Agenda item

Having considered an open officer report, and presentations by the Cabinet

Member for Finance & Resources, Councillor Amanda De Ryk, and the Chair

of the Public Accounts Select Committee, Councillor Mark Ingleby, the Mayor

and Cabinet agreed that:

 

(1) the comments of the Public Accounts Select Committee of 27 January

2022 be received;

 

(2) That, having considered the views of those consulted on the budget, and

subject to consideration of the outcome of consultation with business

ratepayers and subject to proper process, as required, the Mayor and Cabinet

adopted the following recommendations:

 

General Fund Revenue Budget

(3) asks Council to note the projected overall variance of £2.9m (or 1.2%)

against the agreed 2021/22 revenue budget of £243.100m as set out in

section 6 and that any year-end overspend will be met from corporate

provisions and reserves;

 

(4) endorses and asks Council to endorse the budget cut reduction measures

of £11.835m as per the Mayor and Cabinet meeting of the 2 February 2022,

as set out in section 6 and summarised in Appendix Y1 and Y2;

 

(5) agrees and asks Council to agree the allocation of £6.500m in 2022/23 be

set aside for corporate risks and pressures;

 

(6) agrees and asks Council to agree the allocation of £21.315m of resources

from the corporate risks and pressures, social care precept, new homes

bonus, social care grant, lower tier grant, market sustainability and Fair cost of care grant, services grant and legacy s31 monies in 2022/23 to be invested in

funding quantified budget pressures and opportunities, both recurring and

once-off and that within this £1.877m is held in corporate provisions for the

Executive Director for Corporate Resources to apply as necessary to the

identified but as yet unquantified risks as set out in section 6;

 

(7) agrees to recommend to Council that a General Fund Budget Requirement

of £248.610m for 2022/23 be approved;

 

(8) asks Council to agree to a 2.99% increase in Lewisham’s Council Tax

element. This will result in a Band D equivalent Council Tax level of £1,421.22

for Lewisham’s services and £1,816.81 overall. This represents an overall

increase in Council Tax for 2022/23 of 4.2% and is subject to the GLA precept

for 2022/23 being increased by £31.93 (i.e. 8.78%) from £363.66 to £395.59,

in line with the GLA’s draft budget proposals;

 

(9) notes the final settlement figure for 2022/23 has not yet been announced

and delegates authority to the Executive Director for Corporate Resources to

include any change to the provisional settlement of £124,170,641 in the report

for Council with any difference covered from provisions and reserves as

necessary;

 

(10) notes the provisional and estimated precept and levies from the GLA and

other bodies as detailed in Appendix Y6 and delegates authority to the

Executive Director for Corporate Resources to include any changes to these

in the report for Council with any difference covered from provisions and

reserves as necessary;

 

(11) notes and asks Council to note the Council Tax Ready Reckoner which

for illustrative purposes sets out the Band D equivalent Council Tax at various

levels of increase. This is explained in section 6 and is set out in more detail

in Appendix Y4;

 

(12) asks that the Executive Director for Corporate Resources issues cash

limits to all Directorates once the 2022/23 Revenue Budget is agreed;

 

(13) considers, and asks Council to consider, the Section 25 Statement from

the Chief Finance Officer attached at Appendix Y5;

 

(14) agrees and asks Council to agree the draft statutory calculations for

2022/23 as set out at Appendix Y6;

 

(15) notes and asks Council to note the prospects for the revenue budget for

2022/23 and future years as set out in section 6;

 

(16) agrees and asks officers to continue to develop firm proposals to

redesign and transform services and inform the capital strategy by bringing

them forward in good time to support the work towards a savings and

investment round to help plan early to meet the future forecast medium term

finance strategy objectives;

 

Other Grants (within the General Fund)

 

(17) notes and asks Council to note the adjustments to and impact of various

specific grants for 2022/23 on the General Fund as set out in section 7 of this

report;

 

Fees and charges

 

(18) approves the approach to setting 2022/23 fees and charges for

chargeable services in section 8 of the report and attached at Appendix Y8;

External Audit

 

(19) accepts, and recommends that Council accepts, the Public Sector Audit

Appointments’ invitation to opt into the sector-led option for the appointment of

external auditors for five financial years from 1 April 2023.

 

Dedicated Schools Grant and Pupil Premium Schools Block

 

(20) note and recommends that Council notes that the provisional Dedicated

Schools Grant allocation of £221.069m be the Schools’ Budget (Schools

Block) for 2022/23 covering both maintained schools and academies;

 

(21) notes that following the Schools Forum meeting on the 20 January,

submission has been made to the Department for Education with regards to

school funding formula, recommending the application of the National Funding

Formula (including unit values) allowing for a 2% uplift in Minimum Funding

Guarantee (MFG);

 

(22) agrees and recommends that Council agrees, (as recommended by

Schools Forum) the once-off transfer of circa £0.7m of Dedicated Schools

Grant to the High Needs Block;

 

(23) agrees and recommends that Council agrees, (as recommended by

Schools Forum) the once-off transfer of £0.15m to fund the shortfall in the

School Improvement and Brokerage Grant;

 

Central Schools Services Block (CSSB)

 

(24) notes, and asks Council to note, the construct and allocation of £3.693m

for the CSSB block allocation for 2022/23, significantly reduced from the

£4.261m 2021/22 allocation;

 

(25) notes a decrease in both the per pupil unit funding (£0.43) and pupil

numbers (949) resulting in a decrease of £61.2k in the “pupil-led” funding

element of the block;

 

(26) notes that the CSSB is anticipated to cease from 2023/24, with potential

transfer of any residual funding to the Council’s main revenue grant. Officers

are currently engaging with schools to consider options for trading, de-

delegation and cessation or reduction in services;

 

High Needs Block (HNB)

 

(27) notes, and asks Council to note, the provisional HNB £67.608m to

support the Council’s statutory duty with regards Special Education Needs

(SEN). This is a net increase of £5.54m relative to 2021/22, The HNB will be

finalised in March for deductions arising for institutions funded by the

Education and Skills Funding Agency(ESFA);

 

(28) notes that the Schools Forum on 20 January 2022 agreed the transfer of

circa £0.7m to the block to support the Council to meet its statutory functions;

 

(29) notes that the HNB is expected to overspend by between £5m to £6m in

2021/22, increasing the cumulative overspend to £11m in total for 2021/22 as

£5m has been brought forward from 2020/21. This overspend is to be met

from schools reserves;

 

Early Years Block (EYB)

 

(30) notes, and asks Council to note, the provisional Dedicated Schools Grant

allocation of £24.12m to the block; and that the Department for Education has

increased funding for “3 and 4 year old” from £5.76 to £5.93 (i.e. 17p per

hour), and hourly rate for 2 year olds increase from £6.66 to £6.87, an 3%

increase (i.e. 21p per hour) for 2022/23.

 

(31) notes that the maintained nursery supplementary funding allocation for

September 2022 to March 2023 is subject to change and has not yet been

finalised, initial projections from DfE suggest a reduction overall of circa £40k;

Pupil Premium

 

(32) notes, and asks Council to note, that the pupil premium will continue in

the 2022/23 financial year. The funding rates in the year will be same as

2021/22 and the funding is based on data over a six year census period. It is

expected that the DfE will provide updated final allocations in summer 2022;

Social Care Levy Grant

 

(33) notes, and asks Council to note, the new grant to support the increased

costs of the 1.25% increase in schools National Insurance contributions of

£8.8m.

 

Housing Revenue Account

 

(34) notes, and asks Council to note, the consultation report on service

charges to tenants’ and leaseholders in the Brockley area, presented to area

panel members on 10^th November 2021, as attached at Appendix X3;

 

(35) notes, and asks Council to note, the consultation report on service

charges to tenants’and leaseholders and the Lewisham Homes budget

strategy presented to area panel members on 24th November 2021 as

attached at Appendix X4;

 

(36) agrees, and asks Council, to agree set an increase in dwelling rents of

4.1% (an average of £4.07 per week) – as per the formula rent calculations

outlined in section 9

 

(37) agrees, and asks Council to agree, to set an increase in the hostels

accommodation charge by 4.1% (or £3.27 per week), in accordance with

formula rent calculations;

 

(38) approves, and asks Council to approve, the following average weekly

increases/decreases for dwellings for:

 

(38.1) service charges to non-Lewisham Homes managed dwellings

(Brockley) to ensure full cost recovery and 5.90% inflationary uplift for

2022/23;

 caretaking 5.90% (£0.29)

 grounds 5.90% (£0.13)

 communal lighting 5.90% (£0.08)

 bulk waste collection 5.90% (£0.09)

 window cleaning 5.90% (£0.01)

 tenants’ levy 0.00% (£0.00)

 

(38.2) service charges to Lewisham Homes managed dwellings:

 caretaking 4.00% (£0.27)

 grounds 4.00% (£0.09)

 window cleaning 8.00% (£0.01)

 communal lighting 20.00% (£0.21)

 block pest control 15.00% (£0.27)

 waste collection 0.00% (£0.00)

 heating & hot water 10.00% (£1.05)

 tenants’ levy 0.00% (£0.00)

 bulk waste disposal 4.00% (£0.03)

 sheltered housing 0.00% (£0.00)

 

(38.3) approves, and asks Council to approve, the following average weekly

percentage changes for hostels and shared temporary units for;

 service charges (hostels) – caretaking etc.; no change

 energy cost increases for heat, light & power; no change

 water charges increase; no change

 

(38.4) approves, and asks Council to approve, an increase in garage rents by

4.9% (£0.77 per week) for Brockley and Lewisham Homes residents as

outlined in Appendix X6;

 

(38.5) notes, and asks Council to note, that the budgeted expenditure for the

Housing Revenue Account (HRA) for 2022/23 is £304.0m, split £94.4m

revenue and £209.6m capital, which includes the decent homes and new

build programmes;

 

(38.6) agrees the HRA budget strategy cut proposals in order to achieve a

balanced budget in 2022/23, as attached at Appendix X1;

 

(38.7) agrees to write off twenty-one cases of Former Tenants’ Arrears as set

out inparagraphs 9.28 to 9.31 and Appendix X7, totalling £365,462.94;

 

Treasury Management Strategy

 

(39) approves and recommends that Council approves the prudential

indicators and treasury indicators, as set out in section 10;

 

(40) approves and recommends that Council approves the Annual Investment

Strategy and Creditworthiness Policy, set out in further detail at Appendix Z2;

 

(41) approves and recommends that Council approves the Investment

Strategy as set out in section 10;

 

(42) approves and recommends that Council approves the Minimum Revenue

Provision (MRP) policy as set out in section 10;

 

(43) agrees and recommends that Council agrees to delegate to the

Executive Director of Corporate Resources authority during 2022/23 to make

amendments to borrowing and investment limits provided they are consistent

with the strategy and there is no change to the Council’s authorised limit for

borrowing;

 

(44) approves and recommends that Council approves the overall credit and

counterparty risk management criteria, as set out at Appendix Z2, the

proposed countries for investment at Appendix Z3, and that it formally

delegates responsibility for managing transactions with those institutions

which meet the criteria to the Executive Director for Corporate Resources;

 

(45) approves and recommends that Council approves a minimum sovereign

rating of AA for non-UK investments;

 

Capital Programme

 

(46) notes the capital programme position and recommends that Council

approves the 2022/23 to 2024/25 Capital Programme of £600.4m as set out in

section 11 and Appendix W1.

 

 

The Mayor presented his fourth budget, the last of this administration by

reflecting that the Council had suffered Government cuts every year since

2010 and in real terms the Council’s budget had been slashed from over

£400m to £248m resulting in having 1,000 fewer members of staff 

 

When austerity was combined with COVID an even more difficult position was

presented for all councils The Mayor added that one-year budgets made it

difficult to plan for the long term and suggested three-year budgets as

operated by Government Departments would be preferable. The Mayor noted

the “Levelling Up” agenda would drive money out of London. Added to that

was the cost of living crisis evidenced by inflation, rising food prices and fuel

costs.

 

The Mayor stated the intention to increase Council Tax by 2.99 per cent which

was the highest possible without holding a referendum. The budget did not

propose to use reserves to balance the budget. A balanced budget was a

necessity to avoid the alternative of a Council run by Government

commissioners.

 

The Mayor pledged to continue to prioritise good contract management and

improve demand management such as the Newton Review of Adult Social

Care. He said the Council needed to do more of this type of work –

transforming services to deliver differently not just trying to do more with less.  

 

The Mayor acknowledged overspends were too big and cuts need to be

implemented. Despite huge challenges the Mayor noted significant

achievements had been made and he highlighted Lewisham officially had the

best parks in London; was a top-tier council for climate action; had been made 

London Borough of Culture and was officially the UK’s first Borough of

Sanctuary.

 

The Mayor concluded by thanking Councillor Amanda de Ryk for her

leadership and the input made by the Executive Director for Corporate

Resources and her Senior Management Team.

 

This is a budget which delivers on our priorities, safeguards the Council’s

finances, and ensures we are able to continue the important work of putting

 

Councillor Amanda De Ryk formally moved the recommendations and

confirmed the Council Tax increase and the level of cuts. She reflected that

the long term picture was not positive. She ended by thanking the Officers

who had assisted her in preparing the budget.

 

Having considered an open officer report, and presentations by the Cabinet

Member for Finance & Resources, Councillor Amanda De Ryk, and the Chair

of the Public Accounts Select Committee, Councillor Mark Ingleby, the Mayor

and Cabinet, for the reasons set out in the report and by a vote of 6-0:

 

RESOLVED that:

 

(1) the comments of the Public Accounts Select Committee of 27 January

2022 be received;

 

(2) That, having considered the views of those consulted on the budget, and

subject to consideration of the outcome of consultation with business

ratepayers and subject to proper process, as required, the Mayor and Cabinet

adopted the following recommendations:

 

General Fund Revenue Budget

(3) asks Council to note the projected overall variance of £2.9m (or 1.2%)

against the agreed 2021/22 revenue budget of £243.100m as set out in

section 6 and that any year-end overspend will be met from corporate

provisions and reserves;

 

(4) endorses and asks Council to endorse the budget cut reduction measures

of £11.835m as per the Mayor and Cabinet meeting of the 2 February 2022,

as set out in section 6 and summarised in Appendix Y1 and Y2;

 

(5) agrees and asks Council to agree the allocation of £6.500m in 2022/23 be

set aside for corporate risks and pressures;

 

(6) agrees and asks Council to agree the allocation of £21.315m of resources

from the corporate risks and pressures, social care precept, new homes

bonus, social care grant, lower tier grant, market sustainability and Fair cost of care grant, services grant and legacy s31 monies in 2022/23 to be invested in

funding quantified budget pressures and opportunities, both recurring and

once-off and that within this £1.877m is held in corporate provisions for the

Executive Director for Corporate Resources to apply as necessary to the

identified but as yet unquantified risks as set out in section 6;

 

(7) agrees to recommend to Council that a General Fund Budget Requirement

of £248.610m for 2022/23 be approved;

 

(8) asks Council to agree to a 2.99% increase in Lewisham’s Council Tax

element. This will result in a Band D equivalent Council Tax level of £1,421.22

for Lewisham’s services and £1,816.81 overall. This represents an overall

increase in Council Tax for 2022/23 of 4.2% and is subject to the GLA precept

for 2022/23 being increased by £31.93 (i.e. 8.78%) from £363.66 to £395.59,

in line with the GLA’s draft budget proposals;

 

(9) notes the final settlement figure for 2022/23 has not yet been announced

and delegates authority to the Executive Director for Corporate Resources to

include any change to the provisional settlement of £124,170,641 in the report

for Council with any difference covered from provisions and reserves as

necessary;

 

(10) notes the provisional and estimated precept and levies from the GLA and

other bodies as detailed in Appendix Y6 and delegates authority to the

Executive Director for Corporate Resources to include any changes to these

in the report for Council with any difference covered from provisions and

reserves as necessary;

 

(11) notes and asks Council to note the Council Tax Ready Reckoner which

for illustrative purposes sets out the Band D equivalent Council Tax at various

levels of increase. This is explained in section 6 and is set out in more detail

in Appendix Y4;

 

(12) asks that the Executive Director for Corporate Resources issues cash

limits to all Directorates once the 2022/23 Revenue Budget is agreed;

 

(13) considers, and asks Council to consider, the Section 25 Statement from

the Chief Finance Officer attached at Appendix Y5;

 

(14) agrees and asks Council to agree the draft statutory calculations for

2022/23 as set out at Appendix Y6;

 

(15) notes and asks Council to note the prospects for the revenue budget for

2022/23 and future years as set out in section 6;

 

(16) agrees and asks officers to continue to develop firm proposals to

redesign and transform services and inform the capital strategy by bringing

them forward in good time to support the work towards a savings and

investment round to help plan early to meet the future forecast medium term

finance strategy objectives;

 

Other Grants (within the General Fund)

 

(17) notes and asks Council to note the adjustments to and impact of various

specific grants for 2022/23 on the General Fund as set out in section 7 of this

report;

 

Fees and charges

 

(18) approves the approach to setting 2022/23 fees and charges for

chargeable services in section 8 of the report and attached at Appendix Y8;

External Audit

 

(19) accepts, and recommends that Council accepts, the Public Sector Audit

Appointments’ invitation to opt into the sector-led option for the appointment of

external auditors for five financial years from 1 April 2023.

 

Dedicated Schools Grant and Pupil Premium Schools Block

 

(20) note and recommends that Council notes that the provisional Dedicated

Schools Grant allocation of £221.069m be the Schools’ Budget (Schools

Block) for 2022/23 covering both maintained schools and academies;

 

(21) notes that following the Schools Forum meeting on the 20 January,

submission has been made to the Department for Education with regards to

school funding formula, recommending the application of the National Funding

Formula (including unit values) allowing for a 2% uplift in Minimum Funding

Guarantee (MFG);

 

(22) agrees and recommends that Council agrees, (as recommended by

Schools Forum) the once-off transfer of circa £0.7m of Dedicated Schools

Grant to the High Needs Block;

 

(23) agrees and recommends that Council agrees, (as recommended by

Schools Forum) the once-off transfer of £0.15m to fund the shortfall in the

School Improvement and Brokerage Grant;

 

Central Schools Services Block (CSSB)

 

(24) notes, and asks Council to note, the construct and allocation of £3.693m

for the CSSB block allocation for 2022/23, significantly reduced from the

£4.261m 2021/22 allocation;

 

(25) notes a decrease in both the per pupil unit funding (£0.43) and pupil

numbers (949) resulting in a decrease of £61.2k in the “pupil-led” funding

element of the block;

 

(26) notes that the CSSB is anticipated to cease from 2023/24, with potential

transfer of any residual funding to the Council’s main revenue grant. Officers

are currently engaging with schools to consider options for trading, de-

delegation and cessation or reduction in services;

 

High Needs Block (HNB)

 

(27) notes, and asks Council to note, the provisional HNB £67.608m to

support the Council’s statutory duty with regards Special Education Needs

(SEN). This is a net increase of £5.54m relative to 2021/22, The HNB will be

finalised in March for deductions arising for institutions funded by the

Education and Skills Funding Agency(ESFA);

 

(28) notes that the Schools Forum on 20 January 2022 agreed the transfer of

circa £0.7m to the block to support the Council to meet its statutory functions;

 

(29) notes that the HNB is expected to overspend by between £5m to £6m in

2021/22, increasing the cumulative overspend to £11m in total for 2021/22 as

£5m has been brought forward from 2020/21. This overspend is to be met

from schools reserves;

 

Early Years Block (EYB)

 

(30) notes, and asks Council to note, the provisional Dedicated Schools Grant

allocation of £24.12m to the block; and that the Department for Education has

increased funding for “3 and 4 year old” from £5.76 to £5.93 (i.e. 17p per

hour), and hourly rate for 2 year olds increase from £6.66 to £6.87, an 3%

increase (i.e. 21p per hour) for 2022/23.

 

(31) notes that the maintained nursery supplementary funding allocation for

September 2022 to March 2023 is subject to change and has not yet been

finalised, initial projections from DfE suggest a reduction overall of circa £40k;

Pupil Premium

 

(32) notes, and asks Council to note, that the pupil premium will continue in

the 2022/23 financial year. The funding rates in the year will be same as

2021/22 and the funding is based on data over a six year census period. It is

expected that the DfE will provide updated final allocations in summer 2022;

Social Care Levy Grant

 

(33) notes, and asks Council to note, the new grant to support the increased

costs of the 1.25% increase in schools National Insurance contributions of

£8.8m.

 

Housing Revenue Account

 

(34) notes, and asks Council to note, the consultation report on service

charges to tenants’ and leaseholders in the Brockley area, presented to area

panel members on 10^th November 2021, as attached at Appendix X3;

 

(35) notes, and asks Council to note, the consultation report on service

charges to tenants’and leaseholders and the Lewisham Homes budget

strategy presented to area panel members on 24th November 2021 as

attached at Appendix X4;

 

(36) agrees, and asks Council, to agree set an increase in dwelling rents of

4.1% (an average of £4.07 per week) – as per the formula rent calculations

outlined in section 9

 

(37) agrees, and asks Council to agree, to set an increase in the hostels

accommodation charge by 4.1% (or £3.27 per week), in accordance with

formula rent calculations;

 

(38) approves, and asks Council to approve, the following average weekly

increases/decreases for dwellings for:

 

(38.1) service charges to non-Lewisham Homes managed dwellings

(Brockley) to ensure full cost recovery and 5.90% inflationary uplift for

2022/23;

 caretaking 5.90% (£0.29)

 grounds 5.90% (£0.13)

 communal lighting 5.90% (£0.08)

 bulk waste collection 5.90% (£0.09)

 window cleaning 5.90% (£0.01)

 tenants’ levy 0.00% (£0.00)

 

(38.2) service charges to Lewisham Homes managed dwellings:

 caretaking 4.00% (£0.27)

 grounds 4.00% (£0.09)

 window cleaning 8.00% (£0.01)

 communal lighting 20.00% (£0.21)

 block pest control 15.00% (£0.27)

 waste collection 0.00% (£0.00)

 heating & hot water 10.00% (£1.05)

 tenants’ levy 0.00% (£0.00)

 bulk waste disposal 4.00% (£0.03)

 sheltered housing 0.00% (£0.00)

 

(38.3) approves, and asks Council to approve, the following average weekly

percentage changes for hostels and shared temporary units for;

 service charges (hostels) – caretaking etc.; no change

 energy cost increases for heat, light & power; no change

 water charges increase; no change

 

(38.4) approves, and asks Council to approve, an increase in garage rents by

4.9% (£0.77 per week) for Brockley and Lewisham Homes residents as

outlined in Appendix X6;

 

(38.5) notes, and asks Council to note, that the budgeted expenditure for the

Housing Revenue Account (HRA) for 2022/23 is £304.0m, split £94.4m

revenue and £209.6m capital, which includes the decent homes and new

build programmes;

 

(38.6) agrees the HRA budget strategy cut proposals in order to achieve a

balanced budget in 2022/23, as attached at Appendix X1;

 

(38.7) agrees to write off twenty-one cases of Former Tenants’ Arrears as set

out inparagraphs 9.28 to 9.31 and Appendix X7, totalling £365,462.94;

 

Treasury Management Strategy

 

(39) approves and recommends that Council approves the prudential

indicators and treasury indicators, as set out in section 10;

 

(40) approves and recommends that Council approves the Annual Investment

Strategy and Creditworthiness Policy, set out in further detail at Appendix Z2;

 

(41) approves and recommends that Council approves the Investment

Strategy as set out in section 10;

 

(42) approves and recommends that Council approves the Minimum Revenue

Provision (MRP) policy as set out in section 10;

 

(43) agrees and recommends that Council agrees to delegate to the

Executive Director of Corporate Resources authority during 2022/23 to make

amendments to borrowing and investment limits provided they are consistent

with the strategy and there is no change to the Council’s authorised limit for

borrowing;

 

(44) approves and recommends that Council approves the overall credit and

counterparty risk management criteria, as set out at Appendix Z2, the

proposed countries for investment at Appendix Z3, and that it formally

delegates responsibility for managing transactions with those institutions

which meet the criteria to the Executive Director for Corporate Resources;

 

(45) approves and recommends that Council approves a minimum sovereign

rating of AA for non-UK investments;

 

Capital Programme

 

(46) notes the capital programme position and recommends that Council

approves the 2022/23 to 2024/25 Capital Programme of £600.4m as set out in

section 11 and Appendix W1.