Members will receive a presentation.
(7.10 – 7.50)
Councillor Birsen Demirel (Chair) invited Councillor Mary Maguire (Cabinet Member for Finance and Procurement) to briefly introduce to the Panel the information provided to Members on the Budget Review 2021/22 – 2025/26 for the Panel’s consideration.
Councillor Maguire set the context of the budget setting process and the difficulties faced by the Council as a result of the Covid-19 pandemic. It was further noted that had the pandemic not happened, the Council’s budget forecasts would have been accurate and achievable. Members were advised of the funding which had been received from the Government to date but that more was still required to meet the costs incurred by the Council as a result of the pandemic.
Councillor Maguire highlighted the detailed work currently being undertaken and the issues to be considered including the need to challenge the budget assumptions being made regarding forecast expenditure, potential loss of income, risks and, whether the proposed savings were realistic and achievable. A detailed review of savings and income generation had been considered at the October 2020 Cabinet meeting.
Councillor Maguire highlighted the impact of the pandemic on the Borough, in relation to local businesses, and individual residents, with a significant proportion of the working age population in the Borough having been furloughed. This would have a negative impact on the Council’s income through Council Tax and Business rates and, would also result in further expenditure through the Council Tax Support Scheme.
Councillor Demirel thanked Councillor Maguire for her introduction and invited Panel Members to raise any questions.
1. The detailed information that had been circulated to Panel Members in advance of the meeting outlining the budget review 2021/22 – 2025/26. Executive Directors were present at the meeting to answer any questions that Members had.
2. Members were given an opportunity to raise questions which are summarised below together with the responses provided by the Executive Directors of Resources, Place and People:
3. In relation to the current budget gap and funding requirements, Enfield’s position in comparison to other neighbouring Councils was questioned. In response it was noted that benchmarking with other London Councils was undertaken. Differences were highlighted, for example some Central London Councils were being impacted by a significant loss of car parking income; Enfield was not affected so severely by this. Other Councils had set savings targets previously for Adult Social Care provision which they could no longer meet; this was not the case in Enfield. However, Enfield had the highest number of cases in London of Council Tax Support applications, although Enfield’s scheme was not the most expensive, the number of cases arising was an additional pressure for the Borough. The Council would continue to lobby the Government for adequate funding support to meet the growing demand.
4. Members questioned whether the proposed savings were realistic and deliverable. It was noted that whilst the savings were challenging, they had been fully assessed through the budget processes and only those savings felt to be possible were presented for consideration. It was noted however, that continual assessment and monitoring would take place and adjustments made as necessary as the budget review process continued.
5. In considering the savings being put forward, Members asked Executive Directors to outline what areas had been protected and to highlight any distinctions in statutory and discretionary services. The responses are summarised below:
· Resources – the proposals had protected the service areas of income collection for Council Tax and Business Rates and those teams providing support to residents who need to claim benefits. These were key services for both residents and the Council. The Finance team was also protected in view of the importance of maintaining and supporting a solid budget position for the Council. All other services would be subject to a savings review whilst trying to minimise any impact on front line services as far as possible.
· People – the Council had been subject to budget reductions over several years and many non-statutory services had been taken away previously. The majority of services provided were now statutory and sought to protect the most vulnerable people in the Borough including both adults and children. It was noted that Enfield’s expenditure was lower than a number of other comparable local authorities, and that the Public Health grant received by Enfield was also historically lower than other authorities.
The proposed areas of savings focused on increasing efficiency, improving commissioning of services, and, integrating staffing areas and so reducing management costs. Front line services would be protected as far as possible and so the impact on residents and service users would be minimised. It was further noted that these were demand-led services so whilst it was currently felt that the proposed savings were achievable, there were a number of uncertainties that would continue to be closely monitored and reviewed as necessary.
· Place – the wide-ranging services provided by the Place Department had been highlighted in the information circulated to the Panel in advance. Officers would continue to seek to increase income through the provision of Council services including for example through planning and environmental services. Areas of increased efficiency would be sought; including the consolidation of the Council’s property portfolio, and in so doing, reduce the running costs incurred.
A range of services had been protected from the current savings proposals including core street scene services and the Council’s Homelessness and Housing Advisory Services; including the current prevention work that was being developed. These areas would continue to be closely monitored. Whilst the provision of parks was not a statutory service, there were no significant savings proposed in this area.
Members noted the range of savings proposals and the intention to protect front-line services as far as possible.
6. Members questioned the level of staff redundancies proposed and expressed concern over the potential impact on staff members and their families; and, questioned the redeployment opportunities and support to be provided. In response it was explained that redundancies would be kept to a minimum, current vacancies were being held and staffing reductions would initially impact on agency staff.
7. It was further noted that the funding levels for 2021/22 were still awaited from the Government, it was anticipated that this would be made known at the end of November. The Council had to continue to seek savings to ensure that a balanced budget was achievable. Members were advised that the Council Tax deficit for this year would be spread over 3 years, resulting in an approximate budget pressure of £6m per year. The economic impact of the pandemic was significant and the Council would continue to lobby for resources to meet the cost and support the Borough’s recovery. The uncertainty of the current position was noted.
8. Members questioned the support that was being provided to local businesses and the grants that had been made available to them. In response it was explained that the Government had announced a range of differing grants which required careful management. The Council was working closely with local businesses to ensure that the support available was implemented effectively and efficiently as appropriate. In addition, the Council would continue to seek to support young people into employment and encourage new businesses to the Borough. Members requested that a briefing be provided to them on the financial grant support available, to enable them to respond to individual enquiries that they were receiving from both residents and local businesses.
9. Members noted the Government funding which had been received by the Council to date. Whilst funding had been received it was not currently sufficient to meet the budget gap arising from the pandemic; and, the ongoing budget uncertainties of going into a second lockdown, and the resulting impact on businesses and residents. It was noted that approximately 52,000 working age residents had been furloughed, representing approximately a third of the working population in the Borough. This had a significant pressure on council tax collection rates and budget pressures through the council tax support scheme. The detailed financial impact was outlined to Members. The Government’s furlough scheme in comparison to other countries was noted.
10. Members were informed of the detailed budget assumptions and continuing economic impact of the pandemic on the Borough over a range of issues including increasing unemployment, growing demand for support and services, the economic impact on businesses and the housing market.
11. The Council was working closely with other London Boroughs, the GLA and the private sector. The Council would seek to retain large employers in the Borough and provide support where possible.
12. In considering the budget assumptions, Members questioned whether the assumptions had been based on a single dip recession through the previous lockdown period and what assumptions would now need to change as a result of the anticipated double-dip recession. The significant budget uncertainties were highlighted. The Council would continue to adopt a responsible and prudent approach and would continue to seek to plan for a five-year Medium-Term Financial Plan. The Council would continue to protect services and support residents as far as possible.
13. In seeking to set the budget a range of changing factors had to be taken into consideration including for example, income levels, cost pressures, inflation, changing demographics, and demand for services. The budget was normally broadly based on previous years but the current times were unprecedented. The Council would continue to refresh and review the budget assumptions and manage any risks arising.
14. Members questioned if there were any immediate concerns or risks arising that they should be made aware of at this time. In response, it was explained that the economic impact of the pandemic was under constant review, an area of significant budget pressure currently was on council tax income and an increased demand on the council tax support scheme. It was anticipated that more information on Government funding levels for next year would be known at the end of November.
15. In response to questions raised, it was noted that the Council’s capital expenditure assumptions and forecasts were being reviewed. It was proposed to report to Cabinet in December 2020 with a review of the 10 year capital programme and; an update on the Medium Term financial plan and draft 2021/22 budget.
16. Information was sought as to whether the Council had undertaken a risk assessment on the impact on the Council and how to respond should the Government’s furlough scheme end or lessen. In response the work being undertaken was outlined together with the highest areas of perceived risk and the budget assumptions being made. The Council was continuing to lobby Government for funding and would continue to closely monitor and react to the budget pressures arising.
17. In conclusion, thanks were expressed to Councillor Mary Maguire (Cabinet Member for Finance and Procurement), Fay Hammond (Executive Director – Resources), Sarah Cary (Executive Director – Place) and Tony Theodoulou (Executive Director – People) for the information provided to Members and the responses given to questions raised by the Panel. The minutes of the Panel meeting would be submitted to the Overview and Scrutiny Committee as part of their consideration of the budget in December.