Agenda item

This report sets out the financial forecast for the General Fund revenue budget, the Housing Revenue Account, the Dedicated Schools Grant and the Capital Programme, as at Quarter 2 2023/24.

Members are asked to note that the report was considered and approved by Cabinet on 16 October 2023.

Councillor Tatler, Deputy Leader, Cabinet Member for Finance, Resources & Reform and Cabinet Member for Regeneration, Planning & Growth introduced the report that set out the financial forecast for the General Fund revenue budget, the Housing Revenue Account, the Dedicated Schools Grant and the Capital Programme, as at Quarter 2 2023/24. Members were asked to note that the report was considered and approved by Cabinet on 16 October 2023.

In noting the particularly challenging financial circumstances the Council were in due to the national economic climate and limited funding from central government it was recognised that Brent’s financial challenges were not unique and were in line with other Councils.

The following key points were discussed:

·                     It was confirmed that measures were in place to mitigate the £13m pressures as a result of temporary accommodation costs, however these measures were unlikely to have an impact until 24/25.

·                     The Committee queried if increased overspending was anticipated in the future, given the economic climate. In response the Committee was advised that despite the Council’s prudent approach, the challenges in continued reduced piecemeal funding from central government and the pressures from statutory demand led services such as Housing, CYP and ASC could lead to Brent and many other councils incurring overspends in order to deliver essential services to residents.

·                     The Committee was assured that the Council held a healthy reserve fund at present, some of which would need to be used to support the temporary accommodation issues. If it was necessary to withdraw further funds to support other financially challenged areas of the Council, steps would be taken to action this, however this action would not be taken without thorough consideration as any withdrawal from reserve funding would have to be paid back and this would impact budgets across other council services.

·                     It was noted that some reserves were ringfenced for specific purposes and could not be used for broader purposes.

·                     The Committee queried if the Council could generate increased revenue via business rates and collecting increased council tax on vacant properties. In response the Committee was advised that the Council was bound by central government legislation, so were unable to change collection rates. The Committee was informed that central government were due to review business rates and consider the devolution of business rates to councils; if Council’s were given the authority to manage this, Brent could explore increased business rates to generate more income, however this was not currently an option.

·                     Officers recognised there were a number of vacant homes in the borough and continued to explore ways to bring these vacant homes back in to use to support temporary accommodation as well as generating Council income. The identification of vacant homes was supported by public intelligence, Ward Councillors and the empty homes property team who went out into the community to identify vacant properties.

·                     The Committee felt it would be advantageous to reactivate a previously successful campaign to report vacant homes in the borough that the Council had promoted through the ‘Your Brent’ magazine.

·                     Work was being actively undertaken to ensure that the correct level of Council Tax was being collected, with officers investigating single person discount claims and converted properties.

·                     The Committee was advised that there may be a change in legislation that could support increased income generation through the collection of Council tax on vacant properties as the change would allow the Council to collect double the amount of council tax on vacant properties after 1 year as opposed to the current 2 year rule.

·                     In terms of generating income through commercialisation opportunities, the Committee was advised that the Council were often approached with commercial opportunities, however it was felt these often posed unnecessary financial risk to the Council. The Committee noted examples of other Council’s that had tried this method of income generation with results being highly unfavourable to the Council’s finances.

·                     To limit the cost pressures associated with the demand for temporary accommodation, the Committee queried what was being done to bring voids within Brent Housing’s portfolio in to use more quickly. In response the Committee was advised that improvements had been made to procedures within the voids system, this had resulted in improved void turnaround times.

·                     It was hoped that the Mayor’s Refugee Housing Programmes would support the Council in purchasing larger family sized homes for use in the borough that would in turn support a reduction in the excessive temporary accommodation costs.

·                     The Committee was advised that when viability and market conditions improved, further acquisitions would be made to Brent’s Housing portfolio to source additional temporary accommodation.

·                     Following a Committee query in relation to the broader mitigations in places to manage the overspend, the Committee was advised that the Finance Team rigorously monitored the budget, looking for trends in demands to support future projections, however it was noted that there was an element of unpredictability in demand led areas of the budget.

·                     In addition to projections and financial modelling undertaken, service area managers were robustly challenged to ensure their services were providing the best value for money and continued to explore the most efficient ways to deliver services.

At this stage in proceedings, the Committee agreed to apply the guillotine procedure under Standing Order 62(c) in order to extend the meeting for a period of 15 minutes and enable the remaining business on the agenda to be completed.

·         In recognition that the significant overspend in the current budget was not in relation to the typical areas of overspend (ASC and CYP) the Committee queried if this had caused additional pressure on budget holders in these areas to limit their costs, taking in to consideration the already projected overspend. In response Nigel Chapman, Corporate Director, Children & Young People advised that he felt he received an appropriate level of challenge and support to manage the CYP budget. Conscientious efforts continued to be made to manage risk within the community rather than brining children in to care unnecessarily, however it was highlighted that it would only take a small number of emergency care or high cost residential placements to significantly impact the budget.

·         CYP also continued to experience financial pressures in relation to EHCP funding, however this was actively being managed through the support of the Delivering Better Value in SEND (DBV) Programme, with some traction starting to take place.

In closing the discussion, the Chair thanked officers and Committee Members for their contributions towards the scrutiny on the items before summarising the outcomes of the discussions and additional actions, which were AGREED as follows:

Recommendations to Cabinet

(1)            Continue to lobby central government to establish a locally controlled business rates system in order for local authorities to influence policy around the setting of Business Rates and to generate additional income.

Suggestions for Improvement

(1)            Explore new ways to increase collection rates for Business Rates, learning lessons from other local authorities.

(2)            Liaise with the Office for National Statistics (ONS) to explore whether further census data could be provided to the Council on the specific properties in the borough identified as ‘unoccupied dwellings’.

(3)            Undertake a communications and engagement campaign to encourage owners to rent vacant properties to the Council to address the shortage in temporary accommodation supply.