The Full Council of Barking and Dagenham Council met on Wednesday 28 February 2024, approving a budget framework for 2024/25 that includes a 4.99% council tax increase and a revised Treasury Management Strategy. The council also agreed to reactivate the Uphill and Waters Education Foundation to support disadvantaged young people and approved the Pay Policy Statement for 2024/25.

Budget Framework 2024/25 and Medium Term Financial Strategy 2024/25 - 2027/28

The council approved its budget framework for 2024/25, which includes a 2.99% increase for general spending and a further 2% ringfenced for adult social care, resulting in a total council tax increase of 4.99%. This equates to an additional £72.78 per year for a Band D property. The General Fund net budget for 2024/25 is £221.745 million, which incorporates £15.595 million in savings and £54.129 million in growth. To balance the budget, £8.809 million will be drawn from reserves.

Councillor Dominic Twomey, Leader of the Council, highlighted the significant financial pressures faced by the council due to high inflation, the cost-of-living crisis, and increasing demand for social care services. He stated that government funding had not kept pace with these demands, leaving a £4 billion funding gap nationally. Councillor Twomey also noted that the council's investment and acquisition strategy, while beneficial in the past, had been paused due to rising interest rates and inflation, leading to a review of its assumptions.

Concerns were raised by Councillor Lynda Rice regarding the impact of the council tax increase on residents in Longbridge Ward, who live in larger properties and would therefore be more affected by the percentage increase. Councillor Twomey acknowledged this concern, stating that the council had discretionary funds available to support residents struggling to pay their council tax, regardless of their property band.

The council also approved its Medium Term Financial Strategy (MTFS) for 2024/25 to 2026/27, which outlines the approach to financial planning and management to ensure financial sustainability. The MTFS acknowledges the need for further permanent savings to address the budget gap and underpins the long-term viability of the council's finances.

Treasury Management Strategy Statement 2024/25 and Capital Strategy 2024/25 to 2026/27

The council approved its Treasury Management Strategy Statement (TMSS) for 2024/25, which sets out the council's borrowing, investment, and funding plans. The TMSS includes the Annual Investment Strategy (AIS) and the Capital Strategy.

Councillor Dominic Twomey, Cabinet Member for Finance, Growth and Core Services, presented the report, noting that the council's external debt balance was £1.26 billion as of 30 November 2023. He explained that most of this borrowing was long-term and secured against tangible assets, such as housing units, which had grown in value. The Capital Financing Requirement (CFR) is forecast to increase to over £2 billion by March 2025.

Councillor Twomey stressed that all borrowing was underpinned by real assets, and that the council would not engage in borrowing without such security. He also highlighted that the investment and acquisition strategy generates a £4 million return to the general fund annually, in addition to covering borrowing costs.

The report indicated that the total external debt is forecast to increase to approximately £1.5 billion by 2025/26, after which it is planned to be paid down. The council's borrowing strategy aims to secure long-term funding at the lowest possible rates, with a focus on fixed interest rates to mitigate risk.

Councillor Phil Waker raised a question about the expected interest rates on new borrowing for the capital budget, noting that it was likely to be significantly higher than in the past. Councillor Twomey confirmed this, stating that while the base rate was 5.25%, the treasury team would be nimble in monitoring market conditions to secure the best possible deals. He also acknowledged the ongoing challenge of construction inflation, which had made some schemes unviable.

The council resolved to approve the TMSS, AIS, Borrowing Strategy, Capital Prudential and Treasury Indicators, Operational Boundary and Authorised Borrowing Limits, Capital Strategy, and Minimum Revenue Provision Policy Statement.

Overview and Scrutiny Committee Annual Report 2022/23

The Assembly noted the Overview and Scrutiny Committee's Annual Report for 2022/23. Councillor Glenda Paddle, Chair of the Overview and Scrutiny Committee, presented the report, highlighting the committee's work in reviewing council services and making recommendations for improvement. The report detailed the committee's engagement with various council services, external partners, and community groups, including initiatives focused on supporting residents through the cost-of-living crisis, improving job prospects for young people with SEND, and strengthening relationships with faith groups.

Reactivation of Uphill and Waters Education Foundation

The Assembly resolved to support the proposal to reactivate the Uphill and Waters Educational Foundation. This dormant trust fund, with assets of approximately £90,000, will be used to provide financial assistance to disadvantaged young people aged 16-25 in Barking and Dagenham and parts of Redbridge to support their education and entry into professions or trades. Councillors Elizabeth Kangethe and Jane Jones, along with Jane Hargreaves (Commissioning Director, Education), were appointed as Council-appointed Trustees. The London Borough of Redbridge will be asked to appoint a Redbridge Councillor as a Trustee, and authority was delegated to the Commissioning Director, Education, to appoint a member of the local clergy as an ex-officio Trustee. This initiative aims to build on the success of the Colin Pond Trust in supporting young people's educational and employment aspirations.

Pay Policy Statement 2024/25

The Assembly approved the Pay Policy Statement for the London Borough of Barking and Dagenham for 2024/25. Councillor Dominic Twomey, Cabinet Member for Finance, Growth and Core Services, presented the statement, which is a legal requirement under the Localism Act 2011. The statement outlines the council's approach to pay and benefits for chief officers and other employees, emphasizing fairness, equity, and affordability. It confirmed that the council pays its staff at or above the London Living Wage and that the pay ratio between the Chief Executive and the lowest-paid employee has reduced. The statement also detailed the pay structure, performance-related pay arrangements (which are not applied to chief officers), pension provisions, and termination payments.

The meeting concluded at 8:34 pm.