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Corporate Resources and Economy Scrutiny Committee - Thursday, 5th December, 2024 7.30 pm

December 5, 2024 View on council website Watch video of meeting Watch video of meeting
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Summary

The meeting discussed the Local Government and Social Care Ombudsman’s annual review of complaints, social value in home care contracts, the council’s finances, and potential undeliverable savings in a range of areas.

Complaints

The committee considered the Ombudsman’s annual review letter, which had been critical of the council's complaints handling in the past. They questioned Councillor Diarmaid Ward, Executive Member for Finance and Performance, and Manny Lewis, Head of Complaints, on Islington's progress in implementing the Ombudsman's recommendations.

Councillor Ward stated:

There is an awful lot done, but there is an awful lot to do.

He went on to describe how, despite improvements, Islington was still failing to resolve residents' issues at the first point of contact:

I'm going to give [an example] again tonight, because I think it kind of sums up exactly the journey that we have to go on… What sums this up is a piece of case work that ended up in my inbox, but it was a very, very simple thing from a resident. I just want this thing done on my estate. In the end, after two or three emails to said service about why can't this thing be done. The eventual answer that came back was, I'm really sorry, that's not our team… we have done that and it doesn't work. So, tell you what, can you please complain about said other team? Then it will get done.

Mr Lewis described the changes to the complaints process, including a new complaints board, a new complaints management system, and new training for staff. He also described how directorates now have to develop complaint improvement plans in response to issues raised by the Ombudsman and by residents.

Members of the public raised several concerns about the responsiveness of the council's New Build Team, and the quality of responses they had received from the complaints department. Members agreed to request a written response from the council within 14 days, and to add new build to the agenda of the next meeting.

Social Value in the Home Care Market

The committee heard a presentation from Nikki Ralph, Assistant Director of Strategic Commissioning, and Jodi Pilling, Director of Strategic Commissioning and Investment, on the council's work to maximise social value in its Home Care framework.

Ms Ralph described how the council had made social value 20% of the award criteria when procuring the new framework, which had led to much greater diversity in the market:

Before the new contracts were launched, we had two providers that we contracted with, and all our other providers were spot providers. Um, and so now we, we really wanted to create a more diverse market, and we wanted to create more diversity in terms of local providers, but also having more, um, small, medium, um, sized enterprises. And as you can see on the slide, we now have the majority of our, um, organisations are SMEs. Um, we have one VCSE organization, and we have a number of director run organizations. In the previous contract, the two providers that we contracted with were large national organizations. So we've really created diversity in the market.

She went on to describe some of the social value commitments the council had sought, including the London Living Wage, paid travel time for care workers, guaranteed hours contracts, and trade union recognition. She also noted that over half of the staff employed by the council's Home Care providers lived in Islington.

Ms Ralph concluded by describing some of the challenges associated with driving social value, including balancing the desire for an ethical care system with the financial constraints on the council and the providers. The council has committed to implementing its Ethical Care Charter, which sets out a series of standards for home care provision, but Ms Ralph noted that further improvements in social value will rely on a voluntary buy-in from the providers.

Council Finances

Paul Wood, the Corporate Director of Resources, and Councillor Ward presented the second quarter budget monitoring report and the Autumn update to the Medium Term Financial Strategy (MTFS).

Quarter Two Budget Monitoring

Mr Wood described how the council’s General Fund position had worsened by £3.6 million since the first quarter, primarily due to significantly rising demand for and costs of temporary accommodation. The council is forecasting a £5.4 million overspend on temporary accommodation, an increase of £4 million since the first quarter. Mr Wood stated:

We have about a 5 million pound pressure. Other authorities have had 20 or 30 million pound pressures after growth for the last couple of years. Um, temporary accommodation is going to be the thing that pulls a lot of authorities below section 114 level. So to have a pressure of 5 million, I don't expect really to be saying here and getting any sympathy, but we are extremely lucky for the pressures to be managed down so well to that level. Although it is an absolute critical risk to our, to our finances in the medium term.

Councillor Ward described the work the council is doing to mitigate the rising costs of temporary accommodation, including through its Property Acquisition Programme, changes to its allocations policy, and work to prevent homelessness in the first place. He stated:

The biggest frustration for me is there clearly is, uh, a commercial market for Newington Barrow Way. There clearly is, uh, people who would take it. So all I can say is I will report back as soon as, as soon as there's progress on, uh, temporary accommodation. I think we have to, I think we have to look at it again.

The council is also forecasting a £1.18 million shortfall in income from commercial property, which is unchanged since the first quarter. The council is working to identify ways to increase its commercial income, including opportunities to lease space at Newington Barrow Way.

Other areas of overspend included a £1.559 million shortfall in parking income, an £0.805 million overspend in Street Operational Services, and a £0.512 million overspend in leisure services.

Despite these pressures, Mr Wood stated that the council expects to remain within its recurrent means for the year, and to avoid drawing down on its reserves.

Autumn Medium Term Financial Strategy

The Autumn update to the MTFS presented an even bleaker picture. Mr Wood described how the estimated 2025/26 budget gap had increased by £2.772 million since the Summer update, to £30.625 million. He stated:

The budget announced the extra, uh, costs to employers as a result of national insurance. So for the council as an employer, we think that will cost us an additional 4 million pounds. There is, uh, verbal commitments around fully funding that. So hopefully that is a zero cost, but we know we've got the cost and we don't yet know what our reimbursement for that will be.

He went on to describe how the council’s reserves are forecast to fall significantly over the next five years, and could fall below the council’s minimum acceptable level by 2027/28.

Mr Wood described how the council would attempt to close the budget gap through a combination of new savings proposals, additional government funding (although the level of which is as yet unknown), and increases to council tax.

Undeliverable Savings

Throughout the meeting, members raised concerns about the council's ability to deliver the savings it had identified as part of its budget setting process. These included:

Future Works Programme

Councillor Ward acknowledged that the council was way behind on delivering the savings identified through its Future Works Programme.

He stated:

We are way behind on this. Now, for me, this is very much a saving delay, not a saving abandon because there's a huge amount of work has been put into this… In a nutshell, this was all predicated on, uh, the ICB moving from the Laycock building to, uh, Newington Borough Way and Elwood being vacated and redeveloped or used for something else… As things went, uh, along the way, things changed. Um, ICB didn't move to Newington Borough Way and that caused costs. Um, ICB is now taking up the whole of Laycock, which will give us, uh, additional income. Children's are staying at Elwood and Newington Borough Way needs to be leased out. Uh, we need to make progress on Brewery Road, uh, as well. So there's an awful lot of moving parts to this. Um, but this is very much, uh, a saving delay.

Mr Wood described how the savings from the Future Works Programme were delayed rather than undeliverable, and stated that his expectation is that the full 1.7 [million] will be achieved.

Littering Enforcement

Mr Wood stated that the council was also likely to miss its savings target relating to increased income from the enforcement of littering. The council had procured a new contractor to issue Fixed Penalty Notices for littering, but had found that collecting the fines was difficult. He stated:

So the variance relates to the shortfall in the F, in the fixed penalty notice, uh, for, for littering fly tipping commercial, uh, commercial waste. So the income targets that were put in, this was a, a kind of standing start on, uh, on implementing something new. What it has done has resulted in actually less littering. So it is having service, it is having the service impact, uh, whilst not necessarily having the financial impact. The contractor is issuing significant amounts of, uh, fixed penalty notices, probably enough to achieve the income target. But the difficulty is then collecting those fixed penalty notices once they're issued.

He suggested that the council would have to decide whether it was worth still continuing with that course of activity because it is having an overall good for the borough, even if it does not achieve the expected financial savings.

Unoccupied Council Properties

Councillor Jenny Kay highlighted that a recent Freedom of Information request had revealed that nearly 100 council properties had been unoccupied for over 12 months. She requested that the council undertake a review of these properties, and questioned whether bringing them back into use could help to reduce the council's spending on temporary accommodation. She stated:

I've recently found out that there's just under a hundred properties in the borough that have been vacant for over 12 months, council properties. Um, sorry. Oh, no. Yeah. Um, so most of those, uh, as in the biggest proportion of those are in Mildmay ward because of how the Sage Court, which many of you will be familiar with the saga of, um, can we do a review either through your team or through another team that isn't the voids team? Cause they're focused on getting their others done of all of those and what we can possibly do to get those back into the system because I think that the overspend, I don't know exactly cause I don't know the sizes of the properties, but like the overspend is not dissimilar to a hundred properties of pseudo. I mean, these are council properties. It's not the same as TA, but there's some through line there. Um, so yes, an investigation by a team that isn't responsible for that would be great as part of your work on this.

Councillor Ward agreed that 100 empty council properties was a shocking figure, and agreed to take the issue away with Mr Wood.

Councillor Kay also questioned whether the council had explored all possible options for reducing the cost of temporary accommodation, including negotiating discounts with hotels outside of its existing framework agreements.

Contact Centre Consolidation

Councillor Ibrahim questioned whether the council was on track to deliver the savings associated with the consolidation of its contact centres, noting that the budget monitoring report showed an overspend in this area.

Councillor Ward acknowledged that the process of consolidating the council's three contact centres had been a lot more complicated than we thought, and that the saving at present hasn't been achieved. However, he maintained that the consolidation was the right thing to do, and that it will ultimately save money.

Attendees

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