The Scrutiny Panel of Hackney Council met on Monday 07 October 2A024 to discuss the Council's significant financial overspend, the Chief Executive's priorities, and the annual reports on complaints and member inquiries. The meeting addressed a projected £36.7 million overspend for the current financial year, primarily driven by increased costs in adult social care, children's services, and homelessness prevention. The panel also heard about the Chief Executive's goals for the council, focusing on values, equality, wellbeing, listening, and strategy, alongside an update on workforce challenges and efforts to build resident trust. Finally, the panel reviewed the council's performance in handling complaints and member inquiries, noting a substantial increase in housing-related complaints and a rise in the number of cases reaching the Housing Ombudsman.

Quarterly Finance Update

The Council is facing a significant financial challenge, with a projected overspend of £36.7 million for the current financial year (2024/25) after mitigation measures. This figure represents a substantial increase from the May forecast of £21.4 million. The primary drivers for this overspend are escalating costs in adult social care (£17.4 million), children's services (£8.1 million), and climate, homes, and economy services, particularly homelessness prevention (£22.4 million).

Councillor Robert Chapman, Cabinet Member for Finance, Insourcing and Customer Service, highlighted that these pressures are not unique to Hackney but are impacting local authorities across London. He stressed the urgency of mitigating these costs to maintain financial stability, as current spending patterns could exhaust the Council's reserves within three years. The Council is developing a revised Medium-Term Financial Plan (MTFP) to be presented in November, which will outline strategies for managing finances over the next three years. This plan will likely involve difficult decisions regarding reduced spending in some areas to protect essential services, particularly those for vulnerable residents.

Jackie Moylan, Interim Group Director of Finance and Corporate Resources, presented a detailed breakdown of the financial position, explaining that while £11.6 million in mitigation measures have been applied, the overspend remains substantial. She detailed the Council's reserve position, noting that general fund reserves stood at £154 million as of March 31, 2024, but a significant portion is ring-fenced or committed. The Housing Revenue Account (HRA) is also under pressure, with a projected £9.3 million overspend, primarily due to increased costs in building maintenance and legal disrepair cases.

The report also highlighted a London-wide trend, with temporary accommodation identified as the number one pressure across all boroughs. Hackney's temporary accommodation overspend is forecast at £19.5 million, driven by a 16% increase in numbers since August 2023 and a significant rise in the cost of nightly-paid accommodation. Management actions are underway, including the acquisition of two hostels and a lease deal for 300 properties, which are expected to reduce unit costs and increase supply.

The budget development timeline for 2025/26 indicates an estimated budget gap of £22.4 million, projected to rise to £52.3 million by 2027/28. This gap is expected to increase due to the current year's pressures and the need for further savings. Tough decisions will be necessary to close this gap.

Chief Executive Question Time

Dawn Carter-McDonald, Chief Executive of Hackney Council, outlined her personal goals for her first year in the permanent role, focusing on fostering a strong values and culture, promoting equality and anti-racism, prioritizing wellbeing, actively listening to staff and residents, and driving strategy and transformation. She acknowledged the significant financial challenges facing the Council and stressed the need for immediate solutions to reduce costs and increase income.

Carter-McDonald also addressed key workforce challenges, noting improvements in staff morale but acknowledging ongoing workload pressures and the need for career progression opportunities. She highlighted the Council's commitment to equality, diversity, inclusion, and belonging, while also recognizing the need for more targeted plans to address inequality and discrimination.

Regarding resident trust, Carter-McDonald reported that 73% of residents trust the Council, an increase from 67% in 2022, outperforming the LGA benchmark of 53%. However, she expressed a desire to further improve this figure and understand the reasons behind the 24% of residents who do not trust the Council, particularly within specific demographic groups. The Council is committed to robust consultation and engagement, with insights fed into decision-making processes.

Looking ahead to opportunities with a new government, Carter-McDonald emphasized the Council's active engagement with central government through London Councils and the LGA to shape policy and secure benefits for Hackney. She highlighted the Household Support Fund extension and the National Wealth Fund Bill as areas where the Council is seeking to tap into opportunities for its residents.

Hackney Council Complaints and Enquiries Annual Report 2023-2024

Simon Gray, Corporate Complaints Manager, presented the annual report on complaints and member inquiries, noting that Stage 1 complaints have remained at a high level, sustaining a figure of just over 5,300. Despite this volume, the average response time has improved to 20.2 days, the best performance since 2019. Housing services accounted for the largest proportion of complaints (46%), followed by benefits (11%), council tax (9%), environmental services (8%), and parking (7%). Fault was found in 43% of Stage 1 investigations, with resolutions including apologies, remedial action, or compensation.

The number of Stage 2 complaints has significantly increased to 518, the highest ever recorded, with an overall escalation rate of 9.7%. Housing services also dominate Stage 2 complaints, accounting for 69%. Formal investigations by the Local Government and Social Care Ombudsman (LGSCO) and the Housing Ombudsman Service (HOS) have also risen, with 71 investigations by the HOS. Compensation awarded at Stage 2 has seen a substantial increase, reaching £170,000.

Ben Bradley, Head of the Mayor's Office and Cabinet and Civic Support, reported on member inquiries, noting that over 5,000 inquiries were handled in 2023/24. Response times have improved significantly, with an average of 22.5 days for Member Enquiries and 17.1 days for Mayor and Cabinet Enquiries in Q1 2024/25. The majority of casework (77%) relates to housing needs, housing, and environment.

Steve Waddington, Strategic Director of Housing, highlighted an increase in housing complaints, particularly concerning damp and mould, and noted that the Council is exceeding national targets for damp and mould inspections. He acknowledged that the overall number of complaints, especially regarding building maintenance, is higher than desired but placed it in context against the 90,000 repairs undertaken annually. Efforts are being made to improve communication with residents and resolve complaints at Stage 1, with approximately 30% of building maintenance complaints now resolved upon receipt.

Scrutiny Panel Work Programme 2024/2025

The draft work programme for the Scrutiny Panel was presented, outlining key areas of focus for the upcoming year. These include the Council's use of Artificial Intelligence (AI) in services, the transformation programme and strategy, a review of public engagement and consultation, the corporate peer challenge and action plan, and ongoing work on poverty reduction and the climate action plan. Members were invited to provide comments and suggestions for the work plan.

Minutes of the Previous Meeting

The draft minutes of the previous Scrutiny Panel meeting held on 15 July 2024 were presented and agreed by the members as an accurate record.

Other Business

No other business was raised during the meeting.

Mayor of Hackney's Closing Comments

Mayor Caroline Woodley acknowledged the challenging financial situation and the significant work undertaken by officers. She emphasized the importance of collaboration with staff, residents, and communities in shaping future plans. The Mayor also highlighted the Council's proactive engagement with other local authorities on issues like retrofit and green skills, and expressed hope for improved relationships and longer-term funding arrangements with the new government. She recognized the immense work done by staff in pressurized environments and the need to adapt to a changing regulatory landscape.