The Overview and Scrutiny Board is Havering’s principal scrutiny committee. It has twelve members and ten attended this meeting. (Non-attendees were cllrs Summers and Damian White.)1
Item 6, Corporate Risk Register, analysed risks to the budget. (Addendum One) Every risk is rated ‘high’.2 The minutes of the ‘discussion’ are shocking.3 There was virtually nothing said about this ultra-specific report. Worse, the viability of the mitigation of risks was unchallenged. Proposed mitigation included wishful thinking…lobbying government. (Addendum Two)
Members discussed ULEZ’s effects on some care workers, which isn’t a Corporate Risk and wasn’t in the report. The existential bombshell below was in the report and was ignored.
“Difficulty in identification of further efficiencies and savings following a decade [actually 13 years] of Austerity and increased demand following the COVID pandemic.”
Translated: LBH can’t mitigate risk because the Conservative Austerity programme has destroyed the resilience of the council.
The budget is at ‘High Risk’ of failure. Gerry O’Sullivan should summon Chris Wilkins, LBH’s finance Tsar, to discuss his mitigation proposals. The O/S Board meeting with Wilkins will be an important building block in proactive scrutiny.
Addendum One: High risk factors for the 2023-24 budget
Financial Resilience – Inability to deliver a balanced budget as a result of:
- Inadequate Government Funding
- Rising Demographic pressures and/or increased complexity of Social Care
- Rapidly increasing inflation
- Cost of Living Crisis
- Delay or non-achievement of planned MTFS savings
- Inability to forecast due to uncertainty over medium term Government Funding
- Uncertainty regarding timing of future Government funding reforms including introduction of the care cap (currently no sooner than October 2025), whilst being required by government to move towards the median cost of care.
- Difficulty in identification of further efficiencies and savings following a decade of Austerity and increased demand following the COVID pandemic
- Government changes in policy e.g. changes to Home Office refugee dispersal
Addendum Two: Mitigation of the risks to the 2023-24 budget
Early diagnosis of the financial gap to allow time for actions to be put in place including new savings proposals.
– Lobby the Government at every available opportunity to put the case for both lack of Funding for local government generally and more specifically how Havering is disadvantaged from the current distribution formula. (my emphasis)
– Work with national lobbying groups such as the LGA and London Councils to put the case for more funding to the Government. (my emphasis)
– The Council has developed over £30m of savings proposals (over 4 years) which are being consulted on to reduce the financial gap which will be monitored for delivery.
– The Council continues to review its structure to develop a new target operating model which both aligns with current service priorities but also delivers savings and efficiencies.
– The Council is in the process of reviewing the Capital Programme to ensure that all schemes continue to be viable (see regeneration section of this risk register for further details).
– The Council has developed action plans to mitigate and reduce the in-year overspend including:
- All overspends reviewed and challenged to identify any non-recurrent spend which could be funded from reserves · All use of consultancy reviewed by senior management
Appendix 1: Source: HAV00005 p31
1 For enquiries on this agenda please contact (havering.gov.uk) Cllr Ruck is the vice-chair he attended the meeting via Zoom, which wasn’t noted in the minutes.
2 See p28 for details of categories of risk.
3 For enquiries on this agenda please contact (havering.gov.uk) Minutes para 39