Agenda item

To consider and make recommendations to Cabinet on the draft budget

2025/26 and the Medium Term Financial Strategy 2025/30.

The Chair stated that, according to Haringey Council’s constitution, anything related to scrutinizing the annual budget needed to be chaired by a member of the opposition group. The chairing of the meeting was handed over to the Vice Chair, Councillor Connor.

 

The Chair referred to Appendix 1 on page 85, which outlined the 2025-2026 forecast budget pressures, focusing on overspending. It was noted that The Director of Finance had kindly agreed to skip straight to the appendices. The Chair then indicated that the discussion would focus on sections related to culture, strategy, engagement, and overview and scrutiny, with an exception for a specific item under environmental resident experience, which would be addressed later.

 

Appendix 1: Forecast Budget Pressures

 

Digital Services (Culture, Strategy & Engagement):

 

The digital services budget had shown an overspend of £454,000. There had also been additional budget impacts related to digital services throughout the budget discussion. The digital transformation had included planned savings of £200,000 for 2025-2026, followed by £2 million in 2026-2027. Additionally, there had been a capital allocation of £1.9 million for memory-related costs. The Chair had sought clarification on how these various budget items aligned with the overall digital services strategy and had looked to Jess Crowe, Director of Culture, Strategy & Engagement, for further explanation.It was explained the digital services team had been working to modernize and transform the department over the past year, with a focus on making it more structured and efficient. The aim had been to move from a service primarily managing contracts to one that could develop in-house systems and programs. This transformation was necessary because previous efforts had failed to fully analyse the service, leading to redundant packages being procured across different departments.

 

The budget pressure for digital services was forecasted at £545,000, with the need for savings amounting to £2 million in 2026-27. In 2025-26, the target savings were set at £200,000. Despite this, an overspend was already anticipated. Jess Crowe explained that the pressures were mainly due to a major restructuring in digital services, including redundancy costs. Additional challenges stemmed from the incomplete digital transformation, which had yet to be fully implemented due to a lack of in-house expertise. However, the team had begun addressing these issues by hiring the necessary personnel and establishing systems to better track savings.

 

A roadmap was being developed to outline future savings targets, including potential reductions in staffing and savings on printing and postage. Individual roadmaps for different services, such as digital access for adults and children, and further automation in various services, were also being worked on.

Additionally, ongoing investments were required to maintain essential IT infrastructure, particularly in cybersecurity and licensing, which presented a pressure for the next year. These infrastructure investments were necessary to ensure the council remained secure while continuing its digital transformation. The complexities of the digital service strategy were reflected in various sections of the budget.

 

Concerns were raised about ongoing pressures related to technological updates, particularly cybersecurity, and the potential for new pressures in the following years. Questions were asked regarding the realism of the savings targets, with £200,000 for the next year and £2 million for the year after, considering the need for continual technological investments.

 

In response, it was acknowledged that while these were significant changes, there was confidence in achieving the savings. Key factors contributing to this confidence included the completion of work on building the council’s infrastructure and understanding how all systems interacted. This allowed for identifying areas where unnecessary systems could be eliminated, such as reducing the need for separate cybersecurity protection systems by utilizing existing core systems like Microsoft.

 

Additionally, the council had built an internal team of developers with the flexibility to improve the entire system architecture, which would support long-term savings. The fact that other councils had successfully undergone similar digital transformations, despite facing even more challenging savings targets, further supported confidence in achieving the targets. It was emphasized that strong governance and careful decision-making were crucial in avoiding unnecessary system purchases. By sticking to core platforms and making informed decisions through boards like the Enterprise Architecture Board and the Technical Design Authority, the council would be able to track and control its technology investments effectively. The overall progress and plans would be shared with members in the new year.

 

Recommendation: That this item be referred to the Cabinet as an area of concern due to the risk of further future pressures that could be caused by the need for unforeseen technological updates or cyber-security measures.

The Committee also noted that this was an area where future savings were also proposed.

 

Human Resources (Culture, Strategy & Engagement):

 

The next item under discussion was human resources, specifically the additional cost of Disclosure and Barring Service (DBS) checks, which resulted in a full cost budget pressure of £74,000. There were no questions regarding this issue.

 

Housing Benefit (Environment and Resident Experience):

 

The discussion focused on a significant pressure of £3.5 million related to housing benefits, which fell under the portfolio of Councillor Chandwani. She explained that the council administers housing benefits on behalf of the government. In most cases, the council reimburses landlords for the exact amount paid to tenants. However, in cases of supported exempt accommodation provided by non-residential social landlords, such as companies or charities, the council only recovers 60% of the cost and must cover the remaining 40%. This created a budget pressure, especially since the cost for supported exempt accommodation can range from £500 to £700 per week per person. The pressure arose from the number of tenants in such accommodation, which was not provided by residential social landlords.

 

Part of the £3.5 million pressure on housing benefits was attributed to several factors. This included a specific case that was currently under investigation. The issue arose because the Department for Work and Pensions (DWP) believed the council may have wrongfully paid someone. If this is confirmed, the council would not receive the 60% reimbursement for supported exempt accommodation from the DWP.

 

It was stated the significant portion of the pressure, approximately £1.6 to £1.7 million, stemmed from cases where charities or Community Interest Companies (CICs) were involved, as the DWP only reimbursed 60% of the costs. There was also a projected 10% annual growth in cases, with around 3,650 live cases being processed.

 

Additionally, the council had undertaken a detailed review of claims to eliminate improper or potentially fraudulent claims. While stopping fraud was positive, it worsened the financial position as the DWP would not reimburse fraudulent claims.

 

Other contributors included overpayments that exceeded the DWP's coverage threshold, for which the council was liable. The pressure also accounted for bad debt provisions, especially as individuals transitioned from housing benefit to Universal Credit, impacting the recovery of overpayments. These four factors combined to create the £3.5 million pressure.

 

Recommendation: The Committee noted that the description for this item in the agenda papers had been very limited and that a detailed conversation had been required in the meeting in order to understand it. The Committee recommended that significantly more detail should be included in future budget report, particularly for items such as this that involve significant sums of money.

 

Appendix 2: Proposed Savings

 

 

Cross Council Savings:

 

The initial focus was on the first four savings areas: the enabling services review, procurement and contract management, staffing efficiencies, and income generation. Together, these savings total £13 million of the £19 million proposed across the council. These savings are crucial for building a balanced budget for the year. Given that responsibility for these savings falls across all Cabinet members and senior leadership, the question was raised about how to ensure these savings are effectively delivered and who would take responsibility for them.

 

The savings were substantial because they impact significant budgets. For instance, staffing proposals affect a £116 million staffing budget, making the savings targets reasonable. The enabling services review focused on identifying staffing needs within the corporate centre, while a 5% reduction in staffing will be managed by directorates, allowing flexibility in how savings are achieved (e.g., holding vacancies, reducing agency costs). In procurement and contract management, there is confidence that savings can be found, and further details were to be provided by relevant officers. The importance of strengthening the delivery and tracking of savings moving forward was emphasised, beyond what is currently reported in the quarterly monitoring. The goal was to enhance future reporting. These cross-cutting savings were presented collectively in the report.

 

It was acknowledged that there wasn't a robust plan in place at the time for delivering the £250,000 savings target, which led to questions about how the £3 million savings could be achieved. It was stated the Council were committed to finding ways to mitigate the £250,000 shortfall in the current year and reassured that efforts for the £3 million target were still on track.

 

Regarding the general fund, a budget of £600 million was presented, with over £400 million allocated to third-party spending and contracts. The proposed savings represented less than 1% of this expenditure. A more detailed review of contracts, including renewals, would be conducted, based on a newly established contract register.

 

Rather than making speculative assumptions, the approach would focus on concrete evidence, and a pipeline of upcoming projects would be developed. This would involve scrutinizing existing contracts for duplication and managing this through a new procurement board. The speaker assured that by January, a more solid plan would be in place to support the savings, with progress to be monitored ahead of the balanced budget recommendation to Cabinet in February.

 

It was queried whether the detailed savings plan, which was being sent to Directors for delivery in 5% increments, would be subject to scrutiny by the Overview and Scrutiny Committee and individual Panels. There was a concern about ensuring that staffing changes, such as reducing agency staff or vacancies, would not negatively impact service delivery or staff morale. The importance of scrutinizing these changes, especially regarding the potential impact on team workloads and job satisfaction, was emphasized.

 

In response, it was clarified that while the savings included management actions such as reducing agency spend, any potential negative impact on service delivery would be reported to the Scrutiny Panel. Each directorate had specific savings targets, with a combination of management actions and savings to be tracked. If the changes affected service delivery, it would be raised for scrutiny, while management actions like agency cost reductions would not necessarily require scrutiny unless they directly impacted services.

 

Further assurance was provided regarding the processes for delivering these savings, particularly in HR, which would support any necessary restructures. Directors were asked to submit their plans for achieving the 5% savings, which HR would use to plan resources and avoid bottlenecks. A session would be organized for senior managers to ensure they understood the restructuring process. In addition to restructures, HR would assist in reviewing staffing budgets, vacancy factors, and potential savings from staffing levels, ensuring that these adjustments would be genuine savings and not just budget cushions.

Lastly, HR would provide guidance on optimizing management structures and workload distribution to ensure the right balance across teams. This comprehensive approach aimed to manage changes effectively while minimizing disruption and ensuring that all savings were delivered.

 

It was asked whether any income generation efforts could help address the financial pressures, and examples of such efforts would be useful. A specific question was raised regarding the projected savings of £13.5 million for 2025/26 and £4.4 million for 2026/27. It was wondered if these figures were realistic or if they were rough estimates, with more detailed proposals expected later.

 

In response, it was acknowledged that while the focus had primarily been on achieving a balanced budget for 2025/26, future years, especially after 2026/27, would face additional funding changes that needed to be considered. Although some savings had been documented with reasonable assurance, it was expected that additional savings, particularly across various departments, would emerge in future years. However, the work to quantify savings for 2026/27 had not yet been completed, which meant the figures for that year were not fully reliable at this point.

 

Regarding income generation, half a million pounds had been identified with evidence of work underway to explore further income opportunities across services. More potential income generation was anticipated in the future, but no specific figures were included in the budget at this stage until further work was done. An updated figure might be available in January, or it could be included as part of the 2026/27 budget if further analysis was required.

 

The savings initiative was set to impact various departments, with the project being divided into two workstreams. The first workstream focused on reviewing existing contracts to assess whether they provided value for money. The review included both external contracts, such as those for housing repairs and other service-related contracts, as well as contracts for more specialized services, like those supporting women fleeing domestic violence or children with disabilities. These specialized services often required more resources to deliver.

 

The approach aimed to examine all procurement activities, addressing issues like long-standing contracts with organizations, where the original signatories were no longer with the council, and the terms of these contracts were unclear. In some cases, there were duplications, where multiple organizations provided similar services under separate contracts. Given the council’s financial situation, it was crucial to review all contracts, even smaller ones, which had often not received the same level of scrutiny as larger contracts. This thorough examination was intended to identify inefficiencies, duplications, and opportunities for cost-saving

 

The council was not necessarily losing substantial amounts of money over the years, but the focus was on identifying inefficiencies and duplication in procurement. The goal was to ensure that contracts were not being unnecessarily duplicated, which could be streamlined for cost savings. The issue was not about money leaking due to lax management, but rather about closely examining every contract to assess whether it was still necessary and whether costs could be reduced.

 

Regarding the proposed savings, the question arose about whether additional personnel would be needed to scrutinize contracts and implement improvements, as this was expected to be a complex and technical process requiring expertise. The need for more staff to carry out this work was raised, along with a request for further details in January.

 

Recommendation - The Committee noted that the four items discussed under cross-Council savings totalled over £13m for 2025/26 which was a large proportion of overall savings proposed. However, the descriptions for these items in the agenda papers had been very limited. The Committee requested that a more detailed report on these items be provided at the Overview & Scrutiny Committee meeting in 2025/26. In particular, it was requested that this should include details on how future contracts could be improved and the governance structures to support this on a longer-term basis.

 

Recommendation – The Committee noted that consideration would need to be given on how these savings were monitored by Scrutiny during 2025/26, including whether or not this should be carried out by individual Panels via a breakdown of savings on a service-by-service basis. 

 

Service Specific Savings – Culture, Strategy & Engagement

 

Digital Transformation:

 

It was questioned whether it was feasible to deliver an effective digital service for less than a third of the current cost. The response clarified that the proposal involved savings of £2 million next year and £2 million in future years, but these savings came from the total digital spend across the council, not just the £6 million held by digital services. The core digital systems were part of that £6 million, but other services across the council also had separate digital budgets.

It was suggested that a note or a clearer breakdown of the figures would have been helpful for better understanding. No further questions were raised on digital transformation.

 

Recommendation: The Committee requested that further information be provided in future on the tracking of these savings, noting that an approach would need to be in place in order to quantify how digital transformation was resulting in specific reductions in spending across the Council.

 

Culture Review:

 

A question was raised about the proposed £25,000 savings for the culture budget, which appeared to be related to libraries. The response clarified that the savings were aimed at discretionary budgets used to fund Jackson's Lane, Alexandra Palace, and the Bernie Grant Arts Centre, which received grants to cover their core costs. Due to financial challenges, the council was unable to continue funding these grants at the same level and was in active negotiations with the three centres to help them secure alternative funding sources.

 

Recommendation: It was requested that, in the future, any specific funding allocated to organisations be itemised in the budget scrutiny report. This would help clarify which funds would be applied earlier or later, allowing for a better understanding of the proposals.

 

New Local Membership:

 

A £20,000 allocation was proposed for a new local think tank. The think tank was a membership organisation with various local authorities and other groups as members, providing access to policy advice. The policy team is small, so this resource was considered useful but not essential. The entire funding for this was ultimately removed.

 

Resident Survey:

 

It was raised whether the resident survey is conducted annually. In response to the query, it was stated the resident survey was not conducted annually, but every three years. The cost was roughly £70,000 to £75,000, with an annual provision of £25,000 saved up over the years to fund it. The proposal was to remove this budget, meaning that if the Council wished to conduct another survey in three years, it would need to submit a one-off growth bid for the funding, rather than having an annual provision in place. The survey was scheduled for this year, but future surveys would require a decision from the members.

 

The council previously used a proprietary VPN for security but planned to transition to a Microsoft VPN. There were concerns about whether the new system would be as secure. Nathan explained that both systems were effective, with the Microsoft VPN now bundled into the Microsoft package and used by several London boroughs. The change was driven by the expiration of the current contract and the cost-effectiveness of the Microsoft option. The Committee was provided with assurance that proper assessments would be conducted to ensure it met cybersecurity needs and confirmed that they were consulting other boroughs, including Waltham Forest, which had already adopted the system.

 

Registrars:

 

There was uncertainty about why the proposed savings were listed in relation to the increased fees. It was clarified that this was not a savings initiative, but rather an income increase. The increase in fees for registrars was due to a raised fee level, and no additional action was required. The forecast was based on the current level of business, with the expectation that the fee increase would result in a boost in income.

 

Reduction in housing benefit accommodation costs:

 

A savings proposal of £200,000 was discussed for 2025-26, with a focus on developing a new team. Cllr Worrell expressed concerns that the measures might result in more people rough sleeping highlighting the risk that with fewer people being deemed eligible for support and accommodation, there could be an increase in rough sleeping, especially for those who previously had access to emergency accommodation. While she acknowledged the need to make savings, she remained concerned about the potential impact on vulnerable individuals.

 

The discussion focused on concerns over the current accommodation arrangements, where a property was being charged £500 per week for rooms that should only cost £150. The providers claimed to be offering support to vulnerable residents, such as assistance with cooking and literacy, but were unable to provide evidence of such services. This was considered fraudulent behaviour, and it was emphasized that vulnerable people were being exploited. Additionally, some residents were unknowingly claiming supported accommodation, thinking they were just receiving housing benefits.

 

The focus was on ensuring that people were not being exploited, even while the council worked to save money. The importance of protecting the public purse was highlighted, with the savings expected to result in long-term financial benefits for the council. However, it was stressed that this action was about addressing fraud, not simply saving money, and it would ultimately help find appropriate housing for those in need.

 

Leisure Service:

 

The means testing for leisure services was introduced, with a proposed £200,000 savings. The new system would replace blanket discounts for customers aged 65 and over, offering discounts to disabled young people and those on low incomes instead. Further clarification was sought on how means testing would work in practice.

 

The implementation of means testing for leisure service discounts was discussed, with the opportunity to review the borough's concessions now that leisure services were brought in-house on October 1st. It was noted that these concessions had not been reviewed for 17 years, and there was a need to make the system fairer and simpler. The process would involve engaging with residents to understand what concessions should be offered, as well as benchmarking with other boroughs, both those with in-house services and those using private providers.

 

The plan was to begin this engagement in the new year, focusing on identifying groups that would benefit most from the concessions. These included children and young people, as well as residents who had previously left the services, likely due to poor service under the previous provider. Additionally, a commitment was made to prioritize vulnerable residents and ensure that those with long-term health conditions received adequate support through partnerships with the NHS and social prescribing.

 

Concerns were raised about the complexity of means testing, particularly regarding the documentation required, and the challenge of ensuring that vulnerable people would still engage with the process. There was also a request for further clarification on the target groups for discounts and the financial backing for the proposed £200,000 savings. It was suggested that further details on the strategy, co-design process, and the means testing system would be helpful as the project progressed.

 

The broader health and well-being strategy was also discussed, aligning with the council’s efforts to reduce health inequalities and promote physical activity. It was highlighted that the engagement process would involve reaching out to established user groups and those who had previously expressed interest in participating, ensuring a wide range of feedback for the new system.

 

The discussion highlighted concerns over the complexity of pricing at leisure centres, specifically regarding varying prices for different groups. It was suggested that the pricing system needed simplification, ensuring that a junior swim, for example, was offered at one price for all juniors, rather than being categorized into multiple subgroups. The aim was to make the system fairer and simpler.

 

There were estimates made for budget savings, but the specifics of the savings, particularly for the year 2025/26, were not yet finalized. The co-design process with residents was emphasized as a key factor in determining how the discounts would be structured. It was acknowledged that some groups, like asylum seekers, might need support but wouldn't necessarily qualify for traditional means-tested benefits. A careful engagement process would be essential to ensure all relevant groups were included in the plan.

 

Regarding the timeline, concerns were raised about achieving the proposed savings while consultations were still underway. It was noted that the savings would likely be spread over three years, not just one, as indicated in an earlier document error. The budget savings for 2025/26 would be around £50,000, with further profiling dependent on the results of the engagement process. The process would involve working with affected individuals, especially those potentially losing concessions, to ensure a fair and smooth transition.

 

The committee acknowledged the proposed adjustments to the budget and the ongoing consultation with residents, noting that clearer details on the discounts and eligible groups would be provided in the future.

 

Recommendation: Further information to be provided to the Committee when available on the discounts that would be provided and the groups that would be eligible for these.

 

Range of Management actions from the main Overview and Scrutiny Committee and the Climate, Community and Culture Scrutiny Panel:

 

The review of the Council Tax Reduction Scheme (CTRS) aimed at identifying potential savings of £2,000,000 was discussed. A consultancy company, Policy and Practice, was hired to assist with the review. They had experience working with several London boroughs and others outside the city. The goal was to make the scheme more flexible, as it was previously very rigid, with eligibility based strictly on means-testing. The review aimed to ensure support for those in the greatest financial need, regardless of their category. Another key objective was to protect individuals who were unable to work, while also addressing those who were working but still receiving CTRS benefits.

 

The process was acknowledged to be challenging, as it involved potentially making cuts to welfare benefits. However, it was noted that there were individuals in the borough who were still being charged 20% of their council tax, despite not having sufficient income. Some households, despite having additional income sources, still received 100% CTRS due to previous decisions. One example given was the current exemption for anyone classified as low-income. The review was necessary to reassess and potentially adjust these provisions.

 

The proposal for the Council Tax Reduction Scheme (CTRS) was the same as the one put forward last year and was already included in the medium-term financial strategy. It reflected work done this year as part of a review to prepare for the policy and practice review, which resulted in an in-year saving of £2,000,000. This saving was achieved through a range of measures, including identifying individuals who were receiving council tax support when they shouldn't have been, as well as identifying other opportunities for recovery.

 

The work that was originally planned for the following year (2026/2027) was still going to take place, but the £2,000,000 saving had already been realized earlier than expected. This was due to the review of the CTRS, which led to a correction of overpayments made to around 1,000 residents who had been receiving more support than they were entitled to. This correction began in April of the current year, resulting in the early delivery of the £2,000,000 saving. Once the cost of the scheme was reduced by this amount, it would remain at that level, with no further accumulations in subsequent years. The savings were not a reprofiling but rather an outcome of a separate review of the CTRS.

 

The £2,000,000 savings achieved in the current year were not reflected in the 2024/2025 budget. Therefore, the £2,000,000 savings for 2025/2026 were essentially a continuation of the early savings made in 2024/2025, as the budget had not been adjusted for them. The additional savings from the policy and practice work will be realized in 2026/2027, but these figures were not included in the current paper as the policy and practice review is still pending.

 

Recommendation: That a written explanation of the Review of the Council Tax Reduction Scheme be provided to the Committee. As part of the information to be provided, reassurance was sought by the Committee regarding individuals affected by the changes, ensuring they wouldn't fall into further debt or arrears during the process.

 

Appendix 3 – Proposed changes to Capital programme

 

The proposed reductions to Alexandra Palace, amounting to just over £1.5 million, were set for implementation in 2026/27. A question was raised about whether this decision had been made solely by the Council or in collaboration with the Trust. It was clarified that the reduction resulted from negotiations with Alexandra Palace regarding the profiling of capital work, and it was a joint decision, not unilateral.

 

The committee requested additional information from Alexandra Palace about their plans, as well as more details on the £1.9 million digital capital programme.

 

Recommendation: For further information to be provided to the Committee on the proposed reduction to the capital budget on Alexandra Palace, including the view on this of the Alexandra Park and Palace Charitable Trust.

 

Recommendation: For further information to be provided to the Committee on the proposed reduction to the capital support for digital solutions.

 

Next, a budget saving of £236,000 was noted for a one-off reduction related to the move of Broadwater Farm Leisure refurbishment to the HRA. It was explained that this was an accounting adjustment, reducing the general fund capital programme and increasing the HRA capital programme, but with no overall impact on the total council budget.

 

A budget reduction of £75,000 was proposed, raising questions about what it specifically entailed, particularly regarding festival and Christmas tree lighting. It was clarified that the £75,000 usually formed part of the capital programme for street lighting, which totals around £1 million. The plan was to seek external funding to cover this £75,000.

 

A proposal was made for a £300,000 investment in replacing parks and housing machinery over five years, starting in 2025-26. The program aimed to replace aging equipment, including tractors and blowers, which were causing increased downtime and higher repair costs. The plan also included transitioning smaller equipment to battery-powered versions, which would reduce noise, pollution, and vibration, benefiting both performance and staff well-being.

 

This initiative was part of an ongoing strategy to reduce equipment hire costs, with a pre-existing saving already built into the medium-term financial strategy. The new budget proposal focused specifically on purchasing machinery rather than continuing to hire it.

 

It was also noted that the capital programme had shifted to a more consistent, rolling approach, with the recognition that machinery replacement would always be an ongoing need, thus requiring long-term budgeting rather than one-time annual allocations.

 

Cllr Connor noted that three large capital items, which had been considered at other Scrutiny Panels, would also be considered by the Overview & Scrutiny Committee at its meeting in January as the Committee’s remit included oversight of high-profile/cross-cutting issues.

Recommendation: For details of the capital items on Osborne Grove, Wards Corner and decentralised energy networks to be included in the business of the Committee meeting on 20^th January 2025. 

 

It was suggested that a motion needed to be carried to decide whether item 10 could be addressed after 10:00 or deferred to the December meeting. The decision was to defer, but it was important to agree that the current item could continue, and that discretion would be allowed regarding whether to address the next agenda item which was agreed by the Committee.

 

Reassurance was sought that officers would be present at the December meeting, including Directors, services, and possibly Cabinet members, as the discussions would involve specific areas. A commitment was requested from all parties to attend the meeting, with the understanding that if that couldn't be guaranteed, it would be necessary to ensure the right people were present to provide the required information.

 

RESOLVED: That the Savings Tracker 2024/25 and the update from the Director of Finance on the Budget be deferred to the next meeting.