Agenda item

Report of the Director of Finance. To be presented by the Cabinet Member for Finance and Corporate Services

The Leader of the Council introduced the report. She explained that councils across London and the country faced rises in the cost and need for social care and temporary accommodation, noting that  the cost of temporary accommodation in London had increased by 68% the previous year. It was also noted that the cost of adult social care was projected to be almost £1m higher than in quarter 2, with a rise in the number of people requiring support packages and the number of adults aged 50-64 requiring physical disability or mental health support. The cost of local public services was set to be £37.2m higher than projected the previous year.

It was explained that Haringey was a borough with high levels of deprivation and inequalities between east and west. It was explained that the Council was being ambitious for the borough and residents despite the difficult financial circumstances and that the Council worked to make the borough fairer and greener with the tools and funds that we had.

It was explained that 98% of all schools were good or outstanding, Haringey Children’s services had been graded ‘Good’ by Ofsted, and Special Educational Needs and Disabilities services had received the highest possible grading. It was explained that the priority capital investments were continuing, especially where they saved the Council revenue costs in the long run.

It was explained that the Council continued to build new council homes, creating affordable homes that residents needed and reducing the costs that unaffordable housing caused for other public services. It was explained that the Council were on the way to delivering at least 3,000 new, high-quality council homes by 2031, with more than 700 completed and 2,000 under construction. It was highlighted that the Council were planting thousands of street trees. It was additionally explained that Haringey Learns helped adults obtain the education they needed to progress, and Haringey Works, the Council’s bespoke employment support service, had assisted hundreds of residents into work.

It was noted that, for historic reasons, Haringey was considered an outer London borough for funding purposes (although inner London for statistical purposes) but had all the cost pressures of an inner London borough. It was additionally stressed that the Council had lower-than-average business rates receipts and a lower-than-average band C (rather than D) for Council Tax, which meant lower revenue for the local budget.

The Housing Revenue Account (HRA) was affected by the rising cost of repairs, the high number of voids, and the number of properties that required renovation work to address damp and mould. It was stressed that the Council’s capital programme was under constant review to reduce the revenue costs of borrowing and a number of projects had been paused. For the Council’s General Fund, it was explained that around £20m in efficiency savings had been identified and had put in place extraordinary measures to reduce spending.

Following questions from Cllrs Hakata and Emery, the following information was shared:

• Officers explained the actions that the Council had taken to reduce overspend and reduce potential risks to the Council. It was stressed that there was a high risk that the actions the Council were taking, including some one-off savings, would not have significant impact to resolve the position in the last quarter of 2024/25 and that the Council would be required to utilise some of the Exceptional Financial Support of £28 million to alleviate the funding gap. However, it was expected that actions undertaken would have significant impact for 2025/26.
  
  
• It was explained by officers that borrowing would not be undertaken unless absolutely required, and that there were other funding balances which could be utilised. However, it was stressed that any borrowing that would be undertaken would be calculated at the year end, and that the rate would not be known until the borrowing had taken place. It was stressed that the Council would not be paying a premium on borrowing, if it was utilised.
  
  
• Officers highlighted that there were contingencies to ensure that the Council would undertake a balanced budget by year end. However, it was stressed that current reserves would not cover any significant funding gaps, and that the Council would review the possibilities of undertaking some one off savings. It was explained that there was a likelihood for requiring the utilisation of the Exceptional Financial Support to maintain a balanced budget by year end.
  
  
• It was explained that the value of debt write offs in the current year were slightly higher than in previous years, noting that this was largely due to the Council having a better understanding of its current outstanding debts. It was additionally explained that the Council was undertaking an exercise to understand which debts were recoverable and which would be required to be written off.

RESOLVED:

That Cabinet:

1. Noted the forecast total revenue outturn variance for the General Fund of £37.2m comprising £29.7m base budget pressures and £7.5m non-delivery of savings delivery.
   
   
2. Approved the revenue budget virements and receipt of grants.
   
   
3. Noted the net DSG forecast of £2.6m overspend.
   
   
4. Noted the net Housing Revenue Account (HRA) forecast surplus was £5.976m, which was £2.627m lower than anticipated when the budget was set.
   
   
5. Noted the forecast General Fund and HRA Capital expenditure of £239.4m in 2024/25 (including enabling budgets), which equated to 65% of the total current programme for 2024/25.
   
   
6. Approved the proposed budget adjustments and virements to the capital programme.
   
   
7. Noted the debt write-offs approved in Quarter 3 2024/25, which had been approved by the Director of Finance under delegated authority, or for those above £50,000, by the Cabinet Member for Finance as set out in the Constitution.
   
   
8. Approved the creation of a new capital scheme titled “Tottenham Parks” with a budget of £1.5m funded from reducing the budget for Down Lane Park.

Reasons for Decision

A strong financial management framework, including oversight by Members and senior management, was an essential part of delivering the council’s priorities as set out in the Corporate Delivery Plan and to meet its statutory duties. This was made more critically important than ever because of the uncertainties surrounding the Council’s uncertain and challenging financial position, which was impacted by Government funding, high demand for services, particularly for the most vulnerable, and the wider economic outlook.

Alternative Options Considered

The report of the management of the Council’s financial resources was 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 had therefore been considered.