Financial Monitoring Report
- Meeting of Policy and Performance Scrutiny Committee, Thursday, 20th October, 2022 7.30 pm (Item 44.)
Paul Clarke, Director of Finance, and Cllr Ward, Executive Member for Finance, Planning and Performance, presented the report. It was noted that the primary financial challenge was the £21.7m overspend associated with energy inflation, demographic pressures and other factors.
The following main points were noted in the discussion:
· The Committee asked about the council’s long term energy purchasing strategy and if the council would be joining a Public Buying Organisation (PBO). In response, it was advised that the council was seeking to join a PBO for up to two financial years; longer term options would be assessed with reference to advice from the council’s energy consultants.
· With regard to the increased cost of purchasing energy, the committee noted that the council was in a difficult position and faced challenging consequences as a result. It was asked what lessons had been learned from the situation and what would the council’s risk management strategy be going forwards. In response, it was advised that the Energy Team would be requested to provide a briefing note.
· It was queried if other London boroughs were facing the same scale of financial challenge to the increase in energy costs. In response, it was advised that the increased cost of energy was a significant financial issue for many organisations, however the council did not have comparative data on the energy purchasing arrangements or baseline energy usage of other boroughs. Officers across London were discussing how best to respond to the energy crisis. The Committee commented that it was important to consider such issues at a pan-London level, and would welcome information on what other London boroughs are doing to mitigate against the increase in energy costs.
· The Committee discussed the impact of increased energy prices for those on communal heating systems, and expressed concerns about residents being unable to pay bills. In response, it was advised that the council’s financial planning factored in an element of uncollected debt. There were services to support residents experiencing hardship, including SHINE and the Income Maximisation Team. It was commented that the IMAX team were able to attend Ward Partnership meetings on request.
· On the increased cost of borrowing, it was advised that capital projects already underway were largely unaffected, however this may be a factor in allocating budgets to future projects.
· In relation to the upcoming decision on the Forward Plan on parking fees and charges, it was queried if the new fees and charges model would fully cover the cost of providing the Parking service, or if the service would be subsidised through other income. It was advised that a response would be sent after the meeting.
· In response to a question, it was advised that the council was exploring the further use of e-cargo bikes as an alternative to cars and vans. This had environmental benefits, and would reduce spend on the cost of fuel.
· In relation to children’s centre occupancy data at Figure 9 of the report, members asked for more information on why occupancy rates were falling. An update from the service was requested.
· Members asked for further information on the cost pressures faced by Islington Lettings, details of how many people were in the scheme, and the impact of the revised arrangements on residents.
· Members noted the overspend in Fairer Together included cost pressure to deal with complaints effectively and efficiently. Members requested details of what actions are being taken to resolve the complaints backlog, and how the recruitment and retention issues detailed in the report would be resolved. In response, officers advised that work was underway across the organisation to reduce overtime payments where possible. An update would be requested from the service.
· The Committee requested an update on spend on agency and interim staff; including details of which posts are filled by agency and interim staff, and why.
· The council had an ambitious new build programme and the committee queried the impact of budget slippage on previously agreed targets for building new homes. In response, it was advised that project spend typically caught-up towards the end of the financial year. The Committee queried if improvements in project management could result in spend being more evenly spread throughout the financial year, and asked if further information from the Capital Programme team could be reported to the committee. The Executive Member for Finance, Planning and Performance acknowledged the ambitious scale of the capital programme and the challenges of the current financial context.
· The Committee queried previously agreed savings that were now considered to be undeliverable. The Committee requested a summary of those savings, with analysis of why they could not be delivered. It was suggested that this would help to inform the budget setting process for 2023/24.
· The Committee asked for an update on the outcomes of the Consultation on the In-House Transformation Programme.
That the budget monitoring report be noted.
As detailed above, the
Committee requested further information on:
· Lessons learned from the increased cost of energy, and the ongoing risk management strategy;
· The funding arrangements of the parking service, with reference to proposed changes to fees and charges;
· The reasons why children’s centre occupancy rates were falling;
· The cost pressures faced by Islington Lettings;
· Actions being taken to resolve the complaints backlog, and how recruitment and retention issues in Fairer Together would be resolved;
· Spend on agency and interim staff;
· Which previously agreed savings were now considered undeliverable;
· The outcomes of the consultation on the Adult Social Care In-House Transformation Programme.
- PPS 20.10.22 Covering Report - M5 Monitoring Report 2022-23, item 44. PDF 221 KB
- Month 5 22-23 Budget Monitoring Report (1), item 44. PDF 879 KB
- Appendix 1_2022-23 Key Variances_Month 5, item 44. PDF 82 KB
- Appendix 2_Transformation Fund Allocations, item 44. PDF 51 KB
- Appendix 3_Capital Appendix 2022-23, item 44. PDF 106 KB