Verbal Update from the Director of Finance.
Minutes:
The update began by outlining the progress made since the last meeting in November regarding the budget and the Medium-Term Financial Strategy (MTFS). The speaker highlighted that the next steps and expectations for the meeting on the 30th were also addressed.
An update was provided on the provisional local government finance settlement, with a focus on the additional funding received.A key topic was the application for exceptional financial support submitted before Christmas. This application, made due to deadlines and potential risks, would be reviewed, and the outcome would be shared during the meeting on the 30th. The Committee was reminded that the work on the budget remained ongoing, with various elements being continuously adjusted. While there had been some positive funding updates, there were also increased demand pressures. Additionally, the speaker explained that the assurance on savings had not only focused on new savings for 2025-2026 but also on previously approved savings. A review was being conducted to determine which savings could still be delivered and which ones might no longer be achievable.
Regarding the settlement, it was noted that the government had also published a consultation on funding reforms for 2026-2027. The speaker emphasized the importance of participating in the consultation, as it would be evidence-based, and the deadline for submission was set for February 19th.The exceptional financial support application was revisited, clarifying that while the government would review the application, the goal was to avoid needing to draw on this support. The Committee was informed that the outcome of the application would not be known until the end of February, and if required, it would allow the council to set a balanced budget. There was an emphasis on minimizing reliance on such support to avoid long-term borrowing costs.
In closing, the Committee was reassured that significant efforts were underway to minimize any reliance on exceptional financial support for the 2025-2026 budget. The work continued to ensure the budget was as realistic and achievable as possible, with a draft budget report expected next week. The speaker concluded by inviting any questions from the Committee.
It was noted that this was the first time in the council's history that exceptional financial support had been requested. While the additional one-off funding of £2.925 million was seen as a positive development, concerns were raised regarding the pressures faced, particularly due to the high number of residents in private sector accommodation, which was significantly higher than other areas. Haringey had 40% of households in private sector accommodation, contributing to the growing demand for temporary housing. The borough was praised for its success in preventing homelessness, but the rising pressures were acknowledged as part of broader challenges faced by local authorities.
The discussion highlighted the importance of the 2026-2027 funding reform consultation, with a focus on ensuring that funding distribution addressed the actual needs of areas like Haringey. Despite the additional funding, the council's financial pressures were not fully alleviated, particularly in social care sectors, where rising costs and fragility in the sector were significant concerns.
It was confirmed that the assumptions used in forecasting pressures were under review, especially regarding the impact of National Insurance increases. While the council was still waiting for final confirmation on funding for National Insurance increases for direct employees, the budget assumed a 3.5% average increase across social care contracts. Given the uncertainty surrounding the National Insurance increase, work was being done to factor in potential inflation, particularly in the adult social care sector. There was also a need to address the fragility of social care services, and the risks associated with funding allocations that had yet to be confirmed. The council aimed to set a realistic budget while managing the ongoing uncertainties and risks.
RESOLVED:
The verbal update was noted by the Committee.