Agenda item

2023/24 Budget Planning Report for Services within the remit of the Property, Highways & Transport Select Committee


The Chairman introduced the item and welcomed Iain Watters, the Council’s Director of Strategic and Operational Finance, to the meeting for this item. Officers gave a summary of the report highlighting that this was the first of two budget reports that would be coming to the Select Committee in the 2022/23 municipal year. The scope of this report was to give strategic context to the budget setting process; later in the municipal year, the Committee would be receiving the detailed budget proposals for 2023/24.


It was highlighted by officers that the legacy impact of the Covid-19 pandemic was a prominent factor of the 2023/24 budget setting process; this could be seen in areas such as parking charges where there had been an initial projection of a return to 90% of pre-pandemic levels of income from car parks, where it was currently operating in the region of 80% of pre-pandemic levels. It was noted that the emergence from a global pandemic remained uncharted territory, but officers were confident that Covid-19 related pressures were being accounted for appropriately in the budget setting process. With regard to parking habits, Members commented that this may have changed permanently due to the move towards more home working following the pandemic resulting in lower commuting levels.


Another prominent pressure on the budget setting process surrounded inflation. When the initial budget setting process began in February 2022, officers were predicting an inflation rate of around 5%; however, this figure had increased significantly, passing 10% in July and steadily increasing. On matters of inflation, it was highlighted that officers from all departments would need to keep close engagement with suppliers in order to understand the cost base and pick up the impacts of inflation in a sustainable way. The Council was also making use of the earmarked reserves that had been built up over the years in order to mitigate these emerging risks. On forward inflation projections, the Committee queried what preparations were being made in case inflation rates rose at a pace above what was currently projected, to which officers highlighted that, above a certain threshold of sustained increases in inflation, the Council would expect a level of intervention and funding support from central government.


The Committee were informed that officers were continuing to review scope for efficiencies in the organisation, spanning the usual areas for investigation such as service transformation, continuing to review procurement and commissioning arrangements, and not building unnecessary headroom into future budgets. On a related note, Members highlighted key areas in which the Council could easily make efficiency savings, namely that the cost of energy had dramatically increased in 2022 and an emphasis was placed on ensuring that the Civic Centre, as the Council’s largest built asset, was as energy efficient as possible.


Members noted that the pandemic had a significant impact on the finances of Transport for London and that this impact was ongoing however, they sought to query whether officers had any indication of what level of funding would be received from Transport for London for 2023/24. Officers noted that TfL’s own funding position was being updated regularly in the wake of the pandemic however it was not yet known what kind of funding settlement the Council would be receiving from TfL. It was also highlighted that, where TfL had previously offered annual spending submissions, there were now appearing to be shorter term temporary spending submissions coming through. Officers were keeping this under review and hoped to bring further information back to the Committee in the January 2023 meeting.


The Committee thanked officers for their report and commended them on their continued hard work through difficult times. Members looked forward to the second budget setting report that would be coming to the Committee in January 2023.


RESOLVED: That the Committee noted the financial context in which the 2023/24 budget setting process will take place in advance of detailed savings proposals being developed and approved at Cabinet in December 2022.

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