Agenda item

This report updates the Committee on the Council’s Draft Statement of Accounts 2022/23.

Mr Kaycee Ikegwu, Head of Finance (Housing and Chief Accountant), presented the item.

•     A query was raised regarding page 68 of the agenda papers which appeared to indicate that the HRA section had a net expenditure of in 2022 compared to net income in 2023 and it was not clear why there was such a large difference. The meeting heard that the table displayed on that page only shows the net cost of services provided. However, to understand the accounts better, the HRA section provided a clearer picture of the two years as it highlights adjustments between accounting basis and funding basis. HRA was a balanced account. The way that the Council set up its HRA is such that should balance at the end of the period. Within the balancing of the account, there was a listed revenue contribution to capital usually called HRA ‘surplus’ and there was always an expectation of a revenue contribution which was used to fund the capital programme. If the HRA was unable to generate this revenue contributions, then there would be an issue with the HRA viability The Council had set a minimum of £8 million year on year. If one was to examine the budget set and the HRA plans that were brought every year to Cabinet, it would show that it ensured that the borough maintained a minimum of £8 million. This provided financial resilience. If there were changes in the interest rate, the Council would be able to react because it had a larger cushion. The contribution would go back into funding capital programmes.

•    Members queried a report that had been submitted to Cabinet which had stated that the Council’s reserves were lower than average and queried what the plans were to improve upon it. In response, the meeting heard that, in relation to other boroughs, the Council reserves was in midpoint (it was not as high as some boroughs, but not as low as other boroughs). Every year, the Council tried to maintain a reasonable reserve. It must be noted that doing so was difficult at present time. Part of the Project Fortnight Programme was to look at the Council’s position and come up with ideas on how it will improve its financial position. This was an ongoing process through different service areas. The Council was doing a lot to ensure that, at the very least, it was able to maintain the reserves that it had. The borough did not take too many risks and often found alternative solutions when required. Details of what the Council was doing would come as part of the paper scheduled to be presented to Cabinet in December 2023.

•  A query was raised regarding debtors for local taxation and how this would be expected to increase. Members enquired as to how this could be better managed.  In response, the meeting heard that measures were being sought to improve debt collection as a whole going forward. The effect of the income had been built into the current MTFS projections.

•  Members enquired about page 58 of the agenda papers which contained part of the narrative report and enquired about the apparent inconsistencies regarding increases and decreases.  In response, the meeting heard that the report was highlighting that the net increase in asset is as a result of increases in values of assets and decrease in long and short term of which the net effect was an overall increase.  It was agreed that the presentation of tis needed to be reviewed. 

•  Members noted that the index which examined multiple deprivation was important to consider. It was important to move away from the thinking that the deprived areas were all in Tottenham as there was an implication about how the Council viewed the borough as a whole. It was important to bear in mind that areas around Wood Green were are of high multiple deprivation and very similar to other areas in Tottenham. For example, there were people who had been moved into hostels in Muswell Hill. It was important to take consideration when considering the narrative of the east of the borough against the narrative of the west of the borough.

•  The meeting enquired regarding overpayments, such as for housing benefit (HB) (£26 million) and parking (£24 million) and enquired how the overpayments that had been made would be addressed. In response, the meeting heard that HB overpayment arose based on various reasons. The overpayments were considered as a debt as some residents were overpaid and the Council would seek to collect the money from subsequent payments. This was why it appeared in the report as a debt. The was some acknowledgment that the debt may not be recovered. Directors were aware of the problem and work was being done on the issue to ensure overpayments did not occur. Further information could be provided to the Committee at a future meeting. 

RESOLVED:

To note the contents of the report and the appended Draft Statement of Accounts.