Agenda item

The Panel received report which provided a Q1 Finance update for 2025/26. The report covered the position at Quarter 1 of the 2025/26 financial year including General Fund Revenue, Capital, Housing Revenue Account and Dedicated Schools Grant budgets. The forecast total revenue outturn variance for the General Fund was £34.1m comprising £24.9m base budget pressures and £9.2m non delivery of savings. The report was introduced by Kaycee Ikegwu, Head of Finance and Jahedur Rahman, Director of Housing as set out in the agenda pack at pages 43-186. The following arose as part of the discussion of this report:

1. The Panel noted the projected overspend of £11.4m in Housing Demand and the fact that this was related to Temporary Accommodation and the rising costs of Nightly Paid & B&B accommodation.
2. The Panel questioned the fact that there was a significant overspend, given the amount of scrutinising of the budget that took place last year. The Panel queried the extent to which there were contingencies built into the budgets. In response, officers advised that within the HRA there was a reserve balance, which was effectively a contingency. The guidelines suggested that this should be equivalent to 10% of annual rental income. Officers set out that Haringey’s reserve balance was set at a higher level than was set out in the guidelines, and that there was a significant contingency in place.
3. The Panel sought clarification around the reasons behind the slippage in the capital programme. In response, officers advised that 55% of the allocated capital spend was spent last year. There were two key areas where there were slippages. The first was delays to work in two major blocks, which were awaiting approval from the Building Safety Regulator. The second area of slippage related to phase 2 works coming in at an increased cost. This required external assurance around the additional cost, which caused delays.
4. The Panel queried whether there was some learning to be taken forward about factoring in delays arising from legislative changes of from the creation of a new regulatory framework. In response, officers commented that it was difficult as it depended on the body or regulator in question. The delays in this instance were caused by a lack of qualified surveyors to carry out the works. The Cabinet Member commented that it seemed as though there had been no workforce plan put in place by the government to accompany the legislative changes.
5. The Panel queried the personal financial limit that would make someone ineligible for social housing. The Panel also raised concerns about checks on ownership of foreign homes not being adequately undertaken and queried what checks were done in relation to owning a home overseas. In response, officers agreed to come back with a written response. (Action: Jahed).
6. The Panel queried the relationship between the projected £34.1m overspend and the £37m EFS loan that was secured from the government. The Panel requested clarification about where the £37m loan was reflected in the overall budget position. (Action: Corporate Finance).
7. The Panel raised concerns about the fact that the report highlighted that the £37m exceptional financial support may not be enough to cover the budget gap at year end, particularly given assurances that were provided previously on this. The Panel queried to what extent the some of the additional revenue budget pressures could be attributed to a delays in implementing the capital programme. The Panel also questioned how the projected overspend was so large at an early stage in the financial year. In response, officers commented that the Section 151 Officer was best placed to respond to questions about the size of overall projected overspend and the financial assumptions that were made as part of the overall budget. Officers commented that borrowing was seen as the last resort and that other sources of revenue would always be utilised first. Officers also stated that the position was a forecast and the £37m EFS had not been spent at this point. Assurances were given that the overall position was expected to improve by Quarter 2. 
8. The Chair commented that the overall budget position was a matter for the Overview & Scrutiny Committee and he directed members to focus their questions on the bits of the budget pertaining to housing.
9. In relation to the concerns raised about a failure to build new homes having an impact on temporary accommodation spend in the General Fund, the Cabinet Member clarified that the underspends in the capital programme related to refurbishment works, rather than TA.
10. The Panel sought clarification about the fact that the report identified that the monthly costs of TA were up 83% year on year, but that the total number of people in Nightly Paid Accommodation (NPA) was down. In response, officers clarified that there had been a reduction in private sector lease accommodation and that this had led to a knock on increase in NPA. The Director of Housing advised that the service had been targeting B&B accommodation with the aim of consolidating some of the provision and getting a reduced rate. It was commented that the service was also looking to do this with NPA in order to achieve in-year savings. In the longer term, it was commented, the Council was looking to acquire 250 properties to reduce the reliance on B&B and NPA accommodation, which were the most expensive forms of TA.
11. Officers confirmed that the numbers of NPA had increased from 1850 to 2150. Officers confirmed that the units would be used, rather than them being available if the Council needed them. The cost of NPAs had increased by 18% since the budget was agreed, the underlying cost assumption in the budget was that costs would increase by 10%. The overall numbers in B&B had reduced. Officers provided assurances that detailed financial modelling was undertaken and that this led to an increase in the corporate contingency within the budget. External assurance had been carried out on the modelling and the assessment of the modelling used was overwhelmingly positive. In addition, the service was reviewing its future forecasting on a monthly basis going forward.
12. The Chair sought clarification about the acknowledgement in the report around a key future risk relating to the legal disrepair budget of £2.7m. In response, officers advised that there had been a 20% reduction in new cases coming through. The commentary in the report reflected new legislation that was coming through and the associated risk that this could lead to a wave of new disrepair claims against the Council. 

RESOLVED

That the report was noted.