The Cabinet of Enfield Council met on Wednesday 8 January 2025 to discuss the Medium Term Financial Plan for 2025/26 to 2029/30, which included proposals for new savings and income generation totalling £8.7 million. The Cabinet also noted the Housing Revenue Account (HRA) Quarter 3 financial monitoring report for 2024/25, which indicated a forecast pressure of £1.6 million against the approved budget, and approved the acceleration of the Affordable Homes Programme (AHP) capital budget to acquire 94 units at Ladderswood and New Avenue.

The meeting also reviewed the Quarterly Corporate Performance Report for Q2 2024/25, noting progress against key priority indicators for Enfield. Discussions also covered the 2024/25 Quarter 3 Capital Monitoring Report, which detailed a forecast spend of £299.0 million, and the 2024/25 Quarter 3 Treasury Management Monitoring Report. Finally, a half-yearly report on Council companies was presented, with HGL having implemented market rent levels on its owned portfolio and taken transfer of a number of Temporary Accommodation units.

Medium Term Financial Plan Update 2025/26 to 2029/30

The Cabinet discussed the Council's Medium Term Financial Plan (MTFP) for 2025/26 to 2029/30. A report from the Executive Director – Resources outlined the current financial position, highlighting a projected budget gap of £10.8 million for 2025/26 and £68.3 million over the medium term. This gap is attributed to factors such as pay awards, inflation, demographic changes, increased costs in adult and children's social care, and housing benefit subsidy loss.

The Cabinet noted the details of national funding allocations announced in the Chancellor's Autumn Statement and the Local Government Policy statement. Officers are currently analysing the implications of the provisional Local Government Finance Settlement, announced on 18th December, for the MTFP.

A second tranche of savings and income generation proposals amounting to £8.7 million for 2025/26 was agreed in principle. These proposals include £5.7 million from service redesign, efficiencies, and demand management, and £3.0 million from income generation. The Executive Directors confirmed that these proposals, or suitable alternatives, are deliverable.

The report also detailed proposed increases to fees and charges across service departments for 2025/26, with a general strategy to increase charges by 10% where locally controlled, subject to case-by-case conditions. Specific changes were noted for Education Services, with the introduction of a chaperone licensing service, and for licensing, including fees for breeding dogs and animal establishments. Planning fees are set to increase annually by the rate of inflation.

The Cabinet also noted the overall forecast level of reserves over the medium term, acknowledging that the projected overspend for 2024/25 would further deplete these. The S151 Officer will be required to make a statement on the adequacy of reserves in the final budget report.

Housing Revenue Account (HRA) Quarter 3 Financial Monitoring Report 2024/25

The Cabinet received an update on the Housing Revenue Account (HRA) forecast outturn position for 2024/25 as at Quarter 3. The report indicated an overall positive position, with a forecast revenue pressure of £1.6 million against the approved budget. Key variances were attributed to one-off pressures such as costs associated with decanting and maintaining safety at Walbrook, Shropshire House, and Cheshire House (£1 million), higher leaseholder insurance costs (£0.5 million), additional security measures at a number of blocks (£0.85 million), and the upgrade and cloud migration for the housing management system Civica CX (£0.52 million). These pressures were partially offset by a reduction in interest payable on debt due to lower interest rates (£0.65 million) and additional income from interest on HRA reserves (£0.76 million).

The Cabinet noted the ongoing investment in existing homes, the provision of new council homes, and enhancements to services based on resident feedback.

A key decision was the recommendation to Council to approve the acceleration of the AHP approved capital budget of £34.6 million to acquire 82 units at Ladderswood and 12 units at New Avenue. This acquisition would be funded from GLA grant (£20.3 million) and additional borrowing (£14.3 million). Appraisals for these acquisitions showed positive net present values and internal rates of return, with estimated annual debt costs expected to be covered by rental income from year one.

2024/25 Quarter 3 (Q3) Capital Monitoring Report

The Cabinet received an update on the capital programme spend to date at Quarter 3 (30 November 2024). The total forecast spend for the financial year is £299.0 million against an approved budget of £357.3 million. Significant spend is anticipated in Q4, particularly for Meridian Water and the HRA Phase 4 Ladderswood programme.

The report detailed proposed carry forwards of unspent budget from 2024/25 to 2025/26, totalling £43.1 million, which would be funded by £16.4 million borrowing and £26.7 million from grants and other external contributions. Cabinet approval was sought for the transfer of £170,000 from the Pipeline to the Approved 2024/25 capital programme for corporate condition programme minor capital works.

Key outcomes anticipated from the 2024/25 capital programme expenditure were highlighted across various Council priorities, including the completion of Meridian One homes, the delivery of new council homes, investment in school buildings, highway resurfacing, leisure centre refurbishments, and the remodelling of John Wilkes House into a rapid assessment and resettlement hub.

2024/25 Treasury Management Monitoring Report Quarter 3 (Q3)

Cllr Tim Leaver, Cabinet Member for Finance and Procurement, presented the report on the Council's Treasury Management activities up to 30 November 2024. The estimated overall cost of debt for 2024/25 was £28.2 million, with an anticipated underspend of £3.2 million against budget, primarily due to the deferral of voluntary Minimum Revenue Provision (MRP) for Meridian Water. The Council's gross external debt was reported to be £1,295.7 million as at 30 November, which remains within the authorised limit.

Investment income was forecast to exceed budget by £2.2 million, with an estimated average investment return of 4.91%. The report also noted the impact of mandatory changes in lease accounting (IFRS 16) from April 2024, which are presentational and do not affect the Council's overall financial resources. All treasury management activities were reported to be in compliance with the Treasury Management Code and the Council's approved Treasury Management Strategy.

Council Companies - Half Yearly Report

The Cabinet received a half-yearly performance report on Enfield Council Companies, focusing on Energetik and Housing Gateway Limited (HGL).

For Energetik, it was noted that £64.1 million of the £93 million funding available had been drawn down. Access to further funding was contingent on a refreshed business plan. A working capital facility of £3.5 million was in place, with £3.2 million utilised at the half-year point. The company was facing challenges due to rising construction costs and delays in housing developments, leading to a review of its business plan and a pause on new major contracts.

Housing Gateway Limited (HGL) had an opening debt balance of £133 million on 1 April 2024, increasing to £142 million by 30 October, against assets of £161 million. HGL achieved a profit of £1.25 million for the first six months, with a full-year forecast of £2.34 million. The report highlighted an increase in the bad debt provision to £1.5 million due to the move to market rent levels and the transfer of Temporary Accommodation stock. HGL had purchased 10 properties in the first half of the year, with 19 more in the pipeline. The company's dividend potential was noted, subject to the board's decision and the company's financial position.

The Cabinet noted the forecast loan drawdowns, performance, and financial positions of both companies. It was also noted that HGL had implemented market rent levels and taken transfer of Temporary Accommodation units, and that solutions to address the changing cash flow position were being explored.

Quarterly Corporate Performance Report (Q2) 2024/25

The Cabinet reviewed the Quarterly Corporate Performance Report for Q2 2024/25, which reflected performance against the Council Plan 2023-26. Overall performance was noted as generally positive, with improvements in several areas, including recycling contamination rates and a reduction in total notifiable offences. However, challenges remained in areas such as household waste recycling rates, the prevalence of overweight and obese children, and the percentage of pupils achieving the expected standard in reading, writing, and maths compared to national and London averages. Actions were being taken to address these areas, including the recruitment of a Recycling Manager and the expansion of healthy eating programmes.

The report also highlighted a decrease in the number of households in temporary accommodation and a reduction in families in Bed and Breakfast accommodation for over six weeks, contrasting with increases seen across London. The Council's planning service had made progress in reducing the number of outstanding applications and improving appeal success rates. However, the number of enforcement cases remained above target, partly due to work on unauthorised HMOs.

The meeting also noted the performance of customer services, with increased satisfaction ratings for telephony and webchat, exceeding set targets. Financial resilience indicators showed a slight reduction in council tax collection rates compared to the previous year, with an increase in arrears.

Other Matters

The Cabinet noted the date of the next meeting, scheduled for Wednesday 26 February 2025. A resolution was passed to exclude the press and public for Part 2 of the agenda, which contained exempt information relating to the financial or business affairs of specific individuals or organisations.