Agenda item

For the Committee to scrutinise the proposed 2020-21 Council budget.

The Committee considered a report, introduced by the Cabinet Member for Finance and Resources, Councillor Simon Hall, which set out the Administration’s budget proposals for 2020-21. During the introduction to the report the following points were noted:-

·         It was a challenging environment for the local government finance, with continuing austerity and uncertainty over the longer term funding from central government beyond 2020-21 making it difficult to plan financially.

·         The Council will receive a £1,000,000 increase to its grant, which equates to a real term cut when balanced against the ending of the London Business Rates pilot.

·         Despite cross party support across the Council, the cost for supporting Unaccompanied Asylum Seeking Children (UASC) had not been addressed and was costing the Council £9,000,000 each year due to a shortfall in funding from the Home Office.

·         Protecting front line services continued to be a priority in the budget which a focus on new, innovative digital ways of work to deliver improvements for residents.

·         Through sound financial management the budget for 2020-21 increases the contingency and also looks to invest £5,000,000 in to Council reserves, along with continued investment over the next few years.

·         The budget looks to ensure that services are delivered efficiently through partnership and localities based work. Funding will also be sought from partners in areas where there is considered to be an imbalance.

·         Work will start in the next few weeks on monitoring both the budget and the action required to deliver the budget.

Following the introduction by the Cabinet Member, the Committee was given the opportunity to ask questions on the information provided.

The Committee learnt that although there had been periods in the past when the support provided by the Council for unaccompanied asylum seeking children (UASC) had been fully funded by the Home Office, due to the way funding was currently administered that was not presently the case and had not been for a number of years. However, the fact that there was cross party support on the Council and from the local MPs on this issue would help to make the case for fair funding for Croydon. Recent conversations with the government about UASC funding had been encouraging, leading to optimism that the current funding shortfall of approximately £9,000,000 per year would be addressed.

The Committee gave consideration to the fees and charges for Council services, noting that there would be an increase to pay and display parking charges for the first time in a number of years, with care being taken to ensure these increases were fair and equitable. The full year effect of implementing the emissions based charging for residents parking permits and increased Building Control charges had also been factored into the budget.

The Committee questioned whether there would be any contract variations with the Council’s waste collection providers, Veolia, and learnt that there had been an increase in the cost of the contract of £2,500,000 which had been factored into the budget. The cost had increased due to the growth in the number of properties in the borough and also other contractual issues that had been resolved following negotiations through the South London Waste Partnership.

The Committee questioned the priorities used when setting the capital programme for 2020-21, with it advised that it was focussed on areas outlined in both the Labour Party Manifesto and the Corporate Plan. These included asset investment particularly the provision of new housing, ensuring that the requisite school places were available including the provision of a new Special Educational Needs (SEN) school in New Addington and renewing facilities such as roads and investing in sustainability.

The Committee learned that there continued to be uncertainty over the Government’s plans for fair funding for local authorities, which meant it was challenging to plan for the longer term. Once there was additional clarity, an updated Medium Term Financial Strategy would be produced.  It was hoped that the outcome from the Fair Funding Review would be positive for Croydon given that the current level of funding provided was based on out of date census data which was no longer reflective of the borough.

In response to a request for clarity about the focus on high risk and high spend services, it was advised that these were predominately people focussed services such as Adults and Children Social Care and SEN Transport, which were demand driven and as such required additional focus to manage potential risks. Monitoring of these service would focus on both what was being delivered and how it was delivered.

As there had been different programmes aimed at delivering savings over a number of years it was questioned whether these had achieved their targets. It was advised that recent efficiency programmes had achieved significant savings for the Council and had also freed up floor space in Bernard Weatherill House which had been used to deliver a rental income of £4,000,000 per year. The savings delivered had been in the region of £10,000,000, which had enabled the level of reserves to be maintained, unlike many other local authorities.

As there had been an increasing amount of partnership working between the Council and Croydon Health Service NHS Trust over the past few years, the Committee questioned whether it was likely that there would be increasing amounts of partnership working going forward. In response it was highlighted that the One Croydon Alliance had been successful in delivering better outcomes for over 65’s in the borough and saving money, as such it was likely to lead more opportunities in this area. These included plans being developed to expand the One Croydon Alliance to all age care and the recent creation of the Health and Care Board which would see even closer integration between health and social care. In doing this it was essential to ensure that savings were shared across health and social care and as such negotiations were underway with health to address the current imbalance.

The Committee welcomed the inclusion in the budget for 2020-21 of £5,000,000 being added to the Council’s reserves to address concern about the current level which was perceived to be low. However it was acknowledged that the budget would need to be carefully managed throughout the year to ensure that it could be achieved.

As the budget included savings within Children Services, the Committee questioned how this would be managed without service delivery being negatively affected. Reassurance was given that none of the savings identified within the Children Service would involve any of the permanent staff and a range of performance indicators would be used to ensure any savings did not undermine service delivery.

The Committee asked the Council’s Section 151 Officer whether the budget proposed met the requirements for a sound budget. It was confirmed that this was the case, although it was highlighted that there would be a need for continual monitoring of the budget throughout the year along with the agility to respond quickly to any challenges as they arose and address accordingly.

The Committee also sought reassurance that the budget monitoring process would be improved to ensure that issues were quickly responded to and managed appropriately during the year, lessening the need to find in-year savings. It was confirmed that extra resource would be put into finance, including business analytics, to ensure that effective monthly monitoring could take place and forecasting was more accurate. A greater level of monitoring would also be put places in the previously mentioned high risk areas, looking at underlying actions as well as headline budgets.

At the conclusion of the item the Chair thanked both the Cabinet Member and the Section 151 Officer for their attendance at the meeting and their engagement with the questions of the Committee.

Conclusions

At the conclusion of the item the Committee reached the following conclusions:-

1. That the Council was continuing to face significant pressure on its budget position.
2. Supported the proposed increase in balance which will help manage financial uncertainty.
3. That the Council’s ability to accurately forecast and monitor the delivery of required savings would be crucial to achieving the budget in the 2020/21 financial year.

Recommendation

The Committee agreed to recommend to the Cabinet Member for Finance and Resources that an update on the bedding in of the Council’s new financial monitoring systems be provided in September 2020.