Agenda item

[Report of the Director of Finance. To be introduced by the Cabinet Member for Finance and Strategic Regeneration.]

This report provides an update on the budget and Medium Term Financial Strategy (MTFS) as well as on the National economic picture and local authority funding. The report seeks agreement to Invest to Save proposals in respect of Children’s Services and a number of other changes to the Budget and MTFS, and makes recommendations relating to potential changes to the Council’s financial support to Alexandra Palace (APPCCT)

The Cabinet Member for Finance and Strategic Regeneration introduced this report which provided:

• an update on the impact of the provisional General Fund (GF) 2018/19 outturn on Council finances (section 7)
• a summary of the 2019/20 budget position at period 2 (May) including delivery of agreed savings (section 8)
• an update on local changes to the MTFS assumptions outlined in the February report including an update on the National economic picture and local authority funding (section 9)
• an update on progress with the “live budgeting” agenda, the business planning process to deliver a balanced 2020/21 budget and refreshed MTFS. It provided detail of the proposed Invest to Save Programme in Children’s Services and also sets out further budget changes now proposed to be incorporated into the future MTFS (2020-2025) (section 10).

The Cabinet Member detailed the report as set at pages 301-315 and highlighted sections 9.2, 9.5, 9.6, 9.8, 9.10, 10.8, 11 and 12 of the report.

The Cabinet Member noted the positive in-year position currently forecast was better than at the same time last year which reflected the impact of the budget realignments undertaken as part of the 2019/20 budget build.

The Cabinet Member welcomed the progress and ambition that Children’s services were showing in bringing forward a suite of Invest to save proposals which would have a positive impact on delivering the MTFS as well as beneficial outcomes for children and young people in the Borough, in line with the agreed Borough Plan objectives.

The Cabinet Member noted that regarding the Spending Review 2019, this was anticipated to take place in summer 2019 but it was now expected this would not be carried out. This meant that the most likely scenario was that the 2019/20 Local Government funding position would be used as the basis for a shorter-term settlement for 2020/21 at least and potentially for 2021/22.

The Leader highlighted section 11 of the report which stated adherence to strong and effective financial management will enable the Council deliver its stated objectives and priorities.

In response to questions from Councillors Barnes, the following information was noted:

• Regarding details of the Alexandra Palace & Park Trust (APPCT) dispute, the Cabinet Member stated this was exempt information and could not be made public.
• Regarding the decrease in funding to Alexandra Palace & Park Trust (APPCT), discussions were still being had between Officers and the Trust staff over the effects this would have.

Cllr das Neves was next invited to introduce the addendum which included the Overview and Scrutiny (OSC) Comments and recommendations on the Children’s invest to save items. Cllr das Neves highlighted the following

• Grateful to officers within the Children’s services for looking to identify savings through invest to save and that it was clear officers were working hard to find ways balance the budget. The officers were also looking to invest in staff and their training, the quality of the services and, in some case, bringing services back in house to try and provide them in a more efficient way.
• As these were new proposals, it was important that clear review points and targets be reviewed by the Children’s Scrutiny Panel moving forward.
• Regarding investing in foster carers and, specifically around housing, the OSC recommended that careful consideration be given as to whether these would be a worthwhile usage of public funds and that the adequate legal processes be in place to protect the public purse.
• Regarding the family centre, the OSC welcomed bringing a service in house and the investment in staff. However, it felt there was the potential for the service to fail if appropriate quality was not maintained. Therefore, Cabinet must assure itself that the processes were in place to ensure that a quality service was being delivered.
• Regarding the edge of care service, there was concern that based on the proposal, some recipients of that service might feel they are being left out. The OSC was reassured this would not be the case but felt that Cabinet should reassure itself that there was an offer that covered that transition period once individuals came out of that service.
• There were items the OSC had concerns about and did not feel it had adequate information available to make recommendations on. This included the pause programme. There were questions if that programme would achieve its desired outcome for individuals and also questions around the ethics of the programme.
• Regarding SEND and transport, the Committee felt strongly that the voice of users should be at the heart of that service and that it should be co-designed, where possible. The Overview and scrutiny Committee had concerns around the outsourcing of that contract. It sought for Cabinet to reassure itself that outsourcing was the only feasible option available.

The Cabinet Member for Children and Families responded to the Overview and Scrutiny Committee recommendations. The Cabinet Member firstly welcomed the recommendations and highlighted the following:

• The Cabinet Member praised the process of the OSC review.
• The Children’s services were the first to put forward invest to save bids.
• Regarding the family centre, this was not a new model. It was a well -established model for dealing with mothers whose children were likely to be taken into care if there was not a process of intervention. Care proceedings were expensive and this was a model through which the Council attempted to avoid costly care proceedings. The project helps to keep children out of care, where possible.
• Regarding the financial investment for foster carers, this would begin with those foster carers who were tenants of homes for Haringey. The Council would therefore be investing in its own properties for foster carers willing to take on more children. Being in foster care and not in external care would save the Council money.
• The insourcing of certain projects and schemes meant that there would be 27 new roles within the Children’s Service.
• Regarding the Pause programme, the Cabinet Member noted that this was when a woman, who had lost a number of children to care previously, was assisted to ensure that this did not happen with their future children. The Cabinet Member assured that women only entered this programme with informed consent. Through working with those women to change their lives, the Council could prevent children from being taken into care.

Further to considering exempt information at item 28 and noting the comments and recommendations of the Overview and Scrutiny Committee,

RESOLVED

1. To note the forecast revenue outturn for the General Fund (GF) at Period 2 (May 2019)

2. To note the forecast delivery of agreed 2019/20 savings at Period 2 (May 2019)

3. To note the updates to the local and national budgetary position

4. To agree the budgetary changes in Section 10.3 to be incorporated into the future MTFS (2020-2025)

5. To approve the revenue budget variations associated with the Children’s Services Invest to Save Programme in Paragraph 10.7 and Appendix 3; and

6. To delegate to the Director of Children’s Services in consultation with the Cabinet Member for Children & Families future decisions on the Invest to Save Programme (except for SEND Transport) subject to the outcomes of any necessary Equalities Impact Assessment and consultation and any other relevant consideration

7. To note the contractual dispute between the APPCT and a contractor set out in paragraph 8.9 and in the recommendations in part B report.

Reasons for decision

A strong financial management framework, including oversight by Members and senior management, is an essential part of delivering the Council’s priorities and statutory duties.The Council has a statutory duty to set a balanced budget each year and having a clear financial strategy and the maintenance of a medium-term financial plan which is reviewed and updated regularly are critical in delivering this statutory duty.  Accordingly, the report proposes changes now to be implemented in year and incorporated into the future MTFS (2020-2025).

Alternative options considered

The Council has a legal responsibility to set a balanced budget and have a medium term financial strategy. Financial planning is a complex process and requires regular review of current and forecast spending and funding assumptions at both local and national level in order to update financial planning models in a timely fashion to ensure budgetary decisions are made with the fullest information available. Accordingly, no other options have been considered.