Agenda item

Report of the Director of Finance and Assurance

The Forum received the report of the Director of Finance and Assurance which set out the Council’s proposals for the draft Revenue Budget 2014?15, Medium Term Financial Strategy (MTFS) 2014?15 to 2016?17 and the draft Capital Programme 2014?15 to 2017?18.

The Director of Finance and Assurance informed the Forum that this report had been considered at Cabinet on 12 December 2013, would be brought back to Cabinet on 13 February, and would be taken to Council for decision on 27 February.  He added that some figures contained within the report were now out of date and would be corrected in the light of more up-to-date information.

He reminded Members of the continuing economic factors and demographic pressures influencing budget decisions and outlined the following points:

·                    Harrow has one of the lowest government grants in London;

·                    funding for local government has been reduced while demand for Council services has increased;

·                    the budget has been guided by the administration’s corporate priorities;

·                    the impact of welfare reform has not been severe as expected, and provision to counter this has been reduced.

The Director of Finance and Assurance then provided responses to questions from Employees’ Side representatives.

·                    In answer to a query on whether the projected savings identified in Children’s Residential Care took into account the loss of revenue which would result from a reduced service, he explained that the savings were net and had been calculated taking all other factors into account.

·                    A representative queried the wording in respect of a Public Realm item on ‘early termination of vehicles’.  It was noted that this was a delayed saving, and that the item could have been better worded to reflect this.

·                    In response to a request for clarity on an Environment and Enterprise item, ‘additional transitional management roles’, he explained the background to decisions taken, which had differed to the actions originally agreed, and agreed to provide a written response to Unison members.  It was noted that this issue had been discussed at a meeting of the Overview and Scrutiny Committee the previous week.

·                    In response to a question about what provision the Council would make as a ‘buffer’ for those residents affected by welfare reform, he confirmed that a contingency fund had been identified in advance of the welfare reforms being implemented, but that this had been underspent.  This had not been intended as a permanent measure, and current advice suggested that it would not be necessary in 2014-15.  In his opinion, there were sufficient contingency reserves in place which could be drawn upon without requiring a specific fund.

·                    In respect of a planned pay claim by Unison of an increase of £1.20 per hour, he stated that the budget modelling assumed a pay increase of 1%.  It was noted that any pay awards would be negotiated and agreed nationally.

·                    He agreed to share a reconciliation table demonstrating the increase in deficit for the municipal year 2016-17.

Members then discussed the reconfiguration of the Meals on Wheels Service and how best to take it forward in a self-funding and sustainable model.  A Member offered to meet and explore options with Employees’ Side representatives.

Members also discussed proposed savings through procurement, and whether these had been or would be realised.  The Director of Finance and Assurance stated that as the new Head of Procurement had been recently appointed and was still appointing his team, it was too early to assess the performance of the team.  A representative asked if it was possible to compare the cost of the service against savings achieved.

The Forum discussed bad debt provision in the budget and the category and duration of bad debts.  The recovery of some debts was not cost effective, and vulnerable debtors had to be dealt with sensitively.

The Director of Finance and Assurance noted that government had transferred some responsibilities to local authorities but with a lower level of funding than had previously been allowed.  A ‘new burdens doctrine’ had been produced to provide guidance.  A representative asked if these extra duties had had a significant impact on the budget.   The Director agreed to share details of the changes with Unison.

A representative commented that over 80% of Council employees were also Harrow residents, and that any planned reductions in the workforce would therefore have a significant socio-economic impact beyond the immediate impact of loss of jobs.  The Chair acknowledged that this was a factor in determining whether jobs should be outsourced.  The Divisional Director of HR and Development and Shared Services added that there was a formula for assessing the wider costs of changes to the workforce.

Finally, the Director of Finance and assurance confirmed that Equality Impact Assessments (EqIAs) had been undertaken where necessary among the 67 changes to the original budget.

RESOLVED:  That

(1)               the report be noted;

(2)               the Director of Finance and Assurance will provide the following to Employees’ Side representatives:

·                    a written response on the item ‘additional transitional management role’;

·                    a reconciliation table demonstrating the increase in deficit for the municipal year 2016-17;

·                    the ‘new burdens doctrine’ and details of responsibilities transferred from government and their likely impact on the budget.

The meeting then adjourned, and it was agreed to reconvene at 7.30 pm on Monday 3 February in order to consider the remaining business on the agenda.