Agenda item

The Chief Operating Officer, Corporate Director of Place, Director-Strategic & Operational Finance, Head of Finance – Counter Fraud & Finance, Head of Finance – Place, Head of Strategic Finance and Head of Capital Programme provided an update on the Council’s budget and spending.

The senior officers provided an overview of the financial performance relevant to the Corporate Resources and Infrastructure Select Committee’s remit. Members received detailed breakdowns of the Committee's budget by portfolio and service area, adjustments made for inflation, corporate adjustments, growth and savings.

Members heard about the proposed structure and approach to financial monitoring, emphasising transparency and rigorous scrutiny of the Council’s finances. It was reported that future reports would cover spending against the profiled budget, delivery against expected savings and actions to mitigate any issues.

The Chair opened Committee discussions by addressing the challenging financial situation both inside and outside the Council and noted the Committee’s focus to scrutinising the Council's financial situation, assisting senior officers with budget monitoring and issuing interim reports to the Cabinet concerning budgetary pressures. The Chair emphasised the importance of financial scrutiny and budget monitoring, stating that the Committee would hold officers and Cabinet Members accountable.

Members raised queries about the financial robustness of the Council and how departments were working differently to ensure the delivery of savings across all service areas. It was explained that there were measures in place to monitor and manage savings, including regular meetings of the corporate management team, a performance management framework and transparent reporting. It was highlighted that the goal was not only to achieve savings but also to stick within the budget. The involvement of external expertise and the finance team to ensure the quality of savings and avoid cost shunting was noted. Additionally, improvements in financial management and systems were noted as new and different approaches compared to previous years.

In response to questions around the savings in the customer experience service budget, specifically how such a significant reduction in the budget would maintain the quality of the department. It was explained that the investment in digital data and technology had allowed the Council to improve customer service despite budget reductions.

A recent online article with the headline "Hillingdon Council faces financial crisis amid budgetary shortfall” was mentioned and the possibility of issuing a Section 114 notice due to declining reserves, overspending practices and failure to achieve savings targets. Members sought assurance that things had changed and queried the measures being taken to ensure financial stability and deliver savings. The Committee was advised that the Council had made significant investments in understanding the organisation better, leading to improved decision-making and better data analytics around services. Processes such as the ZBB review, and star chamber exercise had been implemented, and officers stressed the significance of regular monthly monitoring and early interventions to manage financial risks effectively.

In terms of the impact of the current economic market on investments and pensions, it was reported that the Council's General Fund investments were in money market funds, which offered a variable interest rate, and the pension fund was evaluated every three years.

The Committee discussed financial systems and noted that core system was working fine for some functions such as payments, invoices and ledger entries, but an add-on module for budget monitoring needed more work. External consultants had been brought in to help as they had the expertise, and the goal was to have a workable solution by May so that service managers could better understand and forecast their budgets. It was clarified that the add-on was not a new system instead it was part of the main system, Oracle, which was widely used in local government and the private sector.

Members considered the Council's efforts to balance commercial and community leasing, emphasising the need to consider community decisions alongside financial ones to avoid negative impacts on the community. Significant budget pressures in areas like adult social care, childrens social care and homelessness were noted, suggesting early intervention and collaboration with the third sector to manage rising costs. Additional Members discussed income generation from the Council's garage portfolio, proposing options like selling, outsourcing management or investing in repairs. The Committee concluded with discussions on fees and charges uplifts, ensuring competitiveness while generating additional income.

The Committee thanked officers for their attendance.

RESOLVED: That the Committee agree the proposed approach to financial monitoring at this select committee as set out in this report.