Apologies for absence were received from Councillor Councillor Maisha Begum.

The Chair welcomed Lutfur Rahman (Executive Mayor); Councillor Saied Ahmed (Cabinet Member for Resources and the Cost of Living); Nisar Visram (Director of Finance, Procurement & Audit Resources); Allister Bannin (Finance Business Partner Corporate Finance); and Kevin Bartle Interim Corporate Director - Resources (Section 151 Officer) to this evening’s meeting.

Members are reminded to consider the categories of interest in the Code of Conduct for Members to determine whether they have an interest in any agenda item and any action they should take. For further details, please see the attached note from the Monitoring Officer.

Members are reminded to declare the nature of the interest and the agenda item it relates to. Please note that ultimately it’s the Members’ responsibility to declare any interests form and to update their register of interest form as required by the Code.

If in doubt as to the nature of your interest, you are advised to seek advice prior to the meeting by contacting the Monitoring Officer or Democratic Services

No Member declared a potential interest at the meeting.

To confirm as a correct record of the proceedings the unrestricted minutes of the meeting of the Overview and Scrutiny Committee held on Monday, 7th March, 2022.

The Chair Moved  and it was:-

RESOLVED

That the unrestricted minutes of the meeting of the Overview and Scrutiny Committee held on 7^th of March be approved and signed by the Chair as a correct record of the proceedings.

1. Noted that the request to receive the performance of youth services since the provision has been commissioned had not yet been received (e.g., progress made to date; how the challenges have been managed and moving forward how will this improve provision; and what targets have been set for the provision and how they will be monitored) and
2. Noted that a requested on the actual scale of digital exclusion in the Borough was outstanding (e.g., how digital skills vary for different groups of residents and some of the barriers to digital inclusion).

To confirm as a correct record of the proceedings the unrestricted minutes of the meeting of the Overview and Scrutiny Committee held on Tuesday, 7th June 2022 – To follow.

The Chair Moved  and it was:-

RESOLVED

That the unrestricted minutes of the meeting of the Overview and Scrutiny Committee held on 7^th June 2022 be approved and signed by the Chair as a correct record of the proceedings.

A.   Noted that Councillor Sabina Khan had accepted the nomination for the Scrutiny Lead for Resources and Finance.

To receive any petitions (to be notified at the meeting).

Nil items

The Committee is asked to note:

1. The most recent editions of the Forward Plan.

2. The Forthcoming Decisions Plan (or 'Forward Plan') will be published at least 28 days before each Cabinet meeting setting out information on all the Key Decisions that are expected to be taken at that meeting, along with other Cabinet decisions where known.

3. Publication dates for future Forthcoming Decision Plans are available on the Cabinet web pages. In advance of being published on the new Plan, individual notices of new Key Decisions will be published as they are known and these are listed as New Issues.

The Committee noted Cabinet forward plan and that for the most up to date version, Members were recommended to check the Cabinet web pages on the council’s website.

To review the Budget monitoring report 2021-22 Outturn in line with the Council’s priorities.

Members are asked to refer to the report included in the Cabinet agenda 11^th  July 2022 as published on the Council’s website on Friday, 1st July 2022.

Tower Hamlets Council - Agenda for Cabinet on Monday, 11th July, 2022, 5.30 p.m.

The Committee considered a report that presented the Provisional Outturn compared to the budget report 2021-22 as of 31st March 2022 (Period 12) for the General Fund, Dedicated Schools Budget (DSB), Housing Revenue Account (HRA), progress made against savings targets and the Council’s capital programme. It also provided projections on General Fund earmarked reserves and the forecast impacts of SARS-CoV-2 on the Councils finances in 2021-22.  The Chair stated that (i) this was the first meeting covering the council’s financial position and marks the beginning of the Committee’s review of the Council’s finances; and (ii) he wanted to ensure that budget scrutiny is a priority across all the scrutiny committees.  A summary of the key elements of discussions on this report is outlined below.

The Committee:

v  Noted that monitoring the Councils budget involves performing a regular comparison of projected financial costs and gains against actual performance numbers. The Scrutiny of the variances between budgeted amounts and actual financial performance of Council services therefore allows the Committee to determine how well LBTH is meeting its goals.

v  Noted the production of the budget has been developed through a set of core assumptions which sets out changes to the environment in which LBTH will be delivering its priorities.

v  Agreed that this approach will ensure that revenue budgets, capital investment and transformation plans are all aligned with each directorate’s service plans and the corporate priorities of the organisation.

v  Noted the importance of ensuring each aspect of planning for the longer and medium-term is completely aligned to provide a stable foundation for delivering services to residents.

v  Noted that the Councils guiding principle will be to tackle inequality and to ensure no one is left behind in the Borough.

v  Agreed that the impacts of SARS-CoV-2and lockdown measures have widened social, economic and health inequalities, with different impacts pending on age, race, poverty, and wealth.

v  Questioned the long-term impact of SARS-CoV-2 pandemic on the Council’s finances, how permanent the spending pressures from will be, and requested further clarity on additional pressures not generated by SARS-CoV-2.

v  Agreed that LBTH is in a hugely unpredictable environment and is facing significant challenges over the medium-term thus it is important to maintain reserves at an adequate level to help mitigate and manage these significant risks and ensure the Council remains on a sustainable footing going forward.

v  Noted that LBTH aims to remove barriers and level the playing field to make it easier for people to engage with the Council and access the services they might need. This will enable LBTH to target resources more effectively so that LBTH can support the most disadvantaged and redesign services in a smarter way to ensure they are inclusive and accessible to all.

v  Requested further details on the transfer of £28.6 million to reserves and greater transparency on where this money has come from.

v  Noted that there are significant discrepancies between the period-9 forecast position and the period-12 forecast position and requested  ...  view the full minutes text for item 7.1

To review the Medium Term Financial Strategy (MTFS) and Budget Scene Setting 2023-26 in line with the Council’s Policy, Service Planning and Performance Management framework

Members are asked to refer to the report included in the Cabinet agenda 11^th  July 2022 as published on the Council’s website on Friday, 1st July 2022.

Tower Hamlets Council - Agenda for Cabinet on Monday, 11th July, 2022, 5.30 p.m.

8.1         Medium Term Financial Strategy (MTFS) and Budget Scene Setting 2023-26

The Committee noted that the Council’s Budget 2022-23 had been approved by Full Council in March 2022. The report before the Committee provided a summary of the review of the MTFS as part of the 2023-24 budget setting process. A summary of the discussions on the report outlined as follows:

The Committee:

v  Noted that despite the Chancellor announcing departmental spending limits for Government departments on 27 October 2021 for three years, 2022-23 to 2024-25, the Local Government Finance Settlement (LGFS) was only announced for a single year covering 2022-23. Therefore, the funding landscape for Local Government over the medium term remains highly uncertain. Core Grants such as the Revenue Support Grant, New Homes Bonus and the Improved Better Care Fund were rolled forward for 2022-23, with additional funding received via the Social Care Grant, with much of this expected to contribute to additional costs arising from Adult Social Care Reforms.

v  Was informed that there was also a one-year one-off Services Grant distributed to Local Authorities for 2022-23. One reason Councils were provided with a single year settlement was due to funding reforms that have been delayed, annually, for several years that the Government has signalled its intention to now take forward. The distribution formula used for allocating resources across Local Authorities dates to 2013-14 and the Government propose to take forward a ‘Fair Funding Review’ to ensure a more up to date assessment of need. Business Rate Baselines have not been reset since 2013-14 and, therefore, Councils that have experienced growth in their Business Rates have been able to retain a share of growth since that year.

v  Understood that the Government intends to reset the Baselines to coincide with a review of the funding formula. In early 2021 the Government consulted on ending New Homes Bonus (NHB), a targeted incentive providing funding based on housing growth within the Council area, and the Government has not yet announced the outcome of this consultation.

v  Noted that the impact of these funding reforms is particularly acute for Tower Hamlets. Funding retained from Business Rates Growth and the New Homes Bonus are significant and therefore the impact of resetting the Business Rates baseline or withdrawing New Homes Bonus would result in a substantial funding reduction for the Council. The Government has indicated that transitional relief would be provided to Councils who were impacted by the reforms. At this stage it is not clear when the reforms will be introduced nor what transitional relief would look like. For 2022-23 the Council benefitted from rolled forward funding and new grants provided.

v  Noted that the Council was therefore able to set a balanced budget and to propose a freeze in the Tower Hamlets element of Council Tax, only levying the 1% Adult Social Care precept to meet demographic pressures within that area.

v  Agreed that it was therefore important to continue work to balance the budget over the medium term, ensuring  ...  view the full minutes text for item 8.1

To consider and agree pre-decision scrutiny questions/comments to be presented to Cabinet.

(Time allocated – 30 minutes).

As papers were only published on Friday the Chair asked that OSC members to submit any pre-decision questions that they wanted raised in regard to unrestricted items on the Cabinet agenda for the 11^th July 2022 to David.Knight@towerhamlets.gov.uk by midday on Wednesday 6^th July 2022.

As the agenda circulated had no exempt/confidential reports and there was therefore no requirement to exclude the press and public to allow for its consideration.

To consider and agree pre-decision scrutiny questions/comments to be presented to Cabinet.

(Time allocated 15 minutes).

As papers were only published on Friday the Chair asked that OSC members to submit any pre-decision questions on exempt/confidential items in regard to the Cabinet agenda for the 11^th July 2022 to David.Knight@towerhamlets.gov.uk by midday on Wednesday 6^th July 2022.

To consider any other unrestricted business that the Chair considers to be urgent.

The Committee agreed that it:

v  is therefore, important that all Members take an interest in the way LBTH is funded and the financial decisions that the Council takes; and

v  requires the publication of certain information to allow all Members and residents to access relevant information about Council finances and provide Members with a clear picture of Council activities, spending, and governance.

As there was no other business the Chair declared the meeting closed and reminded Members that the next meeting is scheduled for Thursday, 28th July 2022 6.30 p.m.