Agenda item - Opposition Business - Financial planning and performance and the 2015 fiscal cliff

Agenda item

Opposition Business - Financial planning and performance and the 2015 fiscal cliff

An issues paper prepared by the Opposition Group is attached for the consideration of Council.

 

The Constitution Procedure Rules relating to Opposition Business are attached for information.

Minutes:

Councillor Lavender introduced the issues paper, prepared by the Conservative Group.  Issues highlighted were as follows:

 

·              The need to recognise the ongoing impact of previous government expenditure, borrowing and taxation policies on the need for current public sector austerity measures.  The Chancellors Autumn Statement had outlined that further public sector budget reductions would continue until at least 2018 for which local government could be expected to bear a significant amount.  Following the announcement of the Provisional Local Government Finance Settlement for 2013-14 and 2014-15 the Local Government Association had estimated that non schools revenue funding would decrease by an additional 4.8%, with limited opportunities to address the gap available through increase in Council Tax as a result of the referendum limits that had been confirmed.

 

·              The need to recognise the limited scope available to manage these ongoing funding reductions and retain services as a result of the continued maximisation of efficiencies and need to proactively plan for the budget reductions required.

 

·              The prudent approach adopted by the previous Conservative Administration towards management of the Council’s budget, which had seen the LEANER programme introduced and the build up of reserves and balances to protect services from unexpected pressures.

 

·              As a result of the concerns expressed the Opposition Group felt there was a need for tough decisions to be made in order to protect the long term financial health of the authority and avoid the risk of setting an unbalanced budget.  This would include the need to stop spending unnecessary money and look at new ways of reducing the increasing demand on services.

 

The Opposition Group felt there was a need to ensure that public awareness was raised around the scale of difficult decisions that needed to be made in order to protect the medium and long term financial position of the Council and that these were recognised and addressed by the current Administration.

 

Councillor Taylor, Cabinet, Leader of the Council, responded on behalf of the Majority Group, highlighting:

 

·              what was felt to be the fatalistic nature, wide scope and limited level of detail and substance in the Opposition Business Paper.

 

·              The need to recognise the impact of the current coalition Government’s economic policy in relation to the limited level of growth being experienced and pace of spending reductions in the public sector.

 

·              The ongoing impact of the reductions in local government funding had been recognised by the National Audit Office and also by the Leaders of 30 Conservative controlled local authorities who had written to the Secretary of State highlighting the consequences of the continued reductions in expenditure.  In addition there was a need to recognise the unfair impact of the current damping mechanism in relation to the funding formula allocation on Enfield.

 

·              The current Administrations commitment to maintain a sensible year by year fiscal policy, recognising the difficulty in predicting the future level of Government funding that would be available.

 

·              The impact of the increasing level of demand on local authority services had been recognised and the Administration had and would continue making hard funding decisions in relation to service provision.  At the same time the Administration believed there was need to carefully consider the scale of reductions required in order to avoid creating unnecessary pain and to protect the long term sustainability of services.

 

Other issues highlighted during the debate were as follows:

 

·              The important role of elected members highlighted by the National Audit Office, in terms of accountability around the prudential management of Council finances.

 

·              Specific concerns were highlighted by the Opposition Group in relation to the level of costs associated with the acquisition of the Morson Road site as the new Council depot and at what was felt to be a growing dependency on income from the extension of Controlled Parking Zones.

 

·              The need to view local government as not just an administrator or commissioner of services but also as a driver for economic growth, recognising the number of innovative and dynamic regeneration initiatives already in place and overall strategy to raise the profile of the borough in order to attract investment.

 

·              The cross party support towards continued lobbying around the impact of the Government’s current funding formula damping mechanism.

 

·              The concern highlighted at the increasing size of the budget deficit outlined within the Council’s Medium Term Financial Plan and Budget Consultation paper for 2014-15 and 2015-16.

 

·              The level of savings already achieved and planned to ensure that the Council was able to maintain a balanced budget, which had totalled 27% of its overall budget.  These had been achieved alongside a 0% increase in Council Tax, minimal impact on frontline services and increased satisfaction levels in relation to the management and provision of services by the Council amongst local residents.

 

·              The opinions provided by the Council’s External Auditors (Grant Thornton) in relation to the Council’s financial resilience which had identified the Council as having a robust and solid approach towards securing Value for Money, efficiency and effectiveness and maintaining an appropriate level of Council balances to mitigate the level of risks currently identified.

 

Councillor Lavender summed up on behalf of the Opposition Group.  In terms of setting a balanced budget he highlighted as an example of the concerns identified that although a range of efficiency savings had already been agreed a further £15m still needed to be found from the 2013/14 budget.  The Opposition felt there were a number of actions that needed to be taken in order to address the financial difficulties facing the Council, which were identified as the need to:

 

(a)       stop spending money unnecessarily e.g. on the expansion of 20mph zones around schools on which there were proposals to expand prior to a full impact assessment having been undertaken & cycle pathway  at Hillyfields which local residents were not in support of.

 

(b)       look at how demand on services could be reduced and better met e.g. Newham Housing Scheme, making buy to let less attractive and considering housing homeless people outside of the borough where rent was cheaper.

 

(c)        increase the focus on outputs/outcomes and reduce attachments to old buildings and sites that the Council owned.

 

(d)       be more honest with people and reduce level of spin in Council communications, including the need for more accurate and transparent reports reducing the need for the Opposition to rely on call-in.

 

(e)       consider how time could be more effectively managed in debating issues at Council meetings.

 

In response to the debate, Councillor Taylor, reemphasised that the Council’s External Auditors had, in their review of the Council’s financial resilience arrangements, commented that the Medium Term Financial Plan was felt to demonstrate an effective approach towards managing the key financial risks identified.  He felt the Council already had an effective financial strategy in place, which recognised the long term pressures on the budget but highlighted the opportunity for the Opposition to come forward with an alternative approach for debate as part of the forthcoming budget setting process.

 

As an outcome of the debate no request was made by the Leader of the Opposition for a vote to be taken on the Opposition Business Paper.

Supporting documents: