Agenda item

Report of the Chamberlain.

The Committee considered a report of the Chamberlain which presented the Committee with the overall financial position of the City Fund. The report set out the overall financial framework and Medium Term Financial Plan and the City Fund Budget requirement. The report requested that Members recommend to the Court of Common Council that both the Council Tax level and Business Rates Premium for 2017/18 remain unchanged.

RESOLVED – That the Committee recommends that the Court of Common Council:

·         Approves the overall financial framework and the revised Medium Term Financial Strategy (paragraph 2)

·         Approves the City Fund Net Budget Requirement of £119.3m (paragraph 14)

·         Approves the following changes from the previous forecast (paragraphs 3 and 11):

o    Allowances for pay and prices are factored in at 1% for 2017/18 and zero thereafter (paragraph 11c);

o    2% cashable efficiency savings for City Fund from 20181/9 are included in line with the published Efficiency Plan (paragraph 12d);

o    A 3.5% increase, for both City Fund and non-uniformed staff in the Police in, employers’ pension contribution to tackle the pension fund deficit (paragraph 3a);

o    Additional provision of £2.9m pa from 2017/18 for IT (split £1.8m City Fund and £1.1m for Police) (paragraph 3c); and

o    A provision of £400k p.a. from 2017/18 onwards for Rough Sleepers and £400k p.a. for Adult Social Care, subject to a further report to Policy and Resources Committee (paragraphs 3g and 3h).

·         Approves the following investment opportunities being included, subject to further reports:

o    Additional provision of £2m in 2017/18 and £4m pa thereafter to fund the  investment in tackling the 'bow wave' for City Fund properties and, in particular, focused on some substantial refurbishment works at specific properties eg Old Bailey (paragraph 3f)

o    Provision for spending on the Cultural Hub, including £5m from City Fund for the 'Look & Feel' strategy (paragraph3e)

o    Substantial provision for the Museum of London relocation project (paragraph 3k), amounting to £81.2m across the planning period.

·         Notes that the forecast includes items already agreed by the Policy and Resources Committee:

o    Provision in the City Fund forecast for the £2.5m to complete the design work for the Centre for Music, together with a provision of £1.25m for the City Surveyor to develop a full commercial scheme for the site if the Centre for Music doesn't go ahead; and

o    Substantial additional City Fund support for City Police, pending the result of the external review; this amounts to £9m revenue funding across the planned period (including £0.9m for the 2017/18 deficit) and to a further c£11m funding for the Police capital schemes.

·         Notes that the revenue estimates, for 2017/18, assumes the City will be in a ‘growth’ position under the business rates retention scheme.

·         Notes the Local Council Tax Reduction Scheme, set by the Court of Common Council on 12 January 2017 and as set out at paragraph 31.

Key decisions

The key decisions to make are in setting the levels of Non Domestic Rates and Council Tax. 

   Business Rates

·      Sets, exclusive of the Business rate premium, a Non-Domestic Rate multiplier of 47.9p for 2017/18 together with a Small Business Non-Domestic Rate multiplier of 46.6p (paragraph 17).

·      Notes that the Greater London Authority is, in addition, levying a Business Rate Supplement in 2017/18 of 2p in the £ on properties with a rateable value greater than £70,000 (paragraph 23).

·      As in previous years, delegate to the Chamberlain the award of the discretionary rate reliefs under Section 47 of the Local Government Finance Act 1988 as set out in paragraph 21.

     Council Tax

·      Recommendation is for the City’s Council Tax (excluding the Greater London Authority precept) to remain unchanged.

·      Based on a zero increase from 2016/17, determine the provisional amounts of Council Tax for the three areas of the City to which are added the precept of the Greater London Authority (appendix A).

·      Determine that the relevant (net of local precepts and levies) basic amount of Council tax for 2017/18 will not be excessive in relation to the requirements for referendum.

·      Approve that the cost of highways, transportation planning, waste collection and disposal, drains and sewers, open spaces and street lighting functions for 2017/18 be treated as special expenses to be borne by the City’s residents outside the Temples (appendix A).

Other recommendations

All other recommendations are largely of a technical and statutory nature; the only one to highlight for particular attention is that it is proposed that the City of London Corporation remains debt free for 2017/18.

Capital expenditure

·      Notes the proposed financing methodology of the capital programme in 2017/18 (paragraph 34).

·      Approves the Prudential Code indicators (Appendix B).

·      Approves the following resolutions for the purpose of the Local Government Act 2003 (paragraph 37 and Appendix E) that:

Ø at this stage, the affordable external borrowing limit (which is the maximum amount which the Corporation may have outstanding by way of external borrowing) be zero.

Ø the prudent amount of Minimum Revenue Provision (MRP) for 2017/18 is £896,000, which equals the amount of deferred income released from the premiums received for the sale of long leases in accordance with the MRP Policy at Appendix E.

·                Any potential external borrowing requirement and associated implications will be subject to a further report to Finance Committee and the Court of Common Council.

·                Notes that the funding for the £200m contribution from City Fund to Crossrail has been accrued to the 2016/17 financial year as the payment is anticipated to be in made in March 2017.

Chamberlain’s assessment

·                Takes account of the Chamberlain’s assessment of the robustness of estimates and the adequacy of reserves (paragraphs 40 and 41; and Appendix D)