Agenda and minutes

1.1  None.

2.1  No urgent items and the order of business is as per the agenda.

3.1  No declarations of interest.

4.1  Minutes of the meeting held on 18^th January 2016 were agreed.

4.2  Matters Arising

4.2.1  Members requested for the Assistant Director ICT to return to the Commission (G&R) in April 2016 with an update on the ICT transformation projects. 

This is scheduled in the work programme.

4.2.2  Chair’s Action to write to the Cabinet Member for Finance and Corporate Director Finance and Resources to inform them about the start of Budget Scrutiny Task Groups.

This action was completed.  The correspondence was sent on 10^th February 2016.  The Chair is awaiting a response.

5.1  The Chair welcomed Ian Williams, Corporate Director Finance and Resources and Councillor Geoff Taylor, Cabinet Member for Finance from London Borough of Hackney (LBH) to the meeting. 

5.2  The PowerPoint presentation about the budget was circulated to Member prior to the meeting.

5.3  The key points highlighted from the presentation were:

5.3.1  The Council has made no material cuts to frontline services.

5.3.2  The cost pressures are homelessness, welfare reform, no resources to public funds (NRPF), pay award, London living wage, care costs, bedroom tax and right to buy.  The Council continues to manage the pressures outlined above on its budget.

5.3.3  Council’s budget has been reduced by £130 million.

5.3.4  The Council’s capital investment programme is extensive and the Council’s strategic acquisition approach is adding value.

5.3.5  The Housing Revenue Account continues to be impacted by the benefit cap reduction (to £23k) and the introduction of Universal Credit.

5.3.6  The Council is expected to come in on budget for 2015/16.

5.3.7  The Government are offering a 4 year funding allocation in return for efficiency plans.  Local authorities have until 14 October 2016 to accept the offer.

5.3.8  Change in the Revenue Support Grant (RSG) distribution methodology aims to help more grant dependent authorities.

5.3.9  Council tax changes – no council tax freeze grant.  The council tax referendum limit stays at (2%) and introduction of the social care “precept” of 2% for council tax. This is expected to raise £55m in 2016/17 for London and a cumulative total of c.£560m by 2020.  There is an assumption of council tax growth.

5.3.10  Significant shift from previous regime of capping and freeze grants.

5.3.11  The “Core Spending Power" has been cut by 9% (England 8%) this includes Better Care Fund (BCF) and New Homes Bonus (NHB). 

5.3.12  Transition grant (following final settlement) of £300m in first 2 years of spending review period nationally (£26m for London) – however it is unclear how this will be calculated.

5.3.13  For 2016/17 the visible top slices and transfers in are:

•  £1.275bn for NHB.

•  £20m for Rural Services Delivery Grant.  The total grant increased to £65m in the final settlement, however it is unclear whether the extra £45m is top-sliced or new money – Hackney Council has been lobbying on this.

•  £50 million top slice for the safety net.

•  Care Act funding £308m.

•  Extra funding for flooding £10m + £1.9m Sustainable Urban Drainage System (SuDS)

•  2015-16 Council Tax Freeze Grant £115m.

•  2015-16 Efficiency Support Grant.

•  £129m Local Welfare Provision (LWP) funding.

5.3.14  Members were shown a chart highlighting the spending reductions for each local authority tier.  This demonstrated how it varied over time.

5.3.15  Significant changes to spending power has and will be:

•  There are assumptions of a 1.75% average council tax increase each year as well as all eligible social care authorities taking up the 2% social care precept.

•  There is an assumption the tax base will grow at the same rate as  ...  view the full minutes text for item 5.

6.1  The Chair welcomed Councillor Geoff Taylor Cabinet Member for Finance from London Borough of Hackney (LBH) Cabinet Question Time. 

6.2  The Chair recapped on the questions submitted in advance to the Cabinet Member for Finance for discussion:

6.2.1  Council Finance

1  What is the prospect for the Council's finances in light of a more positive local government grant settlement for 2016/17?  Has the council’s finances reached crisis point? Do difficult decisions need to be made about service provision or radical service change?

2  What are the recent trends in council tax and debt collection rates and how is the council balancing the need to collect with the need to support those who are struggling to pay, particularly in light of welfare reform and other pressures?

3  Does the Council have a good understanding of the future risks and opportunities presented by changes in land values to the capital programme and the council's overall financial position?

4  In relation to the Discretionary Housing Payment budget and the financial pressure being placed on the Council by Temporary Accommodation - how sustainable is this, what more we can do, and what is the potential impact on other services?

6.2.2  Ethical investment - in particular pension investment (consistent with the Council being a fair trade borough).

5  In relation to the Council’s pension investments, the Commission wishes to understand how much latitude the Pensions Committee has in directing the focus of its investment considering its fiduciary duty to pension fund members?  The Commission enquires if the Council’s fair trade status is at odds with its pension fund investments and has it considered divesting from non-fair trade investments? 

6.2.3  Procurement

6  How does the Council ensure its procurement process supports local small businesses? 

6.3  Questions, Answers and Discussions

6.3.1  The discussion commenced with the Cabinet Member for Finance’s response to each question.

6.3.2  In response to question 1 the Cabinet Member for Finance notified Members the financial position had slightly changed.  The funding gap had reduced to £58 million from £60 million.  In relation to Members query about if the council’s finances had reached crisis point.  The Cabinet Member advised his definition of a crisis was a state of panic.  LBH was not in a state of panic. 

The Budget Scrutiny Task Groups looked at proposals for savings that would have an impact on residents.  The Council has reached the point whereby hard decisions will need to be made.  The council’s aim is to ensure the decisions made are right ones, in tandem the council will still be making efficiencies and generating income.  As funding continues to reduce the Council has reached the point where it will need to consider making changes to frontline services.  The ability to continue making efficiencies from back office alone was limited and changes to frontline service provision will need to be considered.  It was pointed out that changes like Universal Credit are likely to involve radical service change.

  i.  Members enquired if the council was moving from back  ...  view the full minutes text for item 6.

7.1  The Chair informed the Commission about the confirmed speakers for the devolution discussion on 16^th March 2016.  The members of the Health in Hackney Scrutiny commission have been invited to this meeting.

7.2  Members were reminded that the G&R Commission was invited to the Health in Hackney Scrutiny Commission meeting on 11^th April 2016 to explore the interim governance arrangements for the health and social care devolution pilot.  The two scrutiny commissions are working collaboratively to share information from discussion about devolution.

7.3  Members reviewed the discussion items scheduled for April 2016 and agreed to move the following items to the new municipal year:

·  ICT Transformation Projects Update

·  Devolution discussion about Employment and skills.

8.1  None.