Agenda item

RESOLVED to note the impact of COVID 19 on the financial position of the Council

5.2  The Chair stated the contribution of the Audit Committee in assessing risk, measuring performance management and performance, ensuing that the Council is achieving value for money. Questions to be asked at this time included whether the Council was setting clear objectives and accounting for and using its resources. Is there an understanding as far as possible of the medium and long term implications of Covid 19. Is the Council planning appropriately for these and are Council Departments examining the new risks.  

5.2  Rob Miller referred to the fact that consideration had been given to how the council’s governance arrangements were working during the crisis, given the importance of having effective control and democratic oversight. The Councils Management Team and other senior managers were meeting regularly, providing for a clarity of oversight, linking into Cabinet and the newly established Cabinet Sub-Group, ensuring cabinet oversight. The focus was on key thematic, collaborative working across services around the needs of residents, including focusing on such areas, as vulnerable people, accelerating discharge from hospitals, working with rough sleepers. This was carried out at pace.

5.3  Meetings were being held with trade unions to have a combined response, with a joint statement sent to all staff.  Rob Miller referred to staff anxiety in the crisis.  Collaborative work with partners was particularly important in providing social care. He said that the focus was on maintaining key services where possible, referring to effective collaborative work in keeping parks open. New services had been created including to provide food to the isolated.

5.4  Rob Miller referred the Committee to initiatives around:

·  Single management arrangements

·  Home based working

·  Web chat

·  Volunteering hub

·  Contact had not reduced

·  Reduction in wait times

·  Customer satisfaction slightly lower

·  Emergency repairs only

·  Increase in benefits requests

·  Work on staff wellbeing

The slides referred to would be circulated.

  Action: Rob Miller

5.5  Councillor Harvey Odze asked if staff working from home had been made aware of HRMC £6 allowance and whether working from home was in employment contracts.  Councillor Odze asked how the lessons/ innovations currently being learned would be incorporated into economising in the following financial year.  Ian Williams told the Committee of effective engagement with the Trades Unions on employment issues and that technical detail was being worked through. In relation to building in innovation, he referred the Committee to the next steps section of the report at section 19.

5.6  Ian Williams introduced the report, thanking Council staff, public sector partners, partners in the community and voluntary sector, and citizens of Hackney who had stepped up to the challenge posed by Covid 19. He referred the Committee to a number on issues including:

·  A budget gap of £19m over the planning period

·  That timescales were uncertain in relation to the Fairer Funding Review and the spending review

·  Financial challenges were being considered

·  Hackney’s share of the government funding measures was £10.092m. A full announcement of further government additional resources was to be announced on Saturday. Detail was awaited but the working assumption was £7m

·  £500m hardship fund with Hackney’s contribution set at £4.6m

·  £30 million had been paid out to businesses in the Borough with further relief to business of £46m ?

·  New government grant funding for economically vulnerable with Hackney’s contribution set at £4.6m

·  Increased pressure on demand Adult and Children social care

·  The need to meet significant pressures across all services

·  Immediate impact on procurement

·  An increase in transitioning to Universal Credit.

Ian Williams referred to the costs of Covid 19, including first

·  Staff costs

·  Service

·  ICT and facilities

·  Cost of PPE

·  Impact on council income, including around parking

·  Initial estimate of cost pressure was £11.2m to £22m for full years

·  Overall finance pressure (GF and HRA) £36m for first 3 months and £72m for the full year

Ian Williams referred the Committee to the next steps at paragraph 19.1 of the report.

5.7 Councillor Odze asked if any of the Council staff had been furloughed and whether they were paid at 80% or 100%. Ian Williams confirmed that there was no intention to furlough staff.

5.8  Councillor Spence to the challenges around loss of income from car parks and leisure centres and other streams of income. Ian Williams told the Committee of the loss of 90% of car parking. Payment of Council Tax had also reduced. This was being considered in detail with an assessment of how long it would take for demand to return and people’s ability to pay. The Care Market was being looked at differently in relation to cost. 

5.9  Councillor Gregory asked about Council losses and whether there was to be any mapping of this. Further, would contractors be paid if not working? Ian Williams told the Committee that all properties in Tigerway had been sold.  He said that there may be delays in moving in to these properties, bringing about voids costs. The Finance Team had carried out modelling on this matter. This was an initial analysis. Some capital schemes would not go ahead at the moment and the Council was engaging with the Contractors to ensure compliance with guidance. Further, contractors had been written to stressing that the Council wished to engage constructively. 

5.10  Councillor Potter asked about impact of the loss of income to the council. Ian Williams told the Committee that there would need to be an assessment of how long it would take for the demand to return. Detailed work on income and expenditure lines was to be undertaken.

5.11  Councillor Gregory referred to the fact that there were current difficulties in accessing the Hardship Fund and that it was necessary to ensure take up. Councillor Gregory also asked about the impact of the crisis on the Council’s Pension Fund. Ian Williams told the Committee that the Hardship Fund had been advertised externally. £500,000 had been added to the Hardship Fund and that the team was currently considering applications. Ian Williams told the Committee that pensions had a life of between 40 and 80 years. The matter was to be discussed with the Chair of the Pensions Committee. The Actuary was not flagging up any concerns at present with regard to the fund. 

5.12   Councillor Rennison told the Committee that arrangements for accessing the fund was now much more flexible and would benefit larger households. Discounts were applied automatically. Non-payment was to be seen as an indicator that an individual was in greater need and this would trigger intervention

It was agreed to provide the Committee with an update on this matter.

  Action: Ian Williams 

5.13   The Chair said that the Council’s reaction to the crisis was inspiring. He said that it would be important to consider how the Council managed in a new way, with clear criteria with plans for alternate scenario and monitoring. He stressed the need to have mechanisms in place to assess performance in new ways with an emphasis on outcome, with proper accounting in place. The Chair said that there would be a big gap in the medium term with a Covid 19 having a permanent impact. Council Income would be especially impacted and there would be a need to consider the implications for the budget. The scrutiny role would be an important part of the future approach and he would discuss with Councillor Gordon ways to work with scrutiny chairs to ensure that the political, value for money and financial management issues are raised.

5.14   Ian Williams told the Committee that an accounting mechanism had been developed early, whereby all items of spend that are Covid 19 related could be identified.

5.15. Mayor Glanville thanked the Committee for persevering and paid tribute to scrutiny chairs.

RESOLVED to note the impact of COVID 19 on the financial position of the Council