Agenda item

To ratify the recommendations arising from the Scrutiny Panels in relation to the 2026/27 Draft Budget and MTFS 2026/31.

Cllr Connor opened the discussion on the draft 2026/27 Budget and 2026/27–2030/31 MTFS by asking for questions from the Committee:

• Referring to page 79 of the main agenda pack, Cllr Small requested clarification that 10% of the Council’s income came from Council Tax. Cllr Carlin clarified that this was not accurate and that the figures would be corrected in the forthcoming Budget reports to Cabinet and Full Council.
• Cllr Connor requested further explanation about how the forecast budget gap and capital borrowing would be addressed by the Council. Taryn Eves explained that Table 6 illustrated the position in November 2025 based on corporate assumptions but that further work had been conducted since then and the full draft budget, including updated assumptions, was in the process of being finalised. She reiterated that the Council was doing everything it could to minimise the reliance on Exceptional Financial Support (EFS), including spending controls and restrictions, but that 72% of the Council’s budget was spent on statutory services and the demand and cost of these were continuing to rise. This situation was unsustainable and so more radical changes would be required over the next two years, such as on prevention and initiatives with temporary accommodation including acquisitions to reduce reliance on bed & breakfast accommodation. Further details would be provided in the next budget report to Cabinet and Full Council.
• Cllr White referred to the structural problem with funding the Council’s services but expressed concern that some of the pressures currently being experienced were a consequence of previous cuts to services. He suggested that it may not always be the right thing to do to minimise reliance on EFS if there may be opportunities to invest-to-save that may benefit the Council’s finances in the longer term. Cllr Carlin acknowledged that wholesale transformation of the Council would be the only way out of the current situation and that this needed to include growth as well as cuts, including by maximising income from the Council’s assets and transforming the way that services were delivered over the medium-term. She agreed that short-term cuts should not be made if they would lead to additional long-term costs.
• Cllr White commented that feedback from residents often included negativity about the general maintenance of the Borough and that the savings made in recent years may have had knock-on effects to the state of mind of residents. Cllr Carlin pointed out that Haringey was one of the few Boroughs that still had a commitment to clear dumping within 24-48 hours of it being reported. She added that it was essential to reduce spend in some areas but also to have a long-term plan. Taryn Eves commented that the funding envelopes from government for the next three years was now known and, while it may not be as much as was hoped, this did provide some certainty and would assist with the thinking about the approach over this period. She added that conversations were needed with government about the root causes of the excessive demand and price pressures for statutory services, including on SEND, adult social care and temporary accommodation.
• Cllr Connor commented that there was a projection on the EFS in Table 3 of the TMSS and that the figures significantly differed from Table 6 (Cumulative Budget Gap) of the November Cabinet report in the agenda pack. As the November figures were out of date, Cllr Connor requested that an updated table be provided as an appendix to the agenda papers at this stage in future years so that the Committee was clearly able to see the most up to date information. (ACTION)
• Asked by Cllr Connor about savings, Taryn Eves noted that the new savings for the MTFS period in the draft Budget were relatively limited, but that there were around £53m of previously agreed savings to be delivered in 2025/26 and 2026/27. As set out in the Q2 2025/26 Finance Update, not all of the 2025/26 savings were on track to be delivered and so this was the main focus. She highlighted that paragraph 13.6 of the November Cabinet report, which referred to a more fundamental review of Council services, would be expanded upon in the next report to Cabinet in February. This work would be commenced shortly and could involve in-year changes, but overall this was expected to be a two-to-three year plan.
• Asked by Cllr Connor about the progress towards achieving the previously agreed savings for 2025/26 and 2026/27, Taryn Eves said that the Committee had recently seen the Q2 2025/26 update, with the Q3 update due to follow shortly. She confirmed that, although there was likely to be some improvement in the position, there would be some non-delivery of savings in 2025/26, particularly with the cross-cutting savings. An assumption was made in the forecasting that the full £53m of savings would be delivered by the end of 2026/27. She continued that, although there was still some risk associated with this, the assurance process had been tightened and the corporate contingency had been increased to better enable the management of that risk.
• Cllr White challenged the statements in paragraphs 13.6 and 13.7 of the Cabinet report which appeared to suggest that it was possible to fix the budget gap by reducing services. However, he pointed out that up to 80% of the Council’s spend was on statutory services and, while it may be possible to make efficiencies, the Council had no choice about the need to provide these services. He therefore suggested that the Council needed to explain the structural financial problem and the fundamental issue with local government funding more clearly and realistically. Taryn Eves acknowledged that the figures on the budget gap looked very challenging and noted that paragraph 13.6 referred to ‘addressing’ the budget gap rather than ‘closing’ the budget gap. However, until the work had been carried out to establish what was possible and the priorities of the new Council plan had been determined, she would not be in a position to say how much the budget gap could be reduced by. She acknowledged the challenge in Cllr White’s comment and said that she would expand on this issue further in her forthcoming Section 25 statement. Cllr Carlin reiterated the need to look at everything involved with the delivery of services and what transformation could be made as opposed to more ‘salami slicing’ cuts. Cllr Small commented that the future shape of service delivery was a matter for political scrutiny rather than a financial report. Cllr Lawton agreed with Cllr White’s point that fundamental changes to services were required. She commented that paragraphs 13.6 and 13.7 were therefore misleading as the reality was that the budget gap was very large and the way that the Council was funded did not match the services that the Council currently provided. Taryn Eves added that she had spoken at various meetings about the unsustainable nature of the budget gap and so paragraphs 13.6 and 13.7 should be considered in that context. However, she acknowledged the comments that had been made and felt that this would be reflected in the Section 25 statement.

RESOLVED – The Committee recommended that the budget reports should accurately reflect the structural financial issues faced by the Council and should make clear that the situation was now unsustainable without increased local government funding or fundamental changes to the services delivered by the Council.

The Committee then referred to Appendix 9 which summarised the draft recommendations and responses to requests for further information following the series of budget scrutiny meetings conducted by the Scrutiny Panels and the Overview & Scrutiny Committee in November and December 2025. The following amendments were agreed:

Adults & Health Scrutiny Panel

• General (EFS) – Cllr Connor noted that an extract from the TMSS had been provided but felt that this did not provide sufficient detail. OSC requested that Cabinet provide a more detailed response on the long-term sustainability of the interest payments and the capital repayments for EFS.
• General (Better Care Fund) – Cllr Connor welcomed the response received by the Committee and requested that further details be provided in relation to the BCF Support Programme for Neighbourhood Health Planning when this became available.
• Adult Social Care Charging Policy – The Committee requested further reassurance from the Cabinet on:

o   Whether further information, guidance and advocacy was available before changes start.

o   Whether reasonable adjustments were automatic rather than reactive.

o   Whether residents can appeal, pause or review these changes without any detrimental impact.

o   Whether this policy could discourage care uptake from vulnerable groups.

Culture, Community Safety & Environment Scrutiny Panel

• Leisure Commercialisation – The recommendation was that the Committee be provided with detailed figures in relation to the savings presented for Leisure Commercialisation as part of future budget monitoring reports. It was also noted that details of social value would be welcomed by the Scrutiny Panel.
• Clean Air Schools Zone – It was noted that slides on the School Streets Programme had been circulated to the Committee. Zoe Robertson, Programme Director for Wellbeing & Climate, clarified that the slides were about a different programme though the objectives were similar. The Clean Air Schools Zone was a project that had not been developed and had been removed from the capital programme which was why the details of this were limited.

Housing, Development & Planning Scrutiny Panel

• Void properties – It was noted that a response had been received on performance improvement. The Committee sought further clarification from Cabinet that, in view of the challenges faced in meeting the 1% target, whether this target was still in place? It was requested that the Cabinet comment on whether they were happy that having a 1% target was advantageous, given the challenges and the proportion of voids that were generated through the Neighbourhood Moves Scheme, and the fact that the Neighbourhood Moves scheme was being reviewed.
• Sustainability of Long Term Borrowing Costs – Following the response that had been received Cllr Small proposed a recommendation on behalf of the Housing, Development & Planning Scrutiny Panel: “The Panel notes that while the 30-year HRA business plan and model provide a long-term assessment of financial viability, it does not in itself provide a mechanism for regular member scrutiny of incremental HRA borrowing decisions or their interaction with the Council’s wider, pooled debt and treasury management arrangements.

It is recommended that Cabinet considers introducing an annual HRA debt management statement alongside the HRA budget and Capital Strategy.

The statement should summarise the Council’s risk appetite for HRA borrowing, the key prudential metrics used to assess affordability and sustainability within the HRA model, how these are informed by sector practice and relevant peer benchmarks, and the cumulative impact of HRA borrowing decisions on the Council’s overall debt position.

The Panel considers this would strengthen transparency, support effective scrutiny, and ensure alignments between HRA investment decisions and the Council’s broader capital and treasury strategies.”

Children & Young People’s Scrutiny Panel

Cllr Lawton reported that the Panel had scrutinised the proposals relating to Children’s Services and the details were set out in the minutes from the meeting. The previously agreed savings had been delivered and the Panel had been satisfied with this. A new budget pressure related to rising costs in certain areas and so no recommendation was required on this. There had been robust queries from the Panel about additional staff required to deal with subject access requests. There were invest-to-save measures on foster care allowance increases and accommodation for care leavers which the Panel was happy with.

Cllr Lawton noted that some schools were currently running a deficit and so the issue of school financing had been of particular interest to the Panel recently. The budgets were separate from the Council’s General Fund but there was still some risk to be mindful of.

There were no specific recommendations arising from the Children & Young People’s Scrutiny Panel.

Overview & Scrutiny Committee

• General (More details about savings proposals in the written reports) – Cllr Connor proposed that a Cabinet response should be requested on this recommendation.
• Independent Sounding Board – Taryn Eves reported that there would be an update on this item in the Budget report in February.
• Debt Levels – It was noted that information on the Council’s overall position on existing borrowing had not been available at the time of the budget scrutiny meetings in November but had now been provided as part of the TMSS. The Committee recommended that, in future years, the most up to date details of the Council’s overall debt levels be provided to the Overview & Scrutiny Committee as an appendix in the agenda papers at the main budget scrutiny stage in November in order to bring this in line with the information available at this point to the Audit Committee. Cllr Connor suggested that there may need to be an additional conversation outside of the meeting in order to agree on the appropriate procedure for future years and the right stage of the process for key information to be made available to the Committee. (ACTION)
• Corporate Landlord Model – Cllr Connor noted that the report explained that the corporate landlord model had exposed significant unfunded property costs including business rates, utility bills and maintenances costs. She queried the risk to buildings or services due to the increased costs. Taryn Eves explained that uncovered pressures of around £1.7m had been reported in the November Budget papers and additional work had been carried out over the past two months to develop a more accurate estimate. In addition, the revaluation of business rates would come into effect from April 2026. She added that these additional costs were not necessarily associated with risks to services but they were pressures that needed to be factored into the 2026/27 Budget. The Committee recommended that this issue be added to a future Overview & Scrutiny Committee work programme to be monitored after there had been further implementation of the corporate landlord model and there was greater clarity over the business rates issue.
• Reduce Business Saving Support – Jess Crowe, Corporate Director of Culture, Strategy & Communities, commented that Cllr Gordon (Cabinet Member for Placemaking & Local Economy) had previously informed the Committee about the new channels of communication with businesses that had recently been established including the Business Bulletin and the new Business Forum. She added that the Council would also be reviewing its Inclusive Growth Strategy as the existing version had been published a few years previously. Since then, the London Growth Plan had been published which included details of the priority economic sectors across London. The revised Inclusive Growth Strategy would aim to focus business support on priority economic sectors in the Borough and target these in the most useful way. She indicated that a further discussion could be scheduled with the Committee after the initial background work on this had been undertaken. Cllr Connor suggested that an all-Member briefing could be worthwhile given the number of Councillors with an interest in this area. (ACTION)
• Reduction in Digital Schemes – Noting that digital schemes were a significant area of spend, elements of which had been considered across the Scrutiny Panels as part of the budget process, it was recommended that this issue be added to the Committee’s future work programme to be monitored further.