Item 9 - Proposed Revenue Budget and borough subscriptions and charges 2017/18 (L6/12)

Summary    

Following discussions with the members of the Executive, and in advance of any budgetary implications arising from the outcome of the London Councils Challenge process, this report proposes the level of boroughs subscriptions and charges to be levied in 2017/18, together with the consolidated revenue income and expenditure budget for 2017/18. The report also updates members on the current level of London Councils reserves after considering all current and proposed commitments and the timetable for the overall budget approval process. 

These proposals involve:

•    Containing budgetary pressures in 2017/18, including significant business rate increases and the 1% pay award, to allow the three core subscriptions to remain at the current year’s level, which are:

    The Joint Committee subscription of £161,958 per borough;
    The TEC parking core administration charge of £1,500 per borough; and
    Total grants administration costs of £555,000, equating to an average cost of £16,808 per borough.

•    A reduction in the £8 million S.48 borough funded grants budget of £1.332 million. This is in accordance with the recommendation of the Grants Committee, which was approved by the Leaders’ Committee in March 2016 to reduce funding towards the existing Priority 4 Capacity Building;
•    The payment of £826,000 from uncommitted reserves to boroughs in 2017/18, an average repayment of £25,030 per borough;
•    The creation of a Challenge Implementation Fund of £525,000 from uncommitted joint committee reserves;
•    A proposed further transfer from uncommitted TEC general reserves of £800,000 to fund the next Freedom Pass issue exercise in 2020 plus £200,000 to meet exploratory costs associated with the Ultra-Low Emissions Vehicles project, both subject to agreement by the main TEC meeting on 8 December; and 
•    A transfer from reserves of £293,000 to fund the YPES at its current level.

The total proposed savings and repatriation of funds to boroughs for 2017/18 amounts to £2.148 million, or an average of £65,090 per borough, which, for illustrative purposes, is an amount that equates to 40% of the level of the current Joint Committee subscription of £161,958. 

Recommendations    

The Leaders’ Committee is asked to approve the following borough subscription and charges:

•    The proposed Joint Committee subscription for boroughs of £161,958 per borough for 2017/18, no change on the charge of £161,958 for 2016/17. The City of London will pay £158,195, in recognition of the fact the City is not part of the regional Local Government Employers (LGE) arrangements (paragraphs 12-13); 
•    The proposed Joint Committee subscription for the MOPAC and the LFEPA of £15,410 for 2017/18, no change on the charge of £15,410 for 2016/17 (paragraph 14);
•    An overall level of expenditure of £8.668 million for the Grants Scheme in 2017/18 (inclusive of £2 million gross ESF programme), compared to £10 million for 2016/17; and
•    That taking into account the application of £1 million ESF grant,  net borough contributions for 2017/18 should be £7.668 million, compared to £9 million for 2016/17 (paragraphs 15-19).

The Leaders’ Committee is also asked to endorse the following subscription and charges for 2017/18 for TEC, which were considered under the Urgency Procedures by the TEC Executive Sub-Committee and which will be presented to the main TEC meeting on 8 December for final approval:
•    The Parking Core Administration Charge of £1,500 per borough and for TfL (2016/17 - £1,500) (paragraph 20); 
•    No charge to boroughs in respect of the Freedom Pass Administration Charge, which is covered by replacement Freedom Pass income (2016/17 – no charge) (paragraph 22); 
•    The net Taxicard Administration Charge to boroughs of £338,182 in total (2016/17 - £338,182); (paragraph 23);
•    No charge to boroughs and TfL in respect of the Lorry Control Administration Charge, which is fully covered by estimated PCN income (2016/17 – no charge) (paragraph 24); 
•    The Parking Enforcement Service Charge of £0.4915 per PCN, which will be distributed to boroughs and TfL in accordance with the number of PCNs issued in 2015/16 (2016/17 - £0.4681 per PCN; paragraphs 27-28);
•    The Parking and Traffic Appeals Charge of £32.00 per appeal or £28.50 per appeal where electronic evidence is provided by the enforcing authority (2016/17 - £33.32/£29.90 per appeal). For hearing Statutory Declarations, a charge of £26.74 for hard copy submissions and £26.06 for electronic submissions (2016/17 - £28.17/£27.49 per SD) (paragraphs 29-30); 
•    Congestion Charging Appeals – to be recovered on a full cost recovery basis, as for 2016/17, under the new contract arrangement with the GLA (paragraph 31);
•    The TRACE (Electronic) Charge of £7.31 per transaction (2016/17 - £7.31) (paragraphs 32-34, Table 3); 
•    The TRACE (Fax) Charge of £7.48 per transaction (2016/17 -   £7.48) (paragraphs 32-34, Table 3); and
•    The PEC Charge of £0.17 per transaction (2016/17 - £0.17) (paragraphs 32-34, Table 3).
On the basis of the above proposed level of subscriptions and charges, the Leaders’ Committee is asked to approve:
•    The provisional consolidated revenue expenditure budget for 2017/18 for London Councils of £387.450 million, as per Table 4 at paragraph 35 and Appendix A of this report;
•    The provisional consolidated revenue income budget for 2017/18 for London Councils of £387.450 million, also as per Table 4 at paragraph 35 and Appendix B;
•    Within the total income requirement, the use of London Council reserves of £2.372 million in 2017/18, inclusive of the proposed £826,000 repatriation to boroughs and TfL in 2017/18, as detailed in paragraph 4 and Table 12 at paragraph 57. 
The Leaders’ Committee is also asked to note:

•    The reduction of £9.407 million or 2.64% in the Freedom Pass settlement for 2017/18; (paragraphs 41-50) ;

•    The position in respect of forecast uncommitted London Council reserves as at 31 March 2017, as detailed at paragraphs 55-61; and

•    The positive statement on the adequacy of the residual London Councils reserves issued by the Director of Corporate Resources, as detailed in paragraphs 62-63.

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