Issue - meetings

Cabinet Member: Cabinet Memberfor Croydon Renewal, Councillor Stuart King

Cabinet Member for Resources & Financial Governance, Councillor Callton Young

Officer: Interim Director of Finance, Investment & Risk, Chris Buss

Key decision: No

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

RESOLVED: To

1.    Note the current general fund revenue outturn forecast at the end of the quarter 3 of 2020/21 of £64.7m overspend, after the inclusion of both anticipated and received Covid19 funding from the MHCLG of £41.9m;

2.    Note that there are a number of risks totalling £31.8m that could materialise which would see the variance increase further. These are within services due to the current pandemic, potential impact from finalisation of the 2019/20 accounts and in relation to groups structures particularly around interest income from Brick by Brick. Should all of these risks crystalise the total forecast overspend would increase to £96.5m by the year end.

3.    Note the details of the monthly Covid19 impact submissions being made to the MHCLG and the details of the financial support that is available to the council in light of Covid19 as outlined in section 6 of the report.

4.    Note the work being undertaken by the Spending Control Panel and Finance Review Panel to reduce the overspend this financial year.

5.    Note the HRA revenue position of a £0.5m forecast overspend against budget.

6.    Note the revised capital outturn projection of £187m for the general fund and HRA is forecast to be an underspend of £117m against the revised budget.

The Cabinet Member for Croydon Renewal (Councillor Stuart King) noted that the paper reported that there was a £64.7 million overspend by quarter 3 which was a concerning, but accurate, reflection despite the considerable efforts which had been made to improve management of the council’s finances. In addition to the forecast overspend, the Cabinet Member highlighted that £31.8 million of risks had been identified which could cause the total overspend to increase to £96.5 million.

It was noted that the report detailed movement between the quarter 2 and quarter 3 reports which had caused a worsening in position by £38 million as a result of corporate items and £14 million in departmental changes. The Cabinet Member, however, highlighted that £15 million of corporate items did include £15 million contribution to general reserves and that both children’s and adults departmental positions remained effectively unchanged between the two reporting periods.

The Cabinet Member stated that the changes within the Place department had arisen principally from over £4 million reduction in parking income associated with the lockdown and £2.7 million from the delay in receiving a decision from the Secretary of State on the council’s Selective Licensing Scheme. The proposed closure of Virgo Fidelis and St Andrews schools, it was highlighted, had also had a combined impact of £5 million on the council.

It was noted by the Cabinet Member that considerable work was underway to actively manage the in-year situation; including £27.9 million of savings which were being delivered. Furthermore, the impact of the Spend Control Panel, as a result of the Section 114 Notice, was also highlighted by the Cabinet Member. In addition, it was noted that significant amendments to the capital programme of £86 million had been made which would help reduce in-year costs.

The Cabinet Member concluded that there remained a great deal of uncertainty in terms of the in-year position and the following year’s position and the council continued to await the outcome of the Ministry of Housing, Communities & Local Government (MHCLG) decision on the council’s request for a capitalisation direction.

The Cabinet Member for Homes & Gateway Services (Councillor Jane Avis) noted that the council had applied for the Selective Licensing Scheme in summer 2020 as the council had felt it was important to ensure privately rent accommodation in Croydon met the required standard, but that a decision had not yet been received. In response, the Cabinet Member for Croydon Renewal reflected that the Scheme was an important tool for the council to protect renters across the borough but that the government had not yet granted permission for the new scheme. It was felt that the government had been focussed on responding to the Covid-19 pandemic and that MHCLG had not been able to direct resources to consider applications. However, due to this delay it was sensible to reflect the financial impact within the report.

The Cabinet Member for Sustainable Croydon (Councillor Muhammad Ali) noted that council tax collection had dropped by 2% and business rates by 7%  ...  view the full minutes text for item 34