18- 2019/20 and option to fix RSG settlement is a function exercisable by the Cabinet and has already been considered by the Cabinet."

Cllr Warren, leader of Brent Conservative Group, commented:

It is totally disgraceful that the  leader is allowed to make such an important decision and Council members will not be able to question/ express a view.

Brent Council budget 'coup' an affront to democracy?

In a posting prior to Monday's Cabinet meeting LINK I drew attaention to the possible decision by the Cabinet to freeze the Council's Revenue Support Grant (RSG) until 2019/20 which would mean setting out an 'efficiency' plan for Council expenditure over the next four years to be submitted to the Department for Communities and Local Government. Due to the timing of Cabinet and Council and government deadlines the Officers' report recommended that these decisions, as well as one on Council borrowing, would not be made by Cabinet or Full Council but by one councillor and one officer in each case.

I wrote:

It is not only the decision in principle that has to be made by Butt and Downs but an 'efficiency plan' submitted that will dictate the level of savings (cuts, 'efficiencies' and income generation) over the next four years.

These are major decisions and I do not understand why the Cabinet cannot convene a special meeting before the deadline to consider Downs' proposal and efficiency plan. The wider Labour Group as well as the opposition seem to have been left out of the process completely but their hands will be tied for the next four years by these decisions.

Put simply the main parameters of the Council's budget decisions will not be made by the Cabinet, Labour Group or Full Council - and certainly not discussed by Labour Party members.  Within that of course there is also the setting of the level of Council Tax.

When these matters come up for debate over the next four years any decisions will have to conform to the efficiency plan.

Given the clear difficulty the Council is already having in delivering 'efficient' services as a result of funding cuts the 'efficiency' plan needs intense scrutiny.

Instead it will be compiled by  Carolyn Downs, Brent Council CEO and Muhammed Butt, Leader o the Coucnil,  and submitted by them before the government deadline. Additionally the Cabinet agreed to delegate the appointment of specialist fianncial advisers to Conrad Hall, the Brent Chief Finance Officer and Cllr Margaret McLennan, Deputy Leader.

The Cabinet Decision sheet records:

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RESOLVED: 2019/20 and option to fix RSG settlements

Cabinet noted the overall financial position and the risks inherent in it.

Cabinet noted the overall arguments for and against accepting a fixed settlement of its RSG until 2019/20, and that on balance the advice is in favour of accepting it.

Cabinet delegated to the Chief Executive and Leader authority to decide whether or not to accept the fixed RSG settlement.

Cabinet delegated to the Chief Executive and Leader authority to submit an efficiency plan to DCLG as part of any decision to accept a fixed RSG settlement.

Cabinet noted the position in particular in respect of business rates devolution and how this might progress, and that the chief finance officer will continue to respond to technical consultations as necessary.

Cabinet noted the progress in developing a financing programme for the investment strategy. 


Cabinet agreed to delegate procurement and appointment of specialist financial advisers to assist in the financing of the investment strategy to the Chief Finance Officer, in consultation with the Deputy Leader

In the light of these issues Cllr John Warren (Leader of Brent Conservative Group) has submitted a request calling for an Extraordinary Full Council meeting to discuss the Efficiency Plan before its submission.

Although his motivation may be to achieve further 'efficiencies' (cuts) and I would strongly disagree with that, the need for democratic decision making and accountability is essential and I think should be shared by Labour backbenchers.

This is Warren's  request:

Mr.Mayor,

I ask that the following item be included as " Any Other Urgent Business " at the meeting on Monday September 19th 2016


Full Council is asked to consider the Cabinet recommendations, noted below made at its meeting on 13 September 2016 in the report " Financial Position 2017/18- 2019/20 and option to fix RSG settlement " by holding an Extraordinary Council Meeting on Thursday 13 October 2016.

       2.3. That Cabinet delegates to the Chief Executive and Leader authority to decide whether or not to accept the fixed RSG settlement.

       2.4.That Cabinet delegates to the Chief Executive and Leader authority to submit an efficiency plan to DCLG as part of any decision to accept a fixed RSG settlement.

REASON FOR REQUEST.....

Every year Full Council considers the annual budget, in detail ,at a special meeting called for  that purpose.

I believe that the Cabinet recommendations, detailed above, are an important part of this budget process .

I believe that Full Council should consider the issue of fixing RSG up until 2019/20,along with consideration of the efficiency plan attached to this deal.

The deadline for submission to DCLG is 14 October 2016  - hence the meeting on the 13 October 2016 will enable Full Council to debate fully these issues with up - to - date information.
      

 
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The Labour purge is become absurd - and poisonous

I have not got involved in the internal battle in the Labour Party but speaking to friends during the Refugees Welcome demonstration today, and reading some posts on Facebook this evening, I am actually quite shocked and upset about what is going on.

Today Alan Gibbons, the author, wrote on Facebook that his daughter had been expelled from the Labpur Party retweeting the Green Party's message of support for the NUT strike - she is a teacher. A further reason was that she had shared that Green Party Political Broadcast (which I personally did not like) featuring children as politicians.  She cannot re-apply for membership for 5 years.

I wrote a message of solidarity on Alan's Facebook page about the expulsion:

This is beyond ridiculous. Solidarity from a Green Party member who believes that there are overlaps between Labour Left and Green Left where we can work together for the benefit of the wider movement. Today on the Refugees Welcome March I spoke with, and walked with, many Labour Party comrades as well as Greens. Beneath the jokes about being photographed walking with the Greens there was also something more worrying - a recognition that despite it seeming absurd, that this really could be used against them. Poisonous.

 Harrow West CLP recently passed this resolution for the upcoming Labour Party Conference:

For a democratic pluralist Labour Party

Conference notes in late August expulsions and suspensions rose significantly. At time of writing the number is unknown, but on 20th August the Daily Telegraph reported "thousands of labour members....could be suspended or expelled".

This included many long standing members, among them, Bakers, Food and Allied Workers Union general secretary Ronnie Draper; this suspension has now been lifted after a timely hearing, something denied thousands of ordinary party members.

We believe we should ensure our rules are carried out in a spirit consistent with a democratic culture. As the Chakrabarti report argues, "the Labour Party should seek to uphold the strongest principles of natural justice", "due process" and "proportionality".

Expulsions and suspensions must not be used as a factional weapon by members. Accusations must be in writing and must be evidenced by named witnesses. A hearing must take place before any sanction is imposed. There must be an appeals system for all suspensions and expulsions.

Anyone willing to genuinely support labour should be welcome, subject to our rules. Previous political activity should be of no relevance; neither should membership or support of labour supporting socialist organisations or currents. Deal with differences politically; discussion not expulsion.

Conference resolves:

• to call on all party officials and bodies to act in the spirit of democracy and plurality
• to call on the NEC to carry out Chakrabarti reports recommendations
• All those expelled or suspended who have been denied an appeal should be given one

Brent Council answers Full Council Meeting questions from the public

Questions from the public will ne answered for the first time at the Brent Council Meeting tomorrow. The answers have been published in advance in a Supplementary Report which I have posted below.  It also contains answers to questions from Councillors and reports from the two Scrutiny Committees.