The Overview and Scrutiny Committee of Haringey Council met on Tuesday 23 July 2024 to discuss the council's financial outturn for the previous year, the ongoing use of agency staff, and the development of the committee's work plan. Key decisions included noting a significant provisional overspend for the 2023-24 financial year, which has impacted the council's reserves, and agreeing to delegate the review of the Statement of Gambling Policy to the Climate, Community Safety and Environment Scrutiny Panel.

The Leader's Priorities for 2024/25 & Cabinet Member Questions

The Leader of the Council, Councillor Ahmet, presented the Corporate Development Plan for 2024-2026, highlighting achievements such as the introduction of a translation policy and planned pilots for participatory budgeting, a Community Assembly, and a Youth Council. In response to the climate emergency, engagement has begun on a Climate Partnership and Forum to co-produce a Climate Action Plan with residents, alongside plans for more school streets and electric vehicle charging points. A 10-year vision for the borough is being developed with stakeholder involvement.

Significant progress has been made in housing, with improvements in repairs, resident satisfaction, and a focus on reducing voids and legal cases related to disrepair. The council's self-referral to the housing regulator was noted as a necessary step to improve standards. New housing developments will prioritise family-sized and intermediate-income housing, with an emphasis on placemaking. Haringey has also established a new Culture Team, leading to its designation as Borough of Culture in 2027, and a library strategy has been co-produced with residents.

Efforts to reduce hate crime and increase safety are ongoing through regular meetings with Jewish and Muslim community groups, and new Community Safety and Hate Crime strategies have been delivered. The council is also developing a gambling harm reduction strategy. Haringey Works has placed 800 residents into employment.

However, significant financial challenges were acknowledged, including a lack of expected government funding, increased costs for adult and children's social care, and rising prices and availability issues for temporary accommodation. Clearing up the council's property portfolio and historic leases also presents challenges. The council aims to achieve 100% decency in housing standards, and the insourcing of leisure centres will present further challenges. A recent Local Government Association peer review identified issues that have since been rectified, and the long-term vision for the borough is now on track, with a focus on embedding performance management and service improvement.

In response to questions, the Leader assured the committee that the Corporate Plan was achievable, though budget changes might occur due to unknown central government funding. Chief Executive Andy Donald stated that worst-case scenarios are being planned for, and the long-term vision will guide all priorities and spending. The predictability of external factors like funding decreases or increased demand in care services was discussed, with the Leader affirming that good planning can address these scenarios. The Corporate Development Plan was deemed realistic and achievable, with stakeholder consultation planned for any necessary reprioritisation.

Councillor Pippa Connor raised concerns about safe havens for women and girls experiencing domestic abuse, with more information promised from the Chief Executive's Office. Councillor Connor also sought clarification on the dates for new Low Traffic Neighbourhood (LTN) trials, with information to be provided by the CEO's office. The impact of the Borough of Culture award on spending was discussed, with assurances that resources would be secured and the project managed within budget. Councillor Connor also inquired about high legal costs in housing repairs, which were explained as necessary for cost recovery and service improvement.

Councillor Alexandra Worrell questioned accountability within the Corporate Development Plan, with the Leader confirming clear lines of accountability and measurements, and a focus on embedding a performance management culture. Councillor Matt White asked about the production of a performance report, which had been promised twice yearly but not yet received, with the CEO's office to investigate and provide a copy.

Councillor Worrell also asked about future areas of concern, with the Leader identifying financial challenges, housing, and temporary accommodation demands as most pressing. Mr. Donald added that a CQC inspection for Adult Social Care would present challenges, as the service had not been inspected for 15-20 years.

Discussions on alternative funding sources noted the GLA and Mayor's Office as traditional sources, particularly for housing, youth, and eco projects, and City Hall's award for Borough of Culture. Generating income was highlighted as a priority, with the new government's focus on growth potentially bringing resources and an emphasis on partnerships and preventative projects.

Councillor Lester Buxton inquired about the longer-term plans for the borough, which stem from a GLA-led Peer Review, setting a 10-year vision under which the Corporate Delivery Plan sits, with a focus on levelling up inequalities. Mr. Donald added that the vision would be presented for approval in September and November, with extensive stakeholder engagement planned. Councillor Buxton also raised concerns about the consistent reduction in local government funding over the past decade and inquired about plans for financial stability and sustainable budgets. Mr. Donald responded that the vision would outline the council's role more ambitiously, but the immediate focus is on getting the basics right.

Regarding co-production, Councillor Buxton asked about lessons learned and cultural changes. The Leader stated that co-production engages normally disengaged individuals, and a positive culture change has been observed, as noted in the Peer Review. Mr. Donald added that staff understand the importance of community understanding for service delivery. Councillor Buxton also questioned how Haringey residents are fairly represented in partnerships for funding bids and service delivery. Mr. Donald expressed confidence in directors' ability to manage these relationships robustly.

Councillor White raised concerns about residents feeling less safe due to open drug dealing and a perception of inaction. While acknowledging work by the ASB and Safer Neighbourhoods Team, he cited police funding cuts and increased addiction as exacerbating factors, particularly in Tottenham. The Leader acknowledged these concerns, emphasising the need for improved partnerships with the police, greater community input, and more preventative measures, including drug and alcohol projects and early interventions. Mr. Donald noted the disappearance of many early prevention projects due to austerity but highlighted Haringey's two intervention services. He also mentioned lobbying efforts that led to changes in how the police define high harm wards to include drug supply, resulting in more resources for Haringey, though the Met faces staffing challenges. Work is also underway with the police to address the root causes of drug dealing, requiring a multi-agency approach at national and European levels.

Councillor Worrell inquired about the council's approach to anti-social behaviour (ASB) in general needs housing, noting an increase in individuals with extra needs, such as those exiting the criminal justice system or with mental health issues, being placed in settings without adequate support. She also mentioned a significant increase in neighbourhood disputes. The Leader acknowledged challenges in tenancy management, with the CEO stating investment in recruiting more housing officers to improve tenant-officer relationships and support. Regarding ASB and mental health, Mr. Donald highlighted the need for engagement with the voluntary sector and community groups. Mental health support has shifted towards preventative measures, with Mental Health Social Workers brought back in-house and Social Work Assistants addressing lower-level issues.

Councillor Connor noted the Joint Health Overview and Scrutiny Board's long-standing efforts to improve communication between GPs, the Council, the Police, and the Mental Health Trust, suggesting it be prioritised. Mr. Donald confirmed work within the Borough Partnership meeting, involving senior managers from these partners, focusing on health issues at the intersection with housing, with workstreams and an action plan developed. The challenge lies in resourcing and redirecting it for better outcomes.

Agency Staff Contract Update

Councillor Carlin introduced the report, highlighting that reducing agency staff is a key council priority. Despite a proposed increase in funding for the Matrix Contract, which was up for renewal, Councillor Carlin emphasised that this should be viewed within the overall workforce strategy. Actions to reduce agency staff include monthly performance monitoring and quarterly meetings with directors to discuss making staff permanent. While this has driven down numbers, some roles offer no incentive for permanent conversion. Efforts are being made to make permanent those agency staff employed for over a year. However, converting higher-paid agency staff to permanent roles may not be cheaper due to pension contributions (23.5% for permanent staff versus 3% for agency staff). Agency staff spending has reduced from £45 million to £40 million and is continuing to decrease.

In response to questions, Councillor White noted the contradiction between the drive to reduce agency staff and the Matrix contract extension. Councillor Carlin explained that additional costs were due to unforeseen factors like the migration of staff from Homes for Haringey, post-2021 salary increases, and the migration of all agency workers onto Matrix contracts to reduce overheads. She added that the CEO and corporate centre now oversee agency staff reduction, with director sign-off required for each worker, fostering a culture shift.

Dan Paul responded to a question about the cost difference between agency and permanent staff, stating there was no simple answer, as some agency staff are on council pay scales while others are not. He also noted that permanent staff have greater pension entitlements and agency margin rates can vary. Regarding the migration of Homes for Haringey staff, Mr. Paul confirmed they were migrated onto the Matrix contract, increasing its value, but there was no opportunity at that point to offer permanent contracts.

Councillor Connor's question about comparing agency staff numbers with other boroughs was met with the explanation that borough sizes and service outsourcing vary, meaning fewer agency workers might be employed directly but services are still delivered by agency staff. Councillor Carlin added that while permanent staff are preferred for a committed workforce, some agency workers prefer their current status, and flexibility for short-term needs remains necessary.

Councillor Makbule Gunes sought clarification on the total contract cost, which could extend by £30 million, bringing the total to £40 million, depending on the number and cost of agency workers. Councillor Gunes expressed concern about the slow progress on reducing agency staff over her ten years on the council, though she appreciated current efforts. Councillor Carlin stated that agency staff reduction is now a corporate priority with a different approach.

The discussion then turned to consultants, with Councillor Gunes inquiring about the continued need for high-cost consultants. Councillor Carlin stated that consultant numbers are being reduced similarly to all agency staff. Mr. Paul clarified that the report's figures include any agency worker paid over £500 per day, including specialist IT, Digital, and Regeneration staff.

Councillor Lester Buxton raised the imminent insourcing of leisure services and the potential increase in agency staff. Mr. Paul affirmed this was likely but not substantial, with the council deciding on permanent conversion post-migration. The incentive for agency staff to become permanent and the cost-effectiveness of permanent recruitment were discussed, with Councillor Carlin stating the council aims for a committed workforce and Mr. Paul explaining a case-by-case evaluation for agency workers not interested in staying. Councillor Worrell confirmed that the Matrix contract covers all agency staff.

Councillor Worrell highlighted the cost consideration, with Councillor Carlin responding that while permanent staffing is advantageous for organisational stability, it's not always cheaper for lower-paid workers, but considerably cheaper for higher-paid staff in terms of benefits. Councillor Worrell asked about specific targets for agency staff reduction, with Mr. Paul stating that while no explicit targets exist, agency staff numbers are continually measured and reduced as a percentage of the total workforce.

Provisional Financial Outturn 2023-24 & Finance Update

Councillor Carlin introduced the Q4 report and provisional outturn for 2023-2024. She noted a predicted considerable overspend in the corporate budget due to increased costs in adult social care, children's social care, and temporary accommodation, compounded by late-year additional spend, resulting in a £19 million overspend. While reserves covered this, more than anticipated was used. The predicted overspend earlier in the year was £11 million. Steps are being taken to ensure directorates deliver savings and have processes to manage overspends. An additional £5 million gap is anticipated for the current year due to these factors.

In response to Councillor White's concerns about reduced reserves and the sustainability of their ongoing use, Councillor Carlin stated that Haringey's position is not exceptional, with other boroughs receiving government funds for capital sales. She noted that as an Outer London borough, Haringey has high demand and lower reserves. Taryn Eves outlined plans to plan for the worst-case scenario, assuming no government funding for 2025-2026, with a focus on reducing spending and gradually topping up reserves for future sustainability. She stressed the importance of understanding risks in budget setting and scrutinising whether pressures are one-off or recurring. An update on progress and departmental work to reduce spend and increase income will be provided in the autumn.

Ms. Eves stated that while rebuilding reserves might not be immediately possible, she aimed to avoid further drawdowns to balance the budget and develop longer-term plans for reserve replenishment. She confirmed that the total General Fund Reserves were £97.234m at 31.3.2023, reducing to £67.449m at 31.3.2024. A review of reserves over the summer will focus on uncommitted funds.

Councillor Gunes acknowledged Haringey's weaker reserve position but appreciated the transparent approach to identifying and solving financial problems. Ms. Eves emphasised that reserves are part of the medium-term financial strategy, with a focus on identifying and predicting budget pressures. Efficiency reviews are also underway.

Councillor Connor expressed shock at the significant drawdown from reserves and questioned the realism of the £20 million savings target for 2024-2025. Ms. Eves responded that while 100% savings delivery is aimed for, 77% is a more realistic expectation. Work is being done to understand unachieved savings from 2023-2024 and monitor directorate savings using a red, amber, green scheme. Savings will only be built into the budget if delivery is assured.

Councillor Connor also inquired about the impact of the upcoming external audit, given the council's un-audited accounts for several years. Ms. Eves agreed this was a risk, with a new auditor engaged to report in the autumn. She assured the committee that work would be done in conjunction with auditors, noting that this situation is common across local authorities.

Councillor Worrell asked about the impact of changes to the policy on flexible capital receipts. Ms. Eves explained that these receipts fund capital expenditure, and flexibility allows for revenue expenditure on transformation, but this is due to end in 2025. A government consultation on extending this flexibility to 2030 is underway, and planning will address the scenario if it ends.

Regarding expenditure, Councillor Worrell sought clarification on the £5 million HRA budget drawdown. Ms. Eves explained that HRA accounting differs, with income ringfenced for expenditure. A surplus is always budgeted for, but legal costs for disrepairs reduced the surplus, necessitating a drawdown from reserves. She stressed the importance of identifying one-off versus recurring costs and tracking liabilities versus provisions.

Councillor Worrell also asked for an explanation of the leisure overspend, particularly at New River Leisure Centre, and its implications for in-house leisure services. Ms. Eves requested to provide a response after consulting her team.

Councillor White sought clarification on the Parking and Highways budget, noting a significant shift from an underspend to an overspend. Ms. Eves explained that end-of-year accounts include bad debt provisions, with Parking and Adult Social Care being areas of concern. She would investigate and provide a full response.

Councillor White also asked for clarification on a budgeting profile error in Operational Facilities Management. Ms. Eves stated this was incorrectly described as a profiling issue, with the overspend relating to security and staffing costs, and a review of future security needs and costs would be undertaken.

Councillor White inquired about the Housing Benefit overspend, given it is government-funded. Ms. Eves explained that Haringey administers a grant from central government, and historical overpayments discovered in Q3 necessitate repayment to the government.

Councillor White also questioned the data integrity issues in Children's Services, leading to budget disparities between Q1 and Q4. Ms. Eves explained that the migration from Mosaic to Liquid Logic IT systems had revealed issues requiring recording in Q3 that may have occurred earlier.

Councillor White also raised concerns about an apparent accounting error in the Planning Building Standards and Sustainability budget. Ms. Eves stated she would investigate and provide a response, confirming it was a one-off reversal of income incorrectly allocated in the previous financial year.

Councillor Diakides asked for the final overspend figure and reasons for the significant Q1-Q4 variations, questioning financial planning and management. Ms. Eves directed him to page 17 of the report, explaining the HRA budget's ringfencing and the need for accurate budget profiling and capital programme review due to slippage. Reducing agency staff is also a priority. She assured that assumptions would be reviewed until the budget is locked down in December, allowing for mitigation.

Work Plan Development 2024-26

Councillor White proposed recommendations for the committee's 2024-2026 work plan. A discussion on potential changes to the work plan would be held outside the meeting. The committee was asked to suggest agenda items and scrutiny areas for future meetings, with Councillor White suggesting the new performance report and another meeting to discuss agenda items.

The scope and terms of reference for the scrutiny review of the financial planning process were agreed. The committee also agreed to delegate the review of the Statement of Gambling Policy to the Climate, Community Safety and Environment Scrutiny Panel.

Future Meetings

Future meetings are scheduled for 14 October 2024, 25 November 2024, 12 December 2024 (Budget CSE), 20 January 2025 (Budget), and 27 March 2025.

New Items of Urgent Business

No new items of urgent business were recorded.