London Borough of Haringey has agreed plans to balance its budget for next year by dipping into its reserves and proposing £13.7m of cuts whilst increasing spending on social care services.
The council’s cabinet this week voted to approve the 2019/20 spending plans – the first budget since the Labour-run council took a more left-wing bent following last year’s local elections.
In a budget report, council officers warned councillors over proposals to help pay for a £7m net increase in spending on adult and children’s social care by using £5.5m of reserves was “not sustainable”.
The report said: “The continued reliance on reserves to balance budgets is not sustainable.”
The council proposes using cash from two earmarked reserves to reduce the level of savings needed to balance next year’s budget.
Meanwhile, it is proposing to increase spending on children’s services by a net £3m with a net increase of £4m in adult services.
The council will use £2m from the government’s social care support grant to help meet the combined £7m increase, with the rest coming from corporate resources.
The report by officers said: “It is recognised that these commitments by the council inevitably increase the funding gap, putting pressure on these and other services to identify greater budget reductions both for 2019/20 and subsequent years.”
The council is also proposing spending increases of £1.4m for other policy priorities, of which a council tax reduction scheme will take £1.1m, with the rest spent on youth services and a school meals pilot.
Haringey is proposing to make millions in savings through a series of “transformation and change” measures.
These include measures to support more adults in the community, reducing homelessness, reducing the cost of temporary accommodation, designing waste collection “more efficiently”, increasing productivity and moving services online.
Although the council said it was confident the budget reductions were all deliverable, the report said “there will inevitably be some plans that are not deliverable in full (or indeed possibly at all) due to changing circumstances.
“While this budget provides a level of financial capacity for dealing with such circumstances, it is important the council also looks to find alternative solutions (in-year mitigations) as and when savings issues or base budget pressures arise.”
It also warned that the council needs to make progress on taking measures to address its future structural funding gap, which is estimated to rise to £20.5m by 2023/24.
The authority said that it would develop its current budget setting and corporate monitoring process to support a “live budgeting” approach.
“This will help risk manage the in-year budget delivery position and allow us to get the best start for the forthcoming year, and potentially enable better decision making,” the report to councillors said.
The authority said that the final local government funding settlement means that support from central government to Haringey will decrease by 3% to £118.9m next year.
Last week, Room151 revealed that the borough is proposing a £1bn programme of investment through its housing revenue account over the next five years.
