Agenda item

6.1 The council’s budget update to scrutiny is a fixed item on the agenda of the Scrutiny Panel. The Group Director for Finance and Corporate Resources presented to panel members, highlighting the following key issues (slides are available to view in the meet recording).

·  The latest OFP and HRA forecast is predicting an overspend of £7.8m for the former and £9.6m for the latter;

·  There were significant cost drivers for local authorities (contracts, pay aware, energy costs, pension increases) which were adding to financial pressures;

·  London boroughs were predicted to make cumulative savings of around £600-700m per annum through to 2025-2026;

·  The 2022/23 pay award of £1,950 will result in cost pressure in excess of £13m for the council overall (HRA and GF);

·  The mini-budget provided no additional funding for local government to cope with inflationary pressures;

·  Rates of interest for loans through the PLWB have increased significantly to local government resign from 1.58% to 5.12% over a 1 month period which will impact on borrowing;

·  Council’s energy is purchased collectively through a LASER framework operated by Kent County Council over a 6 month period - currently 70% of gas and 50% of electricity has already been purchased and these are below the current CAP rates.

6.2 The Panel requested further information on what the council was doing in response to the Cost of Living Crisis.  The presentation to Panel members noted the following:

·  The Poverty reduction Framework set out the approach of the council prioritising 4 areas: simplifying access to support; maximising income, building existing partnerships and equipping front line services to better support residents in need. Additional funding has been secured for Integrated Care Funding.

·  In terms of impact: 48% of children were living in poverty after housing costs, households not in work (or one working adult), with a disabled adult or carer or low formal qualifications were also identified to be at greater risk of poverty.

·  Financial support provided by the council included£638k to Discretionary Housing Payments, £57k to Discretionary Crisis Support Scheme, £150 fuel rebate paid to over 98,352 residents;

·  Household Support Fund has allocated £2.8m to Hackney to redistribute to children and families 0-19 years, Pensioners and help with housing costs and risk of homelessness.  The scheme has now been extended to March 2023.

·  A centralised information suite has been developed to help residents experiencing financial difficulties;

·  In terms of debt, the council is now issuing notices to residents but instructed to work with residents to develop affordable repayments (extending arrangements);

·  Similarly, officers are working with tenants in relation to rent arrears and eviction continues to be a last resort.

6.3 Whilst members of the Panel welcomed the range of help and support that has been in place for local residents and tenants, there was some concern over the accessibility of the support available.  There were also instances of people being encouraged to apply but then being told they were not eligible.  What are officers doing to ensure that help is getting to those who most need it?  Could there be greater transparency around the Discretionary Housing Payment for instance? How is this DHP benign evaluated?

·  The Cabinet member for finance, insourcing and customer service noted that the teams dealing with these range of benefits and applications for help were under intense pressure and were working to capacity.  Whilst the Cabinet member was not aware of any cases which had been treated unfairly,, it was recommended that councillors referred suspected cases through to Cabinet members for investigation.

·  The Group Director indicated that both the Housing Needs and Housing Benefits teams had put on dedicated training for members to enable them to support and refer residents appropriately for support.  Further sessions could be held if needed.

6.4 Following up from above, Panel members noted that there were over 5,000 cases of under or overpayment of Housing Benefit which was causing considerable hardship in the community.  Residents are being encouraged to move into private sector housing and need to know that their rent is going to be paid otherwise they could end up homeless, and the council would be required to deal with them through another service. Therefore a small payment from the DHP fund might help keep residents secure in their property and reduce the likelihood of eviction which may be more costly for the council to resolve. 

·  The Group Director responded that Hackney had the highest caseload of Housing Benefit claimants and the impact of the cyber-attack has been far reaching across this service.  Whilst many of these cases were not straightforward and did take some time to resolve, the Group Director reassured members of the Panel that caseworkers were working hard to resolve all these as quickly as possible.  Where there has been a risk of eviction, the council has always looked for a way to intervene to prevent this if possible.  There may have been some cases where eviction has taken place, but these were minimal.

6.5 In terms of the MTFS, a budget gap of £24.3m was anticipated for 2023/24 (assuming a 2%) rise in Council Tax.  The mid case projection was (cumulatively) £38.8m deficit for 2024/25 and £53.6m for 2025/26.  Extensive meetings had been held with Cabinet Members and Group Directors to help identify ways to close the financial gap for 2023/24.  Scrutiny Chairs would consider the first tranche of savings proposals shortly.  Similar processes were being deployed to identify savings in the HRA.

6.6 The CEO noted that the financial position would require difficult decisions and would welcome input from scrutiny in this matter, particularly in helping to frame the decision making process with new members.

6.7 The Chair thanked officers for attending and responding to questions from Panel members.