Agenda item - FAIR FUNDING PRESENTATION ON IMPACT FOR ENFIELD

Agenda item

FAIR FUNDING PRESENTATION ON IMPACT FOR ENFIELD

To receive the report of Fay Hammond (Executive Director, Resources)

Minutes:

The Panel received a presentation from Adrian Jenkins of Pixel Financial Management included in the agenda pack.  The information outlines major changes in local government funding expected in 2021-24 (delayed for 4+ years).

 

The modelling provided suggests that Enfield will gain from the review from areas such as council tax equalisation, new public health formula and the remainder from a combination of formula changes and data to include the unwinding of “damping”. 

 

The following comments were received:

 

Fair Funding Review:

 

·         There is a financial pressure on Enfield and the funding review is needed as soon as possible.

 

·         The government’s commitment would be dependent on Covid fall out and no work has taken place within the central government department.

 

Adult Social Care Funding:

 

·         It was noted that the new Adult Social Care formula was developed 5+ years ago and is now out of date.

 

·         Enfield will see a 4% reduction in funding and will therefore not benefit from this review.

 

Funding For Deprivation:

 

·         This important funding formula will help Enfield gain £250K. 

 

·         Measures show Enfield’s deprivation scores are marginally above average.

 

·         It was noted that deprivation within the borough changes dramatically from road to road, although groundwork has shown that Enfield’s deprivation has proven to be localised in areas, not across the Borough and these clusters of deprivation can benefit from commissioned work to aid improvement.

 

Population Change:

 

·         Enfield has seen small reductions in mid-2019 and mid-2020 population estimates - possibly Brexit related. This will impact on Enfield’s funding which will be far less than what is needed.

 

·          It is envisaged that there will be a significant increase in older people living in Enfield which inevitably increases expenditure.  There is already a localised pattern in North and East London boroughs.

 

Area Cost Adjustment:

 

·         Significant losses from these changes will be seen in Enfield and most other London Boroughs except Tower Hamlets and Westminster as ACA based on LA only.

 

Business Rates Baseline Reset:

 

·         Business Rates baseline is expected to be reset in 2023-24 so that it equals business rate income.

 

·         The local share needs to be increased.  Higher growth of share will be kept by Enfield, who have done moderately well from the current model of this.

 

·         Enfield would lose any retained growth as baseline increased to the amount of income produced.

 

·         It is likely that business rate reset will happen sooner than envisaged.

 

New Homes Bonus and Incentive Payments:

 

·         The scheme is being phased out during the last 4 years based on council tax returns. A replacement scheme is expected where a huge range of proposals could be put in place.

 

Council Tax Support:

 

·         The Band D value of Council Tax Support has fallen since its transfer to Local Government in 2013-14 and no longer supports Council.   This is one of Enfield’s biggest pressures.

 

·         There is a strong case to have funding for Council Tax Support reset in some way as Council Tax is equalised and it was recommended that this be lobbied.

 

Covid Support:

 

·         The final tranche of Covid support will be received 2021/22 and will then be dependent on spending review thereafter.

 

·         £10m were set aside for Covid financial reserve.

 

Total Resources and Damping:

 

·         Overall, Enfield is likely to gain from all funding changes in 2023-24.

 

Short and Medium Term Funding:

 

·         Funding is expected for public services and growth is expected from spending review.

 

Future of Local Government Spending, Levelling Up and Lobbying:

 

·         Enfield has some characteristics similar to typical “levelling up” authority but new sources of funding are unlikely to go to Enfield.

 

·         Lobbying needs to be more informed and pressure put on Ministers as there is a risk of impact on services that are provided to residents.

 

·         It is important to lobby where funding does not represent our residents such as areas of deprivation.

 

 

The Chair thanked Adrian Jenkins for his informed presentation.

 

Supporting documents: