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 further information on the drivers of this change between March and June.

The Chair Moved and it was:- RESOLVED to request:

1. Further details on the transfer of £28.6 million to reserves and greater transparency on where this money has come from.
2. Further information on the drivers of this change between March and June, given the discrepancies between the period-9 forecast position and the period-12 forecast position.
3. Details of (a) the long-term impact of Covid on the Council’s finances, (b) how permanent the spending pressures from Covid will be; and (c)  and further clarity on additional pressures not generated by Covid.