Agenda item

Cabinet Member: Leader of the Council, Councillor Hamida Ali

Cabinet Member for Croydon Renewal, Councillor Stuart King

Officer: Interim Director of Finance, Investment & Risk, Chris Buss

Key decision: no

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

RESOLVED: To recommend to Full Council that it note that the Statutory Chief Finance officer is of the view that following the receipt of the Capitalisation Directions for 2020/1 and 2021/22 that the previously issued letter under section 114 of the Local Government Finance Act 1988, no longer applies as the Council has sufficient resources to meet likely revenue costs in 2020/1 and has a balanced budget for 2021/22.

The Leader of the Council (Councillor Hamida Ali) noted that the report did not contain any recommendations for Cabinet to approve but requested that Cabinet recommend to Council to note the report. The report contained the Interim Section 151 Officer’s (Chris Buss) opinion that following the agreement for two capitalisation directions that the Section 114 Notice be lifted.

It was stressed that the budget earlier in March 2021 had been based on retaining some of the controls the council had put in place as part of the Section 114 Notice; in particular the Spending Control Panel; which would support the council in meeting its budget. There were notable exceptions to the controls which had been outlined within the paper.

The Leader highlighted that the report reminded Members that the capitalisation directions, and the opinion that the Section 114 Notice could be lifted, were both conditional on meeting the terms of the capitalisation direction; which was to achieve the identified savings and deliver the budget. Should those conditions not be met, the Interim Section 151 Officer stated within his report that a new Section 114 Notice would likely be required.

The Cabinet Member for Croydon Renewal (Councillor Stuart King) highlighted that it was essential that the Spending Control Panel conditions remained in place and that this was a position which both Members and officers agreed was integral to delivering the budget. Paragraph 3.6 of the report was brought to Members attention which stated that the Interim Section 151 Officer was clear that it was of the utmost importance that the council met the conditions of the capitalisation direction, including greater financial rigour and discipline.

The Cabinet Member for Culture & Regeneration (Councillor Oliver Lewis) welcomed the lifting of the Section 114 Notice and the continued financial discipline with which the Administration sought to enable the council to conduct its business.

It was noted by the Cabinet Member for Resources & Financial Governance (Councillor Callton Young) that the council had come a long way since the initial days of the Section 114 Notice but that it was integral that spending controls remained in place to support delivery for Croydon. It was stressed by the Cabinet Member that the Administration was committed to keeping those controls in place.

The Cabinet Member for Sustainable Croydon (Councillor Muhammad Ali) reiterated that the lifting of the Section 114 Notice was an important milestone in the recovery of the council but that the milestone should not take away from the importance of rigour and financial resilience which was required in the coming year. Concerns were raised that the council would need to continue to manage the economic uncertainty in response to Covid-19; as such, it was stressed that financial resilience was integral to ensure the council continued on the road to recovery.  

It was highlighted by the Cabinet Member for Children, Young & Learning that the majority of spend within local government, and Croydon, was around social care. Work was continuing within the council in terms of commissioning intentions to ensure that the right amount was being paid and the right level of service was being provided. Benchmarking with neighbouring boroughs was being undertaken to understand the right levels of service and cost of packages whilst ensuring the most vulnerable in the borough continued to be protected.

The Shadow Cabinet Member for Homes & Gateway Services (Councillor Lynne Hale) noted that while the report was an important and welcome step in the right direction in the recovery of the council; the letter from the Improvement & Assurance Panel to the Secretary of State in February 2021 stated that there was more to do for the council to become a properly functioning local authority. The Shadow Cabinet Member queried what the realistic timeframe was for the council to be a properly functioning local authority once more.

In response, the Leader of the Council noted that the previous five months had been spent reflecting on the issues originally raised within the Report in the Public Interest as well as other reviews and in preparing the Croydon Renewal Improvement Plan which would enable the council to set a budget. Alongside the budget, the Leader highlighted that the Medium Term Financial Strategy (MTFS) had been agreed which ran until March 2024. The Administration, it was stated, was working to fully stabilise the council’s finances and to live within its means, but that it was understood by all that it would take more than a year to achieve that goal. Whilst much of the work had been done to identify savings within the MTFS, it was recognised that more work was required and further savings needed to be identified, along with an overall cultural change.

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

RESOLVED: To recommend to Full Council that it note that the Statutory Chief Finance officer is of the view that following the receipt of the Capitalisation Directions for 2020/21 and 2021/22 that the previously issued letter under section 114 of the Local Government Finance Act 1988, no longer applies as the Council has sufficient resources to meet likely revenue costs in 2020/1 and has a balanced budget for 2021/22.