Agenda item

To monitor the City 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 monitor Quarter 2 performance results against the 2021/2022 business plans and to conduct a half-yearly overview of performance.

4.1       The Committee received the Finance and Performance Monitoring Reports, which were introduced by Jake Bacchus.

Finance Monitoring Report

4.2       Jake Bacchus summarised the Finance Monitoring Report, noting it was the year mid-point report outlining the position for the General Fund and the Housing Revenue Account (HRA).

4.3       The Committee heard that at the end of September 2021, Westminster City Council had a forecast revenue overspend of £4.6 million, driven by lowered commercial waste income and parking income, although parking income was noted to be improving in comparison to its previous positions throughout the COVID-19 pandemic period.

4.4       Some of the overspend was also attributable to spending pressures, including reduction in funding for care leavers requiring increased spend in Children’s Services, as well as SEND transport and short breaks, mirroring the picture nationally.       

4.5       A £2.7 million revenue underspend was forecast for the HRA, mainly attributable to staffing and an imminent restructure.

4.6       The General Fund reported a £33 million capital underspend, reduced from £100 million in the previous year, and approximately £50 million in the year prior to the pandemic. The causes of the underspend included slippage in planned capital works and regeneration programmes.

4.7       The HRA reported a £26 million capital underspend, reduced from £68 million in the previous year.

4.8       Regarding the Spending Review, the Committee heard that Westminster City Council anticipated learning its settlement amount imminently, and the Finance and Resource team would prepare an update for the next Audit and Performance Committee meeting regarding this. It was believed that the increase in funding would be approximately 3% in real terms of Core Spending Power year-on-year, which was expected to be largely allocated to adult social care funding reform.

4.9       The Committee raised a query about the timing of the upcoming Business Support Function Review (BSFR). The Committee was informed by Jake Bacchus that more information would be available at the next Committee meeting as a decision had very recently been made and consequently the BSFR was being reworked.

4.10     The Committee queried the Adult Social Care underspend in the context of a reported increase in demand. Bernie Flaherty confirmed that the budget for Adult Social Care had been very volatile, that there had been a substantial increase in residential care demand, and that although there had been an increase in home care demand, this was not yet to expected levels. Bernie Flaherty explained that there had been changes in regulations concerning patient discharge, and that the health service had been better supporting patient discharge from hospital with grant funding, which had helped with Council care spend. She also explained that there had been significant savings made by reducing staffing in adult social care, including agency staffing.

4.11     The Committee asked about Temporary Accommodation (TA), concerning a review of the use of social housing stock which was void due to regeneration programmes. Debbie Jackson explained that some void social housing was let for TA on a case-by-case basis.

4.12     The Committee questioned the overspend for Westminster Builds including out-of-borough schemes and investment acquisitions. Debbie Jackson explained that this was due to acquisitions at Farm Street, Parsons North, and West End Gate. The Committee heard that Cabinet had not approved Westminster Builds’ involvement in out-of-borough schemes, requesting instead that the focus be on delivery of homes in Westminster. Regarding out-of-borough housing, the Committee queried how acquisition of out-of-borough properties for TA was funded. It heard that there was existing provision in the Capital Budget for financing acquisitions through borrowing, delivering longer-term net savings through reduction in emergency TA costs.

4.13     The Committee questioned the Council Tax and National Non-Domestic Rates (NNDR) arrears and collection rates. Martin Hinckley explained that, although the Covid19 pandemic had meant that the Council was prevented for a period of time from initiating recovery proceedings, it was anticipated that Council Tax arrears would yet be collected over time. It was noted that the 9% reduction in NNDR income included a large number of businesses in insolvency proceedings or administration, so this may not be recovered.

4.14     The Committee was informed that Planning income (chiefly from pre-applications and major applications) was significantly reduced, with applications at around 50% of pre-pandemic levels.

4.15     The Committee requested information about upward pressure on spend for passenger transport for SEND children. Ian Heggs explained that there were increased requests for Education, Health, and Care Assessments for disabled children, and some of these assessments when finalised revealed requirements for passenger transport. This was noted to be a national issue rather than a local one.

4.16     There was discussion about how the impact of COVID-19 had been accounted for overall in the figures presented to the Committee. Rikin Tailor explained that the process had taken the impact of the pandemic into account whilst producing budgets, resulting in reduced variances.

            Performance Monitoring Report Q1

4.17     The Committee was presented with a brief overview of the 2021/22 Q2 Performance Report by Mo Rahman.

4.18     The Committee queried whether the Department for Education’s closure of the Sir Simon Milton UTC was forecast to have an impact on training and skills opportunities in Westminster. Ian Heggs confirmed that Westminster City Council would prefer to be able to provide high-quality technical training opportunities at the UTC site, and the DfE was investigating possibilities for alternative providers.

4.19     The Committee questioned some of the missed targets described in the monitoring report. These included new permanent admissions to adult residential and nursing care, and the surplus of school places as well as schools in deficit.

4.20     The Committee was informed that new guidance introduced by NHS England, Discharge to Assess, was a significant change from the previous model of assessment by a specialist social care team based in hospitals. This team previously carried out assessments of care needs prior to discharge, to ensure a well-planned discharge with appropriate care arrangements for the patient, ideally at home. Discharge to Assess required hospitals to focus on quick discharges, which meant that social care teams had been unable to provide the previous level of support to allow patients to return home. Many of these patients were therefore discharged by health service staff into residential care facilities, and it frequently proved difficult for Adult Social Care to support a return home after a period in residential care. This was a key driver for the increased new permanent admissions to residential care. The health service had provided funding, but this was due to end in March 2022, and therefore this was noted as a key risk.

4.21     The school places surplus was noted as following a trend with fewer families living in inner London boroughs. The Committee heard that the Council was supporting Westminster schools to reduce the number of school places available by reducing form entries, and was supporting a marketing programme for Westminster schools.

4.22     The Committee asked whether the waste contract was due for retendering or whether it would be extended, as its present arrangement had been in place for fifteen years. Raj Mistry confirmed that the contract with Veolia had been extended until 2024, with investment in food recycling and electric waste vehicles, as well as improvements to recycling options for residents. A new tender was anticipated to include these improvements, and would go live at the end of the current extension period.

4.23     The Committee asked when Westminster City Council could expect data from the 2021 Census. Sophie Shore confirmed that this was expected in the Spring, and that there had been discussion with the Office for National Statistics regarding this.

4.24     The Committee was provided with an update by Raj Mistry regarding the flash flooding of North Westminster in July 2021 and the extraordinary meeting of the Finance, Smart City and City Management Policy an Scrutiny Committee on 30 September 2021. The Council’s Environment and City Management directorate had inspected its gullies and drainage across the area and found no issue. The Committee heard that Thames Water was carrying out its own inspections on a wider scale in preparation for a Section 19 report, which Raj Mistry anticipated would be provided to the Council in Q1 2022.

4.25     The Committee observed that the risk score for increased inflationary costs of materials seemed low, given the upward pressure which the increased costs were placing on overall budgets. Debbie Jackson agreed to review the risk scoring. Housing repairs were noted as being below target, and this was explained as being due to a backlog accumulated during the pandemic, which was improving. The Committee noted the reports.

4.26     RESOLVED: That the Committee note the reports.