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Reserve Budget Meeting, Overview & Scrutiny Committee - Tuesday, 4th February, 2025 6.30 p.m.

February 4, 2025 View on council website Watch video of meeting Watch video of meeting
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Summary

The Committee reviewed additional information on the Housing Revenue Account (HRA) and the capital programme budgets that had been approved at the Cabinet meeting on 29th January 2025. It was agreed to refer queries about repairs and maintenance, and the Council's contract for this work, to the Housing and Regeneration Scrutiny Sub-Committee. The Committee will then monitor the work of the Sub-Committee and provide feedback to the Executive. The Committee also requested further information from the Executive about the timeline for the spending of the £140 million allocated to the HRA for improvements to the existing housing stock, including new windows, bathrooms, and kitchens. Finally, the Committee requested clarity on the process of bringing temporary accommodation in-house.

Housing Revenue Account

Councillor Saeed Ahmed, Cabinet Member for Resources and Costs of Living, presented an overview of the proposed HRA budget, including a planned rent increase of 2.7% in 2025/26. Councillor Ahmed argued that this increase was necessary to fund the Council's ambitious plans for investing in the existing housing stock and building new homes, and was lower than the previous year's increase of 7.7%. He pointed out that

Approximately 68% of the tenants are on housing benefit and will not be impacted directly by the increase of 2.7%

He also noted that the increase was equivalent to maybe a cup of coffee.

Several Committee members raised concerns about the affordability of the rent increase for residents, particularly those who are not on housing benefits, in the context of the rising cost of living. Councillor Ahmed responded that the Council had a range of support measures in place for residents who are struggling to pay their rent, including the Council Tax Cost of Living Relief Fund and the Tackling Poverty team. The Committee requested further clarity on what support is available to residents who do not meet the threshold for these schemes, in light of rising energy and water bills.

The Committee also questioned why funding for previously announced new-build homes at several sites, including Bancroft, Whitford, Albert Jacob House, H8, and the Caliche Estate had to be re-announced. Councillor Ahmed responded that

There was never a proper plan in place of what was actually deliverable. There was a lot of unfinished work around that programme

He also noted that the Council had come to a point now where we have built this in, and I'm hoping that we can see this sort of pull through completely to the end of this programme. David Joyce, Corporate Director of Housing and Regeneration, assured the Committee that

We have made a lot of progress towards delivering that scheme, including appointing a development partner recently, a cabinet, to do this pre-contract services agreement work to move us forward and then allow us to basically get on site and start delivering that scheme.

Capital Programme

Councillor Ahmed also presented an overview of the proposed £242 million capital programme, highlighting key investments in culture, schools, infrastructure, and public realm improvements. This included £56.1 million for a new leisure centre on the site of the former St George's Town Hall, as well as upgrades to existing leisure centres.

Several Committee members raised concerns about the deliverability of the capital programme, noting that a number of previously announced schemes had been cancelled or paused. Julie Lorraine, Deputy Chief Executive and Corporate Director of Resources, explained that the Council had to make tough decisions about its capital spending in light of the challenging economic environment. She said

Every single council and landlord in the country is having to make difficult decisions and we can’t do it all at once just from an affordability point of view.

Committee members requested further details on the process by which the Council decides which capital projects to fund, and what happens to unspent capital funds. Ms Lorraine explained that the Council's capital receipts could be used flexibly to support transformation, invest-to-save, and efficiency projects. She explained that

If a scheme were to be stopped or reported, then the balances would go back into the council's ability to fund other schemes. A N alternative scheme coming forward would be separately costed. You couldn't just say, well, we're going to use that and move it over there without that governance process that went with it.

Committee members requested further information on a perceived gap in the funding for the insourcing of leisure services, which was estimated at £27 million over ten years. Ms Lorraine explained that the £27 million figure was based on a stock condition survey, and that the Council would not be able to do all of the work identified in the survey. She said

We don't have to do everything.

Joe O'Reilly, Director of Culture and Leisure, explained that the Council would prioritise the most urgent work, and that if new information were to arise, such as a ceiling collapse, the Council would come back and say, actually, we need more money. He also noted that funding had been allocated to cover the main boilers, tanks, and water heaters in the leisure centres. Ms Lorraine added that the Council would review the capital programme every quarter, and that it would include ins and outs into that capital programme. It's not just forgotten.

Committee members also questioned the use of £3 million of the capital receipts for a redundancy scheme. Ms Lorraine explained that the scheme was voluntary and that it was designed to generate long-term savings for the Council. She said

If we were to spend all of that 3 million in year one the rules say that it would have to generate 1.3 million a year savings and repay it and those savings would go on year after year after year. So you spend your redundancy payment once the saving you make against it continues year after year after year and that's how we demonstrate value for money.

She acknowledged that there were risks associated with the scheme, such as the loss of staff expertise. However, she assured the Committee that the process was tightly controlled, and that managers were often reluctant to let staff go. She added that the Council had a policy of no compulsory redundancy. Councillor Ahmed agreed that it was important to have a robust plan in place and that the Council would like to retain our staff. He added

At the end of the day if someone wants an early redundancy a voluntary redundancy we can't tie them down forcefully.

Other matters

Committee members also raised a number of other issues, including the impact of the international situation on the Council's finances, the prioritisation of repairs, and the availability of school uniform grants.

Ms Lorraine acknowledged that the Council was operating in a challenging environment, but she assured the Committee that the Council had a robust financial strategy in place. She said that the Council had run scenario tests. And we run the scenario test that breaks the business plan. We see what will it take to break this? And what could we do if it broke to fix it? She concluded that the answer is yes when asked whether the Council had undertaken a worst-case scenario assessment.

Councillor Ahmed assured the Committee that the Council was committed to providing a high-quality repairs service, and that it was investing in new technology to improve the service. Gillam Hussain, Acting Director of Neighbourhoods and Customer Services, explained that the Council was training all housing officers in accordance with the Housing Health and Safety Rating System, so they could look at the environment and understand risks and come back and raise those repairs with our colleagues internally. Mr Joyce explained that

The strongest response in terms of trying to invest in this issue is around the planned investment program.

Councillor Ahmed confirmed that the Council was introducing a new scheme to provide school uniform grants to all students starting primary or secondary school in Tower Hamlets, subject to a household income ceiling of £50,350. He said

It's the starting support that we're giving to the students and of course the families but obviously this is something we can explore going forward and see how it goes how well things are taken up and there's always room for improvement and see how things go.

Recommendations

The Committee agreed to make the following recommendations to the Mayor in Cabinet:

  1. The Committee requests that officers work with the Tackling Poverty team and the Committee itself to explore how the Council can better support residents who are struggling with the cost of living but who do not meet the threshold for the existing schemes. This work will take place during the next calendar year and will include gathering evidence from residents.
  2. The Committee requests that the quarterly budget reporting be amended to clarify the narrative about the deliverability of capital projects and the viability of the HRA budget.
  3. The Committee requests that the Housing and Regeneration Scrutiny Sub-Committee obtain more information about the timeline for the spending of the £140 million allocated to the HRA for improvements to the existing housing stock, and report back to the Committee.
  4. The Committee requests that the Housing and Regeneration Scrutiny Sub-Committee investigate the Council's current arrangements for repairs and maintenance, including its contract for this work, and report back to the Committee.
  5. The Committee requests that the Executive provide further information about the process of bringing temporary accommodation in-house.

The Committee also requested further information on:

  • The funding for school improvements.
  • The cost of the Council failing to get repairs right first time, and efficiency savings in this area.
  • The level of leaseholder engagement with the programme for replacing windows, bathrooms and kitchens.
  • The level of male membership of Council leisure centres.

Finally, the Committee requested clarity on:

  • The level of funding for leisure centres, including the upgrade of pitches.
  • The level of unspent capital receipts.

Documents