The Scrutiny Panel met to review the Council’s budget and spending priorities for 2024/25. In a challenging financial context, the Panel received presentations from each of the directorate heads who set out the key areas of expenditure, cost pressures, and savings delivery proposals. The Panel also received a brief verbal update from the Mayor of Hackney, Mayor Caroline Woodley.

Children and Education

The Panel heard from Jacquie Burke, the Group Director for Children and Education, about the priorities for her directorate. Councillor Burke explained that the Children and Education budget is under particular pressure this year due to a number of factors including the rising cost of care placements for looked-after children, the increasing demand for special educational needs and disabilities (SEND) provision, and the expansion of free childcare.

The Panel was informed that:

The SEND continues to be a huge pressure for us and we are working with the [DfE](https://www.gov.uk/government/organisations/department-for-education) on a Delivering Better Value programme and we've got a £1 million grant allocation that's to help us mitigate some of the high need budget pressures.

In relation to the Dedicated Schools Grant,¹ Councillor Burke informed the Panel that:

[T]he overspend [on SEND] has been allowed to stay on the balance sheet but at some point that will have to end and the previous government didn't have a solution for that. We are working very hard with the DFE in terms of trying to reduce that spend as much as possible but Hackney's one of the highest issues of education, health and care plans for children with special education needs and disabilities.

Councillor Burke explained to the Panel that the budget for the service includes over-established posts. This is because the service was previously understaffed and had to employ agency workers to fill the gap. The Council has now made a number of permanent appointments to reduce its reliance on agency staff and is in the process of undertaking a staffing review.

[W]e were under-established and we have a situation in children's social care where our caseloads are reasonable. We have had Ofsted[^3] in for the last few weeks, our caseloads are reasonable and if we don't have reasonable caseloads we can't run a safe service. We are in the middle of a consultation regarding structure and staffing in children and family services and we will deliver savings on that but I'd want to be absolutely clear we're not over-staffed in terms of the work of children.

The Dedicated Schools Grant (DSG) is a ring-fenced grant that is provided by central government to local authorities to fund schools. Ofsted (Office for Standards in Education, Children's Services and Skills) is a non-ministerial government department which inspects services providing education and skills for learners of all ages.

The Panel asked Councillor Burke a number of questions about the savings proposals, including the impact of the proposed changes to Children's Centres and the achievability of the savings target for Young Hackney. The Panel was also interested to understand the extent to which there would be further investment in early help services. Deputy Mayor Anntoinette Bramble added that the Council is committed to protecting its early help offer, as evidenced by the recent reduction in referral rates to children's social care.

The Panel heard that there are a number of primary schools in Hackney that are running budget deficits. The Panel asked for further information to understand how these deficits are being accounted for and managed.

Adult Social Care and Public Health

The Panel heard from Helen Woodland, Group Director of Adult Health and Integration, about the priorities for her directorate. Councillor Woodland explained that the Adult Social Care budget is under significant pressure due to a number of factors, including the increasing demand for care, the rising cost of care, and the impact of the cost of living crisis. Councillor Woodland noted that the service was statutory and so was obliged to meet all assessed need. She also commented that:

Since 1920 the overall percentage of people receiving care has increased by 40 per cent [and] my budget has decreased by 25 per cent.

The Panel heard that the service is working to transform its approach to care, including by promoting independence, redesigning reablement services, and rethinking support for learning disabled adults. The Council is also working to integrate its commissioning functions across health, public health, and adult social care.

Councillor Woodland informed the Panel that the Adult Social Care service was experiencing particular pressures from hospital discharge. She informed the Panel that while additional monies had been provided by central government through the Discharge Fund,² this did not cover the cost of providing ongoing care to those discharged.

Councillor Woodland also reported to the Panel on the Market Sustainability and Improvement Fund,³ a two-year grant fund which the service used to support care provider fee uplifts and to reduce waiting times for care.

The Market Sustainability and Improvement Fund is a two-year grant that has been provided by central government to local authorities to support the adult social care market.

The Panel asked a number of questions about the savings proposals, including the achievability of the savings target for day care services, and the impact of the proposed transformation programme. Councillor Lynch made the observation that there were opportunities to do things differently, focusing on new ways to deliver better outcomes for residents, while recognising that these changes were being made as a result of funding pressures. The Panel asked what work was being done to educate family members about the benefits of caring for their relatives in their own homes, rather than in residential care, and to change culture within the NHS. The Panel also challenged Councillor Woodland on the impact of the savings proposals on residents, asking for the service to be honest about the likely consequences.

Climate, Homes and Economy

The Panel heard from Rickardo Hyatt, the Group Director for Climate, Homes and Economy, about the priorities for his directorate. Councillor Hyatt explained that his directorate is responsible for a wide range of services, including waste and recycling, housing, parks and green spaces, community safety, and economic development. He informed the Panel that the directorate had a net budget of £43 million, which represents 11.5% of the General Fund.

Councillor Hyatt explained that the directorate is facing a number of cost pressures, including:

• Increasing demand for the homelessness prevention service.
• Vandalism to the borough's CCTV systems, which has reduced income from penalty charge notices.
• Increases in the cost of running the commercial waste service, such as the cost of fuel and vehicle maintenance.

The Panel was also informed about savings delivery proposals in a number of areas. This included:

• Charging for garden waste collection.
• Restructuring the Community Safety Intelligence Hub.
• Reviewing fees for the enforcement service.
• Extending the operating hours of some parking schemes.
• Reviewing the structure of the Regeneration and Economic Development service.

The Panel asked Councillor Hyatt a number of questions about the savings proposals, including the impact of the proposed changes to the Parking Service on the Council’s reputation, and the viability of the savings target for Commercial Waste. In particular the Panel asked for details of:

[T]he split of the 2.5 million [risk]

associated with the Parking Service. The Panel was also interested to understand the impact of the savings proposals on plans for inclusive economic development, as well as exploring the potential for capital investment to alleviate the cost pressures around temporary accommodation.

Corporate Strategy and Transformation

The Panel heard from Kieran Reid, Director of Corporate Strategy and Transformation, about the work being done to transform the Council. Councillor Reid explained that the Council has developed a Transformation Strategy, which is designed to:

• Deliver better services for residents.
• Support the workforce.
• Contribute to closing the budget gap.

The Panel was informed that the strategy will involve working with colleagues across the Council to develop new proposals in a number of areas, including:

• Resident experience.
• Demand management and prevention.
• Efficiency.

Councillor Reid explained that the strategy will be delivered in a phased way, and that the Council will work with Scrutiny and other stakeholders to ensure that the transformation programme is delivered effectively.

The Panel asked Councillor Reid a number of questions about the transformation strategy, including the impact of the strategy on the delivery of statutory services and the extent to which the strategy will take into account the impact of budget cuts on residents. The Panel also asked how the strategy will address the issue of councils competing for scarce resources, particularly in relation to social care. Councillor Gordon was interested to understand:

[H]ow to collaborate with other local authorities where there are relevant resource savings.

Councillor Reid explained that the Council was aware of these issues and was already working with other local authorities to share best practice and to explore opportunities for collaboration. He also said that the Council would continue to monitor the impact of the transformation strategy on residents and would make changes to the strategy as necessary.

Financial and Corporate Resources

The Panel received two presentations from Deirdre Worrell, the Interim Director of Financial Management, on the Council's General Fund and Housing Revenue Account (HRA).

Councillor Worrell explained that the General Fund is facing a number of cost pressures, including:

• Rising inflation, which is increasing the cost of goods and services.
• The cost of living crisis, which is putting pressure on the Council’s budget for benefits and homelessness prevention.
• The ongoing impact of the cyber-attack on the Council’s IT systems.
• Pressures in the Council's fleet maintenance service, such as the cost of maintaining vehicles.
• Shortfalls in income from traded services with schools.

The Panel was informed that the General Fund was forecast to overspend by £9.875m for the year, which would be funded through a number of one-off measures.

The Panel asked Councillor Worrell a number of questions about the savings proposals, including the reason for the delay in the letting of Christopher Addison House. Councillor Worrell explained that this was due to a delay in the lessee taking possession of the property.

Councillor Worrell explained that the Housing Revenue Account is facing a number of cost pressures, including:

• Rising inflation, which is increasing the cost of repairs and maintenance.
• The increasing number of legal disrepair cases.
• The need to invest in new lifts.

The Panel was informed that the HRA was balanced for 2023/24, however this was achieved by drawing on reserves set aside to deliver savings in future years. These savings will now need to be delivered through alternative means. The Panel asked Councillor Worrell a number of questions about the HRA, including the impact of the increased cost of reactive repairs. Councillor Worrell explained that this was due to a number of factors, including the age of the Council's housing stock, the impact of the cyber-attack, and the increasing number of legal disrepair cases.

The Panel asked Councillor Hyatt about the Alternative Dispute Resolution (ADR) process, which has been developed to try and reduce the number of legal disrepair cases. Councillor Hyatt explained that:

[T]he ADR practice is quite a challenging one because it's predicated on negotiations with individual tenants. So you know where we have been able to agree alternative dispute resolution routes with tenants we've managed to complete the works more quickly but also made savings that we otherwise wouldn't have made had we gone all the way through the legal disrepair process.

Mayor's Update

The Panel received a verbal update from Mayor Woodley who:

• Expressed her thanks to the Panel and the Directorate Heads for their work on the budget.
• Emphasised the proactive nature of collaboration with other local authorities and pointed to recent examples of joint working on housing and local economy.
• Expressed cautious optimism that the new Labour Government will be more supportive of local government.
• Reassured the Panel that the Council is committed to continuing to make progress on its key priorities, such as insourcing and the Responsible Business Charge.
• Thanked the Council staff for their creativity and flexibility in responding to the challenges facing the Council.
• Asked for feedback from the Panel on the budget scrutiny process.

Minutes, Work Programme and Any Other Business

The Panel agreed the minutes of the previous meeting and noted the matters arising. The Panel also received a report on the Scrutiny Panel Work Programme 2024/2025 and the Public Consultation Report 2024. There was no other business.