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Item 9 - Proposed Revenue Budget & Borough Subscriptions & Charges 2018/19 (E14/11)

Summary    

Following discussions with the Chair of London Councils, this report proposes the level of boroughs subscriptions and charges to be levied in 2018/19, together with the consolidated revenue income and expenditure budget for 2018/19. The report also updates the Executive on the current level of London Councils reserves after considering all current and proposed commitments and the timetable for the overall budget approval process. Following consideration by this meeting, proposals will be submitted to the Leaders’ Committee meeting on 5 December for final consideration and approval.

These proposals involve:

•    Containing all budgetary pressures in 2018/19, including the rent review at Southwark Street, the officer pay award, GDPR preparatory work and other contract and general running cost increases, from within the 2017/18 approved budgetary resources, which will allow the three core subscriptions to remain at the current year’s level;

•    A £1 million reduction in the borough contribution towards the S.48 ESF programme as the three-year borough funding commitment expires at the end of 2017/18. However, as the programme has slipped by roughly 16 months, accumulated funds held in Grants Committee reserves will be applied to fund the programme, along with ESF grant, up until the current stated project end-date of March 2019; and

•    The continuation of the Challenge Implementation Fund of £525,000, funded from any underspent funds carried forward from the current year, replenished by uncommitted joint committee reserves.

Recommendations    

The Executive is asked to recommend that the Leaders’ Committee approve at their meeting on 5 December 2017 the following borough subscription and charges:

•    The proposed Joint Committee subscription for boroughs of £161,958 per borough for 2018/19, no change on the charge of £161,958 for 2017/18 (paragraph 12); 
•    The proposed Joint Committee subscription for the MOPAC and the LFEPA of £15,410 for 2018/19, no change on the charge of £15,410 for 2017/18 (paragraph 13);
•    An overall level of expenditure of £8.668 million for the Grants Scheme in 2018/19 (inclusive of £2 million gross ESF programme), the same level as for 2017/18; and
•    That taking into account the application of £1 million ESF grant and £1 million from earmarked Grants Committee reserves, net borough contributions for 2018/19 should be £6.668 million, compared to £7.668 million for 2017/18 (paragraphs 14-17).

The Executive is also asked to recommend that the Leaders’ Committee endorse the following subscription and charges for 2018/19 for TEC, which will be considered by the TEC Executive Sub-Committee on 16 November, before being presented to the main meeting of TEC on 7 December for final approval:
•    The Parking Core Administration Charge of £1,500 per borough and for TfL (2017/18 - £1,500) (paragraph 18); 
•    No charge to boroughs in respect of the Freedom Pass Administration Charge, which is covered by replacement Freedom Pass income (2017/18 – no charge) (paragraph 20); 
•    The net Taxicard Administration Charge to boroughs of £338,182 in total (2017/18 - £338,182); (paragraph 21);
•    No charge to boroughs and TfL in respect of the Lorry Control Administration Charge, which is fully covered by estimated PCN income (2017/18 – no charge) (paragraph 22); 
•    The Parking Enforcement Service Charge of £0.4226 per PCN, which will be distributed to boroughs and TfL in accordance with the number of PCNs issued in 2016/17 (2017/18 - £0.4915 per PCN; paragraphs 25-26);
•    The Parking and Traffic Appeals Charge of £30.63 per appeal or £27.02 per appeal where electronic evidence is provided by the enforcing authority (2017/18 - £32.00/£28.50 per appeal). For  hearing Statutory Declarations, a charge of £25.21 for hard copy submissions and £23.53 for electronic submissions (2017/18 - £26.74/£26.06 per SD) (paragraphs 27-28); 
•    Congestion Charging Appeals – to be recovered on a full cost recovery basis, as for 2017/18, under the new contract arrangement with the GLA (paragraph 29);
•    The TRACE (Electronic) Charge of £7.53 per transaction (2017/18 - £7.31) (paragraphs 30-32); 
•    The TRACE (Fax) Charge of £7.70 per transaction (2017/18 -   £7.48) (paragraphs 30-32); and
•    The PEC Charge of £0.175 per transaction (2017/18 - £0.17) (paragraphs 30-32).
    On the basis of the above proposed level of subscriptions and charges, the Executive is asked to recommend to the Leaders’ Committee:
•    The provisional consolidated revenue expenditure budget for 2018/19 for London Councils of £386.609 million, as per Table 4 at paragraph 33 and Appendix A of this report;
•    The provisional consolidated revenue income budget for 2018/19 for London Councils of £384.313 million, also as per Table 4 at paragraph 33 and Appendix B;
•    Within the total income requirement, the use of London Council reserves of £2.296 million in 2018/19, as detailed in Table 12 at paragraph 53. 

The Executive is also asked to recommend that the Leaders’ Committee note:

•    The position in respect of forecast uncommitted London Council reserves as at 31 March 2018, as detailed at paragraphs 51-57; and

•    The positive statement on the adequacy of the residual London Councils reserves issued by the Director of Corporate Resources, as detailed in paragraphs 58-59.