Agenda item

Resolved: that the report be noted. That additional information should be provided about the funding being made available for dilapidation works on leisure centre buildings. The Chair also agreed to give further consideration to scrutiny of the issue of leisure centres management – in consultation with the Chair of Overview of Scrutiny.

5.1    Selwyn Thompson (Director of Financial Services) introduced the report and highlighted budget pressures in key areas.

5.2    Selwyn Thompson and David Austin responded to questions from the Committee, the following key points were noted:

·         Concerns had been raised by some service managers about their capacity to use the Oracle financial system. This was particularly the case in areas of the Council that employed significant numbers of agency staff because the system required more data input for payments than had previously been the case.

·         There was a mismatch between the operational costs of the youth service and its contract value.

·         As part of the mutualisation of the youth service (in 2015) there was an expectation that the new organisation would be able to access funding and grants that were not available for Council services. This had not been the case.

·         However, the service had increased the number of young people it provided services for. It had also reduced its overhead costs.

·         There was additional pressure on the budget due to the withdrawal of a Government grant for youth services.

·         Future options were currently being considered for the contract. This would involve re-working assumptions about the budget.

·         Increases in budgets for services would have to be met through either cuts from other services or by drawing on reserves.

·         Measures were being taken to manage overspending in the children and young people directorate budget.

·         A pantomime had been held in the Broadway theatre for the first time in a number of years. It had not been as successful as expected, which resulted in a significant loss.

·         Three years ago investment had been made in new refuse vehicles. It was intended that this would solve the problem of overspending. The service still requires hire vehicles and an additional refuse round had been added.

·         Work was also ongoing to use capital expenditure to buy vehicles to replace the use of hire vehicles and the associated costs.

·         Further information would be provided about the replacement of refuse vehicles in future budget monitoring reports.

·         Underspend on the One Public Estate programme was a timing issue. The Council was still committed to delivering the programme.

·         There was no indication in January that there would be an overspend in the Lewisham Homes repairs and maintenance budget.

·         Officers could not confirm that the overspend was due to the performance of Lewisham Homes’ repairs and maintenance contractor.

·         The figures in the report had been provided earlier than usual. It was possible that part of the sum for repairs and maintenance might have been intended to be capital, rather than revenue spending.

·         Lewisham Homes had a significant annual spend on repairs and maintenance with a programme which would be delivered over a number of years – it was possible that the spending this year would be offset in another.

·         There had been no previous indication that Lewisham Homes was overspending its repairs and maintenance budget.

·         One of the big shortfalls in the capital budget was as a result of the housing matters programme.

·         A capital programme budget had also been set aside for the redevelopment of Catford Town Centre.

·         There had been some revaluations and some movements in the Council’s stated positon on its reserves.

·         The level of the Council’s unearmarked reserves had been increased by £7m – from £13m to £20m.

·         Earmarked reserves had reduced from £160m to £148m. Within the earmarked reserves there were various movements. Allocations in some areas (such as the PFI sinking funds) had increased and although some of the reserves had been released to cover the overspend in the 2018-19 budget - the Council was spending in line with its plans.

5.3    In Committee discussions, the following key points were also noted:

·         Members highlighted the need for service managers to understand levels of spending in their services – in order to ensure that problems could be foreseen – and appropriate management action taken.

·         Members questioned the way in which budgets were set for services. Examples were given of services that continually appeared to overspend  in consecutive years.

·         There were specific concerns about the way in which the budget had been set for children and young people’s services.

·         The new Executive Director for Community Services would be invited to the next meeting of the Committee. It was acknowledged that he was new to the role – so he would also be invited to provide a more comprehensive update to the Committee on the finances of adult social care in the autumn.

·         Members noted the additional funding that had been made available for adult social care through the Better Care Fund and questioned whether action was still being taken to manage pressures and control costs.

·         Examples were given of issues with the management and operation of Lewisham’s leisure centres.

·         Members questioned the processes in place for managing and enforcing contracts.

·         It was noted that a recent report had been considered by the Healthier Communities Select Committee about the management and operation of the leisure centres contract.

·         There were differences of opinion about future options for the Broadway theatre. Some Members felt it was difficult to make it work as a commercial venture, others expressed the importance of the theatre as a key part of Catford’s future cultural offer.

·         There was significant concern about the overspend in the housing revenue account repairs and maintenance budget for Lewisham Homes.

·         Members noted concerns that had been expressed about Lewisham Homes’ repairs and maintenance subcontractor.

·         Members highlighted the discrepancy in the budgeted and the actual spending of capital programme resources.

·         It was noted that the Committee’s proposal to Overview and Scrutiny Business Panel – that all select committees should give additional consideration to budgetary issues- had been agreed.

·         Members expressed their continued concerns about the viability of the children and young people’s budget.

5.4    Resolved: that the report be noted. That additional information should be provided about the funding being made available for dilapidation works on leisure centre buildings. The Chair also agreed to give further consideration to scrutiny of the issue of leisure centres management – in consultation with the Chair of Overview of Scrutiny.