Agenda and minutes

Apologies for absence were received from Councillor Andrew Jones.

If a Councillor has a disclosable pecuniary interest in a particular item, whether or not it is entered in the Authority’s register of interests, or any other significant interest which they consider should be declared in the public interest, they should declare the existence and, unless it is a sensitive interest as defined in the Member Code of Conduct, the nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

Where Members of the public are not allowed to be in attendance and speak, then the Councillor with a disclosable pecuniary interest should withdraw from the meeting whilst the matter is under consideration. Councillors who have declared other significant interests should also withdraw from the meeting if they consider their continued participation in the matter would not be reasonable in the circumstances and may give rise to a perception of a conflict of interest.

Councillors are not obliged to withdraw from the meeting where a dispensation to that effect has been obtained from the Standards Committee.

There were no declarations of interest.

To note the minutes of the previous meeting.

The minutes of the meeting held on 9 November 2021 were noted. As this was an informal meeting, minutes will be formally agreed at the next in person meeting.

This meeting is being held remotely on Zoom and will be live streamed

to YouTube: https://youtu.be/HAhqgSrCbfs

If you would like to ask a question at the meeting about any of the items

on the agenda please send your question to governance@lbhf.gov.uk

by 12 noon on Friday, 21 January

No public questions were received.

This report sets out the budget proposals for the services covered by this Policy and Accountability Committee (PAC). An update is also provided on any proposed changes in fees and charges in the budget.

Corporate Budget Context

Emily Hill (Director of Finance) provided a corporate overview of the Council’s budget.

In terms of the Government Spending Review 2021, it was noted that over the past few years there had been an increase in funding to local government, but historically, looking back to 2010/11, there had been a 20% decrease in core spending power amongst London Boroughs. Details were provided on how core spending power was calculated, and it was highlighted that London had been hit harder than the rest of England in its funding cuts.

Looking forwards, Emily Hill provided an overview of public spending by Governmental Department (2021-22 to 2024-25), and it was noted that when social care reform costs were excluded, Local Government budgets will see a 1.8% increase (compared to 4.1% for health and social care over the same period).

Details were provided on recent savings and growth in Hammersmith and Fulham. It was noted that the level of savings to balance the budget had decreased over time and a significant proportion of growth had been allocated to health and social care as demand and pressures had increased.

The budget proposals for 2022/23 were summarised, noting that the Economy Department was one of the lower spending departments in the general fund and that due to Covid and health and social care pressures, most of the growth had been allocated for social care demand and inflation costs. Emily Hill explained that provisions had been made for inflation and contractual / pay inflation, but these remained a concern and inflation was a significant risk. Details were provided on the Government grant to Hammersmith and Fulham which had increased by £6.174 million and covered the employer’s national insurance increase of 1.75%. However, it was highlighted that the future of the services grant of £4.2 million was uncertain with no guaranteed protection.

Summing up Emily Hill (Director of Finance) provided an overview of the corporate risks facing the Council.

2022 MTFS

Danny Rochford (Head of Finance, Economy & Housing Revenue Account) provided a presentation on the proposed Economy general fund budget for 2022/23, highlighting the following key points:

• The plan for the next financial year included a combination of inflation and temporary growth requirements, as well as savings.
• It delivered a diverse range of services (mostly statutory), continuing to prevent homelessness and eliminating rough sleeping, maximising income generation opportunities, ensuring Covid safety, as well as delivering the Civic Campus programme and the delivery of new homes and support for local businesses.
• The proposed budget for the Economy department includes the following services: Housing Solutions, Operations, Economic Development, Learning and Skills, Planning, Regeneration and Development and Place.
• £0.235m savings had been identified through: The consolidation of management and workforce, and the reduction in the use of agency staff (£200,000) - the final year of implementation of a three-year phased delivery programme, as well as a review of senior management posts funding  and section 106 funding (£35,000).
• Permanent growth of £350,000 – Planning fees income, temporary growth (for  ...  view the full minutes text for item 5.

This report sets out the HRA budget proposals for the financial year 2022/23 including changes to rent levels and other charges and explains the wider financial risks facing the HRA. Recognising the cost of living pressures faced by tenants due to inflation and Government tax increases, it notes that the administration proposes a real-terms reduction in rent.

Danny Rochford (Head of Finance, Economy & Housing Revenue Account) provided a presentation on the HRA highlighting the following key points:

·       The HRA was presented to the Housing Representatives Forum and support was received for a rent increase.

·       The rent increase of 1.5% (real terms reduction), was well below the Government’s proposal of 4.1%. The average rent will be lower than neighbouring boroughs’ average rent.

·       The 1.5% rent increase will place further pressures on the HRA. 

·       Significant emerging pressures included – Depreciation - £1m, Void Homes – £0.7m, Inflation - £0.6m, Improvements to repairs and maintenance - £0.4m, Health & Social Care Levy - £0.25m

·       Therefore, savings of £3.8m were needed for 2023, rising to £7.1m in 2024.

·       Most of the savings required remained unidentified at this stage. Officers would be working over the next few months to meet these targets.

·       The challenging savings target must be achieved to ensure the financial sustainability of the HRA.

·       Both with and without the savings target, we are planning to spend more money than we have coming in. This means we will need to draw at least £4m from the HRA’s reserves next year. Much of the reason we need to make more savings over the coming years is because reserves are reducing and we need to move quickly to a position where our costs are matched by income.

·       The HRA’s Long Term Financial Plan took the following factors into account: The current financial position, significant compliance and climate change capital spending plans, macro-economic changes and new affordable housing development schemes.

·       Savings of £8m over the next 3 years were to be delivered through: a review of management costs, the Housing Transformation Programme, income opportunities and other plans yet to be identified.

The Chair invited Councillor Lisa Homan to comment on the HRA presentation. Councillor Lisa Homan explained the 1.5% rent increase recognised the recent increases in the cost of living and feedback from the Housing Representatives Forum was positive and included a number of suggestions where future savings might be identified. Councillor Lisa Homan commented that there was room for further efficiencies, but these would be challenging. Concluding her remarks, she commended the proposed rent increase and service charges as set out in the report, notwithstanding the uncertainty and level of risks which had also been highlighted.

Councillor Adronie Alford asked what the difference was between Hammersmith and Fulham rents and an average figure for Housing Associations operating in the borough.

Action – That Danny Rochford provide Councillor Adronie Alford with a list of rents comparing Hammersmith and Fulham properties with an average rent of Housing Associations operating in the borough.

Councillor Adronie Alford highlighted the lack of reserves in the Housing Revenue Account and commented she was deeply concerned about the unidentified savings and level of savings which were required.

Commenting on the reduction of income due to the higher void rate, Councillor Adronie Alford asked whether this was due to the constraints of the Covid period (with works being delayed)  ...  view the full minutes text for item 6.