Agenda item

5.1  The Chair welcomed the Group Director of Finance and Corporate Resources, Ian Williams to speak about the financial plan.

5.2  The Group Director of Finance and Corporate Resources advised that the Head of Policy and Strategic Delivery would do an overview of the corporate plan first, and then he would speak on the financial plan.

5.3.1  The Head of Policy and Strategic Delivery prefaced her piece by advising aim was to publish a plan with the direction of travel quickly and that this was an opportunity to hear from Members to feed in any comments before finalising the plan or presenting it for approval.

5.3.2  The Head of Policy and Strategic Delivery advised the corporate plan focuses on ways of working in addition to what has already been committed to.  In addition an important element is to consider the opportunities to engage with residents, learn from Hackney Young Futures Commission and to look at culture.

5.3.3  The Head of Policy and Strategic Delivery advised that the 9 priorities from the existing 2018 corporate plan have been simplified and consolidated. There is an increased focus on a cross-cutting basis to prioritise the most vulnerable and key inequalities, particularly racial inequalities, and the priorities are grouped under the Mayor’s Fairer, Safer, Greener priorities.

5.3.4  The Head of Policy and Strategic Delivery advised that the priorities have been looked at holistically as well as consolidated. The Head of Policy and Strategic Delivery observed that previously the priorities were looked at from the perspective of the corporate issue, but now they’ve been pulled together with wider priorities in mind such as poverty reduction. There was an increased emphasis on what all partners and departments of the council can do to support these aims.

5.3.5  The Head of Policy and Strategic Delivery advised that the corporate plan talks about the community and equality impacts. The first section of the refresh is about specific things that the council is going to do to reset the equality priorities in light of Covid-19; inclusive leadership and workforce diversity, improving outcomes for young black men, the aging well strategy, and an increased focus on tackling digital divide. 

5.3.6  The Head of Policy and Strategic Delivery advised that there were also priorities for the Single Equality Scheme that need to be revisited now that there is increased corporate capacity, in particular Turkish/ Kurdish inequalities and that a similar approach to improving outcomes for young black men programme is required.

5.3.7  The Head of Policy and Strategic Delivery advised that the Aging Well Strategy had not been adopted by Cabinet because it was due to go out for consultation when lockdown commenced. It will be revisited to look at what is required to sharpen the policy in light of Covid-19 and for further stakeholder engagement with organisations that have been supporting older residents during the pandemic.

5.3.8  The Head of Policy and Strategic Delivery stated that the short, medium and long-term impacts and key points during the reset include highlighting what has been learnt from the network of community organisations and taking more of an asset based approach, connecting together support in a more increased way.  Secondly taking into consideration the partnerships they have in terms of DWP. Thirdly the inclusive economy in relation to tackling homelessness, and as Cabinet Member for Community Safety, Policy, and the Voluntary Sector pointed out, poverty proofing.  They talked about the need for this to be imbedded within all the work across the council. Part of the corporate plan work is finding out how this can be prioritised across the council. 

5.3.9  In terms of inclusive economy, the skills issue is going to be an area of particular concern in light of the need for residents to potentially seek different employment and the skills gap that some may face.  In addition to the challenges in business and business continuity in high streets and other parts of the economy.

5.3.10The Head of Policy and Strategic Delivery advised that the financial aspect of the plan is going to be a challenge and so the financial plan must support the corporate plan for it to be effective and succeed.

5.4  The Chair thanked the Head of Policy and Strategic Delivery for outlining the plan and invited the Group Director of Finance and Corporate Resources outline the financial plan.

5.5  The Group Director of Finance and Corporate Resources echoed the Head of Policy and Strategic Delivery’s sentiment and advised the he, the Chief Executive, Mayor, and Deputy Mayor wanted to ensure that the corporate plan and financial plan were linked together.

5.6.1  The Group Director of Finance and Corporate Resources commended the staff and residents for their efforts during the crisis.

5.6.2  The Group Director of Finance and Corporate Resources advised on further updates since the publication of the agenda papers, namely that central government had announced a multi-year spending review.  This was announced by the Chancellor and will be finalised this autumn, to cover the years 21/22 – 23/24 for revenue spending, and 21/22 – 24/25 for capital.

5.6.3  The Group Director of Finance and Corporate Resources agreed with the call to lobby for local government funding and for this to be at the fore of that review.

5.6.4  The Group Director of Finance and Corporate Resources informed there is an update pertaining to business rates revaluation. The Group Director of Finance and Corporate Resources observed that in Hackney business rates rose the highest of any borough in London to just over 40%. The new revaluation will take effect on the first of April 2023 based on property prices on the first of April 2021. The Group Director of Finance and Corporate Resources observed that business rates are challenging for local business, particularly the high business rates relative to other parts of the country. The Group Director of Finance and Corporate Resources suggested that the council should strongly advocate for business rate reliefs to continue into future years before the revaluation takes place. 

5.6.5  The Group Director of Finance and Corporate Resources highlighted it was encouraging to see the Chancellor also call for evidence in terms of a business rates review in a fundamental look at business rates.

5.6.6  The Group Director of Finance and Corporate Resources updated the commission advising that there has been confirmation on how the third tranche of funding for local government will be distributed. This refers to the £500m that was recently announced which brought the total amount of government support to councils to £3.7billion, which equates to just over £21m for Hackney.

5.6.7  The Group Director of Finance and Corporate Resources advised the council has now received further details on the Compensation Scheme for Loss of Income, which relates to sales fees and charges, this confirmed some of the planning assumptions that The Group Director of Finance and Corporate Resources’ team had been working on, in relation to how local authorities may be compensated for loss of income.

5.6.8  The Group Director of Finance and Corporate Resources issued a warning that while the news is welcomed, the specific detail around how and when the money will be paid remains to be announced, nor have there been any arrangements around the audit of this. The Group Director of Finance and Corporate Resources urged the council to avoid complacency around its calculations in terms of what the compensation level is expected to be.

5.6.9  The Group Director of Finance and Corporate Resources informed there has been clarification around the treatment of collection fund deficits in that they would be spread over the three financial years starting in 21/22.

5.6.10The Group Director of Finance and Corporate Resources expressed that it’s been encouraging to see that, when under examination by the ministry of housing, the secretary of state suggested that the treatment of collection fund deficits could be looked at again to potentially include something akin to the compensation for loss of income, which would mean a quicker and more immediate alleviation of some of those financial pressures.

5.6.11The Group Director of Finance and Corporate Resources advised that the Head of Policy and Strategic Delivery has been doing a fantastic piece of work with colleagues across the council in terms of the Local Authority Emergency Assistant Grant for Food and Essential Supplies of which the Hackney allocation has been confirmed at £427k and should work closely with the Cabinet Member for Health, Adult Social Care and Leisure and other colleagues in relation to how the council can ensure that grant is deployed to provide support for people in need of food and essential supplies.

5.6.12The Group Director of Finance and Corporate Resources urged members to read the Overall Financial Position report to understand the latest position of the council which after all of the government scheme that have been brought forward and the income compensation meant there was still, in the current financial year alone, a shortfall of over £9m. In terms of the housing revenue account, while those numbers are still being looked at, the magnitude is between £6-8m, although the Finance and Corporate Resources’ team is working hard to mitigate the impacts of that.

5.6.13The Group Director of Finance and Corporate Resources advised that work is ongoing to better understand the financial position in relation to the forecasts for 21/22.  The report details assumptions made as well as the range of forecasts provided.  However, uncertainties exist around the level of expected income and the expenditure incurred while combating essential things like reduction of homelessness.

5.6.14The Group Director of Finance and Corporate Resources advised that there are a range of forecasts from the optimistic forecast being an £11m worth of savings for the general fund to ultimately the worst case scenario of £50m; should there be further challenges in relation to Covid-19.  There is also a middle figure of just under £33m.

5.6.15The Group Director of Finance and Corporate Resources advised he commissioned a piece of work to identify the range of saving targets across all the London boroughs.  This was helpful because it helped to create an evidence base for lobbying in relation to the challenges ahead for London and other metropolitan boroughs across the country.

5.6.16The Group Director of Finance and Corporate Resources referred to the Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply for further comments.

5.7.1  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply pointed out for council tax and the collection fund, there has been close work with the Audit Committee and Scrutiny.  But effectively the shortfall in council tax this year remains and will follow through into future years.  The changes the Government have brought forward gives more flexibility but the shortfall and the gap remain. 

5.7.2  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply advised that the best case scenario for post-Covid-19 next year looks better than was previously forecast.  This is due to the fact that the Government paused the fair funding review rather than the suggestion that the council has come out of Covid-19 better off. The council is expecting to lose £12m because of fair funding.

5.7.3  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply advised that sufficient actions have been put in place to get the council through this year with flexibility around things like reserves, but cautioned that essential central government has push the issues into future years.

5.7.4  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply urged for sensitivity in relation to how the finances are discussed, noting that staff could become concerned by the large figures and what it means for their employment. The Cabinet Member advised this is a conversation around what tools are needed to address the situation but is not a cause for alarm. 

5.8  The Chair thanked The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply and opened the meeting up to questions.

Questions, Comments and Discussion

5.9  Members asked two questions, firstly asking how much of the projected £9m deficit in the current financial year has been accrued to date, and the actual deficit accruing on a month-by-month basis. In relation to the corporate plan, Members asked whether the council is challenging itself enough in terms of closing the digital divide.  Referring to the numbers of young people from ethnic minority communities without sufficient access to online services and the cost of filling that gap.

5.10  The Chair of Audit Committee asked about the highest priorities and who would be responsible on the executive side for achieving this plan.

5.11  In response to Members question, the Group Director of Finance and Corporate Resources advised the figure of £9 million was their estimate up until 31^st March 2021. The Group Director of Finance and Corporate Resources informed the Scrutiny Panel that funding tranches one and two were received but that the third tranche was outstanding and that there are many shifting variables contributing to the month on month figure.  Such as the reopening of the economy, changing behaviours etc.  Therefore expressing a monthly figure at this point may not be valuable.

5.12  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply pointed out in the Overall Financial Plan, the Covid related figures and the existing figures are reported side-by-side for transparency.

5.13  In response to the questions about the corporate plan’s ambitiousness and the digital divide the Head of Policy and Strategic Delivery advised that the commitment made in the plan is quite specific, but not ambitious enough to meet the full scale of the challenge.  This is the reason why the Mayor and Cabinet have picked this up to look at what additional measures are needed. The Head of Policy and Strategic Delivery advised the plan is specific in trying to get as many people online in as skilled a way as possible, and that scaling up is a greater challenge that requires a more holistic community approach.

5.14  Members commented that a whole community approach may run the risk of having no specific person to take responsibility to filling the gap.

5.15  The Head of Policy and Strategic Delivery advised that each week the partnership programme is making solutions clearer and that the work is tangible.

5.16  In response to the Chair of the Audit Committee’s question around priorities, the Head of Policy and Strategic Delivery advised the plan isn’t a straightforward delivery plan. To identify the cross-cutting strands of work requires bringing services together on issues like inequality. The first piece of work is around identifying areas that require stretch. The Head of Policy and Strategic Delivery advised that taking ownership of these priorities is why ways of working is a central requirement of the refresh.

5.17  On the digital divide, the Cabinet Member for Community Safety and the Voluntary commented that the plan continues several strands with different cabinet leads which removes the risk of no one becoming responsible for the success emphasising the necessity for the partnership programme approach.

5.18  The Chair asked about the cross-cutting, over-arching plan asking where the level of detail exists and if they could be confident that the lines of responsibility will be maintained.

5.19  The Cabinet Member for Community Safety and the Voluntary advised the Mayor and Cabinet receive a regular update which provides a collective way of keeping them updated on what is happening with the plan, to ensure everyone understands what’s happening with different work streams.

5.20  The Head of Policy and Strategic Delivery advised that in terms of accountability there is an annual review in February. The Head of Policy and Strategic Delivery advised that when she became responsible for the corporate plan she observed an opportunity to revisit the way we support delivery, and this is not as straightforward as performance management. The Head of Policy and Strategic Delivery advised that there is ongoing work about how to deliver cross-cutting measures, but that it’s a complex issue. But overall accountability lies with the Mayor of Hackney.

5.21  Members posed a question to Head of Policy and Strategic Delivery as to whether the partnership programme extends outside the council and a further question to Group Director of Finance and Corporate Resources around the funding gap and whether there is work to campaign with other boroughs to secure more funding.

5.22  The Group Director of Finance and Corporate Resources responded by saying extensive lobbying is taking place for further SEND funding, but further lobbying will take place for greater funding, with a greater number of boroughs across London.

5.23  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply echoed this and highlighted Hackney is speaking with other boroughs facing similar challenges, noting that the funding issue isn’t particular to London, and that lobbying will continue.

5.24  The Chair asked if Members can contact them with further questions, and observed how positive it is to see poverty reduction as a theme throughout the plan.

5.25  The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply commented that plans for rough sleeping have been set out, and those with no recourse to public funds are being considered in future measures. The Deputy Mayor and Cabinet Member for Finance, Housing Needs and Supply observed the issue is as much to do with health as housing, and that a flexible approach would be needed from central government to change structures.

5.28  The Chair of Audit Committee asked about the time scale for a draft of the plan.

5.29  The Head of Policy and Strategic Delivery advised the work is ongoing, as well as drafting a summary version, but that there would be something more substantial by September.

5.30  The Chair thanked the attending guests for their contributions.