Agenda item

The Scrutiny & Overview Committee is presented with the latest Financial Performance Monitoring report (Period 5 – August 2023) for its information. The Committee is asked to: -

1.         Review the information provided in the report on the 2023-24 Period 5 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 49 to 86 of the agenda that provided an overview of the latest budget position for 2023-24 up until the end of Period 5 (August 2023). This report was included on the agenda as part of the Committee’s ongoing scrutiny of the delivery of 2023-24 budget.

The following people were in attendance at the meeting to answer questions during the discussion of this item: -

·       Jason Perry - Executive Mayor of Croydon

·       Councillor Jason Cummings – Cabinet Member for Finance

·       Katherine Kerswell – Chief Executive

·       Debbie Jones – Corporate Director for Children, Young People & Education

·       Annette McPartland – Corporate Director for Adult Social Care & Health

·       Jane West - Corporate Director for Resources & Section 151 Officer,

·       Elaine Jackson - Assistant Chief Executive

·       Allister Bannin - Director of Finance

·       Huw Rhys-Lewis – Interim Director of Commercial Investment & Capital

During the introduction to the report, the following points were noted: -

• The General Fund budget was still forecasting a balanced year end position, which given the current climate for local government finance, was evidence of the Council’s improved financial discipline. Other similar councils, such as Havering and Barnet were predicting £20m overspends in the current year.
• There was still a small overspend in Childrens and Adults services, but there was an expectation that there would be further improvement in forthcoming reports. Work was also ongoing to identify how the overspend in Education could be rectified.
• There was a significant change in the Housing Revenue Account (HRA), which was primarily down to addressing cases of disrepair and void recovery. Work was also underway to rebased the budget for the HRA to take account of the repair backlog.

Following the introduction, the first question from the Committee asked whether there was a full understanding of the extent of the HRA overspend and could it be met from reserves. It was advised that the overspend of £12m against the HRA was a year-end forecast based on the current prediction. Unless there was a significant change, further escalation was not expected. There had been a lot of modelling of the HRA since the last Committee meeting to look at different options. Additional controls had been put in place with sub-budgets for specific types of repairs which had review points built in based on the level of expenditure. A review panel had been set up to approve any work that was going to cost over £5,000. Should the combined cost of a series of repairs on an individual property exceed £40,000 it would be escalated to the Housing Departmental Management Team to pick up possible links to wider regeneration work. As mentioned in the introduction, work was also underway to right size the budget for housing repairs.

In response to a question about what was the driver leading to a reduction in the previously predicted overspend for the Childrens service, it was advised that forecasting was based on the cost of placements, which are regularly reviewed and will vary from month to month. Despite the reduction there was a real pressure on resources within the department from the cost of placements.

An update was requested on the work to address the predicted overspend within the Adult service budget. It was advised that plans had not changed for the service, which was on a trajectory to meet the needs of adults and come in on budget. Work was ongoing with the local health service on the reablement of patients stepping down from hospital care. There was also work underway with the Childrens service to assist young people on the transition between the services.

It was questioned why there was no funding allocated to commercial and income opportunities in the transformation programme. It was explained that as the Council was disposing of assets, it was likely there would be few opportunities to bring in new sources of income, but options were being explored to increase income. Once the asset disposal process had been completed there would then be an opportunity to review.

Regarding the work to transform the Programme Management Office (PMO), it was advised that there was a small central PMO teams which was in the process of becoming the Transformation team. Alongside this there would be specific resource within services to provide support for larger projects and consistency would be added through the use of the council-wide project management software. It was acknowledged that the team was still a work in progress, but a bigger resource would be built as the Council built its transformation programme.

There was a concern raised about the framing of some of the questions in the budget consultation, with it noted that there was a marked difference in quality to the Mayoral consultation. It was advised that the Mayoral consultation had been delivered by an external survey company contracted for that purpose. The budget consultation was being delivered internally and had been based on the same approach as used in the previous year. Learning from both processes would be used to inform future consultations.

It was noted that the Council Tax collection rate was 1% lower in comparison to the same point last year, which was not unexpected due to the ongoing cost of living crisis. It was noted that checks were made to ensure that people who were unable to pay were receiving the benefits they were entitled to and were being signposted to support. The Committee agreed that it would be helpful for the service to engage with local advice groups in six months to check that the changes made to Council Tax collections were having a beneficial impact.

It was confirmed that the potential cost arising from forthcoming damp and mould regulations would be built into the HRA business plan going forward. It was also confirmed that scope for extra demand would be built into the budget to take account of the Home Office speeding up the processing of asylum cases.

At the conclusion of the item the Chair thanked those in attendance for their engagement with the questions of the Committee.

Conclusions

Following its discussion of the 2023-24 Period 5 Financial Performance Monitoring Report, the Committee reached the following conclusions:-

1. The Committee welcomed the reassurance given that the overspend within the Housing Revenue Account, to address the backlog of repairs, was reaching its peak and that there were controls in place to monitor and manage expenditure.
2. The Committee noted that work continued on the delivery of identified savings within Childrens and Adults Social Care budgets that required further evidencing before being included in projections, with it anticipated that these would be delivered by the year end.
3. The Committee welcomed the confirmation that their previous recommendations relating to council tax collection had been accepted, but with the reintroduction of enforcement processes, recognised that there would be value in the Service engaging with local advocacy organisations to review processes after a period of operation.
4. The Committee raised concern about the quality of the questions in the Budget Consultation in comparison to those in the Mayor’s resident’s engagement survey.

Recommendations

Following its discussion of the 2023-24 Period 5 Financial Performance Monitoring Report, the Committee agreed to submit the following recommendations for the consideration of the Mayor: -

1. The Scrutiny & Overview Committee recommends that with the reintroduction of council tax enforcement to those in receipt of council tax support, a meeting should be arranged with local advocacy organisations, including the CAB and the South West London Law Centre, after a few months of operation to review the processes to ensure that the available support is reaching those who need it most.
2. The Scrutiny & Overview Committee recommends that future iterations of the budget consultation are subject to independent review before publication.