Agenda item

To monitor the Council’s financial position including revenue forecast outturn, revenue expenditure including key risks and opportunities, capital expenditure and HRA revenue and capital expenditure and reserves.

To also monitor Quarter 1 performance results against the 2019/20 business plans.

4.1       Period 4 Finance Report 2019/20

4.1.1    Gerald Almeroth (Executive Director of Finance & Resources) and David Hodgkinson (Assistant City Treasurer) presented the Period 4 Finance Report, which provided details of the forecast outturn in respect of revenue and capita, together with a summary by Cabinet Portfolio of forecast variances, risks and opportunities.

4.1.2    The report projected a £0.133m overspend; with a variance increasing overspend to £0.632m if all risks and opportunities were realised. The report also projected an expenditure variance of £52.338m by year-end: and income variance of £8.616m resulting in a net variance of £43.722m. The Housing Revenue Account (HRA) revenue forecast was for an overall net surplus of £9.252m, which represented a shortfall of £0.541m against budget. The forecast gross capital expenditure outturn for the HRA at the end of Period 4 was £148.524m, resulting in a total variance of £1.331m compared to the budget of £149.854m.

4.1.3    Variances, risks and opportunities within Cabinet Portfolios continued to be monitored closely as the year progressed. In the Deputy Leader’s portfolio, parking revenue remained volatile with a £1.2m under recovery of parking suspensions; and Finance & Resources were reporting a £900,000 underspend due to increased treasury balances. Fortuitous budget variances changed over time, and that there were currently no concerns in the robustness of the City Council’s budget. The Committee noted that a forecast overspend due to under recovery of income relating to non-dwelling properties related to garages on estates.

4.1.4    The Committee discussed parking suspensions, and Sara Sutton (Executive Director of City Management & Communities) confirmed that it was difficult to forecast future trends due to changeable external factors. Although the introduction of the Lower Emissions Zone and roll-out of the digital surcharge on parking income were being tracked, the impact was yet to be assessed.

4.1.5    The level of placements in Adult Social Care had been lower than forecast, and it was anticipated that seasonal and demographic pressures and increasing complexity of service users would be met from within existing resources. Committee Members recognised that seasonal issues were difficult to predict and could put more pressure on hospitals.

4.1.6    The Committee noted that 11 schools in Westminster had been in deficit this year compared to 8 in 2018. Andrew Tagg (Director of Operations & Management) confirmed that this had been due to the fall in pupil numbers, especially in the primary sector; and that the reduction of 460 pupils had equated to a loss of £2.3m in funding for the schools affected.  Actions being taken to mitigate the deficit included schools working in federation with a shared head teacher and management structure; and working with the Schools Forum. Funding for schools in deficit was available from reserves allocated by the City Council, and could be released if supported by a robust business case.  Data suggested that pupil numbers were beginning to stabilise, and the next pupil count in October would provide more up to date information. Schools and governing bodies also received training in managing financial resources.

4.1.7    Other issues discussed included the risks associated with the Oxford Street Project and delays in procurement; and ongoing discussions with the Clinical Commissioning Group on their contribution towards the Better Care Fund.

4.1.8    RESOLVED: That the Period 4 Monitoring Report be noted.

4.2.      Quarter 1 Performance Report.

4.2.1    Julia Corkey (Executive Director of Policy, Performance & Communications) presented the Quarter 1 Performance Report, which summarised the City Council’s performance at the end of the first quarter of the 2019/20 financial year against City for All priorities. The report also set out progress towards achieving the deliverables and targets within departmental business plans; and provided commentary in respect of outstanding and poor performance, providing details of remedial actions where appropriate.

4.2.2    The Committee noted that instances of knife crime in Westminster had risen by 36% over the past year from 704 to 1000, and asked whether it was anticipated that this trend would continue. Sara Sutton (Executive Director of City Management & Communities) confirmed that the figure included instances of possession following Police activity such as stop and search. The City Council continued to work closely with communities, partner agencies and the voluntary sector in seeking to reduce knife crime; and in promoting initiatives for young people which included sports centres and enrichment programmes such as the City Lions.  The Committee asked to receive a copy of the report on activity by the Police and City Council to stop knife crime, which had been submitted to the City Management & Public Protection Policy & Scrutiny Committee.

4.2.3    The Committee discussed the increasing number of school exclusions, and whether school exclusions diverted resources from knife crime. Andrew Tagg (Director of Operations & Management) confirmed that a pilot scheme with secondary schools which related to exclusions was ongoing; and that a successful alternative provision for short and fixed term exclusions had resulted in a high rate of children re-integrating back into schools. The City Council was monitoring risk, together with the measures that schools could take to keep children in school. Although the number of exclusions in Westminster’s Primary schools was below the national average, there had been a significant spike in secondary schools which had led to the measures being put in place. 

4.2.4    A Robbery Team created specifically by the Police to tackle organised robbery in Westminster had reduced a list of 90 identified offenders almost by half.  Members noted that a knife amnesty had been included in Operation Sceptre, which was a week-long national campaign staged twice a year to reduce knife crime; and that the Leader of the City Council had hosted a summit with London Councils on the response to county lines in London

4.2.5    The Committee discussed the financial liability and increasing risk of the breach and misuse of data, and noted that recent costs awarded against local

government had ranged between £100k and £200k. Gerald Almeroth (Executive Director of Finance & Resources) commented that the larger fines had generally been imposed where companies had been negligent in looking after data, or had not provided the proper training or right kind of security. The Committee noted that contractors who handled IT on Westminster’s behalf were responsible for the security of data. 

4.2.6    The Committee discussed how the profile for Social Value contracts would be measured, and Barbara Brownlee (Executive Director of Growth, Planning & Housing) agreed to provide Members with details of the range of criteria and individual skill sets that were taken into account.

4.2.7    The City Council was considering proposals for different types of scheme for buskers and street entertainers in different locations, which included public space protection orders and an element of licensing. Although the introduction of the scheme was off-track, it was in the final stages of development and the Committee would be informed when it was ready for implementation. 

4.2.8    Committee Members commented on the shortfall in the number of trees planted in Westminster, and noted that although a commitment had been made to plant 3000 trees by 2020, 327 had been planted at the end of 2018/19. Barbara Brownlee and Sara Sutton acknowledged that the original target would not be met, but confirmed that as many would be planted as possible together with other forms of street greening. A new target would be set as part of an investment plan that was being developed by the City Council for delivering street greening.

4.2.9    Committee Members noted that the target for less than 4% of calls being abandoned by Agylasis was off-track, and Julia Corkey confirmed that performance had now improved.

4.2.10  Other issues discussed included the City Council’s financial obligations in view of the fragility of the adult care market; the potential impact of Brexit on EEA nationals employed by Veolia; and the management plan for the Oxford Street Project and ongoing problems of organised crime in Edgware Road.

4.2.11  The Committee made a number of requests for further information.

4.2.7    RESOLVED: That the Period 1 Performance Report for 2019/20 be noted.

            ACTIONS:

1.         Committee Members to receive the report on knife crime that was submitted to the City Management & Public Protection Policy & Scrutiny Committee on 10 September.  (Action for Sara Sutton - Executive Director of City Management & Communities) 

2.         Committee Members to receive details of the policy on Social Value contracts requests.  (Action for Gerald Almeroth - Executive Director of Finance & Resources)

3.         A report on the performance of the Basic Command Unit for Westminster, including Key Performance Indicators, to be included in the Committee Work Programme for the next meeting on 27 November.  (Action for Sara Sutton - Executive Director of City Management & Communities) 

4.         Details to be provided of the reasons performance of the Agilysys customer service contract was off-target in Quarter 1; together with an explanation of any issues remaining in Quarter 2.  (Action for Julia Corkey - Executive Director of Policy, Performance & Communications) 

5.         A deliverable target for tree planting in Westminster to be established; together with general infrastructure greening.  (Action for Sara Sutton - Executive Director of City Management & Communities) 

6.         Details to be provided of how Children’s Services are managing the finance and restructure of schools in response to school budgets and deficits. (Action for Andrew Tagg - Director of Operations & Management) 

7.         Analysis to be provided of the financial pressures on Adult Social Care and the implications for the City Council.  (Action for Gerald Almeroth - Executive Director of Finance & Resources) 

8.         Analysis to be provide of the underlying reasons for the increase in fixed-term exclusions; including a breakdown of the reasons for exclusion; schools; age groups; and any other characteristics available. (Action for Sarah Newman – Bi-Borough Executive Director of Children's Services)