Agenda item

To receive an update on the Council’s financial position and the budget going forward to 2014/15, from the Cabinet Member for Finance and Carbon Reduction.

TO FOLLOW

The Chair welcomed Councillor Goldberg and Julie Parker – Director of Corporate Resources – to the meeting.  Councillor Goldberg provided a short overview of the financial position of the Council.

NOTED

·               In 2010, the Government announced a four year austerity programme – this was now likely to be seven years.  The authority had experienced a 13 fold hit compared to some less deprived boroughs, and a 30 fold hit compared to the least deprived borough, Dorset.

·               The authority was in a dangerous situation and there were challenges to be faced with regards to changes to Council Tax and Business Rates collections.

·               The Public Administration Committee was very concerned about the fiscal resistance of local authorities.

·               It was important that the authority had reserves in place to enable the right choices to be made.

The following responses were provided to questions from the Committee:

·               Although there could be change of Government by 2015, one could not speculate as to whether the cuts would continue, or for how long.

·               Paragraph 9.3 related to Alexandra Palace and was revenue rather than capital fundings.  Councillor Goldberg had set a challenge for the Palace to reduce their overheads and running costs in order to identify savings – these savings could then be used to support the regeneration plans.  With regards to match-funding, Alexandra Palace were likely to request some funding from the authority at a later stage of the regeneration process.

·               Paragraph 6.1 – the general underspend was 2.2%.  When put into perspective with the whole budget this was not a significant sum.  A benefit of producing a provisional outturn was that savings could be made earlier, for example Adult Services were able to manage their projected over spend quickly.

·               Treasury Management savings of £2m a year were anticipated as these had been achieved previously, however this saving would depend on being able to continue to borrow internally and on interest rates.

·               Paragraph 6.5 – there were different rules for different schools becoming academies in different ways.  This meant that some schools would leave behind a deficit with the authority and some would not.  This was not something that the authority could control.  The aim would be to get schools out of any deficit at all.  Where schools had a ‘licensed deficit’ the local authority can work with them to give support.  However, schools did not always want this support.

·               Work was being done on Zero Based Budgeting.  The process was about where the Council was, where we would like to be by 2020 and how we can get there.  The ZBB work would feed into the 2015/16 budget setting process, not the 2014/15.  Work currently being done included:

-       Speaking to residents

-       Benchmarking with other authorities

-       Internal challenge

The ZBB work would begin in the Autumn, and would be an opportune time for scrutiny to consider the evidence base.

·               Some services had been lost as part of the cuts.  When making the decision to deal with challenges, sometimes the most obvious solution was to look at where services could be commissioned and use the expertise of others in the borough.

·               By providing savings proposals earlier in the year, this provided the opportunity to implement them earlier and minimise the impact.  It also meant that there would be more opportunity for scrutiny.

·               The Looked After Children (LAC) underspend was due to a redirection of services from LAC to early intervention, and was part of a managed process.

·               Appendix B, Line 8 (‘reducing care packages where possible’) – this would involve improving commissioning, costs and negotiating with suppliers. 

·               The centralisation of procurement had been successful in rationalising spends, and allowing procurement to be involved in contracts can produce better results.

·               Troubled Families – there was a name change to ‘Families First’.  A Co-ordinator had been appointed, and a team made up from services within Children’s Services.  The Chief Executive monitored the progress on a regular basis.  The underspend was partly due to £500k being taken by central Government by mistake and following lobbying, had been returned to the Council (and other authorities, who had also had the same experience).  There was a published report available on the website.

·               There was a need for more homes and more businesses in the borough.  More business would mean an increase in Business Rates receipts.  Haringey were in a favourable position relative to other authorities in relation to how Business Rates money can be used.

·               Risks by having RAG status outlined in the provisional savings proposals was about the deliverability for the savings as opposed to the impact of the savings being made.

Actions:

·               For a training session to be provided to Members on Zero Based Budget and a glossary to be developed, ahead of OSC considering evidence base.

ACTION: Julie Parker / Kevin Bartle

·               The Zero Based Budget pack to be circulated to OSC.

ACTION: Cllr Goldberg

·               OSC to look at evidence base of Zero Based Budget work later this year.  (to be added to work programme timetable).

ACTION: Scrutiny Officers

·               UNISON report on quality of care to be circulated to the Adults and Health Scrutiny Panel Members.

ACTION: Scrutiny Officers