Agenda item

Resolved:

The Committee noted the report and agreed to add an item to the work programme that would further investigate the issues around people with no recourse to public funds.

Selwyn Thompson, Head of Financial Services introduced the report and explained that it had already gone to Mayor and Cabinet on 25 June 2014 and to Overview and Scrutiny Business Panel on 8 July 2014. He then highlighted the following key points:

·         Overall there was an underspend of £1.8m

·         There was a £4.1m overspend in the Children and Young People’s Directorate (CYP), which is largely due to pressures caused by families with no recourse to public funds, as well as demands for services for Looked After Children.

·         There was an overspend in the Customer Services directorate, largely caused by increased demands for temporary Bed & Breakfast accommodation.

·         Council Tax collection was 94.8%, which slightly exceeded the target of 94.5%. Business Rates collection was 99%.

In response to questions from the Committee, Selwyn Thompson, Janet Senior, Executive Director for Resources and Regeneration, David Austin, Head of Corporate Resources, Peter Gadsdon, Head of Service Design and Innovation, Robert Mellors, Group Finance Manager (Community Services) and Alan Docksey, Head of Resources and Performance (CYP) provided the following information:

·         The public works loan board is a government body, underwritten by the Treasury, which local authorities can borrow from. 

·         The Treasury Management Strategy takes a prudent approach to investment. Advisors look at the ratings of organisations Lewisham invests with and a strict list of counter-parties is maintained. The length of investment is restricted, usually for 3 months and never for more than a year.

·         The target for Council Tax collection is 94.5% in year, with a target of 98% after year end which can be achieved by pursuing those that still owe money. The write-off policy is reviewed every year with auditors. The Council does use bailiffs to collect money if required.

·         The Supporting People budget is a non-ringfenced budget. It was previously ringfenced and was £17m per annum but has been reduced to £13-14m per annum, which represents a smaller cut than other government grants to Lewisham.

·         The overspend due to increased use of Bed and Breakfast (B&B) provision has a number of causes. Since 2010 the budgets for building social housing has been reduced, meaning that there is not enough provision of social housing to meet demand. In addition the private sector rented housing market is strong, with high rents that many people can’t afford. Analysis shows that there has been an increase in those evicted from the private rented sector.

·         If people become homeless there is a shortage of accommodation available to house them, so Lewisham has to use temporary accommodation. Currently there is a lack of hostel stock available so accommodation is usually in B&B. When using B&B, Lewisham can only claim for the first room, so if there is a large family that needs to be housed then additional rooms will be paid by the local authority.

·         The average number of clients in B&B accommodation was 197 in 2013/14 compared to 79 in 2012/13. In addition families now require longer term accommodation, whereas the previous need was for short term accommodation.

·         The Council is looking at procuring more hostels and private sector stock to address this issue.

·         In the last few weeks there has been a reduction in the demand for temporary accommodation, though it is so far unclear whether this is a longer term trend.

Officers then provided the following information about people with no recourse to public funds:

·         The impact of people with no recourse to public funds is being closely monitored as it represents a significant budget pressure for Lewisham Council. There was a £4.5m pressure in 2013/14, with a £5.7m pressure estimated for 2014/15. On average it costs £25k to support a family each year.

·         Part of the increase in numbers is because advice from charities and other advice groups is to go to the local authority. In addition some have used judicial review after their cases are not taken up. Lewisham is working with other local authorities to collect evidence and lobby the government on the issue.

·         Most people presenting as needing support are overstayers, those who have come to the UK on a visa and have not gone back after this expired. Many will have been in the country for a while, existing in the grey economy. However increasing economic pressures over the last 4 years have meant that a change in circumstance, such as losing work, more children, illness or relationship breakdown results in them needing assistance. Support is provided by the borough in which people present.

·         The budget pressure is mainly in the CYP directorate as local authorities have a duty to support all vulnerable children in the borough. However there are also adults who require assistance.

·         London is experiencing more pressure around no recourse than the rest of the UK.

·         Lewisham has looked at assessing and supporting those presenting with no recourse to public funds in a different way. A pilot started 2 weeks ago that has transformed the system used. Officers are doing due diligence to make sure Lewisham is supporting those who need it, such as checking if people have money in their accounts, checking the local connections and whether they have presented elsewhere previously. There is also an officer from the Home Office working within the assessment unit to prioritise the determination of their status to remain in the country and is also working with the Border Agency to progress cases.

·         The pilot has only recently started, but early signs have been positive. Up to June, Lewisham took on 2 people a week presenting with no recourse to public funds. In the last 2 weeks using the new process Lewisham has accepted 1.

·         Officers are also tracking a new category of people presenting with no recourse to public funds, EU nationals who have been employed for less than six months and have their benefits stopped. Officers are aware of 70 families in Lewisham that are having their benefits stopped.

The Committee discussed the significance of the budgetary pressures presented by people with no recourse to public funds and the need for further scrutiny of the issue.

Resolved:

The Committee noted the report and agreed to add an item to the work programme that would further investigate the issues around people with no recourse to public funds.