Agenda item

This report presents to the Committee progress on the delivery of the Council’s Financial Strategy.

The Director of Finance, Investment and Risk (S151 Officer) introduced the report and informed the meeting that the annual report was the outturn position for 2018/19. Part of the report was presented at Cabinet in July 2019, and this report provided a more detailed position for the Council and on its capital position.

Officers shared that the executive summary detailed an over spend of £5.466 million which was made up of small amounts of pre-exceptional and exceptional overspend.

The analysis of the departmental variances showed that the total departmental overspend finished with £6,998 million in the year, which was more than budgeted. The overspend was mainly as a result of placement costs for looked after children and children with disabilities.

The report highlighted the Council balances and reserves where officers noted that the General Fund balance was not stable. Currently the service had seen a demand increase. Officers highlighted that the Council had a General Fund balance of £10.4 million as of 31 March 2019 and earmarked reserves of £14.2 million, which would fluctuate in years to come.

Officers highlighted that the capital programme for the Council was £449 million. There was an underspend of 21% which resulted from slippage within the delivery of the scheme. The department was optimistic for change in the New Year.

Officers highlighted that the housing revenue account had an underspend of £736k which would carry forward to 2019/20 budget.

Officers summarised the 9.80% increase of the value in the Croydon Pension Fund and noted that details of the treasury management which was in a good position for the financial year.

Officers highlighted that Cabinet approved a four-year financial strategy in October 2018. Subsequently, the service was delivering against the financial strategy, which was a part of the budget setting process.

In response to questions raised by Members in relation to the overspend of £5.466 million, officers clarified that the exceptional spend related to additional costs associated with Unaccompanied Asylum Seeking Children, which there was no recourse to public funds, and the impact on Universal Credit.

In response to questions raised by Members in relation to the overspend of electoral services, public realm and the unachievable digital advertising income target, officers explained that for electoral services the overspend was a mixture of timing and the additional costs of work scheduled in 2018/2019. For public realm and street lighting, officers explained that there were no new contracts in place and the service was managing and working with the contractor. With regards to the unachievable digital advertising income it was noted that savings were difficult to manage. Although there was a target, there were unforeseen issues.

In response to questions raised by Members in relation to borrowing, officers highlighted that the official borrowing figure would fall under that which has been set, as this was not nationally set. It was highlighted that for 2018-22, due to the Brexit, interest rates were favourable and did not change on the 1^st April.

In response to questions raised by Members, in relation to the shortfall in housing benefits, officers shared that the Department for  Work and Pensions provided subsidised the payment of benefits to households in need. However, the Council would not be fully reimbursed. For clarity, the Department for Work and Pensions funded the grants for the Gateway Department. In the report, the overspend was noted in the Resources Division.

Further, Members queried about the exceptional variance in the housing budget. Officers shared in detail how the Home Office provided a grant to the Council. The Council had incurred costs for the unaccompanied minor service, however, the grant did not cover the full costs for looked after children, so the Council covered some of the costs. It was therefore important to receive the right level of funding for the borough. The Council had received a big shortfall in the funding as pay had increased. It was noted that the  Council was campaigning for more funding to provide the level of care needed by young people.

In response to questions raised by Members in relation to housing benefits officers clarified that what was paid was determined on a case-by-case basis. As such, the Council often paid above the housing allowance to support individuals and families.

The Committee RESOLVED to:

§  Approve the levels of reserves and provisions set out in section 8 of the report, as recommended by the Interim Section 151 Officer;

§  Note the Council’s outturn position, and the progress of the Council’s current Financial Strategy objectives;

§  Note the departmental revenue budget outturn variances as contained within Table 1 and 2 and Appendix 1 of the report;

§  Note the capital budget outturn as detailed in section 4 and Appendix 2 of this report.

§  Note that a report seeking final approval of the accounts following their review by external audit is a separate item on this agenda; and

§  Note that work has commenced to review the MTFS which was approved at full Council in October 2018 and will be presented to Cabinet as part of the budget 2020/21 report in February 2020 with a report on the budget setting process also being presented to Scrutiny and Overview Committee in September 2019.