Decision details

Frank Higgins, Chief Accountant, gave a presentation covering the following points:

•         The Government had announced the provisional grant settlement for local authorities on 13 December 2010 and asked for responses by 17 January 2011.

•         Lambeth’s formula grant (excluding the “rolling in” grants) would reduce in 2011/12 by £20.17million in cash terms. Taking into account the “rolling in” grants this equated to a total reduction of 11.3%.

•         Lambeth’s formula grant (excluding the “rolling in” grants) would reduce further in 2012/13 by £16.97million in cash terms. Taking into account the “rolling in” grants this equated to a total reduction of 7.4%.

•         The Year 1 previous savings target was £42.378million, against a revised estimate of £37.446million giving a positive variance of £4.932million.

•         The final two years of the spending review period remained uncertain but there was no indication that the Government intended to reduce the overall Savings Target.

The following statistics were provided:

October Spending Review Savings Targets

Revised Savings Targets following the 13 December announcement

He concluded by pointing out that:

•         The final settlement was due in January 2011.

•         The detail around schools and the interplay on the Early Intervention Grant was still being worked on. This would be critical to the “trading relationship” between the authority and the schools.

•         Additional funding to the NHS of approximately £1billion, nationally, had been announced and it was anticipated that some of this would be available to support social care provision but no further information was known at the time of the meeting.    

•         He expected other Government communications and details to emerge in the next few days. However, there was some evidence that lobbying on front loading had had some impact.

•         Further steps to take would be progressed through the Council’s Service and Financial Planning process.

Councillor Paul McGlone, Cabinet Member for Finance and Resources addressed the meeting.  He stated that the Council was being asked to make an unprecedented cut of £37million.  In addition the full details of which grants were to be ring fenced was not known at the time of the meeting as not all of the announcements had been made. It was expected that the final details would be published on 19January in advance of the next meeting of the Sub-Committee.

In response to questions from Members it was explained that:

·        There were over 135 grants where details had not been released.  Details of these would be forwarded to members of the Sub-Committee. The biggest component was the Dedicated Schools Grant.

·        As far as finance officers were concerned the cessation of ring fencing gave greater flexibility but it also resulted in less transparency. Individual officers preferred ring fencing as it meant there was greater certainty for financial planning.

·        There had been only 3 London Boroughs which had received Transitional Grant – Hackney, Newham and Tower Hamlets. It was not known what criteria the government had used to arrive at this conclusion. If these details were available they would be forwarded to members of the Sub-Committee.

·        The position regarding capital receipts was not clear but a worse case scenario was that there would be a reduction of 60% for 2011/12.  Capital works would only be carried out if they were affordable.

·        The Dedicated Schools Grant could be known in the near future but the other grants may not be known.

·        Councillor Paul McGlone stated that he was willing to approach the Leader of The Council with a view to a cross party response to the settlement announcement.

·        Until the proposals were finalised the absolute reduction would not be known.

·        Lambeth was still a ‘floor authority’ and it was estimated that this was worth £22million of protection.

The Chair thanked the officers for their work and the predictions provided.

RESOLVED:

That the presentation be received.