Agenda item

To follow as a supplement.

Benjamin Ainsworth (Head of Finance at the London Borough of Brent) presented the paper which outlined the draft Statement of Accounts prior to their submission for audit. He paid specific the table on page 7 to the Supplementary Agenda Pack which reflected the structure of the Council and compared revenue budget to outturn. Mr Ainsworth commented on each line of the table and reported that the total outturn for the general fund was 0.0. He drew Members’ attention to a table on page 9 to the Agenda Pack outlining the Capital Outturn and said that there were plans to address the underspend in 2017-18. This lead to a question about the assurance that the money would be spend in the 2017-18. Conrad Hall (the Council’s Chief Finance Officer) responded that the capital budget underspend had been acknowledged and dealt with and that sometimes project managers were too optimistic about the amount of money they were going to spend (e.g. the Schools Programme). The Committee heard that the Capital Programme Board met monthly to review progress and that a number of potential causes of underspending had been identified (for example, unrealistic profiling and issues related to capacity).  The Chair requested that a report be presented to the next meeting on the monitoring of the Capital Programme.

Committee Members enquired about overspending in various departments, among which Community and Wellbeing, Resources and Regeneration and Environment.  Mr Ainsworth attributed the  overspend in the Community and Wellbeing Department to late delivery of the New Accommodation for Independent Living, the increased number of Adult Social Care clients and the missing of targets related to technical change. In relation to overspend in the Resources Department, Mr Hall said that some significant savings in legal services had been made, but it had been difficult to reduce legal support as this could have  led to increased risks and could have been counter-productive. He noted that the targets that had been sent unrealistically ambitious. Althea Loderick (the Council’s Strategic Director for Resources) added that the legal budget would be reduced by up to £900,000 by introducing more efficient ways of working. Mr Hall pointed out that 2016-17 had been an unusual year for the Regeneration and Environment Department as over- and underspends matched in various areas. He stressed that underspending in the department had not been delivered by cuts, but through savings already planned and agreed, without affecting the level of the service provided. He said that he would discuss some budget adjustments with the Deputy Leader before these were included in a report to the Cabinet and he informed the Committee that would be able to share the document before it was published.    

Mr Ainsworth directed Members’ attention to the following pages of the Supplementary Agenda Pack:

·         Page 10, stating that it was the most important page of the whole report as it contained the Council’s balance sheet and noting that liabilities fluctuated every year.

·         Page 14, commenting that there was very little movement on most lines with the exception of some liabilities, with some of the bigger movements explained in the narrative of the report.

·         Page 32 onwards, where information on financial issues and LOBOs was contained

·         Page 41 which detailed senior officer’s remuneration

·         Page 50, detailing the Housing Revenue Account. Mr Ainsworth said that any movement on the value of council dwellings had a big impact on the Council’s balance sheet. The Committee heard that there had been a slight fall (2-3%) in housing values in Brent.

A Member of the Committee asked a question that related to the impact of Right to Buy on the housing revenue account. Mr Ainsworth explained that it had an effect on the number of assets, which had reduced by approximately 160 in the last year. He clarified that some of this reduction could be as a result of movement of assets to the South Kilburn Regeneration Programme.

In response to a Member’s question, Mr Hall said that it was a legal requirement to publish information about the remuneration of the Chief Executive, officers who reported directly to her (mostly the Council’s Management Team), and statutory officers. He emphasised that all senior officers were paid via Payroll and that in 2016-17 there had been a large increase in the number of officers paid via Payroll.

The Chair advised the Committee that Mr Ainsworth would be available to take further questions from Members in writing. He asked Mr Hall to comment on the level of reserves, to which Mr Hall said that the £12 million general reserves was an appropriate level for a local authority of Brent’s size. Mr Hall stated that it would be difficult to have lower level of reserves with the current risk profile, highlighting that Local Authorities had to attain separate reserves against contingency (to be used in emergency situations).   

RESOLVED:

(i)        The contents of the Statement of Accounts report be noted; and

(ii)       The opinion of the external auditor on the Statement of Accounts be provided at the Audit Advisory Committee meeting on 20 September 2017.

(iii)      A report on the monitoring of the Capital Programme be presented at the meeting of the Audit Advisory Committee in September 2017.