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Mayor's Background Statement in Support of His Draft Consolidated

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Mayor's Background Statement in Support of His Draft Consolidated Mayor's Background Statement in support of his Final Draft Consolidated Budget for 2008-09 Summary This report presents the Mayor's Budget proposals for the GLA and the functional bodies for 2008-09. This is the final draft budget and it will be the Budget unless the Assembly amends it, In accordance with the provisions of the GLA Act 1999, before 29 February. 1. Introduction 1.1 On 30 January the Assembly considered the Mayor's draft consolidated budget and did not make any amendments to it as defined in the Greater London Authority Act 1999. The process of approval of the final draft budget is set out in Schedule 6 of this Act and is as follows: (a) After considering the final draft budget, the Assembly must approve it with or without amendment. The only amendments which are to be made are those agreed to by at least two-thirds of the Assembly members voting. (b) If no amendments are made following consideration of the final draft budget, the final draft budget shall be deemed to be approved without amendment. (c) The final draft budget as approved by the Assembly with or without amendment shall be the Authority's consolidated budget for 2008-09. (d) It shall be the duty of the Assembly to approve the final draft budget with or without amendment before 29 February 2008. If the Assembly fails to meet this deadline, the final draft budget shall be the Authority's consolidated budget for 2008-09. 1.2 Annex A to this statement presents the Mayor's final draft consolidated budget as defined in the Greater London Authority Act 1999. Separate accompanying documents provide an explanation of the budget proposals, and finance and legal advice. These are the same as those provided for the draft consolidated budget, except for changes made where necessary to reflect the Mayor's final budget proposals, updated information in respect of grant and council tax levels, consequential drafting and the correction of typographical mistakes. 1 2. Final Draft Budget Proposals 2.1 Careful consideration has been given to the debate on the Mayor's draft consolidated budget at the 30 January Assembly meeting. The final draft budget results in a small reduction from the precept proposed in the draft consolidated budget. This is made possible by an increase from forecast in the final council tax base and from the GLA’s share of a surplus from borough council tax collection, which together are equivalent to an additional £8.4 million of income. The Mayor’s final draft budget proposes increases in the budget requirements for MPA and LFEPA, of £4.2 million in total and this means that of the extra £8.4m available, this is split equally between increased budget provision and a reduction in the burden on council taxpayers. 2.2 The increase in council tax base means that the component budget requirement for the Mayor of London has been increased by £0.1 million. This is because the amount to be raised through the council tax precept for the 2012 Olympic and Paralympic Games increases from the £58.6 million forecast to £58.7 million (this is the product of a £20 precept for a band D household). This increases the like for like increase in the Mayor’s component budget from 0.8 to 0.9 per cent, however, this is still less than the increase in the Mayor’s proposed budget for the Assembly, which remains unchanged from that presented on 30 January. Therefore the Assembly cannot increase its component budget by way of budget amendment. 2.3 Reference was made in the Assembly’s debate to LFEPA’s funding position and the proposed use of reserves in 2008-09 and 2009-10. Even after the proposed use of general reserves to support the budget in these years, the level would still be 3 per cent of net revenue expenditure by 1 April 2010. However, the Mayor is proposing to reduce the use of reserves in 2008-09 by £3 million so this is available to support the budget in 2009-10. The other proposed change is to increase the budget requirement of the MPA by £1.2 million to ensure the full roll-out of the ‘No Witness No Justice’ programme, which the MPA had requested in particular should be considered if there was any flexibility in the final budget adjustments. 2.4 The net effect of increases in LFEPA, MPA and Mayor of London component budget requirements, the final tax base and the Authority’s share of a the net surplus on London Borough collection funds is to reduce the increase in the GLA precept for a band D household to 11p a week, as shown below: Increase in precepts Pence/week Metropolitan Police Authority 7p London Fire & Emergency Planning Authority 6p Increased surplus on Borough Collection Funds -2p Total band D increase 11p 2.5 There are no other changes reflected within the Mayor’s final draft budget. The budget proposals include a net £3.9 million to develop borough partnerships in two-year deals 2 to provide an extra 320 police officers within the Metropolitan Police Service (MPS) to tackle specific community issues. These officers are part of a planned overall increase next year of almost 1,000 police officers, subject to the outcome of bids to Government. There is an extra £2 million in 2008-09 for 20 officer posts to provide more proactive resources in combating the increasingly harmful gun and gang culture and an additional £5 million rising to £19 million in 2009-10 to continue the roll-out of Integrated Borough Operations to provide important local information and intelligence to help deliver the best response to incidents and ensure public and officer safety. 2.6 One of the highest priorities continues to be given to combating the terrorist threat and fulfilling the security and protection duty. However, the Home Office has not yet informed the MPS of the details of its security and counter-terrorism settlement for 2008-09 or later years. The budget provides an increase of £59 million in 2008-09. If there were to be a shortfall in the grant settlement, then the MPA and the MPS would manage operations within the overall financial resources available so that there is a nil budgetary impact. 2.7 The MPS are also leading on the security, safety and resilience arrangements for the 2012 Olympic and Paralympic Games. In addition to staff costs to expand key areas this budget also includes proposals for new Strategic Co-ordination and Olympic Intelligence Centres at Hendon, a deployment base and two sector bases within the Olympic Park and additional critical IT infrastructure enhancements to Command and Control, additional Airwave coverage and a secure Data Centre. The budget includes an extra £40 million in 2008-09 and £25 million for extra capital expenditure. The outcome of the bid to the Home Office will determine the precise amounts and this will be managed to ensure there is no impact on council tax payers. 2.8 TfL’s longer-term funding has allowed it to put in place a range of programmes and projects to make London’s transport system more comprehensive, more reliable, faster and accessible, and going a long way towards meeting growth in demand. As explained in the Mayor’s published background statement in support of the draft consolidated budget the implications of the Spending Review are not yet fully appraised and are not included in this budget. The current deal with the Government always assumed that reserves would be built up over a period before being drawn down by 2009-10. Accordingly the proposed budget for TfL uses £613 million in 2008-09 and £336 million in the following year. 2.9 The Mayor’s published background statement also stated that the contribution of £12 million from council tax payers is appropriate since TfL is investing in a range of services which are directed at providing broader benefits to the community and not just to those contributing to TfL’s transport revenues and in the context of major funding contributions from the Government, TfL (through its efficiency programme) and fare- payers. 2.10 The amount to be raised through the council tax precept for the 2012 Olympic and Paralympic Games remains at 38p a week for a band D household – the same as for the 3 each of the last two years in line with the Mayor’s commitment agreed with Government that Londoners will not be asked to pay any more than this amount to fund the Games. There is no contribution in respect of the proposed component budget requirements for the MPA, LFEPA, TfL and LDA. 2.11 The LDA has a pivotal role in ensuring that the 2012 Games bring lasting benefits to Londoners through effective land remediation and in ensuring that ambitious design and effective delivery of a sustainable plan brings a worthwhile and permanent legacy to the east of London. The budget includes a provision of £300 million in line with the Mayor’s revised Memorandum of Understanding with Government that he contributes this additional amount towards the cost of the Games, from which the first £100 million tranche is assumed to be payable in 2010-11. LDA’s programme expenditure plans and debt obligations remain fully-funded, based on its necessarily prudent basis for the estimate of capital receipts from the sale of land, although the Mayor anticipates that actual receipts will be significantly higher. 3. The Impact on Local Taxpayers 3.1 The Mayor’s final budget proposals provide for gross expenditure of £11.3 billion funded as shown in the table below.
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