Agenda item

The Scrutiny & Overview Committee is presented with the Period 8 Financial Performance Monitoring report for its information. The Committee is asked to: -

1.     Review the information provided in the report on the 2023-24 Period 8 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 set out in the agenda supplement that provided an overview of the latest budget position for 2023-24 up until the end of Period 8 (November 2023). This report was included on the agenda as part of the Committee’s ongoing scrutiny of the delivery of 2023-24 budget.

·       Councillor Jason Cummings – Cabinet Member for Finance

·       Katherine Kerswell – Chief Executive

·       Nick Hibberd – Corporate Director for Sustainable Communities, Economic Recovery & Regeneration

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

·       Susmita Sen – Corporate Director for Housing

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

·       Simon Robson –Director for Adult Social Care Operations

·       Allister Bannin - Director of Finance & Deputy Section 151 Officer

·       David Courcoux - Director for Policy, Programmes & Performance

·       Helen Reeves – Interim Head of Strategy & Policy

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

• The budget position at the end of Period 8 (November 2023) was predicting there would be a budget underspend at the year end, with all departmental budgets improving in comparison to the Period 7 forecast.
• There remained an overspend within the Children’s Service, but the forecasted amount had reduced from Period 7 and could be balanced against underspends elsewhere in the budget.
• Based on the current forecast, the Council would not need to use any of the £5m Corporate Contingency Fund. It was not expected that the current position would worsen and it was possible there may even be further improvement.

Following the introduction, the Committee was given the opportunity to ask questions on the information provided in the Period 8 report. The first question sought an explanation for the increase in the predicted underspend within the Adult Social Care budget. It was confirmed that the predicted underspend had increased from £1.1m to £1.3m since Period 7 due to a small reduction in placement costs. This was the result of transformation work within Adult Social Care over the past three years, which was aimed at managing the cost of placements.

As a follow-up, reassurance was sought that the transformation work was not aimed at gatekeeping the service by reducing the number of placements, which may result in vulnerable residents being unable to access the services and care they required. It was confirmed that the number of placements provided had remained consistent over the past three years. The transformation programme was aimed at ensuring the right level of care was provided, at the right time, through improving reablement services for patients after a hospital stays and having a better range of options to improve outcomes for residents needing care support. At the same time the service was managing providers to ensure there was a sustainable care market in Croydon. It was highlighted that social workers had regulated standards which meant their assessments had to be based on an individual’s care needs and not the potential cost factors. The Director of Adult Social Service (or Corporate Director for Adult Social Care & Health), Annette McPartland, also had a legal duty to ensure the Council was providing safe care, which was not based on cost factors. 

It was noted that the report was seeking the Mayor’s approval to transfer £2.1m from the Adult Social Care budget to the Housing budget, with an explanation for this requested. It was advised that as a result of Adult Social Care receiving additional grant funding in September 2023 from the Market Sustainability and Improvement Fund, it had enabled the previous allocation of £2.1m from the non-pay inflation budget to be transferred on a one-off basis to Housing to support current pressures within emergency accomodation.

As the budget was now forecasted to have an underspend, it was questioned whether, given the level of need in the borough, there would be further work to bring the budget back to a balanced position. In response it was explained that if there was an overspend had been predicted, there would an expectation that it would be managed back to a balanced position where possible. However, should there be an underspend, providing there was reassurance that services were being delivered as required, there would be no expectation that spending would increase in an effort to achieve a balanced position.

It was questioned whether there had been any work to model the worst case scenario outcome for the emergency accommodation budget. It was advised that modelling had been challenging due to a peak in the number of homelessness cases at the end of the summer, which had now returned to the expected level. Work was underway to establish whether demand would continue at its present rate or whether there would be another spike. Based on the current worst case scenario modelling, the potential overspend could be managed as a result of the underspend elsewhere in the budget and if needed the Corporate Contingency Fund. Through block booking, the service had been able to access cheaper emergency accomodation from January 2024, which would help to manage costs. Although, as the team was currently working through a back log of cases, more need may become apparent.

In response to a question about budgeting for the cost of the upcoming London Mayoral Elections in May and the General Election, which had to be held by January 2025, it was confirmed that costs relating to these elections would be recoverable from the GLA and the Cabinet Office respectively. There would be an increase cost related to electoral registration, that would need to be met by the Council, but this was likely to be relatively small.

Regarding the Council’s bad debt provision, it was confirmed that it had been revised in 2019-20, and as a result was on a fairly stable footing going forward. There was not a significant amount of new bad debt expected, but it was good practice that it was reviewed and recalculated each year. The Director of Finance advised the Committee that the Council had a cautious level of bad debt provision and as such no major changes were expected.

Following the discussion of this item, the Chair thanked those in attendance for their engagement with the Committee.

Conclusions

Following its discussion of this item the Committee reached the following conclusions: -

1.     The Committee welcomed the updated budget position for Period 8 which predicted there would be an overall underspend in the General Fund budget at the year end, which was an improvement on the forecasted overspend in Period 7.

2.     The Committee also welcomed the reassurance given that the underspend was being delivered while the Council continued to meet its statutory obligations to the people of Croydon.

3.     It was agreed that the continued overspend within the Children’s Service budget would be monitored by the Children & Young People Sub-Committee.

4.     It was also agreed that the work to manage the high level of demand for emergency and temporary accommodation would continue to be monitored by the Homes Sub-Committee.