Question time with the Cabinet Member for Finance and Resources, Councillor Simon Hall.
The Cabinet Member for Finance and Resources, Councillor Simon Hall, was in attendance at the meeting to provide the Committee with an update on his Portfolio and answer questions arising.
During the course of the presentation, the following points were noted:-
· It was highlighted that Croydon had lost three quarters of its funding from central government since the start of austerity in 2010. The General Fund balance had remained stable over the past 5 years and was actually showing a percentage increase due to budgetary control over that time period. In comparison to other London authorities the level of reserves held by the Council was relatively low and as such required careful management.
· From the 2018-2019 accounts there had been a revenue overspend of £5,466m, with this mainly attributed to an overspend on support for unaccompanied asylum seeking children (UASC) and a growing demand for high needs educational services.
· For the 2020-2021 budget a funding gap of £12.5m had been identified which was being addressed through ‘sprint sessions’ taking a detailed look at specific areas of the budget to identify areas of either saving or growth. A key driver of these sessions was to develop realistic options that did not lead to unintended consequences further down the line. Due to a lack of clarity from central government over funding there was a greater level of uncertainty in the budget than would usually be expected.
· From the recently announced Government Spending Review it would appear that cuts to grants were stopping and in some areas such as public health there would be a modest increase. The Adult Social Care precept had been extended and there would also be additional funding for Special Educational Needs provision. As the Business Rate Retention Scheme had ended in London, but continued across the rest of the country, it was hoped that the decision for London may be reversed.
· Electoral Services were currently running the annual canvass with a 57% response rate to date and 74% of electors matched. Home visits to non-responding properties would begin in October. There was a total of 267,776 electors in the borough, 8.7% of which were European Union nationals.
· The Polling District and Polling Place Review had been completed with a report due to be considered by Council later in the year, however significant change was not expected. The Electoral Services team had started preparations for the possibility of a General Election with staff being put on stand-by, contact being made with polling stations and the main contractors such as those responsible for printing.
· The new Croydon Digital Service had seen a strong start with a new culture being displayed within the team. Work undertaken so far included a seamless move to new suppliers and a website review was underway. Work had been prioritised towards those systems that would make the most difference for residents.
· A new strategy for commissioning and contract management was being implemented which included a focus on social value and local procurement as well as cost. The in-sourcing of services also continued with Special Educational Needs transport and shelter housing support being the latest services in the process of being brought back in-house.
· The second phase of the purchase of the Colonnades was in the process of being completed. Options for new commercial acquisitions had been identified and further information would be provided once any negotiations had concluded. A review was underway to ensure the best use of the Council’s estate and investments for residents.
Following the presentation the Committee were given the opportunity to question the Cabinet Member on his portfolio. The first question related to the level of reserves retained by the Council with it confirmed that approximately £3-4m would be required to ensure the target of retaining 5% of the total Revenue Budget was achieved. It was highlighted that Croydon had always had a low level of reserves, but it had been maintained at its present level for a number of years despite the ongoing austerity. The Council’s current level of reserves was within the Audit Commissions recommended level of 3 – 5% with the intention to move the level of reserves held towards 5%.
It was advised that part of the focus of the sprint sessions organised to address the projected budget shortfall would be on transforming the service offered to residents to prevent them from getting into crisis.
In response to a question about the how the budget increase for the redevelopment of Fairfield Halls had been authorised, it was advised that it was the responsibility of the Brick by Brick Board to manage the project. It was agreed that this issue would be raised at the Streets, Environment and Homes Sub-Committee meeting in January 2020 when Brick by Brick presented their annual report. It was confirmed that Brick by Brick was on track to deliver housing and a profit this year which would provide a dividend to the Council.
It was highlighted that a 3% growth in demand for Adult Social Care services was anticipated which equated to an estimated £7m growth in the cost of providing the service. The Government had recently announced £1.5b extra funding for social care, £500m of which was predicated on a 2.5% rise in Council Tax through the Adult Social Care Precept.
As it was noted that the market for selling recycled material was difficult at present, it was questioned whether this would have an impact on the Council’s budget. It was confirmed that the contract for the waste and recycling with Veolia had a formula in place to determine the level of funds that would come back to the Council from the sale of recyclable material. There was a risk for the contractor, Veolia, to manage with discussions on going through the South London Waste Partnership. As well as delivering a financial income there was significant environmental benefits from diverting waste from landfill to take into account as well.
It was confirmed that control mechanisms were in place to ensure that overspends were identified at an early stage of the budget process, allowing them to be effectively managed. This included regular budget monitoring reports going to the Cabinet each quarter as well as more frequent meetings between Cabinet Members and officers to monitor risks within their portfolios. Potential risks on key projects, including any financial risk, were also regularly reviewed.
In response to a concern raised about a specific contractor, it was advised that customer feedback was used and if any issues were identified they would be raised. It was envisioned that contract monitoring would be improved going forward through the use of technology. Social value provided by contractors was also monitored with this area being strengthened in the new Commissioning and Contract Monitoring Strategy to include elements of social value such as paying staff the London Living Wage and apprenticeships.
It was confirmed that the value of the Council’s Pension Fund was currently £1.3b and it had been performing well. It was recognised that should the markets collapse there would be an impact so steps had been taken to diversify the portfolio, the progress of which was closely monitored by the Pensions Committee.
The redesign of the Council’s website was welcomed by the Committee, with it confirmed that there would be extensive alpha and beta testing of the site before it went live in March 2020. Agreement had been reached with Brighton Council to use their website platform as the basis for the Council’s new site.
In response to a request for an update on the Council Front Door project it was advised that improvements had been identified and were in the process of being rolled out. New telephony equipment was also being procured, which along with the redesigned website would provide significant improvement for residents when interacting with the Council.
It was agreed that further information on local procurement would be provided to the Committee once the new system for managing procurement was in place. It was also agreed that further information would be provided to the Committee to demonstrate the improvements in basic service performance since the move to the new Croydon Digital Services and the new Digital Strategy.
At the conclusion of the item the Chair thanked the Cabinet Member and the officers in attendance for their engagement with the Committee.
1. An update on Local Procurement (it was agreed that this would be provided once the new system allowed)
2. Data to demonstrate the impact on basic service performance since the move to the new Croydon Digital Service and the introduction of the Digital Strategy.
Following discussion of the report, the Committee reached the following conclusions:-
1. The Committee was disappointed that a detailed report had not been provided and as such concluded that it had been difficult to reach any further clarity on the budget setting process. It was agreed that a recommendation reminding Cabinet Members of the need to provide a written report in addition to a presentation would be made.
2. It was agreed that it would be useful to request further information on spending power as well as grant funding figures in future updates from the Cabinet Member for Finance and Resources.
3. The Committee recognised that the Council was facing a number of difficult budgetary decisions in the forthcoming year.
4. The Committee noted that Brick by Brick was due to present its annual report to the Streets, Environment and Homes Sub-Committee in January, which would be an opportunity to ask the budgetary questions raised at the meeting.
The Committee RESOLVED to recommend to all Cabinet Members that a written report setting out an overview of their portfolio along with key performance data be submitted in addition to a presentation by Cabinet Members for their Question Time sessions with the Scrutiny and Overview Committee and its Sub-Committees.
The Committee RESOLVED to recommend to the Cabinet Member for Finance and Resources that information be included on spending power along with grant funding figures in future updates to the Committee.