Agenda item

LONDON BOROUGH OF ENFIELD BUDGET CONSULTATION 2019/20

Enfield’s Overview & Scrutiny Committee has set up a Budget Meeting to consider the proposals within the Council’s 2019/20 Budget Consultation.

 

The purpose of the Committee Meeting is to:

 

a)    Seek comments on and consider the Budget Consultation proposals,

b)    To prepare a response on the Budget Consultation proposals for consideration by Cabinet and Council as part of the budget setting process.

 

Members of the Committee are asked to note:

 

·         The public have been invited to attend the meeting to participate in the budget consultation process;

·         That Cabinet is due to consider the response from the budget consultation process at its meeting on 13 February 2019. The final response agreed by the Committee will be referred onto Cabinet for consideration as part of this process. The Council’s final 2019/20 budget proposals are due to be considered and approved at the Council meeting on 27 February 2019.

 

Minutes:

The Chair outlined the structure and process for the update and budget consultation.

 

Councillor Maguire introduced this item and spoke of the need to set a realistic, sustainable and achievable budget in the context of the need for continuing savings to be made. She said savings for this year had been identified in four tranches and this was the final tranche.  Member sessions had been introduced which were designed to challenge and interrogate the savings predicted.

She confirmed that Enfield was not alone in the country in finding further cuts challenging and stressed the need to be careful to protect the most vulnerable.

 

Fay Hammond, Director of Finance, gave a presentation.  

She spoke of the reasons why it was necessary to have a resilient budget-

  • to ensure we set a realistic budget and learn reduce the risks which have led to S114 notices being issued in other councils such as Northamptonshire CC. It is therefore important that we do not have an over reliance on capital receipts.
  • that council’s ambitious savings and income generation budget proposals have not always been fully realised
  • the 2020/21 funding review of all local authority funding is uncertain, and the quantum of funding will not be known until late in 2019.
  • under the CIPFA Financial Resilience Index, it is important that we ensure that Enfield reputation for good financial is upheld.
  • If we were to take no action, we would have no reserves by March 2020.

 

The other key points of the presentation were as follows:

  • The Budget as at December 2018 shows a reduction in grant and baseline rates of over £6m.
  • An additional £1m has been invested in Children’s Services.
  • For the past 3 to 4 years there has been an overspend on transport for children with SEN (Special Educational Needs), this is an example of where we are now recognising this cost pressure in the budget.
  • Additional funding received for social care and Better Care Fund of approx. £6.6m.
  • The proposals to balance the budget gap include efficiency savings, income generation, prevention of cost pressures and technical/ recharging savings.
  • There was a budget gap at December 2018 of £6m.
  • A summary of 2019/20 savings and income generation was given. ‘Place’ department have been a key contributor to the savings proposals for 2019-20.
  • Draft settlement was announced 14 December 2018. The budget consultation and waste consultation ended 7 January 2019.  Final settlement and London Council Business Rate Pool update is expected which would give more certainty over Business Rates.
  • At December 2018 there appears to be a £10.2m gap for 2020-21 this assumes no Adult Social Care precept and 1.99% council tax.  However, there is uncertainty regarding funding review. Themes are already under consideration for 2020-21 for future budget savings.
  • The Medium- Term Financial Plan (MTFP) covers planned council expenditure over the next four years and is to be agreed by Cabinet and Council during February 2019.  There is a need to have a ten- year MTFP to look at our long- term cost pressures.  Also, a ten- year capital programme to include Meridian Water model.
  • Reserves summary shows Enfield has unallocated reserves balances of 6.3% of net budget requirement (London average is 8.7%) Enfield is in a ‘median’ position compared to other Local Authorities for this year. The General Fund reserves include sums allocated for various funds.

 

Councillor Maguire spoke of the necessity to keep adequate reserves for reasons of security and to mitigate against risks and uncertainties for the future, for example around Brexit.

 

Questions and comments raised

 

Q. Is the reason why all efforts had been made to build resilience into this budget because of the number of unknowns?

A. Yes, we are in a particular period of uncertainty with the imminent funding review and therefore ensuring a resilient budget including maintaining adequate reserves is imperative.

 

Councillor Caliskan said financial resilience was essential. Other Councils who had in recent times experienced financial difficulties were those that had made poor decisions over a period of time.  In contrast, Enfield council’s use of reserves were appropriate and sensible. Our investment in Children’s services for 2018 -19 and beyond was key.

 

Budget Consultation

 

Ilhan Basharan (Consultation & Resident Services Team Manager) gave a presentation on the Budget Consultation and the following was highlighted:

  • The Consultation period was from 26 October 2018 to 8 January 2019. It was available on line and included easy read questionnaires. 
  • It asked people to consider their priorities for the protection or reduction of services. It also asked if they had any suggestions for increasing income and gave an on-line budget simulator. The budget simulator demonstrates the impact of changes to budgets.
  • Extensive communication was carried out with adverts in the press and posters/ leaflets.
  • There were 388 responses given. Of those that answered 148 were male - and 183 female,.210 were white and 94- BME with 21 given as other.  From West Enfield -263 and Eastern Enfield -84
  • Findings for the protection of resources given-

Street cleansing, waste services and regulatory services (total-47%) - 46%=Western Enfield and 49%=Eastern Enfield

Leisure, culture, libraries, parks and open spaces (total-47%) –

45%=Western Enfield and 38%=Eastern Enfield

Highways, Street Lighting, Traffic and Transport (total- 40%) –

39% = Western Enfield and 43%=Eastern Enfield

  • Findings for reduction of resources – Customer Services (37%), Leisure Culture etc (25%), Grants to Voluntary and Community Sector, and payments to Carers (25%) and Independence and wellbeing (24%).
  • Suggestions for increasing income included – increase council tax for wealthy (28), increase fines for fly-tipping/ making bulky collections free (18), stop spending money on cycle lanes (17) reduce Enfield council top management salaries and Councillors (15) and increase parking charges and fines (15)

 

Questions and comments raised

 

Councillor Levy thought findings from the consultation was surprising in that people’s priorities appear to show more concern about street cleaning and waste services for the borough than for Adult and Children’s services.

 

Councillor Maguire thought the consultation response was disappointing, she thought some of the responses given appear to be contradictory for example around independence and wellbeing.  She thought people may not be fully aware of what ‘Customer services’ cover and wondered if the questionnaire needed to be more explicit. She said it is clear, that people want clean streets and spoke of the need to consider carefully the money available and our manifesto promises to deliver this.

 

Councillor Caliskan wondered if the service users, for example those that use John Wilkes House, would have responded to the consultation.  

 

Councillor Levy was disappointed that there were no members of the public at the meeting.  He mentioned that the consultation on ‘Potential Waste Services Changes’ (Item 5 on the agenda) had received a much larger response, he wondered if we could learn from this.

 

Q. Councillor Aramaz referred to cuts in funding and asked if we could withstand further cutbacks next year should this be necessary.

A. We are currently anticipating a budget gap in the region of £10m in 2020 onwards.  We will need to look at long term reductions in the budget such as how we can reduce our underlying budget pressures in areas such as temporary accommodation.

 

Q. Councillor David Sanders referred to Appendix 1 of the report regarding previous years overspends and asked how confidence can be given that this would not be a problem next year.  Also looking at Savings and Income Generation proposals how have these been modelled.

A. Fay Hammond said officers have looked at the top key 10 areas of overspend with an aim to reduce risk for 2019/20 she said we would continue to work with officers around this to reduce pressures. Councillor Maguire referred to work carried out by officers in scrutinizing and interrogating figures to see if savings can be achieved to ensure a rigorous budget.

 

Q. Councillor Smith said it would appear that this is a ‘steady as you go budget’ the only growth is in respect of Children’s Services?

A This is to ensure the budget is robust.  Children’s services funding is for 18 front line social workers.

 

Councillor Smith referred to the Meridian Water project and Fay Hammond said details on this would be going to Cabinet in the summer.  Details re capitalising this project and figures re interest charges on it would be sent to Cllr Smith for information. Action Fay Hammond.

 

In response to Councillor Smiths remark that this was a ‘steady as you go’ budget, Councillor Caliskan said the council was being forced to save £18m.  She thought it was right that money had been used to support Children’s Services, and that we are investing HRA money to support housing for those in most need.

 

Councillor Aramaz said that the report did not show assumptions or analysis.  It would be helpful if impact assessment both positive and negative had been included in the report. He suggested that this could be included in future years reports.  Fay Hammond explained the impact of financial risks around children’s and adults services for the wider council, for example a 5% overspend in People Services equates to 10% of Place. if, for example, there was a sudden change in this demographic.

 

Councillor Cazimoglu said we needed to be mindful of the moral obligation we have, to look after those that are vulnerable.

 

Councillor Maguire referred to the sessions held looking at impact assessments for each service. She said we shall look to see if figures/ tables can be provided as suggested by Councillor Aramaz.

Savings and Income Generation Proposals for 2019/20 were included in Appendix 1 of the report and rigour and due diligence had been put into this, looking at how we can meet our needs and make use of our companies to enable this to happen.

 

Councillor Caliskan referred to this being the 10th year of cutbacks for local authorities and spoke of the impact this is having on people. She said we can see an increase in homelessness in the country however the cumulative effects are harder to measure.

 

Q. Councillor Anne Brown asked if there was the potential for us to borrow at preferential rates to cover for shortfalls.

A: Fay Hammond said it was not legal for us to borrow money to fund our day to day operational budgets. We can only borrow for capital purposes such as to build assets. We can use capital assets to generate income, but we must ensure that there is a business case for this.   Fay Hammond will forward details of the legal directive on this to Cllr Brown.  Action: Fay Hammond

 

Q; Councillor Smith questioned the figure of £150k given for energy saving initiatives.

A: Fay Hammond thought this referred to a one-off use of grant which was unallocated related to the re-fit programme. We purchase our energy from Kent County Council who procure on behalf of most local authorities to keep prices as low as possible.

 

With reference to the consultation exercise it was commented that many people do not realise that a large proportion of the council’s funding goes on Adult social services.  It was suggested that this might be more clearly shown in any future consultation.  A suggestion was also made that it might be useful for the consultation to be presented at Ward Forums in future.

 

Ilhan Basharan said he agreed that the response rate to the consultation was low and we needed to look at how to stimulate engagement with people.  However, he said in the past when more extensive engagement was carried out there were still low participation rates.

 

Councillor Laban referred to the participation of the Enfield Youth Parliament (EYP) members and wondered if they had been involved in the consultation exercise. She also referred to an item under the ‘Savings and Income Generation Proposals’ for the additional income from sales of mausolea and vaulted graves and said money for this project needed to be delivered.  Doug Wilkinson gave assurances that building works would be rigorously project managed.

 

Councillor Rawlings commented on the Parking strategy which refers to a review of the parking strategy to be undertaken across the borough and council owned car parks. She asked what the parking figures were for this year, Doug Wilkinson said he would provide this information separately. Action: Doug Wilkinson 

 

Councillor Barry mentioned that a member of the public had commented that residents should not be asked to comment about savings because councillors are elected to make these decisions.

 

Councillor Maguire confirmed that briefing notes had been prepared for Councillors to use at their ward forums.  She informed the committee that, along with the Leader, she had presented a briefing of the budget, followed by Q&A sessions, to both the Youth Parliament and the Over 50s Forum. The finance team had attended the Voluntary Sector Strategy Group, Health and Well-being Board and Deaf Projects.  However, it was felt that there were too many ward forums to expect officers to attend each one.  Councillor Maguire confirmed that we borrow money only to invest in capital or transformation projects.  In terms of the consultation questions, she thought we might need to give some extra explanation in the future.

 

Councillor Levy referred to some Local Authorities using the OSC function for scrutinizing the budget and engagement with the public throughout the year. He said some councils specifically Merton, base their entire OSC function around finances, budgeting and public accounts because finance underpins all activities in the Council.  He had previously stated that Enfield might want to entertain a standing financial scrutiny panel to enable more regular analysis of the budget and budget process, and potentially to seek more engagement with the public, throughout the year. .  It was confirmed that the budget details had been done in tranches this year, and details included in Cabinet reports.

 

Councillor Anderson said budget consultations in the past had higher response rates. He noted that there were no press here, at the meeting and no members of the public, he thought we needed to reflect on why there were so few responses to the consultation.

 

Councillor Lee Sanders referred to the property strategy for next year which he thought might impact on this year’s budget.

 

Councillor Oykener referred to income regeneration and the Property Strategy & Asset Management Strategy and spoke of the creation of companies which has helped to reduce costs. We are looking at some buildings where leases are now coming to an end, to make possible savings. We need to continue to be innovative as a way of making income.

In answer to a question from Cllr Smith it was confirmed that any possible savings from the Asset Strategy has not been incorporated in these budget savings.

 

It was NOTED that the Minutes of the Overview and Scrutiny Committee Budget Meeting would form the Scrutiny response to the Budget Consultation 2019/20 and would be included in the budget papers presented to Cabinet on 13 February 2019.

 

Many Members left at this point.  OSC Members and Councillor Dogan remained to discuss the other items on the agenda.

Supporting documents: