Agenda item

The Corporate Director of Finance, the Head of Strategic Finance, Head of Digital, Head of Capital Programme Works Services and the Director of Operational Assets introduced the budget report and provided an overview of the different services areas.

Members considered the draft revenue budget and capital programme for services within the remit of the Corporate Resources & Infrastructure Select Committee for the financial year 2025/26. It was reported that this was part of the agreed consultation process for the General Fund and Housing Revenue Account budgets, alongside the Council's Capital Programme.

The following key points were highlighted to the Committee:

·         The budget proposals were initially considered by Cabinet on 12 December 2024 and were now under consultation. The final recommendations would be made to the full Council on 27 February 2025.

·         The Committee needed to consider the budget proposals in the context of the corporate budgetary position and any financial constraints

·         The Council aimed to set a balanced budget for 2025/26, requiring a drawdown of £6.4m from reserves. The report also set out a five-year budget strategy focusing on driving value for money, maintaining low Council Tax, reviewing the operating model for efficiency, investing in new assets and improving housing quality.

·         The budget strategy included mechanisms such as increasing net savings, adjusting Council Tax policy within thresholds and releasing funding from reserves.

Members heard about the financial challenges faced by the Council, including the high demand for services, national issues and reduced Government funding. Many boroughs were in a similar position and the different forms of exceptional financial support were noted.

It was reported that there were financial variances and savings required for the upcoming years, focusing on staffing vacancies, treasury activities and property income. A medium-term financial strategy consultation budget showed a saving requirement of 39 million pounds for 2025-2026, with 32.6 million pounds of savings identified, leaving a residual gap of 6.4 million pounds. Over five years, the saving requirement was 62 million pounds, with 65 million pounds of savings identified, resulting in a 3 million pound surplus. The budget requirement for services within the Committee's remit stood at 5.3 million pounds. Additionally, there was an inflation requirement related to workforce expenditure and the pay award. The largest saving areas included reshaping customer experience and business support, digital intelligence and digital and technology contract reviews. Outside of Corporate Services, finance had identified savings from revenues and benefits, customer contract reviews and the Oracle implementation.

In response to Member questions around proactive repairs and the potential savings they could bring, it was explained that the stock condition survey played an important role in driving figures. There was an expectation that there would be a reduction in reactive repairs due to proactive measures undertaken by officers. The significance of contractors in maintaining the housing stock to good standards, ensuring quality and value for residents was also noted.

Members raised queries around cross cutting savings programmes and performance of previous years where savings had not been achieved. The financial implications of these delays were noted and further information was requested on changes that had been made to ensure the achievement of savings. It was explained that financial skills and commercial thinking were crucial across the Council to ensure effective management and decision-making. Strong leadership and a culture focused on financial discipline were essential to drive these efforts. Starting savings initiatives early was necessary to avoid delays and ensure timely achievement of financial goals. The use of contingency funds required formal Cabinet authorisation over their release to maintain financial stability. Members heard that the Oracle system played a significant role in improving financial management by providing better oversight and control. Presenting options to Cabinet and Council for decision-making was important to ensure informed and strategic decisions. Additionally, seeking external help and advocating for additional funding from the government and other sources provided the necessary support to achieve financial objectives.

During Member discussions it was noted that the local authority covered the costs of the freedom pass and vacant positions were held to try to achieve savings.

In terms of the budget and risks, specifically about the range of previously estimated risks and factors that drove those risks, it was explained that the budget was scrutinised by the s151 officer who assessed any risks and big pressure areas such as adult care and temporary accommodation. These risks would then be balanced against commercial needs and statutory services /capital projects. The importance of managing contractor risks early intervention was highlighted.

The Committee discussed the importance of building safeguards in project financing to handle economic volatility and ensure robustness in break contracts. The need for continuous monitoring of financial implications from the initiation stage and up to the point of awarding contracts was emphasised. Members also heard about the digital transformation program, including the merger of the contact centre and business admin into the resident hub, and the use of technology to modernise processes and improve efficiency.

The Committee thanked officers for their work and acknowledged that it was a difficult time for any local authority. Members welcomed the investment particularly in the Platinum Jubilee Leisure Centre and Hillingdon Watersports facilities.

The Committee agreed a draft proposal for budget comments that was circulated to Members prior to the meeting subject to including the concern of the track record of unachieved savings.

The Committee agreed the following comments:

1.            This committee has Cabinet Member lines of accountability to 5 of the 7 Cabinet Members, including areas of responsibility held by the Leader of the Council.  Each of the portfolio areas are complex, high in numbers of challenging subjects and large scale, including high spend subjects. Resulting in the committee having 26 “heads” of responsibility or topics of interest to investigate and hold to account across these 5 portfolio areas. 

The number of topics we are able to review and report on is limited to “one- at- a -time” due to other pressures.  However; the committee does often receive multiple reports at meetings and receives multiple service updates from relevant Officers.

2.            The 2025 / 2026 Budget Proposals

2.1 The Committee notes the budget proposals relating to the areas under our remit and acknowledges not only those but inevitably the effects of pressures and influences outside our remit which effect the overall position.  

2.2 There are very high spending and costly service areas frequently noted and referred to in the budget report which in themselves provide the some of the most financially challenging sectors of the Council’s work which impact on virtually all other services.

2.3 The committee also notes and acknowledges the consistent impact of external and all financial pressures which continue to have a significant impact on budget setting, namely; inflation pressures, rising costs, increased demand for costly services, reduced or inadequate central government funding, adult social care costs and system  (such as it is), high demand for specialist children’s services and all of the complex impacting pressures set out in the budget report.  The setting of a balanced budget in these circumstances is not only an exceptional challenge from years gone by but a continual complexity in these deeply problematic economic times.

2.4 The Committee note and welcome the financial strategy, and the 8 budgetary aims set out in the Executive Summary. We encourage the Cabinet and Officer team(s) to pursue these aims and this strategy to the fullest extent.

2.5 The committee are also concerned to ensure that all senior managers, budget holders and decision makers are evermore commercially and financially aware being cognisant of the need to be so.  Building a sustainable culture of financial understanding.

2.6 Such a culture as identified in 2.5 will assist in ongoing determination to successfully obtain the savings needed in pursuit of future budgetary balancing.

2.7 We note the savings programme, the continued development and implementation of the digital and other transformation plans, the careful attention to reviewing all Council expenditure so that it is fit for purpose.  These being essential factors in setting out financial position on a better course for the future.

2.8 Set against the national and consequential financial picture, with what many see as an inadequate financial structure for local government, the fact that the Cabinet, in particular the Cabinet Member for Finance and Transformation, and the Officer finance team have been able to produce a balanced budget across the Committees service areas is to be commented.

RESOLVED: That the Committee:

a.    noted the budget projections contained in the report; and

b.    agreed the above comments on the combined budget proposals affecting the relevant service areas within the Corporate Services & Property and Finance & Transformation Cabinet Portfolios, within the context of the corporate budgetary position.