Agenda item

The Heard of Strategic Finance and Head of Finance – Counter Fraud and Finance introduced the report detailing the draft revenue budget and capital programme for the services within the remit the Committee.

Key points from the report were highlighted, including details of the financial pressures generated by the ongoing inflation, growing demand for services and a lack of certainty over Government funding beyond 2024/25, with the budget taking a prudent approach to support financial resilience over the medium term.  It was reported that the balanced budget was set to be achieved through a combination of efficiency savings and increases in Council Tax and Fees and Charges.

Budget proposals for 2024/5 had been prepared in the context of a wider strategy addressing the five-year MTFF period.        The latest monitoring position for the 2023/24 financial year reported a net underspend of £2k which would leave uncommitted General Balances at £26,848k entering the 2024/25 financial year.

The Committee noted that Cabinet would consider the budget proposals on 15 February 2024 and the report would include comments from Select Committees. Members were informed that Council would meet to agree the 2024/25 budgets and Council tax levels on 22 February 2024.

The Chairman acknowledged that this was a good news budget in incredibly tough times and circumstances.

In response to questions around efficiency savings, collaboration, and shared funding projects with other local authorities, it was explained that the budget gap was identified to consider the value of savings required. This was followed by MTFS strategy workshops where corporate directors were invited to present their proposals and wide-reaching discussions were undertaken. Benchmarking data from other local authorities was considered and at present Grant Thornton was helping to review the budget. Grant Thornton was very knowledgeable and experienced with working local authorities.

The Committee was informed that the Council was very resident driven and service delivery was prioritised. Factors such as inflation and the knock-on effects of wars had impacted the budget and wider service impacts.

Some Members raised concerns about the lack flexibility in the budget and, without investment from the government, questions were raised around sustainability. Concerns were raised around the level of reserves available, Council programs potentially not being delivered, the amount of savings to be made, the manage vacancy approach and the wellbeing of staffing teams that were already under resourced. It was noted that the general reserves were the third lowest in London and the Council was using a substantial proportion of its earmarked reserves.  The benefits of transformation were acknowledged but questions were raised about whether the current projects aligned with resident needs. The Cabinet was called to consider ways to build more resilience into the budget taking into account the financial challenges faced by the Council.

Some Members enquired how transformation would be funded if assets were not sold. The closure of childrens centres, nurseries and relocating libraries to release assets was questionable when these services were required by the Community.

Clarification was sought in respect of the Hillingdon first card savings and it was noted that this had been factored into the savings program and was process  focussed. It was also clarified that if transformation was not funded by capital assets it would be released from revenue expenditure. It was confirmed that the older people initiative in the capital programme was not related to the older people discount.

It was explained that six million of ear marked reserves were being used and five million of that was budget for. The approach was to have a low level of reserves with a low-level budget strategy to mitigate having those lower risks and there were underspends showing prudence. Contract inflation expenditure was also another prudent area of the budget.  Assets were being sold that were in surplus requirement or that were deemed no longer suitable for the services that were being delivered.

It was noted that producing a balanced budget was difficult in the current circumstances. The budget aimed to deliver services in a more efficient way.

Officers were thanked for preparing the budget and for the continued monitoring of service areas. The Committee considered this to be a comprehensive report and easily digestible set of papers.

The following comments were proposed as the Committee’s comments.

‘The Committee welcome the Budget as published and consulted on set out in the Cabinet papers of the 14th December 2023, the Council's Budget.

We acknowledge the substantial and significant pressures and complexities that are usually involved in a Council setting a balanced Budget across the myriad of disciplines, statutory obligations and service intentions that a council may wish to budget for.

This process has been made even more challenging and complex due to the combined effects of inflationary and interest rate pressures contributing to the harsh economic realities for everyone concerned, in working with or being provided for, by the Council. Service provision of every type has been affected by the economic circumstances that the London Borough of Hillingdon has to "live with and in". Add to this the way in which Local Authorities are financed, with the seemingly haphazard and timely unhelpful funding formulas makes budget setting and provision a complexity of extraordinary proportions.

In this regard, we commend the work of the Cabinet Member for Finance, in particular, together with the Leader of the Council and Cabinet and of course the Finance Officer Team for their excellent work in achieving a balanced budget for this time period. Many other Local Authorities with the same pressures are failing and will fail to achieve what the whole finance team have done in Hillingdon.

We are particularly keen to endorse the proposals for savings, within our Committee remit, while continuing to promote and maintain all services in whatever way can be done so. The clear intention to drive efficiency in service provision without a reduction in service is welcome and necessary. Where necessary some services will need re-balancing or realigning and refreshing to meet the current circumstances.

That is only to be expected when applying efficiency standards, prudence in approach and financial rectitude. Strong financial management of the Hillingdon budget is the absolute route to budgetary success.

We acknowledge the budget proposals for the committee service areas, the need to update, in as resident focused was as possible, the overall picture regarding fees and charges and council tax is a significant challenge given the economic issues as they have developed in recent years contrasting with the past.

Proposals for digitalisation, commercialisation, better use of services and delivery are all budgetary proposals that are welcome and which we as a committee will closely scrutinise to aid the process. We will be keen to engage with reviews around commercialisation in appropriate areas and of services eg Legal services, corporate services and others in our remit.

This budget is a significant achievement which is to be commended.’

A motion was made to submit the comments stated above, and when put to a vote there were four in favour and three against.

RESOLVED: That the Committee:

1.    noted the budget projections contained in the report.

2.    Submitted the above statement to Cabinet.