Agenda item

List of Documents:

MTFS Cover Report

Appendix A – Key lines of enquiry for budget setting

Appendix B – 2023/24 Draft Budget and 2023/2028 Medium Term Financial Strategy Report (presented to Cabinet 6^th December 2022)

Appendix C – Summary of General Fund Revenue 2022-23 Budget and Medium Term Financial Plan 2023-2028

Appendix D – 2023/24 New Revenue Growth Proposals

Appendix E – Summary of total agreed Revenue budget reduction proposals 2023-2028

Appendix F -2023/2028 Proposed Capital Programme

Appendix G – New Capital Budget Proposals 2023/24

Appendix H – MTFS Savings Tracker 2022/23-2025/26

Appendix I – Budget Scrutiny Recommendations Cover Report (To Follow)

Appendix J - Budget Scrutiny Recommendations (To Follow)

The Committee received the Council’s 2023/24 Draft Budget and 5 Year Medium Term Financial Strategy (MTFS) 2023/2028 proposals. The report was introduced by Jon Warlow, Director of Finance as set out in the agenda pack at pages 61- 174. The Cabinet Member for Finance and Local Investment, Sarah Williams was also present for this agenda item. Frances Palopoli and Josephine Lyseight from Corporate Finance were also present. As the Chair of Budget Scrutiny, Cllr Connor chaired the meeting for this agenda item. The key points of the Director of Finance’s introduction were noted as:

·         As in recent years, this budget was set in a very challenging climate for this local authority, and the UK more generally. The overspend at Quarter 2 of the current 2022/23 financial year was around £16m. A significant improvement to this position was not anticipated and the degree of challenge was not expected to lessen. The overspend was primarily related to care service areas.

·         The draft report presented to Members was prepared in December and was a best estimate in advance of the local government provisional financial statement.

·         It was commented that in light of the savings programme this year, the amount of savings not achieved at all, was not unreasonable. Some of the previous savings have been re-profiled to future years.

·         The Director of Finance advised that there was nearly £50m of additional investment in the budget, two-thirds of which was in care services. The additional net savings programme totalled around £10m. There were no new savings put forward in last year’s budget.

·         There was a circa £3m budget gap in the draft report, but this was before the local government finance settlement was released.

·         There had been reports in the media that the government had increased core spending power for local authorities by an average of 9.2%. This was 9.8% for Haringey. This core spending power was made up of the majority of income streams to the General Fund including the revenue support grant, new homes bonus, social care grants and Council Tax. The majority of this increase was predicated on increasing Council Tax by the maximum permitted of 4.99%. The draft budget had been set with an assumption of a 2.99% increase.

·         The Director of Finance advised that the main funding elements for Haringey had broadly come out as anticipated. Social care grants were higher than expected by around £10m. Of that £10m, £3.3m were specific grants, which left around £6.5m increase in the social care grant. Whilst the additional funding was welcomed, the Director cautioned that this did not even match the degree of expected increase in spending forecast in the social care area.

·         The consequences of the grant announcements would be further reflected in the February report. The final MTFS report in February would set a balanced budget, as required by law.

·         In relation to the HRA, the Committee was advised that there was a new form of rent modelled at a 7% increase, as announced by the government.

·         In relation to the DSG and schools, the Council was continuing its dialogue with the government about joining the DfE Safety Valve Programme and this was progressing as well as might be expected.

The following arose as part of the discussion of this item:

a.    The Committee sought assurances around the current budget gap and the level of reserves being used to offset this deficit. In response, officers advised that the draft budget utilised £5.5m of reserves from a reserve that was specially created for this purpose two years ago. The final MTFS report in February would set out in detail the updated position in detail following receipt of any outstanding grants. The Council was legally required to set a balanced budget and officers gave assurances that it would do so.

b.    The Committee sought clarification as to whether further announcements were expected from government that may improve the picture. In response, it was noted that there were a number of outstanding grant allocations on which the authority was waiting. The largest of these was the Public Health grant which was around £20m and it was commented that this was always announced at a late stage in the budget setting process.

c.    The Committee enquired how much additional income could be raised from Council Tax, for example how much would a 1% increase generate. In response, officers advised that a 1% increase would equate to around £1.2m.

d.    The Committee sought assurances around the additional £6.5m in social care grant, over what had been anticipated and whether this would be used to increase the base budget position. In response, officers advised that there was no direct correlation between the amount of grant received and an increase in the social care budget. The draft budget already included a number of assumptions about what has been funded and officers reiterated that the increased grant did not match the expected additional spend required in this area.

e.    The Committee sought assurances around the Safety Valve programme and requested an update on when Haringey might get a positive decision on this from DfE, given it was supposed to happen in December. In response, the Cabinet Member advised that everyone was very keen to get this formed up as soon as possible. The Cabinet Member set out that it was her understanding that the Secretary of State was looking positively on Haringey’s submission but that she didn’t have any further information at this stage.

f.     The Committee went through the table of budget recommendations, as well as the additional information that was provided in response to queries submitted by the scrutiny panels at their respective budget meetings, along with responses to queries on the Culture, Strategy and Engagement budget raised at the OSC meeting on 12^th January.

g.    In relation to saving AHC_SAV_008, Housing Demand – Targeted 1 bedroom move on project, the Committee requested that further information be supplied to the Housing, Planning and Development Scrutiny Panel on how the saving related to the spend on families living in TA. How does the £80k saving relate to 100 families, given the figures provided? (Action: Clerk/Finance).

h.    The Chair of OSC enquired whether the additional rent charged under the London Affordable Rent model could result in some residents being automatically entitled to housing benefit to meet the increased rent costs. In response, the Cabinet Member advised that LAR would only be charged on new build properties and that anyone moving into one of those properties would have a choice of whether they would like to do so. Nobody would be forced into a new set of circumstances, without their consent.

i.      The Chair of the Environment & Community Safety Scrutiny Panel requested that a written response to be provided to the Panel, in relation to the shortfall in clean-up costs from THFC match days and events and how much money the Council would like to recover from Spurs for this. This was in relation to the MTFS tracker/pre agreed saving PL20/9. (Action: Clerk/Finance).

*Clerks note – this information was provide to Cabinet and the costs vary year on year, depending on the number of matches. The estimated costs for the current year for match day cleansing are £100k. For 2023/24, it is anticipated these costs will be circa £115k.*

j.      In response to a point of clarification, the Chair of the Children’s Panel agreed that the budgetary impact of the Safety Valve programme  be included in future quarterly budget updates to the Children’s Panel, rather than OSC. (Action: Clerk).

k.    In relation to the existing capital programme, line 214 on Osborne Grove nursing home, the Committee requested a breakdown of the financial benefits expected, if the scheme went ahead. This was so that these could be shared with the co-design group, in order to elicit further engagement/buy-in from residents. (Action: Finance).   

l.      In relation to the new saving proposal CSE_SAV_002 - additional commercial advertising opportunities, officers advised that the revenue target for part of this saving from advertising on council vehicles was £30k per annum. After some discussion, the Committee voted by three votes to two, in favour of requesting that Cabinet remove the portion of the overall saving, CSE_SAV_002, that specifically related to advertising on Council fleet vehicles given the relatively low amount of money involved.

m.  The Committee requested that future budget scrutiny reports contain a  panel specific cover report, setting out the key information relevant to each panel and that the main Cabinet report be attached as an appendix. (Action: Finance).

RESOLVED

That the Committee considered and provided recommendations on the Council’s 2023/24 Draft Budget and Five Year Medium Term  Financial Strategy 2023/28.