Agenda item

This report provides an update on the overall preparation and proposals for the 2024/25 revenue budget, risks, financial resilience, and the impact of those proposals.

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

Councillor Rowan Ree (Cabinet Member for Finance and Reform) gave an overview of the 2024 Medium Term Financial Strategy.  He highlighted that despite the difficult circumstances faced by local authorities, the Council had put together a budget that protected not just the core services but also those that made Hammersmith and Fulham (H&F) unique, such as the council tax support scheme. He reassured residents that this Council would continue to provide services they needed as it had managed to run a budget surplus and contribute them to last years’ reserves. The budget setting this year had started with a budget gap of £23m from which savings had to be found. This was made possible because of the Council’s ruthlessly financially efficient approach in setting and managing the budgets as well as its continuous process of public service reform. Councillor Ree also took the opportunity to thank officers in Finance and other departments in producing balanced budgets, and Councillor Frances Umeh, Cabinet Member for Housing and Homelessness, for managing its budgets throughout the year.

In terms of technology reform, Councillor Ree noted the use of artificial intelligence in adult social care services and the continual exploration of the latest technology that could be deployed to support the provision of the best quality services to residents. Under organisational reform, more savings across the Council were identified through the four large corporate savings programmes. The Council was also funding new reforms to improve the ways of service delivery, such as the Family Hubs.

Sukvinder Kalsi (Strategic Director of Finance) presented the Corporate Budget Strategy 2024/25.  He outlined the strategic operating environment, the objectives of the financial plans and delivery strategy, proposed budget 2024/25 including council tax consideration and the medium-term forward look. The Corporate Budget would be considered by the Cabinet on 12 February and approved by the Council on 28 February this year.

Danny Rochford (Head of Finance – Economy and Housing Revenue Account) presented the MTFS for Housing Solutions.  He outlined the current strategic service context, budget strategy, proposed budget 2024/25, savings, growth and inflation 2024/25 and financial risks.

Officers’ presentations are attached in Appendices A and B

In response to the Chair’s question, Richard Shwe (Director of Housing) noted that residents could access housing and homelessness services through the Family Hubs. The Housing Services team was now working more closely with colleagues in Adult Social Care and Children’s Services as well as those in the refugee programme. Each party was complementing each other on matters of common concern and the services were delivered through existing routes.  Councillor Ree added that the Family Hubs would eventually become a one-stop shop for residents to access Council services they needed. 

The Chair noted that some of the items on growth allocations were compulsory spending while some others might be listed therein due to pressure from external factors. Councillor Ree differentiated the commitments in developing high quality of services from delivering basic level of service. For example, the Family Hubs were new investment proposals intended to fill the gaps that had been created by additional demand due to the difficult economic circumstances. With growth allocations, the procurement process was enhanced with extra spending to ensure the quality of service, with staff providing best quality service undergoing proper training. 

The Chair was concerned about budget contingency should  the Household Support Fund  not be renewed or replaced by central government, at the end of March.  Councillor Ree noted that at the end of November last year, there was hearsay that the £2.8-million Household Support Fund that had helped some of the most vulnerable residents was going to stop. Danny Rochford said he remained hopeful there would be a positive announcement about this by the Chancellor in the March budget.  Nevertheless, if the Fund was not going to continue, he noted there would still be strong service offer to support people in need, including accessing other funds such as the discretionary housing pot and various mitigating/prevention activities in support of housing initiatives. Councillor Ree referred to the Council’s allocation of £1 million last year to support residents struggling with the cost-of-living crisis, and the Council had set aside policy contingencies to fund services should it require to do so pending the outcome in March.

Addressing Councillor Adronie Alford’s concern about keeping the balances, Councillor Ree highlighted that the final figures of financial settlement under the central government funding allocation was not known until 18 December, which had made planning very difficult. Notwithstanding this, the Council had a good record in operating in accordance with the budgets and managed to contribute savings to the general reserve at a time when most councils were taking monies out of it. Councillor Ree said he was confident that the Council would be able to meet the balances as planned. As regards reserve set aside for damages, Councillor Ree noted that a Cabinet paper about the Council’s insurance procurement would soon be available. There was also a suggestion to put aside an extra fund outside the general balances (recommended range £19 to £23 million) to cover emergencies and rainy days. He was confident this might be realised by the end of the year. 

Councillor Alford remarked that the efficient commissioning of temporary accommodation and stoppage of using agency staff had been listed as housing solutions at a number of past budget meetings. She asked what the efficiencies were this time and how they were made. Sukvinder Kalsi referred to some £1.5m savings achieved by the Housing Solutions team over the past few years.  The team had been working with the private sector landlords to contain costs and prevent eviction as best as it could. It had also worked with authorities across London to ensure adequate supply of temporary accommodation within and outside the borough. The Housing Solutions team was also reviewed to see if the level of agency spend could be reduced with a view to recruiting more permanent and temporary staff.   In response to the ongoing pressures of the homelessness approach, the team would continue the strategies to work with the private sector landlords, registered providers and London authorities.  

Councillor Alford was concerned with ways to manage the expectation of residents who needed to be placed out of the borough to prevent homelessness. There might be concerns over their medical needs and/or their children’s schools.  Richard Shwe considered honesty was the best policy and the Council should let people know what could be done or otherwise.  In terms of temporary accommodation, the Council would focus on H&F and then neighbouring boroughs, and certainly not outside London as other boroughs had been.   Housing Services had been doing a good job with commissioning and contract management in the private sector rented market. The agility of its structure enabled the management to understand residents’ needs and be held accountable to them.

Responding to Councillor Alford’s enquiry about the acquisition of housing for temporary accommodation, Sukvinder Kalsi briefed members on the properties acquired by the Council last June. He said that a housing association exiting the sector had potentially exposed the Council to a number of vulnerable young adults and children who shall become homeless upon losing the tenancy.  The Council thus acquired those properties to maintain their tenancies. Sukvinder noted that the Council would continue to look at different options in securing properties in the market. Jon Pickstone (Strategic Director for the Economy) added that while the Council looked forward to additional funding for acquiring temporary accommodation to meet the anticipated increasing demand, Housing Services had been working very hard to clear the repairs backlog and reduce damp and mould cases so that fewer people would need temporary accommodation.   

On Councillor Alford’s further question about enlarging the housing portfolio, Jon Pickstone (Strategic Director for the Economy) noted there were two major means. The Council, being the developer, used private market sales to cross-subsidies building affordable housing stock in the borough.  The other was buying affordable homes directly from other developers.  Jon noted occasions where housing associations acquiring fewer properties offered chances for the Council to acquire more affordable homes at a good price from the developers and that newly-built stock typically had lower maintenance and energy costs, and owning it helped the council to mix the age of its housing portfolio. 

Councillor Asif Siddique appreciated Councillor Ree and the officers for their hard work in presenting a balanced budget within the limited resources.  Councillor Paul Alexander also took the opportunity to express his thanks for their work given the challenging environment. 

Councillor Siddique asked whether any service had been reduced or their standard compromised as a result of the proposed budget.  Councillor Ree remarked that despite the central grant having been cut by 56% in real terms since 2010/11, the Council was able to deliver the same quality of services and offer new services such as offering free breakfast in primary schools and abolishing homecare charges.  It also helped generate more than £118 million of efficiencies without impacting core services. Councillor Ree noted that going forward, the Council was looking at how it could use residents’ data to operate and deliver the services in the most efficient way.

Councillor Siddique asked about the timeframe in rehousing a homeless household moved outside the borough. Jon Pickstone remarked that the timeframe would vary among households due to their individual needs. He hoped that putting the Council’s stock for more use could help ease the pressure on temporary accommodation and allow small households to come back to the borough.  Moreover, the current local housing allowance had been frozen for a few years and would be adjusted nationally from this April which might help increase the supply of private rented homes loally. Richard Shwe highlighted the Council’s policy to prevent homelessness and keep those residents at risk within the borough. He appreciated the difficulty in finding appropriately sized accommodation in borough for larger households, and the need to explain to families placed in temporary accommodation outside of the borough that returning may not be possible at all.

Councillor Frances Umeh (Cabinet Member for Housing and Homelessness) noted that the number of homelessness approaches had increased by 20% at the end of 2023 as compared to the previous year. In addition to those policy measures mentioned earlier in response to the rising demand, the Housing Services also sought to enhance communication with residents in temporary accommodation and explore alternative ways for them to look out for suitable housing.  For example, they could bid for a home online.  Councillor Siddique thanked the officers’ hard work and looked forward to the commissioning of the one-stop Family Hubs which, as pointed out by Councillor Umeh, shall be an avenue for delivering support and continual dialogue.

RESOLVED

1.     That the Committee noted the budget proposal and recommended it to Cabinet.

2.     That the Committee noted the proposed changes to fees and charges and recommended them to Cabinet.