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2015 16 Budget Report

Minutes:

The Budget proposals were introduced by the Mayor who outlined the process

involved and the hard choices that had to be made in promoting a balanced

budget and frozen Council Tax. He cautioned the Council that already

announced spending limits would ensure the Council faced another very

difficult Budget round in the forthcoming year. The Mayor confirmed that he

did not intend to vary the budget proposals he had already fully set out at

Mayor and Cabinet on February 11 and 18.

 

A motion that the proposals be accepted was moved by the Cabinet Member

for Resources, Councillor Kevin Bonavia and seconded by Councillor Alan

Hall.  There was then a general debate to which Councillors Coughlin,

Mallory, Till, Dromey, Reid and Maslin contributed followed by a reply from

Councillor Bonavia. During this general debate on the budget the 5 minute

limit on speeches for the Mayor and Councillors Bonavia, Hall and Coughlin

was suspended.

 

Once the debate was concluded, there was, in accordance with statutory

provisions, a recorded vote on the Mayor’s proposed Budget. The result of the

vote was as follows:

 

48 Votes In favour of the Mayor’s Budget Proposals

 

Councillor Obajimi Adefiranye

Councillor Chris Barnham

Councillor Paul Bell

Councillor Peter Bernards

Councillor Chris Best

Councillor Kevin Bonavia

Councillor Andre Bourne

Councillor David Britton

Councillor Bill Brown

Mayor Steve Bullock

Councillor Suzannah Clarke

Councillor Janet Daby

Councillor Brenda Dacres

Councillor Amanda De Ryk

Councillor Joe Dromey

Councillor Damien Egan

Councillor Colin Elliott

Councillor Alan Hall

Councillor Carl Handley

Councillor Maja Hilton

Councillor Simon Hooks

Councillor Ami Ibitson

Councillor Mark Ingleby

Councillor Stella Jeffrey

Councillor Helen Klier

Councillor Jim Mallory

Councillor Paul Maslin

Councillor David Michael

Councillor Joan Millbank

Councillor Jamie Milne

Councillor Hilary Moore

Councillor Pauline Morrison

Councillor John Muldoon

Councillor Otimi Ogunbadewa

Councillor Rachel Onikosi

Councillor Crada Onuegbu

Councillor Jacq Paschoud

Councillor John Paschoud

Councillor Pat Raven

Councillor Joan Reid

Councillor Jonathan Slater

Councillor Alan Smith

Councillor Luke Sorba

Councillor Eva Stamirowski

Councillor Alan Till

Councillor Paul Upex

Councillor James-J Walsh

Councillor Susan Wise

 

1 Vote Against the Mayor’s Budget Proposals

 

Councillor John Coughlin

 

Abstentions nil

 

RESOLVED that:

 

i) the recommendations shown below in respect of the 2015/16 budget be

agreed;

 

(ii) no further amendments to the Budget were required following

consideration of the Budget update report at Mayor & Cabinet on February 18

2015:

 

Capital Programme

 

(iii) the 2014/15 Quarter 3 Capital Programme monitoring position set out be

noted;

 

(iv) the 2015/16 to 2018/19 Capital Programme of £424.3m be approved, with

two new proposed major capital projects for 2015/16 and including an

allocation of £90,000 of capital to Phoenix Housing in respect of their

proposals for developing the Fellowship Inn, as set out in section 5 of the

report and attached at Appendices W1 and W2;

 

Housing Revenue Account

 

(v) the consultation report on service charges to tenants’ and leaseholders in

the Brockley area, presented to area panel members on 11 December 2014

be noted;

 

(vi) the consultation report on service charges to tenants and leaseholders

and the Lewisham Homes budget strategy presented to area panel members

on 15 December 2014 be noted;

 

(vii) an increase in dwelling rents of 2.61% (an average of £2.51 per week) be

set – option B as presented in section 6 of the report, in accordance with

current Housing Revenue Account financial strategy;

 

(viii) an increase in the hostels accommodation charge by 2.20% (or £1.50 per

week) be set, in accordance with the Rent Restructuring formula;

 

(ix) the following average weekly increases for dwellings be approved for:

 

service charges to non-Lewisham Homes managed dwellings (Brockley);

caretaking 2.20% (£0.07)

• grounds 2.20% (£0.04)

communal lighting 2.20% (£0.01)

bulk waste collection 2.20% (£0.02)

window cleaning 0.00% (£0.00)

tenants levy No increase

 

service charges to Lewisham Homes managed dwellings:

caretaking No increase

• grounds No increase

window cleaning No increase

communal lighting 40.70% (£0.35)

• block pest control 5.16% (£0.08)

• waste collection No change

heating & hot water -18.93% (-£1.87) decrease

tenants levy No increase

 

(x) the following average weekly percentage increases for hostels and shared

temporary units be approved for;

service charges (hostels) – caretaking etc.; 4.08% (£2.77)

no energy cost increases for heat, light & power; 0.0% (£0.00)

water charges increase; 5.88% (£0.01)

 

(xi) an increase in garage rents by Retail Price Inflation (RPI) be approved of

2.3% (£0.20 per week) for Brockley residents and 2.3% (£0.27 per week) for

Lewisham Homes residents;

 

(xii) the budgeted expenditure for the Housing Revenue Account (HRA) for

2015/16 is £130.9m be noted;

 

(xiii) the HRA budget strategy savings proposals be endorsed in order to

achieve a balanced budget in 2015/16;

 

(xiv) 20 cases of Former Tenants’ Arrears be written off totalling £265,843.81;

 

Dedicated Schools Grant and Pupil Premium

 

(xv) subject to final confirmation of the allocation, that the provisional

Dedicated Schools Grant allocation of £275.8m be the Schools’ Budget for

2015/16; and the changes to the funding arrangements for High Needs Pupils

as set out be approved and the level of pupil premium anticipated for 2015/16

of £18.2m be noted;

 

General Fund Revenue Budget

(xvi) the projected overall variance against the agreed 2014/15 revenue

budget as set out and that any year-end overspend will be met from reserves

be noted;

 

(xvii) the previously approved revenue budget savings of £1.48m for 2015/16

and delegated budget savings proposals as per the Mayor and Cabinet

meeting of the 12 November 2014, as set out in section 8 and summarised in

Appendix Y1, be endorsed;

 

(xviii) the revenue budget savings presented at Mayor and Cabinet on 11

February 2015 as summarised in Appendices Y1 and Y2 of the 2015/16

Revenue Budget Savings Report (with the exception of proposal O1) will be

used to balance the budget;

 

(xix) the previously agreed efficiency savings of £2.5m from 2015/16 to

2017/18 be off-set against non-pay inflation in directorate budgets;

 

(xx) the transfer of £5.0m in 2015/16 from the New Homes Bonus reserve to

the General Fund for one year to meet funding shortfalls be approved and that

the position be reviewed again for 2016/17;

 

(xxi) the use of £4.96m reserves to fill the budget gap in 2015/16 be

approved;

 

(xxii) the creation of a fund in respect of quantified revenue budget pressures

in the sum of £4.3m in 2015/16 be approved, allowing the Executive Director

for Resources & Regeneration to hold these resources corporately until such

time that these pressures emerge during the year, and the Executive Director

for Resources and Regeneration be authorised to allocate these funds to

meet pressures when satisfied that those pressures cannot be contained

within the Directorates’ cash limits;

 

(xxiii) the creation of a fund in respect of as yet un-quantified revenue budget

risks in the sum of £3.2m in 2015/16 be approved, allowing the Executive

Director for Resources & Regeneration to hold these resources corporately in

case these pressures emerge during the year, and the Executive Director for

Resources and Regeneration be authorised to allocate these funds to meet

such pressures when satisfied that those pressures cannot be contained

within the Directorates’ cash limits;

 

(xxiv) a General Fund Budget Requirement of £246.224m for 2015/16 be

approved, based on a 0% increase in Lewisham’s Council Tax element and

the 1% Council Tax freeze grant of £1.0m being accepted. This will result in a

Band D equivalent Council Tax level of £1,060.35 for Lewisham’s services

and £1,355.35 overall. This represents an overall decrease in Council Tax for

2015/16 of 0.3% and is subject to the GLA precept for 2015/16 being reduced

by 1.3% from its existing 2014/15 level, in line with the GLA’s draft proposal;

 

(xxv) the Council Tax Ready Reckoner which for illustrative purposes sets out

the Band D equivalent Council Tax at various levels of increase be noted;

 

(xxvi) the Executive Director for Resources & Regeneration be asked to issue

cash limits to all Directorates once the 2015/16 Revenue Budget is agreed;

 

(xxvii) the draft Chief Financial Officer’s Section 25 Statement be received,

 

(xxviii) the draft statutory calculations for 2015/16 be approved;

 

(xxviii) the prospects for the revenue budget for 2016/17 and future years as

set out be noted:

 

(xxx) officers continue to develop firm proposals as part of the Lewisham

Future Programme to help meet the forecast budget shortfalls in 2015/16 and

for future years;

 

Other Grants (within the General Fund)

 

(xxxi) the adjustments to and impact of various specific grants for 2015/16 on

the General Fund as set out be noted;

 

Treasury Management Strategy

 

(xxxii) the prudential indicators and treasury limits be approved, as set out;

 

(xxxiii) the 2015/16 treasury strategy, including the investment strategy and

the credit worthiness policy be approved, as set out;

 

(xxxiv) the Executive Director for Resources & Regeneration be delegated

authority during 2015/16 to make amendments to borrowing and investment

strategies provided there is no change to the Council’s authorised limit for

borrowing;

 

(xxxv) the Minimum Revenue Provision (MRP) policy be approved as set out;

 

(xxxvi) the credit and counterparty risk management criteria and the proposed

countries for investment be approved, and responsibility for managing

transactions with those institutions which meet the criteria be delegated to the

Executive Director for Resources & Regeneration;

 

(xxxvii) the maximum deposit limits with the part nationalised banks be

decreased from £65m to £40m for each of Lloyds Banking Group and Royal

Bank of Scotland (RBS) Group;

 

(xxxviii) the one incidence of a breach of the investment policy in November

2014 when an investment with an approved counter party was made for 12

months which should have been limited to 6 months be noted; and

 

(xxxviii) the development of the Municipal Bond Agency be noted.

 

APPENDIX A

 

Statutory Calculations

 

1)   It be noted that at its meeting on 21 January 2015, the Council calculated

the number of 75,526.1 as its Council Tax base for 2015/16 in accordance

with the Local Authorities (Calculation of Taxbase) Regulations;

 

2)   The following amounts be now calculated by the Council for the year

2015/16 in accordance with the Local Government Finance Act 1992:

 

a. £1,042,058,620 being the aggregate of the amounts which the Council

estimates for gross expenditure, calculated in accordance with Section 32(2)A

of the Act;

 

b. £795,834,465 being the aggregate of the amounts which the Council

estimates for income, calculated in accordance with Section 32(3)A of the Act;

 

c. £246,224,155 being the amount by which the aggregate of 2(a) above

exceeds the aggregate of 2(b) above, calculated by the Council, in

accordance with Section 32A(4) of the Act, as its General Fund budget

requirement for the year;

 

d. £161,276,055 being the aggregate of the sums which the Council estimates

will be payable for the year into its General Fund in respect of the Settlement

Funding Assessment. This includes a Settlement Funding Assessment

adjustment of £1,259,461;

 

e. £84,948,100 being the residual amount required to be collected from

Council Tax payers.  This includes the surplus on the Council’s Collection

Fund of £4,864,000.

 

f. £1,060.35 being the residual sum at (e) above (less the surplus on the

Collection Fund), divided by the Council Tax base of 75,526.1 which is

Lewisham’s precept on the Collection Fund for 2014/15 at the level of Band D;

 

Band

Council Tax

(LBL)

 

£

A

706.90

B

824.72

C

942.53

D

1,060.35

E

1,295.98

F

1,531.62

G

1,767.25

H

2,120.70

 

 

Being the amounts given by multiplying the amount at (f) above by the

number which, in proportion set out in Section 5(1) of the Act, is applicable to

dwellings listed in a particular valuation band divided by the number which in

that proportion is applicable to dwellings listed in valuation Band D, calculated

by the Council in accordance with Section 36(1) of the Act, as the amounts to

be taken into account for the year in respect of categories of dwellings listed

in different valuation bands;

 

3) It be noted that for the year 2015/16, the Greater London Authority is

currently consulting on the following amounts in precepts issued to the

Council, in accordance with Section 40 of the Local Government Finance Act

1992 (as amended), for each of the categories of dwellings shown below:-

 

Band

GLA

Precept

 

£

A

196.67

B

229.44

C

262.22

D

295.00

E

360.56

F

426.11

G

491.67

H

590.00

 

4) Having calculated the estimated aggregate amount in each case of the

amounts at 2) (f) and 3) above, the Council, in accordance with Section 30(2)

of the Local Government Finance Act 1992, assumed the following amounts

as the amounts of Council Tax for the year 2015/16 for each of the categories

of dwellings shown below:-

 

Band

Total Council

Tax

(LBL & GLA)

 

£

A

903.57

B

1,054.16

C

1,204.75

D

1,355.35

E

1,656.54

F

1,957.73

G

2,258.92

H

2,710.70

 

Supporting documents: