Agenda item

Cabinet Member: Cabinet Member for Croydon Renewal, Councillor Stuart King and Cabinet Member for Resources & Financial Governance, Councillor Callton Young

Officer: Interim Corporate Director of Resources, Richard Ennis

Key decision: no

RESOLVED: To

1. Note the General Fund is projecting a net adverse movement of £0.685m from Period 5. Service departments are indicating a £4.050m overspend (Month 5 £3.365m) with this being netted of as in the past five months against release of a one off Covid Grant (£3.451m released = 31% of the grant) confirmed to Croydon Council for 21/22 by MHCLG as part of the Local Government Finance Settlement;

2. Note that a further number of risks and compensating opportunities may materialise which would see the forecast year-end variance change and these are reported within Section 3 of the report. Should these risks materialise or the mitigations not be effective the Council could overspend by £11.063m (Month 5 £7.814m);

3. Note the Housing Revenue Account (HRA) is projecting a £0.733m (Month 5 £0.742m) overspend for 2021/22. If no further mitigations are found to reduce this overspend the HRA will need to drawdown reserves from HRA balances which at the moment there are sufficient balances to cover this;

4. Note the capital spend to date for the General Fund of £11.402m (against a budget of £138.688m) and for the HRA of £7.633m (against a budget of £183.209m), with a projected forecast variance of £48.758m on the general fund against budget and £86.220m forecast variance against budget for the housing revenue account;

5. Note, the above figures are predicated on forecasts from Month 7 to the year end and therefore could be subject to change as forecasts are refined and new and updated information is provided on a monthly basis. Forecasts are made based on the best available information at this time.

6. Note that whilst the Section 114 notice has formally been lifted, the internal controls established as part of the S114, such as the Spend Control Panel remain. However, restrictions have been lifted for ring-fenced accounts such as the Pensions Fund, Housing Revenue Account and Coroner’s Costs as these do not directly impact on the financial position of the General Fund. The Spending Control Panel which was set up at the beginning of November 2020 continues to meet on a twice daily basis.

7. Note that the Council has received a one off financial support of £2.36m from Government to help cover the pressures related to Unaccompanied Asylum seeking Children (UASC) and care leavers, which means the Council still funds £1.615m of pressures post the Grant support.

8. Note that in addition to the UASC pressures, Croydon Borough has taken on c1000 asylum seekers who have been placed in eight hotels by the Home Office. The hotel costs are funded by the Home Office, however the Council will be responsible for further ancillary services particularly around safeguarding, public health, children & youth provision and broader community support. These additional costs, which are being worked out and have been flagged within unquantified risks, could result in further pressures for the Council.

9. Note the Council has been advised it will receive £1.517m one off Homelessness Prevention Grant (Covid winter pressures) this year to support local authorities to help vulnerable households with rent arrears to reduce the risk of them being evicted and becoming homeless. This is not included in the forecast as the grant condition details are being worked through and will be included in next months report.

10.Note that until recently the Borough also housed a number of Afghanistan Asylum seekers citizens and their families as part of the Government’s Afghan citizens resettlement scheme. The Home Office decommissioned this hotel and relocated the residents on 27th October 2021.

The Cabinet Member for Croydon Renewal (Councillor Stuart King) introduced the report which signified the year mid-point of the financial year. He highlighted the following:

· There had been a departmental focus of savings which had resulted in underspends in Adult’s and Children’s.

· The risk of non-delivery of the savings from the Medium Term financial Strategy Savings (MTFS) for year 2021/22 was at the lowest point to date.

· He stated that the mid-point of the financial year was an appropriate time to review all of the MTFS savings for 2021/22 and ensure the robustness of assessments set out in the Period 6 report. He stated that Cabinet wrote to the Chief Executive asking for this review, to provide maximum confidence in the council’s ability to deliver the savings programme.

· Spend against the General Fund and the Housing Revenue Account (HRA) capital programmes had forecast a £135 million underspend. These underspends represented a positive step to decrease spending across departments.

· He noted that as the winter approached that pressures would increase resulting in increased service demands and challenges across the organisation.

Headline changes for Period 6 (since Period 5):

· Period 6 reflected an adverse £3 million, which was not present in Period 5, due to the reforecasting of parking income.

· The net quantified risks had risen by £ 2 million, now sitting at a total of £10 million. Risk mitigations had been identified and were now at their highest at £12 million, which sufficiently covered that risk.

Cabinet Members commented that these were challenging times and there was clear evidence that the council was trying to live within its means and the culture change was materialising, whilst accepting there was progress still to be made.

In response to the Cabinet Member for Croydon Renewal raising that £2.5 million of quantified risks had emerged from Adult Social Care, the Acting Corporate Director Adult Social Care & Health (Annette McPartland) stated that the council had recently had confirmation they would receive continued Covid-19 funding. Due to the late notification, the forecasted winter pressures did not account for that financial support. The numbers in the next monthly report, Period 7, would improve to reflect the funding. Additionally, she added that the council was waiting for the outcome from a Judicial Review in December which could potentially bring pressures and would be reflected in the next reporting.

In response to questions from Members, the following was clarified:

· In relation to Unaccompanied Asylum Seeker Children (UASC), it was stated that the council was not properly or sustainably funded to match the demand in the borough compared to other authorities, however the Administration welcomed the one-off payment nevertheless. This sentiment held cross party consensus.

· In relation to the improved performance since the previous mid-year assessments and claims that it resulted from the additional government lending received in that period, it was stated that the improvement was also based on the savings programme. There was a significant amount of additional Covid-related demand to the council during that time, to which a portion of government lending was specifically allocated to.

· In relation to the lack and de-prioritisation of budgeted essential capital programme delivery, it was stated that the council was not going to spend for the sake of spending even if there was a budget allocated. Capital programme delivery would be reviewed on a case-by-case basis looking at specific needs of the organisation.

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