Agenda item

The Scrutiny & Overview Committee is presented with the latest Financial Performance Monitoring report (Month 2 – May 2023) for its information. The Committee is asked to: -

1.  Review the information provided in the report on the Month 2 Financial Performance Report, and

2.  Consider its conclusions on the latest budget position for 2023-24

3.  Consider whether there are any recommendations to bring to the attention of the Mayor.

The Committee considered a report on pages 19 to 52 of the agenda that provided an overview of the latest budget position for 2023-24 up until the end of Month 2 (May 2023). This report was included on the agenda as part of the Committee’s ongoing scrutiny of the delivery of 2023-24 budget.

The Cabinet Member for Finance, Councillor Jason Cummings, Chief Executive, Katherine Kerswell, Corporate Director for Resources, Jane West, and Director of Finance, Allister Bannin were in attendance for this item at the meeting.

The first question from the Committee related to the forecast that, based on the current projection, there would be an overspend of £3.6m at year end, which would require the use of contingency funding to deliver a balanced budget. It was questioned whether it was normal accounting practice to allocate contingency funding at such an early stage in the year and whether this would discourage services from addressing any such overspends. In response, it was clarified that £3.6m figure in the report was not a current overspend, instead it was a year-end forecast, which should it crystalise by the year end, could be met from contingency funds. Where potential overspends had been highlighted within individual service budgets, there was an expectation that the specific service would proactively work to recover this over the course of the year by either addressing the cause of the overspend or through identifying alternative savings.

It was confirmed that the report included a breakdown on the underspend within the budget arising from staffing vacancies, which was broken down by directorates. It was noted that there were particular underspends forecasted on staffing within services with hard to recruit roles, such as social care and planning. There were also instances where recruitment had been held where a restructure was planned.

In response to concerns about the potential impact of staffing vacancies, it was confirmed that the risk was being actively monitored and managed. There was a specific challenge within social care, with a national shortage of trained staff to fill specialised roles. This required a wider workforce strategy and separately work was underway on overseas recruitment. As well as working on encouraging new employees to join Croydon, given the need to make significant savings, it was also important for the Council to look at how it could do things differently and more efficiently through areas such as automation.

As the next meeting of the Committee on 26 September 2023 was due to include an item on the People and Cultural Transformation Strategy, it was agreed that further information on the work on recruitment and retention would be requested as part of this report.

Regarding transformation, it was confirmed that the Transformation Internal Control Board had been meeting for six months, which had helped to shape the programme. The various transformation projects were being loaded into the new Verto project management software and officers were being trained on how to use this system. Projects were underway, such as the one to improve the Council’s business intelligence, which was already delivering savings through identifying where the Council was paying for services that were not needed like freedom passes or identifying council tenants sub-letting their properties. The new Director of Transformation was also due to start at the Council in mid-September and it was expected that they would be leading on the wider communication of the Council’s vision for transformation and ensuring the residents voice was being captured in the improvement journey.

In response to a question about whether the Council would be putting more resources into areas such as tenancy checks, it was confirmed that it would be doing so. The Council worked in partnership with Lambeth Council on fraud and was in discussions with them about additional resource. Technology, such as data matching, would also be used to identify potential fraud and the Council had recently invested in the national fraud data hub, which was providing benefit.

It was questioned whether the Council would be able to present a full budget for transformation in 2024-25 as part of the budget setting process in early 2024. It was confirmed that this would be presented as part of the budget, as the transformation work streams were crucial to the improvement journey of the Council. The Cabinet Member for Finance emphasised the importance of transformation to the Council. The work was still at an early stage and had involved staff learning a lot of new processes, even so, it was already producing results. Outside of their normal workstreams, transformation was the largest part of the role for the Cabinet Members and needed to be looked at over a three to four year period.

It was noted that it could be challenging to engage effectively with residents and that any such communication would need to be carefully managed as transformation began to change the way services were delivered. Reassurance was given that the process for how the Council engaged with residents on transformation was currently under consideration and if needed additional resource could be allocated for this within the transformation budget. It was highlighted that a new equalities screening tool was being used which would help to identify the projects where further consultation was needed.

In advance of the meeting, additional information had been requested by the Committee on the rate of Council tax collection and the number of applications to the new hardship scheme brought in as part of the budget to mitigate against the potential impact from the 15% Council Tax rise. It was noted that collection rate was currently 0.03% below the expected target, but it was expected that this would be recovered in the coming months.

There was surprise noted by some of the Committee that there had only been 283 applications to the Hardship Scheme and as such it was questioned whether knowledge of the scheme was reaching those in most need. In response, it was highlighted that the Hardship Scheme had been created to supplement other existing schemes that would be utilised first. When the scheme was created the level of need was not known, which was why a significant buffer was put in place. The Committee agreed that it would provide additional reassurance to confirm that information on the various support schemes available was being included with arrears letters when sent.

In response to a question about whether the amount of housing benefit officers employed by the Council was being reduced, it was advised that these officers were being moved from the Housing team to the Revenue & Benefits team to maximise resources. There was no plan to make any officers redundant.

It was noted that the budget for Adult Social Care included the forecasted costs for three high cost care packages. If these care packages changed during the year, the forecast would be revised to take this into account. The increasing cost of adult social care was a national challenge, which would require long term transformation work to address. Although the Council had to meet its statutory duties to residents, it was important to ensure that best value was being provided as well.

In response to a question about planning income, it was confirmed that there had been lower activity in major applications, which if it continued would impact upon the budget. The main issue was the timing of applications being submitted which was beyond the Council’s control, however the service was working on modelling the applications expected to come through the planning system to provide greater certainty.

At the conclusion of this item, the Chair thanked the Cabinet Member and officers for their attendance at the meeting.

Actions

Following consideration of this item, the Scrutiny & Overview Committee agreed the following action to follow-up after the meeting: -

1. The Committee agreed that an item on staffing and recruitment across the Council would be added to its work programme for 2023-24 as part of its review of the action plan for the People & Cultural Transformation Strategy.

2. Although it was accepted the data would be continually fluctuating, the Committee agreed that the provision of data on the level of staff vacancies across the organisation would help it better understand the scale of the challenge with recruitment and retention. The Committee requested the provision of data on the Council’s workforce, to include: -

3. The Committee agreed that it would seek to engage with the new Transformation Director, once in post, about the transformation workstream on resident engagement.

4. In light of questions raised on the impact of the 15% Council Tax rise, agreed by Council in March 2023, the Committee agreed to request data comparing the current rate of Council Tax arrears against data from previous years.

Conclusions

At the conclusion of this item, the Scrutiny & Overview Committee reached the following conclusions: -

1. The Committee welcomed the reassurance given by the Cabinet Member for Finance on progress made with the Council’s Transformation Programmes and noted that the first quarterly Transformation Monitoring report was due to be considered at the Cabinet meeting on 27 September 2023.

2. Although it was accepted that some of the factors involved were not unique to Croydon and were either London-wide or national challenges, the Committee concluded that the vacancy rates within certain services of the Council presented a considerable risk to the delivery of both business as usual services and transformation programmes.

Recommendations

The Committee agreed to submit the following recommendation for the consideration of the Mayor: -

1. The Scrutiny & Overview Committee would like to recommend that the letters sent to residents regarding Council Tax arrears are reviewed to ensure they include information about the potential availability of support schemes, such as the Council Tax Hardship Scheme.