Agenda item

Grant Thornton’s value for money conclusions about the council  will be based upon two reporting criteria specified by the Audit Commission. This report provides information on how the council is meeting  the  first criteria for  securing financial resilience.

The Committee noted that as part of the external auditor’s value for money assessment of the Council they had undertaken a review to determine if the Council had proper arrangements in place for securing financial resilience. This involved considering: key indicators of financial performance, the Council’s approach to strategic planning, approach to financial governance and the financial control of the Council.  The results of the review were presented to the Committee. Council officers were content with the findings of the auditors which showed mainly ‘green’ assessments with one ‘amber’ assessment for strategic financial planning. In relation to this the auditors explained that the financial decisions taken in 2010/2011 had put the Council in a good position to deal with the scale of reductions in government funding. The budget decision in 2010/11 had been completed in quite tight time scales but the Council were now already underway with their financial planning exercise for setting the budget for 2012/13. The Council were recognised by the auditors as having a good track record for financial governance and this was still indicated to be the case. The ‘amber’ rating was given as  impact of the budget reductions made in 2010/2011 had yet to be fully realised

The following clarifications were sought from Committee:

• In terms of the back office efficiencies made in the budget to protect frontline services, comment was made on why this had not been a recommendation of action before for the Council? In response it was noted that judgement on the financial planning of the Council was based on risk and historically the Council had been judged as having sound financial governance. However, although the back office efficiencies were being made there was still a need to wait and see what the impact of the changes would be.

• Clarification was sought on why zero based budgeting was not commonly used by the Council. It was explained that this had been a worthwhile exercise which the Council had in the past embarked upon with a couple of schemes. However, this finance exercise was a detailed process and with reduced finance staff would be challenging to do in the future.

• Page 195 provided a graph of the net cost of services for 2008/09 to 2010/11.  This compared Haringey’s net cost of services to the London Borough Average but with no details of the comparable boroughs attached. Agreed that more details on this be provided to members.  Grant Thornton advice after the meeting that The LB figures are the LB average, and relate to GT analysis. Page 194 relates to Audit Commission data, and is based on the Commission's nearest neighbour group (as per p. 167). Attached is the original analysis that relates to the graph on p.195. Can only assume the data seen by the Member is looking at a different comparator figures or comparator group, but would need to see the source information to be able to confirm.
  
  Page 196 set out a graph which compared the boroughs spending power reduction during 2011/12 with the London Borough average. The 'Findings said that Haringey has not faired well compared to the rest of London' and a question was asked about the source for this statement? Grant Thornton since advise that as with Page 195, this relates to GT analysis of all LBs, so does not relate to the AC benchmarking group on page 167 – Grant Thornton

• Page 169 – General Fund overspend – Officers explained that they had an overspend of £2.4m which was tackled with the following measures: spending embargo, a review of high spend articles, removal of purchase cards. These action had resulted in a complete reduction of the overspend and a surplus of £51k.

 Following a question on how the Council were mitigating against a Children’s service overspend as experienced in the previous financial year, officers outlined how they were managing the growth in budget for Children and Young People’s service with a risk based approach to controlling expenditure which included monthly reviews of spending on Looked after Children.

The Chair thanked the external auditors, Grant Thornton for their work in completing the review.

RESOLVED

That the findings of the review be noted.