The Scrutiny Panel will hear from the following, outlining priorities and areas of challenge.
Councillor Mary Maguire (Cabinet Member for Finance and Procurement)
Fay Hammond (Executive Director – Resources)
Matt Bowmer (Director – Finance and Commercial)
Cabinet Member(s) and Officers will be asked to leave the meeting at this point.
Councillor Demirel (Chair) invited Councillor Mary Maguire (Cabinet Member for Finance and Procurement), Fay Hammond (Executive Director – Resources) and Matt Bowmer (Director of Finance and Commercial) to present to the Panel the local priorities for 2020/21, including the Council’s response to the financial challenges of Covid 19. This information would help to inform the Panel’s work programme planning for the coming year.
Panel Members had received a copy of the presentation slides in advance of the meeting.
Councillor Mary Maguire (Cabinet Member for Finance and Procurement) took this opportunity to outline to the Panel the challenges now being faced by the Council as a result of the Covid-19 pandemic and how the Council was responding to the unprecedented pressures and demands on Council services. A range of issues were highlighted and potential priority areas for detailed scrutiny outlined for the Panel’s consideration, as set out below:
· Impact of Covid 19 – finance and performance
· Focus on income and debt recovery risks re Covid 19 (including how the Council is supporting residents in financial hardship)
· Performance report indicators revision in response to the Corporate Plan refresh
· Dedicated Schools Grant
· Housing Revenue Account – updated business plan (January 2021)
The following points were included in Councillor Maguire’s presentation to the Panel:
1. The effect on residents in the Borough had been significant which in turn had impacted on the Council’s income and debt recovery; whilst seeking to support residents in financial hardship. The large number of residents who had been furloughed in the Borough was noted. The pandemic had also adversely impacted on a range of businesses in the Borough.
2. The Council had set a balanced budget for 2020/21 in February 2020 prior to the pandemic, which had followed years of austerity and savings. It was further noted that the Government funding received by the Council had been inadequate to meet the additional costs and pressures arising from the pandemic. Particular areas of potential scrutiny suggested were the Dedicated Schools’ Grant which was currently in deficit and; the Housing Revenue Account in the light of the Council’s review of the business plan.
3. Councillor Maguire highlighted the Council’s responsibility and commitment to supporting its residents. Fay Hammond and Matt Bowmer would outline the financial pressures on the Council in detail.
Fay Hammond (Executive Director – Resources) followed with a detailed presentation to the Panel providing an update on the Covid 19 financial position and actions taken; the current Medium-Term Financial Plan budget gap for 2020/21; and, progress on the 2021/22 Medium Term Financial Plan challenges. In the absence of Cllr Barnes, Fay Hammond also highlighted to Members the Council’s high-performance levels during the pandemic responding to telephone calls and webchats received through the Council’s contact centre. Members’ received a detailed presentation including the following points:
4. The potential priority areas for scrutiny as outlined by Councillor Maguire and set out above. The impact of Covid 19 on the Council’s finances had been significant and would continue in future years. Members were informed of the impact on income and debt recovery risks and how the Council was supporting its residents.
5. The Council’s Plan had recently been refreshed and the key performance indicators were being reviewed in the light of this.
6. The budget pressures in relation to the Dedicated Schools Grant were outlined and the current deficit noted.
7. The business plan in relation to the Housing Revenue Account was being updated. The significance of the Plan in supporting the Council’s priorities and ambitions was outlined.
8. The Panel’s terms of reference, appended to the agenda (Minute No.6 below referred) outlined the regular and annual items that the Panel was expected to consider as part of its work programme including the quarterly monitoring reports on revenue, capital and performance; and, consideration of the annual Budget and medium term financial plan.
9. In order to inform the Panel’s consideration of their work programme for the remainder of the municipal year, Members received a detailed and informative briefing providing a financial overview of the Council. The following aspects were covered:
· An update on the Medium-Term Financial Plan including the remainder of the in-year position 2020/21; and, the gap and actions for 2021/22 to 2025/26. A report had been presented to the July 2020 Cabinet meeting which all Members would have received. There was potentially a significant funding gap going forward.
· A monthly update was produced for the Ministry of Housing, Communities and Local Government (MHCLG) on the Council’s financial position in the light of Covid 19, the figures for July 2020 were presented and explained. Members were also advised how Enfield Covid 19 budget pressures are on a par with other London Boroughs. The funding that had been received to date was noted.
· The actions being taken by the Council to mitigate the financial pressures including the use of contingency funding and savings being sought across departments. The collection fund deficit was explained and the impact on future years with repayment over a period of 3 years required. The potential budget gap was explained to Members in detail.
· A range of Covid 19 in year actions were set out including: identification of savings; review of opportunities for property sales (anticipated October Cabinet consideration); review of capital programme; Human Resources/Finance Board actions; review of service specific reserves; and, potential mid-year increase in fees and charges.
· In response to a question raised, it was noted that the Council did not anticipate receiving any additional Government funding this year.
· The assumptions for the medium-term financial plan funding gaps; the funding levels; and, pressures faced were outlined; the “least worse case” assumed for 2020/21 was approximately £25m. The financial position would continue to be closely monitored and reviewed in view of the significant level of uncertainty faced.
· A graph showed that if no action is taken to balance the budget the Council’s reserves would be depleted during 2022/23.
· Matt Bowmer (Director of Finance and Commercial) provided further detail on the Council’s strategy and approach covering a range of themed budget workshops and the significant challenges being faced. Costed proposals would be coming forward later in the year as a result of the work currently being undertaken. All proposals would be considered in line with the Council Plan objectives and priorities. This was a challenging process.
· Members were reminded of the Budget timetable for the coming year and the legal requirements for setting a balanced budget.
Councillor Demirel (Chair) thanked Councillor Mary Maguire, Fay Hammond and Matt Bowmer for their comprehensive and informative presentation to the Panel. They left the meeting at this point and the Panel continued with planning their work programme for 2020/21, as set out in Minute No.5 below.