Agenda item

Reports of the City Treasurer and the Director of Policy, Performance & Communications

6.1     Steve Mair, City Treasurer, introduced the period 9 finance report which provided details of the forecast outturn in respect of revenue and capital and projected revenue and capital expenditure by Cabinet Member including key risks and opportunities.  The report also included details in relation to the revenue and capital expenditure for the Housing Revenue Account.

6.2     The Committee expressed on-going concern over the capital forecast outturn variances against budget .  Members expressed concern about the ability of service areas to produce robust forecasts.  The City Treasurer stated that the City Council was a large and complex and business with a budget of over £800 million per annum and a large and significant capital programme.  Therefore, it was not unusual given its complexities for slippage to occur in the capital programme.  Effective forecasting relied on a combination of leadership and project management skills.  He advised that the finance team does robustly challenge the assessments from those leading on capital projects.  He further advised that the Council was not currently borrowing to finance capital expenditure but that this would be the case in the future.  He explained that the Council had introduced a new business case arrangement for awarding capital programme expenditure to projects and that the finance team was working with service colleagues to address this.  Moreover, the chief executive had commissioned a report to investigate the Council’s programme management and delivery processes. Members suggested that a report on this issue should be added to the committee’s work programme.

6.3     The Committee expressed concern over the possibility that a large number of projects that are currently delayed may all progress at the same time and they questioned whether officers would be have the capacity to deal with such a challenging workload.  The City Treasurer advised that this issue would be picked up as part of the full service review.

6.4     The Committee noted that the £86 million capital receipt for the Moxon Street site which had yet to materialise was delayed due to challenges over Rights to Light.

6.5     The City Treasurer was asked for details of the Council’s reserves.  He reported that the general fund reserves were £41.56m at March 2016.  This is likely to increase by approximately £5m to £46.6m over the course of the year.

6.6     In response to questions he was of the view that reserves should be built up to £70m as a minimum over the next 4 years or so.  He referred to the fact that the Council cannot operate without sufficient reserves.  As mentioned previously the Council’s annual budget was approximately £800m.  A modest 3% error on income and expenditure would result in the Council having to find £48m to make up the shortfall.  He reminded the committee that in 2008 the Council had reserves of £70m which were heavily called upon following the global recession.  He explained that at the current rate it would take a further four years for the Council to build reserves to a similar level.  Members commented that the Council’s external auditor at the time expressed the view that the Council was over reserved.  The City Treasurer advised that this was not his view.  The committee expressed concern as to whether the government would potentially reduce the Council’s grant settlement in such circumstances.  It also wished to ensure a balance between increasing reserves and seeing further cuts to services.

6.7     Members also asked about the Council’s income generation capabilities both in relation to contributing to the Council’s budget and reserves.  The City Treasurer advised that approaching one third of the budget proposals in the last 2 years had been generated from income such as car parking charges, commercial waste collections and the renting of advertising hoardings.  This compared favourably with other local authorities.  The committee suggested examining at a future meeting the Council’s income generation streams and opportunities and how they can contribute to the ambition to increase general fund reserves.

6.8     Damian Highwood, Evaluation and Performance Manager, Policy Performance and Communications, introduced the remainder of the report which outlined of the progress made against the performance management framework between April and December 2016.  The committee considered the major achievements and challenges, performance issues against internally set 2016-17 targets and where key performance needed to be improved.

6.9     Greg Ward, Director of Economy, addressed of the committee on the Council’s progress in reducing long term unemployment amongst Westminster residents.  He explained that to support the Council’s ambition to reduce by a third the residents who are long-term unemployed (defined as residents claiming DWP benefits for one year plus) a new Westminster Employment Service was established in December 2016.

6.10    He informed members that despite the huge volume of jobs on offer Westminster has a high proportion of working age residents who are long-term unemployed compared with other parts of London.  This is despite Westminster’s unemployed being well-qualified. It has a greater proportion of its workforce further from work due to a combination of significant health or disability issues (the majority are Employment Support Allowance claimants), barriers to affordable childcare and the high costs of accommodation.

6.11    The Committee was informed that the Council had only started focusing on reducing long-term unemployment two years ago.  In 2015 the number of long-term unemployed in Westminster was 11,500.  This has now reduced to 9,600 due to a combination of factors including residents moving out of the borough or moving into retirement and therefore no longer being in receipt of certain DWP benefits.  551 of this group had been helped into work.  Mr Ward stated that while this may seem a small number the implications were significant given the particular challenges presented by the target group.  He advised that compared to 378 local authority districts in England, Wales and Scotland, Westminster achieved the 8^th highest fall in the numbers of long-term unemployed.  One third had sustained employment for more than 6 months.  Evidence had shown that those who manage to stay in work for this length of time were more likely to remain in work.  At the present time he was unable to provide statistics about how many had sustained employment for 12 and 24 months but through the new service there is now opportunity to start to monitor to these timeframes.

6.12    Mr Ward advised that the Council was focusing on those residents who had the highest support costs such as those in temporary accommodation or in receipt of social care, children known to the police or with addiction, mental and health issues.  It was estimated that the savings from the Treasury amounted to £9000 per person.  In response to further questions around costs he advised that the service cost £277,000 from the general fund annually with all other funding being attracted from alternative more external resources.

6.13    Mr Ward was asked about the on-going support provided to the long-term unemployed once they have found work.  Members considered that some on-going monitoring and support was likely to be required for those with the challenging circumstances previously identified.  Mr Ward reported that a particular issue identified was that those who enter employment can find it challenging to turn up consistently and on time and therefore to maintain work in the short term.  The Council wished to work further with partners to ensure that the long-term unemployed have a greater opportunity to succeed.

6.14    The Chairman questioned the accuracy of the performance information for each directorate.  With reference to the Community Independence Service (CIS) which featured as one of the successes within Adults Services he advised that from September 2016 he had chaired a task group of the Adults, Health & Public Protection Policy and Scrutiny Committee which examined the re-procurement and strategy for the re-commissioning of the CIS.  He advised that the task group struggled to obtain information on the forecasting process which would determine the resourcing strategy, details about whether the model was appropriate to meet the demand and the mitigation of risks associated with the labour market which was required to support the service.  The chairman expressed concern about the ability to track its performance when such information could not be scrutinised.

6.15    Mr Highwood explained that the report presented for this quarter was a hybrid report.  He advised that some of the outcomes for the service were set out in the performance indicator table in appendix 1 although he acknowledged that this could be better interlinked. He advised that moving forward the Evaluation & Performance Team would be asking service directorates to outline in detail the outcomes achieved rather than listing successes. 

6.16    The committee then raised questions and asked for further information on a range of key service updates within the performance business plans.

6.17   RESOLVED: That the report be noted.

6.18    ACTION:

Finance

1.     Provide the committee with the cost of leasing accommodation at 5 Strand and Portland House as part of the City Hall refurbishment programme.

(Action for: Steve Mair, City Treasurer)

Performance

2.     Advise whether the pressure on Adult Service budgets are likely to have an impact on future eligibility criteria; 

3.     The slowness to get the Young Westminster Foundation up and running has left a service gap (for instance Stowe Youth Centre reducing its opening times and provision) – what progress has been made and what impact will the delay have on services?

4.     Clarify what steps can be taken to deal with rough sleepers who refuse support, but contribute to antisocial behaviour;

5.     Is planning performance getting back on track in terms of determining applications for non-major developments?

6.     Circulate updated demographics of long term unemployed in Westminster together with details of the costs/benefits associated with supporting those into employment as well as details of the outcomes achieved to date;

7.     Provide some narrative as to how social value has been used to support distinctly i) local residents, and ii) local businesses;

8.     Does the Council have an IT strategy to mitigate the risk from failure of remaining legacy data centre services and the risk of malicious virus/hacking from external sources?

9.     Provide more information in the next quarterly report around the HR metrics and MSP improvement plans in place to resolve the current lack of dashboard data which is impacting on policy development and workforce planning.  Confirm the number of staff in the council

10.Detail how Cornerstone has marketed for new potential Foster Carers – how might this change to deliver improved performance which has been off track for some time?

(Action for: Damian Highwood/Mo Rahman, Strategic Performance Team)