The Committee received and commented on the Council’s projected outturn position against General Fund, Dedicated Schools Budget, Housing Revenue Account, and earmarked reserves for 2020-21, based on forecasts as of 31st December 2020. The main points of the discussion arising from questioning on the report may be summarised as follows:

The Committee:

v  Noted that (i) the General Fund forecast position is a net overspend of £2.9m, a £3.2m deterioration on the P8 forecast; (ii) there is an underlying overspend of £15.2m in services (before contributions from reserves of £13m); and (iii) there are significant savings to be delivered in 2021/22, so strategically these are very challenging circumstances.

v  Was troubled to note that (i) any overspend at the year-end will have to be financed from reserves; and (ii) the reserves position remains uncertain pending the delayed closure and audit of the Council’s accounts for the period 2016 – 2020.

v  Was concerned that the Council’s response to the pandemic continues to overlay considerable complexity and uncertainty to forecasting, given that the financial impact ranges from additional expenditure requirements, increases in demand from vulnerable clients, consequential losses of income, unachievable savings and for services having to work differently.

v  Was informed that the forecasting in this area is also affected both by the unknown length of the emergency and indeed the extent and depth of any consequential recession. Therefore, it was important the Council gets great clarity in respect of reporting and monitoring if it is to address it’s a “very challenging” financial position and delivers the planned savings.

v  Was advised that Tower Hamlets as are all councils is finding it impossible to plan for the pandemic as the Council is in the middle of trying to deliver services and the financial position has been running behind the delivery of services.

v  Was informed that the underspend on the Housing Revenue Account (HRA) is to do with the day-to-day maintenance and repairs programme and not the long-term capital programme

v  Wanted to know how the Council intends (i) to develop forecasts and projections to highlight areas of likely financial failure and to move to financial sustainability; (ii) to spend the Covid Emergency Funding for related expenditure.

v  Noted that due to Covid whilst the Council has had underspends in Housing; Regeneration; Public Realm; Planning; Building Control that are not expected to see replicated in future years.

v  Commented that if the Council is going to arrest the ongoing decline of the reserves it is essential that the responsible officers spend within their budgets.

v  Wanted to receive an explanation on the reasons for the overspend in regarding Homeless Services

In conclusion, the Chair:

A.   Thanked Councillor Candida Ronald; Kevin Bartle; and Hitesh Jolapara for their presentation and to all members for their contributions in the discussions on this topic; and

B.   Indicated that the following should be added to the Committees Action Log (i) details of necessary and additional Covid-19 expenditure; (ii) the development of forecasts and projections to  ...  view the full minutes text for item 7