Agenda item

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

This will report will provide an update on the Quarter 1 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 the report which covered the Council’s financial position at Quarter 1 (Period 3) of the 2020/21 financial year, include General Fund Revenue, Capital, Housing Revenue Account and Dedicated Schools Grant budgets. The Cabinet Member drew the Cabinet’s attention particularly to paragraphs 1.3, 1.4, 2.2, 4.1, 5.1, 6.11, 7, 9 and 10. He added that it was critical to maintain strong financial management in the current economic climate and pandemic.

The Cabinet Member highlighted the continued and increasing pressure that the Council were facing from underfunding of the High Needs Block of the DSG since the Government’s expansion of the age for Education, Health and Care Plan (EHCP) eligibility. The Council, like many other authorities across the country, had been left in a position where, despite best efforts, were unable to meet the needs of these young people within the budget that had been allocated. The Cabinet Member underlined that the additional funds provided for 2020/21 to date in no way went far enough and do not provide the sustainable solution that these young people and their families needed as was evidenced by the forecast £4.5m overspend included in the report.

The outcome of the Government’s SEND review was still waiting publication and in the interim the Cabinet Member emphasised the need for the Council to continue to vocally lobby for additional resources.

• In response to a question from Cllr Ogiehor, there were ongoing risks in relation to the money spent at the start of the Covid-19 pandemic. This spending was in accordance with central government directions and further spending was expected. So far, the Council had only received in the region of £18m but were forecasting to have a greater net spend impact resulting from the pandemic than the grant allocated. There was growing concern about the risk of not receiving full reimbursement and the effect this would have on the Council’s finances if it had to ameliorate this, and it continued to hope to receive the reimbursement. 

• Councillor Ogiehor spoke about the conclusion of a 4 year legal challenge in which carers working for a provider in Haringey had recently been awardedbackdated earnings for not receiving the minimum wage. In response to queries about: the financial risk to the Council as a result of care workers of a council contractor paying them below the minimum wage, having assurance on care contract management  arrangements and auditing care  contracts  to ensure no similar issues occurred in the future , the Cabinet Member advised that he would discuss this with the relevant Cabinet Member  and respond to Cllr Ogiehor in due course.

• The Cabinet Member also advised that more recently, there were provisions made by the Council , during Covid 19, for home care workers, working for providers in Haringey, to receive an uplift equivalent to the London Living wage  and the requirement to pay London Living Wage was also added to the new DPS home care contracts agreed at Cabinet in June.

RESOLVED

1. To note the forecast revenue outturn for the General Fund (GF), including the impact of Covid, and known and estimated levels of announced Covid funding, is a net overspend of £23.1m. This is before any further emergency grant support (Section 6, Tables 1a and 1b, and Appendix 1). This excludes the DSG forecast.

2. To note that Directors have been asked to focus on actions to bring the forecast overspend down before the end of the year.

3. To note the net Housing Revenue Account (HRA) forecast of £9.6m overspend (Section 6, Table 2, and Appendix 2).

4. To note the net DSG forecast of £4.6m overspend, the actions being taken to seek to address this and the potential implications for the GF (Section 7 and Table 3).

5. To note the forecast budget savings position in 2020/21 which indicates that 50% (£8.3m) may not be achieved. (Section 8, Table 4, and Appendix 3). This is incorporated in the GF budget pressures addressed in recommendation 3.1 above.

6. To approve the proposed budget adjustments and virements to the capital programme as set out in Table 5 and Appendix 4 and note the forecast expenditure of £251.5m in 2020/21 which equates to 43% of the revised capital budget (Section 9, Table 5 and Appendix 4).

7. To approve the budget virements as set out in Appendix 5.

8. To note the debt write-offs approved in Quarter 4 2019/20 (Appendix 6).

9. To approve the Council’s income recovery practices, operative from 1 October 2020, following the temporary changes made since April of this year (Section 10).

10. To approve the approach to providing assistance to the Bernie Grant Arts Centre, as set out in section 6.17.6.

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. This is made more critically important than ever as a result of the severe financial duress placed on the Council by the Covid-19 crisis.

COVID-19 affects everything local authorities do – as community leaders, public health authorities, education authorities, employers, partners, and service deliverers. The Leader, Cabinet and its officers continue to need to focus on responding to the crisis while ensuring normal critical services are provided.

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.