Agenda item

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

This report will provide an update on the Quarter 2 budget monitoring and will seek approval for any budget changes required to respond to the changing financial scenario and the delivery of the MTFS.

The Cabinet Member for Finance and Strategic Regeneration introduced this report which provided an update on the Quarter 2 budget monitoring and sought approval for any budget changes required to respond to the changing financial scenario and the delivery of the MTFS.

The Cabinet Member was pleased to be able to report that the General Fund budget position and delivery of agreed savings was in a more robust position this financial year, and believed that this was due to the decisions taken when setting this year’s budget which sought to ensure that these were set to be as realistic as possible within the overall available resource envelope.

The Cabinet Member noted that the final agreed 2019/20 Budget reflected a number of actions taken to de-risk the base budget position. This mainly focussed on addressing the budget pressures in the two People related services which had been significantly overspent in 2018/19. These actions were intended to provide greater confidence of managing within the agreed budget as well as delivering agreed budget reduction proposals.

The Cabinet Member informed the GF revenue forecast of £5.2m overspend presented had remained stable at the level reported in Qtr1 and was significantly below the £15.9m reported in the same period in 2018/19 (which was before the application of budget contingencies of £6.6m in that year). This evidenced that the approach to setting the budget was sound and was having the intended consequence. Two of the most significant budget pressures driving the forecast overspend had been considered in the draft 2020/21 Budget/MTFS 2020-2025 proposals. Officers continued to focus on strategies to bring the in-year overspend down with the aim of achieving a balanced outturn by year end.

The Cabinet Member closed by drawing Member’s attention to two final points. The first was the increased forecast DSG overspend now standing at £5.1m. This was a matter of real concern and pressure needed to be put on Government to recognise this issue and come forward with a sustainable solution. The second point was that there was a new appendix to the quarterly budget update reports which provided Members with a record of debt write-offs across the various debt fields.

In response to questions from Councillor Dennison, the following information was provided:

• Regarding the spending pressure on the housing General Fund and temporary accommodation, Officers forecast that the Council would receive enough flexible Housing Support Grant to continue to support this function through to next year. The Council had been taking action that would seek to ease pressure in future years, such as through the Community Benefit Society.
• Regarding the savings on Alexandra House which would not be achieved, Officers noted the original saving represented a wider savings across the estate.

• Regarding the High Road West Business, the Cabinet Member noted there were a number of conversations taking place, not only with the Council but with the GLA and Mayor of London. Talks were focusing on looking at increasing the number of social housing units provided within the scheme. Thus the delay to the scheme commencing was due to the Council seeking to ensure there was an adequate number of social homes provided by the scheme for its residents.

• Regarding debt write off detailed at Appendix 6, the Cabinet Member informed that the Council was looking to deal with these as soon as possible and would take all the necessary steps to reclaim what was owed to it. The ‘ethical debt collection’ was also highlighted as a means by which the Corporate Debt Team were promoting alternative payment solutions that would not only prevent constituents from falling into a cycle of debt, but also protect their ability to obtain Credit, therefore improving their Health and Wellbeing. Officers added that no organisation that had income activities on the scale of the Council would be able to operate without write offs as there would be inevitably be circumstances where writing off debts could not be avoided.
• The Cabinet Member had held discussions with Homes for Haringey to ensure they had the appropriate mechanisms in place to ensure arrears were dealt with.

RESOLVED

1. To note the forecast revenue outturn for the General Fund (GF), including savings pressures, of £5.2m overspend (£5.2m Qtr1) (Section 6, Table 1, and Appendix 1).
2. To note the net HRA forecast of £0.4m underspend (£0.2m Qtr1) (Section 6, Table 2, and Appendix 2).
3. To note the net DSG forecast of £5.1m overspend (£1.8m Qtr1), the actions being taken to seek to address this and the potential implications for the GF (Section 7 and Table 3).
4. To note the forecast budget savings position in 2019/20 which indicates that 10% (£1.295m) will not be achieved. (Section 8, Table 4 and Appendix 3). This is incorporated into the GF budget pressure in recommendation 3.1.
5. To approve the proposed budget adjustments, varmints and rephrasing to the capital programme as set out in table 5 and Appendix 4 and note the forecast expenditure of £249.4m in 2019/20 which equates to 82.9% of the revised capital budget (Section 9, Table 5 and Appendix 4).
6. To approve the revenue budget virements (Appendix 5).
7. To note the debt write-off approved since April 2019 (Appendix 6).

Reason 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.

Alternative Options Considered

The report of the management of the Council’s financial resources is a key part of the role of the Director of Finance (Section 151 Officer) in helping members to exercise their role and no other options have therefore been considered.