The Overview & Scrutiny Committee of Tower Hamlets Council met on Monday 26 September 2022, discussing significant budget monitoring reports and a call-in regarding housing development decisions. Key decisions included approving increased project budgets for housing developments at Arnold Road and Bancroft Road/Wickford Street, while cancelling the Gill Street scheme. The committee also reviewed the Council's Budget Monitoring Report for Quarter 1, highlighting projected overspends and financial risks.

Housing Development Decisions: Arnold Road, Bancroft Road, Wickford Street, and Gill Street

The committee considered a call-in regarding an individual mayoral decision made on 8 September 2022, concerning the approval to increase the project budget for the Arnold Road development, and a cabinet decision on 14 September 2022, relating to the redevelopment of Bancroft Road and Wickford Street garages. The call-in proposed an alternative course of action to fund the increased contract and project budgets for the Arnold Road and Bancroft/Wickford Street schemes from Housing Revenue Account (HRA) reserves, and to reconsider or cancel the Gill Street scheme.

Councillor James King King, representing the call-in members, argued that cancelling the Gill Street development was unnecessary, citing an £8.3 million underspend in the HRA reported in July's Cabinet meeting, which could have funded all three schemes. He highlighted that £850,000 had already been invested in the Gill Street development, which would be lost if cancelled. He also emphasised the community benefits associated with the Gill Street proposals, including 15 new homes, community facilities, and a new multi-use games area.

Councillor Kabir Ahmed, Cabinet Member for Regeneration, Inclusive Development and Housebuilding, explained that the decision to proceed with Arnold Road (55 units) and Bancroft Road/Wickford Street (33 units) over Gill Street (15 units) was based on optimising the delivery of social housing units within the fixed three-year capital programme. He stated that resources are limited and that delving into HRA reserves would be irresponsible given the current economic uncertainty, including the cost of living crisis and potential recession. Councillor Ahmed also highlighted the urgency for the Arnold Road and Bancroft Road/Wickford Street projects: the Bancroft programme needed to start by October to avoid losing funding from the Greater London Authority (GLA) and right-to-buy receipts, while the Arnold Road project risked losing its planning permission if work did not commence by December.

Following extensive discussion and questions, the committee voted to approve the administration's decision to proceed with the Arnold Road and Bancroft Road/Wickford Street developments, thereby effectively cancelling the Gill Street scheme. The decision was made on the basis that the two chosen projects would deliver a significantly higher number of social housing units (88 in total) compared to Gill Street.

Budget Monitoring Report 2022-23 (Quarter 1)

Councillor Saeed Ahmed, Cabinet Member for Resources and the Cost of Living, and Nisar Visram, Director for Finance, presented the Quarter 1 Budget Monitor for the financial year 2022-23. The report forecasts a £2.8 million overspend for the general fund, with £2.6 million attributed to unbudgeted energy cost pressures. Electricity costs were projected to increase by 68% and gas costs by 160-200%.

The report indicated that general fund earmarked reserves were forecast to be £181.2 million at the end of the financial year, with £75 million restricted, £21 million in general balance, and £85 million unrestricted. The Dedicated Schools Grant showed a deficit brought forward of £14.6 million, forecast to remain unchanged. The Housing Revenue Account (HRA) was forecasting an adverse variance of £0.5 million due to unbudgeted gas and electricity costs of £2.4 million for the HRA.

Key pressure areas identified included children's and culture services, primarily due to special education needs transport costs, and health and care, particularly adult social care, which faced a £1.9 million forecast overspend despite additional funding. The 'place' directorate was forecasting a £1 million overspend, driven by costs associated with surplus properties (vacant schools) and under-recovery of commercial waste.

Regarding savings targets, the council aimed to deliver £7 million for the current year, with an additional £4.8 million slipped from the previous year, totalling £11.8 million. However, only £5.8 million was forecast to be delivered, with £1.7 million slipping into future years and £4.3 million under-recovered. Issues were noted with savings related to special education needs transformation, a new town hall saving, and contract management efficiencies impacted by inflation.

Councillor Marc Francis raised concerns about the tendency for variances to decrease towards the end of the financial year and questioned whether the reported figures accounted for the new £500 million government announcement for NHS and local authority partnership working on hospital discharge. Officers confirmed that this announcement was too recent to be included in the current figures and that further details were awaited. Denise Radley, Director of Health and Adult and Community, added that adult social care funding was complex, relying on multiple short-term grants, and that the removal of the national insurance levy to fund adult social care reforms presented additional cost pressures.

Scrutiny Work Programme 2022-23

The committee agreed to the proposed Scrutiny Work Programme for 2022-23. Councillor Marc Francis raised a concern regarding the housing scrutiny subcommittee's intention to scrutinise the performance of Tower Hamlets Homes, particularly in light of the proposed bringing of the service back in-house. He noted that the subcommittee had resolved twice for Tower Hamlets Homes to present their performance, but this was not currently on the work programme. Councillor Abdul Mannan, Chair of the Housing Committee, explained that the decision not to bring Tower Hamlets Homes in for a report on 20 October was due to a potential conflict of interest given the ongoing review of bringing the service in-house, and that the priority for that meeting was to address issues related to parking for residents and leaseholders. Councillor Marc Francis expressed his dissatisfaction with the explanation of a conflict of interest and requested transparency on the matter. Democratic Services agreed to look into the issue.

Scrutiny Lead Updates

Several scrutiny leads provided updates on their activities. Councillor Bodrul Choudhury highlighted visits to the Somalian Community Fund Day, a school in Lansbury with the Deputy Mayor, and a local football club, as well as attending an open day for councillors with the borough commander. Councillor Abdul Mannan expressed support for the Phoenix School, a special needs school in his ward, and hoped it would receive continued funding. Councillor Ahmodur Khan detailed his involvement in meetings concerning adult health and social care statistics, GP visits, and engaging with the scrutiny network on the NHS workforce. Councillor Maisha Begum shared her experience of participating in the Mayor's surgeries, noting the significant number of residents seeking assistance and expressing a desire for these sessions to continue.