Agenda item

To consider the report on the Council’s financial position at the end of Quarter 1 of 2026/27.

The report included with this item was first published as part of the agenda papers for the Cabinet meeting on 15^th September 2026.

Attendees for this item were:

·       Cllr Johann Beckford, Cabinet Member for Finance & Corporate Services

·       Taryn Eves, Corporate Director of Finance & Resources and S151 Officer

·       Josephine Lyseight, Director of Finance and Deputy S151 Officer

·       Ann Graham, Corporate Director of Children’s Services

·       Jess Crowe, Corporate Director of Culture, Strategy & Communities

·       Laura Crouch, Head of Active Wellbeing

Cllr Johann Beckford introduced the report for this item and highlighted the following key points:

• The Council was now forecast to spend £374.8m in 2026/27 which was £21.7m above what had been budgeted for in March 2026.
• Much of this overspend resulted from base budget pressures but the report also highlighted savings required to meet the savings targets.
• On General Fund capital spending, the Quarter 1 forecast spend for the year was £234.4m against the budget of £344.49m.
• On Housing Revenue Account capital spending, the Quarter 1 forecast spend for the year was £310.7m against the budget of £376.9m.
• There was an additional overspend of £8.4m in the Dedicated Schools Grant (DSG) forecast which was largely caused by higher than expected SEND pressures.
• There was an overspend of £3.478m in the Housing Revenue Account (HRA), mainly due to temporary accommodation costs.
• There were therefore several areas where improvement was required before the end of the financial year to bring these back to the original budget position.

Taryn Eves then added the following points:

• As a Q1 report, this represented a very early forecast of the financial position at the year end and was based on a series of assumptions, many of which related to the large demand-led services. These were difficult to predict at this early stage and so the forecasts would be kept under review and were monitored by officers on a monthly basis.
• Of the overall £21.7m overspend, a total of £10.4m was across services and £6.3m at the corporate level. The £21.7m position was based on the figure before the application of the remaining corporate contingency which could be used to offset overspend.
• There would be a deeper review at the Q2 report of the treasury management side, including investment income and interest costs.
• There was a significant underspend on both capital budgets and the record of forecasting in this area was not good. A fundamental review of the existing capital programme was being carried out.
• The collection of council tax and business rates was above target (by 0.5% and 1.1% respectively), although the target had been reduced to 92.5% for the current year. It was possible that the target could be increased for the following year’s budget.
• The level of write-offs was included in the last section of the report. All but one of these was below £50k. The total write-off for the quarter was £2.1m of which 46% related to parking.

Cllr Beckford and Taryn Eves then responded to questions from the Committee:

• Cllr Jenner requested further explanation about the level of confidence to get the overspend back on track and what measures would be put in place. Taryn Eves responded that:

o   In previous years, it had not been uncommon to take a pessimistic view at the Q1 stage because of the potential demand on statutory services, but that the position often improved by year end.

o   In forecasting, the aim was to avoid these swings, but it was also important to be open about the risks and pressures.

o   All services were considering actions that they could take to bring themselves back into balance by year end. These would be efficiency savings and financial controls at this stage as any service reductions would need to go through a formal governance process.

o   The EFS requirement for 2026/27 was just over £84m so, with the forecast overspend, this figure would reach at least £104m if nothing changed.

o   The figures showed that the projections at the start of the year had not been quite right, particularly for demand-led services, but it was not realistically possible for these forecasts to be 100% accurate. Every local authority carried significant risk when setting a budget and the corporate contingency had been increased to £25m this year to mitigate this.

• Speaking about the situation relating to Children’s Services, Ann Graham, Corporate Director of Children’s Services, explained that:

o   Numbers for children in care had been steadily decreasing in recent years, with 428 children in care in 2018 compared to around 300 now.

o   However, services were experiencing an increase in complexity and therefore also unit costs and more expensive residential placements.

o   Age and disabilities were also factors relevant to cost.

o   Services were demand-led and needed to be provided even when the budget had reached its limit.

o   In her view, delivering high-quality services was cost-effective as otherwise there were likely to be issues such as a high turnover of social workers with delays and disruption to cases. Poorer outcomes also then led to increased demand for other services including adult social care services in the future.

o   She considered that the governance processes and reviews of cases were robust and strong but was happy for these to be scrutinised further as continual improvement was always needed.

o   She noted that private equity firms were behind some services providing placements and that unit costs had increased considerably when compared to the previous year in some cohorts. She noted that there were forthcoming government reforms designed to make change in this area and this issue could be explored in more detail at the Children & Young People’s Scrutiny Panel. (ACTION)

• Asked by Cllr das Neves about the Department for Education’s Safety Valve programme and approach to schools funding, Ann Graham said that:

o   She was pleased to hear about the additional funding for teachers that had recently been announced and hoped that this would mean that the National Education Union would no longer be going ahead with their strike ballot.

o   While Safety Valve had not been received positively nationally, it had worked well in Haringey with a successful transformation plan and considerable financial savings.

o   There had also been a more positive inspection outcome for SEND in 2025 when compared to 2021. Haringey was now a low-cost service which was a benchmark of high-performing services.

o   While the ending of the Safety Valve programme had changed the goalposts, there was now the introduction of local SEND reform plans. The Haringey plan was submitted in the summer with the funding outcome letter expected soon. If the plan was approved then this would mean a potential payment of £9.339m against a current deficit of £12.702m, meaning a revised deficit of £3.363m.

• Cllr Jenner asked Cllr Beckford about his reflections on the 2026/27 budget, given that he had not been part of the original process for setting this. Cllr Beckford:

o   Expressed concern about the potential for the EFS requirement to exceed £100m but acknowledged the difficulties with making accurate projections, particularly in light of global events which impacted on factors such as inflation and interest rates.

o   Noted that savings delivery in recent years had been around 60-70% which represented a significant challenge, despite the considerable efforts of officers to achieve these. He wanted to ensure that confidence in savings delivery was as high as possible before being translated into specific plans.

o   Emphasised the importance of prevention measures that would deliver a positive impact future years. This medium-term outlook therefore needed to be central to everything that the Council did.

o   Supported the previous comments from the Corporate Director for Children’s Services about the rising unit costs and potential national changes in this area, adding that the Council needed to be involved with those conversations.

• Cllr Gray queried whether savings could be made if residents could be given the option of paying their Council Tax in a lump sum at the beginning of the financial year. Taryn Eves said that she believed that this was already an option but would need to check this. She would also take away the suggestion that greater incentives to do so might save money. (ACTION)
• Cllr Gray requested further details on the large savings required on corporate budgets, including the dependence on digital transformation to deliver these.

o   Cllr Beckford commented that it was easier for departments to deliver savings when they had direct control over delivery, whereas cross-cutting savings lacked direct ownership in the same way which created additional challenges. He also acknowledged that a lot more work was required in the area of digital transformation.

o   Taryn Eves explained that the overspend in this area was due to the non-delivery of cross-cutting savings which was led by herself and Jess Crowe (Corporate Director of Culture, Strategy & Communities) but required accountability and ownership across the organisation.

o   Taryn Eves noted that two large areas were service modernisation and procurement/commissioning which had not been successful last year and so changes had been put in place. It was also recognised that additional resources and capacity may be required to implement cross-cutting savings effectively.

o   Jess Crowe explained that she was responsible for the enabling services review which looked at how back-office services could be provided in a cost-effective way. These services included Human Resources, Legal, Procurement, Project Management and Business Support. There were some complexities with this, but progress was being made and some efficiencies and vacant posts which could be reduced had been identified.

• Asked by Cllr Gray about the potential for savings through joint procurement with other boroughs:

o   Taryn Eves said that a lot of work was underway in relation to contracts and commissioning arrangements. There was a commissioning modernisation programme and a new commissioning panel that looked at contracts worth over £160k and examined aims, needs and evidence. It also aimed to ensure that services had considered all options including shared services and joint procurement.

o   Cllr Beckford added that it was right to exhaust every possibility and that he was in favour of trying to insource services where possible. He also felt that joint service provision could be useful, particularly when there were lead Boroughs in London with particular areas of expertise in working with providers. This required longer-term structural measures to make insourcing and joint service provision more achievable.

• Cllr Small asked for further explanation of the risk of commissioners coming into the Council and the likelihood of this happening given the Quarter 1 position. Taryn Eves explained that commissioners may come into a local authority for many different reasons. As the Council was in the third year of EFS, it was being monitored on whether it was doing everything it could to improve financial sustainability and had the right governance and processes in place. In addition, the CIPFA review was nearing completion. She emphasised the importance of the Council establishing appropriate measures itself rather than this being done later by commissioners and this was why more stringent internal financial controls had recently been implemented. The transformational funding was a good sign that there was confidence in Haringey being able to do things differently. However, the growing extent of the EFS requirement represented a potential trigger point. 
• Asked by Cllr Small about the policy approach from Cabinet to deal with the fiscal situation, Cllr Beckford said that conversations included the situation with EFS, the broader picture, competing pressures and the central goal of keeping members in control of the Council to serve the needs of residents. The policy priorities of the administration would be set out in further detail in due course by the new CDP.
• Cllr Small suggested that the government required the Council to demonstrate financial discipline more than financial sustainability because discipline led to less waste whereas sustainability was not necessarily possible if resources were insufficient. Taryn Eves agreed that sustainability was not quite the right way to describe this as it implied that EFS would no longer be required. However, the Council’s current aim was to improve the financial position and reduce reliance on EFS. It was important to be open and transparent about pressures which were also being experienced by other local authorities.
• Cllr Cawley-Harrison requested that an invest-to-save tracker be included in future reports so that the Committee could monitor projects. (ACTION)
• Cllr Cawley-Harrison suggested that savings in one area to offset unachieved savings in another area should be clear in reports and not referred to an ‘mitigations’ if they were independent from one another. (ACTION)
• Cllr Cawley-Harrison requested that the terms of reference and reports from the newly established Finance Recovery Board should be provided to the Committee. (ACTION)
• Cllr Cawley-Harrison queried whether the 5% staffing reduction objective for departments was still relevant as it was not targeted and suggested that restructuring should be reconsidered. Taryn Eves responded that the bulk of money spent by the Council was on staffing and contracts and so this was where savings needed to be made. How to achieve the 5% staffing savings target was left to Corporate Directors to decide and, in most services, it was possible to achieve just by holding vacancies. She felt that the target remained relevant as staffing reductions were essential to improving the financial situation and this approach enabled each service to have flexibility on how to achieve this. She added that in some areas, income generation could be increased by having more staff which further underlined why flexibility was needed.
• Cllr Cawley-Harrison asked about the knock-on impact on service delivery caused by the delays to digital modernisation and accountability for this. He suggested that specific areas should be prioritised for digital modernisation with additional resource brought in where necessary. Cllr das Neves added that there was a question about the visibility of organisational cost and impact of such changes. Taryn Eves said that:

o   She was responsible for leading the organisation in this area and achieving savings through more efficient ways of working.

o   The programme had been established 18-24 months previously with targets allocated to individual directorates. Further reductions had been identified in 2025/26 but these were held corporately. There would be a conversation as part of the budget setting process on where savings were held.

o   The current priority focus was on customer services, whereas earlier in the programme the focus had been on adult social services and housing.

o   The Council had an issue with ageing infrastructure with a lot of time and resource used on replacing essential infrastructure. This limited the capacity to carry out real digital transformation.

• Cllr Cawley-Harrison expressed concern about the bottleneck involved with digital transformation and competing services. He suggested that all services should be able to provide a business case with delivery within four years with minimal use of Council resources. He added that EFS was originally designed as an invest-to-save resource to enable transformation and deliver more savings. He also proposed that a Transformation Director should be brought in with the skills to deliver a transformation plan for every service and to bring certain services together.
• Cllr Cawley-Harrison highlighted a particular concern about under-delivery in certain areas which was increasing annual costs. He cited slower housing acquisitions as an example of this as greater resources to invest in this would result in larger savings.
• Cllr das Neves felt that the new CDP should include change and transformation as some areas had not been approached any differently than they had for a long time.
• Cllr Cawley-Harrison referred to wellbeing and climate pressure of £1.3m under Environment & Resident Experience and requested further explanation on part of this being due to the review and update of lease arrangements.

o   Taryn Eves explained that this had not progressed as quickly as hoped. Around 60 property-related interventions had been identified across the leisure estate. There were challenges across commercial and operation property and the services were working together on this, although it had taken longer than hoped.

o   Taryn Eves added that capacity was focussed on areas of greatest impact and current activity was mainly on Tottenham Green Leisure Centre and Park Road. Issues included long-standing and complex lease arrangements which took a significant amount of time to deliver and this was one cause of the income shortfall.

o   Laura Crouch, Head of Active Wellbeing, explained that the leases were connected to the income received and so, when the leases were properly in place, the income streams were more stable. Her team was working closely with the property team to make sure there were solid leases to achieve maximum income.

o   It was suggested that the detail of this could be explored further by the Housing, Planning & Development Scrutiny Panel. (ACTION) Cllr das Neves added that some future conversations on this may need to involve the Overview & Scrutiny Committee due to the cross-cutting elements.

• Cllr Cawley-Harrison requested further details on delays and under-delivery against revenue targets on the corporate property strategy. He expressed concerns that some of these projects were not achieving the intended long-term impact. Due to shortage of time, it was agreed that this would be followed up at a later meeting or in writing. (ACTION)
• Cllr das Neves suggested that a further discussion was required on the mitigation of risk issues such as the housing inspectorate and the Care Quality Commission (CQC). She also suggested that there could be further discussion on the recovery of income and issues around resident experience.