To monitor the council’s financial performance to ensure it supports council priorities and provides residents with value for money

Members are asked to refer to the report included in the Cabinet - Wednesday, 28^th September 2022 5.30 p.m. as published on the Council’s website.

Tower Hamlets Council - Agenda for Cabinet on Wednesday, 28th September, 2022, 5.30 p.m.

The Committee considered a report included in the Cabinet - Wednesday, 28th September 2022 5.30 p.m. that provided details on the Council’s financial performance to ensure it is supporting the Council priorities and provides residents with value for money. The main point of the discussion summarised as follows:

The Committee

v  Wanted to understand (i) if the Council's savings targets are on track; (ii) if there are any significant overspends and the reasons behind this; (iii) the main financial risks facing the Council; (iv) the implications those risks will have on decisions; (v) and what actions are being taking to tackle these.

v  Noted that the Housing Revenue Account (HRA) is forecasting (i) an adverse variance of £0.5m when compared with budget. It is assumed that this balance will be transferred from general HRA balances at year-end; and (ii) an unbudgeted energy cost pressure totalling £2.4m for gas and electricity in 2022/23.

v  Noted that these costs are partly recoverable from leaseholders where they relate to communal areas and this additional income has been reflected separately in the forecast.

v  Was informed that further cost increases in 2023/24 will result in an unbudgeted cost pressure of £8m which will need to be met from existing HRA income streams. Whilst other variances in the HRA relate to delegated budget, which is forecasting a year-end favourable variance of £0.7m.

v  Noted that the management fee is forecasting a year-end adverse variance of £0.4m and the non-delegated budget is forecasting a year-end favourable variance of £1.6m.

v  Noted that the forecasts are based on usage data provided by the Council’s energy providers over the summer period and this review will continue throughout the year. As the Council is facing significant pressure this year as a result not only of energy price increases but also inflation and the projected increases to the National Living Wage.

v  Noted that through a new government scheme energy prices for non-domestic energy customers such as businesses, charities and public sector organisations will be cut – protecting them from rising energy costs, whilst the government will collaborate with suppliers to reduce wholesale energy costs – and the significant rises in bills that businesses have seen this support is in addition to the Energy Price Guarantee for households.

v  Considered that it was important to promote the benefits of flexible retirement to the Council employee as it would (i) help staff work to continue working in the LBTH for longer, by varying the nature or pattern of work in the lead-up to retirement, (ii) assist succession planning by retaining valuable skills and experience which can be passed on to other staff; and retaining valuable staff reduces the time and costs of recruitment and training.

v  Observed that are assumptions being made about overspends in the first half of the year and then towards the end of the financial year or even the after the financial years close e.g., there have been times when LBTH has found itself with a surplus  ...  view the full minutes text for item 8