The Cabinet of Enfield Council met on Wednesday, 8 January 2025, to discuss the council's financial health and performance. Key decisions included the approval of savings proposals for the Medium Term Financial Plan, the acceleration of housing acquisition budgets, and the noting of quarterly financial monitoring reports.

Medium Term Financial Plan Update 2025/26 to 2029/30

The Cabinet agreed to note the progress made towards balancing the budget for 2025/26, which currently has a projected gap of £10.8 million. This is being addressed through robust challenges to council pressures and the identification of new savings and income proposals totalling £8.7 million for 2025/26. These proposals are divided into £5.7 million from service redesign, efficiencies, and demand management, and £3.0 million from income generation. Executive Directors have confirmed that these savings, or suitable alternatives, are deliverable for 2025/26.

The Cabinet also noted the details of national funding allocations announced in the Chancellor's Autumn Statement and the Local Government Policy statement. Enfield Council has expressed interest in continuing with a smaller Business Rate Pool of eight London boroughs for another year into 2025/26. The income and savings proposals are recommended for approval subject to consultation and assessment of equality implications. The overall forecast level of reserves over the medium term was noted, with the S151 Officer required to make a statement on their adequacy in the final budget. Proposed fees and charges, subject to Council approval, were also noted, along with the continuation of flexibility to vary them in-year.

The report highlighted significant financial pressures, including those in Temporary Accommodation, children's external care placements, and Housing Benefit subsidy loss. The Council is forecasting an overspend at the end of the second quarter, which will further deplete reserves. The budget gap for 2025/26 has been reduced from £30 million to £10.8 million through a review of growth bids and the identification of new savings and income proposals totalling £18.7 million for 2025/26. However, some proposals are subject to public consultation and further due diligence. The budget is also prior to the announcement of the final Local Government Finance settlement and finalised Council Tax and Business Rates income. Key risks identified include macro-economic factors, the final pay award, and demand for services increasing beyond current assumptions.

The proposed fees and charges for 2025/26 were also detailed, with a general focus on increasing charges by 10% where locally controlled, subject to case-by-case conditions. New charges are proposed in Education Services for chaperone licensing, and existing charges for garden waste are proposed to remain unchanged. A range of new charges are proposed under licensing for activities such as breeding dogs, dangerous wild animals, and animal exhibitions. Planning fees are set to increase annually by the rate of inflation, as measured by the Consumer Prices Index.

Housing Revenue Account (HRA) Quarter 3 Financial Monitoring Report 2024/25

The Cabinet agreed to note the quarter 3 forecast outturn position for 2024/25 for both revenue and capital. A forecast pressure of £1.6 million against the approved budget was noted, primarily due to one-off pressures and changes in economic assumptions, including costs associated with decanting and maintaining safety at Walbrook, Shropshire House, and Cheshire House (£1 million), increased leaseholder insurance costs (£0.5 million), additional security at a number of blocks to mitigate anti-social behaviour (£0.85 million), and upgrade and cloud migration for the housing management system Civica CX (£0.52 million). Reductions in interest payable on debt due to lower interest rates (£0.65 million) and additional income from interest on HRA reserves (£0.76 million) were also noted.

The Cabinet recommended to Council the acceleration of the Affordable Homes Programme (AHP) approved capital budget of £34.6 million to acquire 82 units at Ladderswood and 12 units at New Avenue. This acquisition will be funded from GLA grant (£20.3 million) and additional borrowing (£14.3 million). The Cabinet also noted the enhancements delivered, including investment in existing homes, provision of new council homes, and improvements to services based on resident feedback.

The HRA capital programme is forecast to spend £134.4 million against the approved budget of £135.9 million. Investments in council homes are continuing to improve decency standards, comply with building and fire safety regulations, and enhance energy performance. New council homes are being delivered through development, estate regeneration, and acquisitions. The acceleration of the capital programme to acquire 82 units at Ladderswood and 12 units at New Avenue was requested, with offer prices secured and subject to further due diligence. The HRA rent setting report approved the 10-year budget for the capital programme, including the AHP programme budget. The forecast position for HRA reserves at the end of the financial year 2024/25 is £33.9 million, a planned reduction of £13.7 million to fund the capital programme.

Quarterly Corporate Performance Report (Q2) 2024/25

The Cabinet agreed to note the progress being made against the key priority indicators for Enfield. The report highlighted performance across various areas, including clean and green places, strong, healthy and safe communities, thriving children and young people, more and better homes, an economy that works for everyone, fairer Enfield, accessible and responsive services, and financial resilience.

Key performance indicators showed improvements in tonnage rejected and contamination rates for household waste. Crime indicators indicated a decrease in total notifiable offences compared to the previous 12 months. The proportion of drug users successfully completing treatment increased slightly, and the proportion of young people exiting substance misuse treatment in a planned way remained at 100%. Take-up of healthy start vouchers was lower than the London and England averages, with training being provided to encourage uptake. Smoking prevalence in Enfield was estimated to be higher than the London and England averages, with Stop Smoking Services to be commissioned from January 2025.

In early years education, the take-up rate for 2-year-olds was higher than the London average, but below the England average. For 3-4-year-olds, the take-up rate was slightly lower than the London average and significantly below the England average. Enfield had a higher prevalence of overweight and obese children in Reception and Year 6 compared to London and England averages. The percentage of care leavers aged 19-21 in education, employment, or training was 60.8%, with reasons for non-engagement including immigration issues, custody, health issues, and young parenthood. The percentage of children in suitable education, training, and employment at the end of their intervention programme or order was 68.2%, slightly lower than the previous quarter. Educational attainment for Year 6 pupils achieving the expected standard in reading, writing, and maths was higher than the England average but below the London and Outer London averages. Enfield had a low permanent exclusion rate and a suspension rate in the top quarter nationally.

In housing, 78% of 2-year rolling minor planning applications were determined within target, exceeding the statutory target of 70%. The number of outstanding planning applications had significantly reduced. The number of net homes granted permission was lower than anticipated, but expected to increase significantly in the next quarter. The percentage of non-major planning applications dismissed at appeal had decreased and was under the set target. The number of enforcement cases live in the system was above the target, in response to a project addressing unauthorised housing in multiple occupancy. Full Fibre broadband coverage in Enfield was significantly lower than the England average and the lowest in London. Private sector housing licensing compliance inspections were carried out against the target. The number of households in temporary accommodation had fallen slightly, with a reduction in families in Bed and Breakfast accommodation beyond six weeks. Unemployment rates in Enfield were higher than London and Great Britain averages, and a higher percentage of working-age residents had no qualifications. Active businesses registered had increased, but business start-ups had decreased. Complaints, FOI requests, MEQs, and SARs performance were below target, with work underway to review the complaints procedure and improve online reporting. Customer service telephony and webchat satisfaction ratings had increased and were exceeding set targets. Council tax collection rates were slightly reduced compared to the previous year, with an increase in council tax arrears. Business rates arrears had decreased.

2024/25 Quarter 3 (Q3) Capital Monitoring Report

The Cabinet agreed to approve the inclusion of £43.1 million of unspent 2024/25 capital budget in the 2025/26 capital programme for Council approval. This will be funded by £16.4 million borrowing and £26.7 million in grants and other external contributions. All proposed unspent budget carry-forward has been reviewed by the Executive Management Team Budget. The Cabinet also agreed to transfer £170,000 from the Pipeline to the Approved 2024/25 capital programme for corporate condition programme minor capital works.

The Cabinet noted the quarter 3 spend to date of £127.7 million, including £56.0 million on Priority Projects, with 34% of the September budget for Priority Projects spent to date. Significant spend is anticipated in Q4 for Meridian Water and the HRA Phase 4 Ladderswood programme. The quarter 3 full year forecast spend is £299.0 million, funded from £139.5 million in capital grants, £4.6 million in Section 106 contributions and CIL, £30.6 million in capital receipts (including HRA Right to Buy receipts), £27.8 million in earmarked reserves, and £96.5 million in borrowing. Management of key strategic capital and treasury risks by the Capital Finance Review Panel, Meridian Water Executive Board, and Executive Management Team Budget was also noted.

2024/25 Treasury Management Monitoring Report Quarter 3 (Q3)

The Cabinet agreed to note the borrowing and investments position as at 30 November 2024 and the Quarter 3 estimates for the financial year 2024/25. The estimated overall cost of interest, debt charges, and Minimum Revenue Provision (MRP) for the General Fund in 2024/25 is £28.2 million, forecasting an underspend of £3.2 million against the budget, primarily due to the deferral of voluntary MRP for Meridian Water. Gross external debt is forecast to reach £1.343 billion by 31 March 2025, remaining below the Loans CFR and within the Authorised Limit. Investments are forecast to average over £50 million during 2024/25, with investment returns estimated to exceed £5 million, a return of 4.91% on average. The report also noted the impact of mandatory changes in lease accounting (IFRS 16) from April 2024, which are presentational and have no impact on overall financial resources.

Council Companies - Half Yearly Report

The Cabinet agreed to note the 2024/25 forecast loan drawdown for each company, their 2024/25 performance at Quarter 2, and their current financial position. It was noted that Housing Gateway Limited (HGL) has implemented market rent levels on its owned portfolio and has taken transfer of a number of Temporary Accommodation (TA) units, as agreed in its Business Strategy. Solutions to address the changing nature of the cash flow position are being explored.

For Energetik, it was noted that access to further funding is contingent upon a refreshed business plan. A working capital facility of £3.5 million is in place to aid cash flow while connections are built out. The financial performance for the half-year and full-year forecast are presented in the report's appendix.

HGL has a loan balance of £142.3 million against assets of £161 million. The company achieved a profit of £1.25 million for the first six months, with a forecast profit of £2.34 million for the year. The bad debt provision has increased to £1.5 million due to a higher proportion of tenants being unable to pay market rent top-ups and adjustments to income collection strategies following the transfer of Temporary Accommodation. HGL has purchased 10 properties in the first half of the year, with 19 more in the pipeline. The report also detailed the capital programme for HGL and Energetik, and the potential for HGL to pay a dividend to the Council. Key risks identified include the impact of income collection rates on HGL's cash flow, potential reductions in property values, and rising interest rates affecting new debt.

Quarterly Corporate Performance Report (Q2) 2024/25

The Cabinet agreed to note the progress being made against the key priority indicators for Enfield. The report highlighted performance across various areas, including clean and green places, strong, healthy and safe communities, thriving children and young people, more and better homes, an economy that works for everyone, fairer Enfield, accessible and responsive services, and financial resilience.

Key performance indicators showed improvements in tonnage rejected and contamination rates for household waste. Crime indicators indicated a decrease in total notifiable offences compared to the previous 12 months. The proportion of drug users successfully completing treatment increased slightly, and the proportion of young people exiting substance misuse treatment in a planned way remained at 100%. Take-up of healthy start vouchers was lower than the London and England averages, with training being provided to encourage uptake. Smoking prevalence in Enfield was estimated to be higher than the London and England averages, with Stop Smoking Services to be commissioned from January 2025.

In early years education, the take-up rate for 2-year-olds was higher than the London average, but below the England average. For 3-4-year-olds, the take-up rate was slightly lower than the London average and significantly below the England average. Enfield had a higher prevalence of overweight and obese children in Reception and Year 6 compared to London and England averages. The percentage of care leavers aged 19-21 in education, employment, or training was 60.8%, with reasons for non-engagement including immigration issues, custody, health issues, and young parenthood. The percentage of children in suitable education, training, and employment at the end of their intervention programme or order was 68.2%, slightly lower than the previous quarter. Educational attainment for Year 6 pupils achieving the expected standard in reading, writing, and maths was higher than the England average but below the London and Outer London averages. Enfield had a low permanent exclusion rate and a suspension rate in the top quarter nationally.

In housing, 78% of 2-year rolling minor planning applications were determined within target, exceeding the statutory target of 70%. The number of outstanding planning applications had significantly reduced. The number of net homes granted permission was lower than anticipated, but expected to increase significantly in the next quarter. The percentage of non-major planning applications dismissed at appeal had decreased and was under the set target. The number of enforcement cases live in the system was above the target, in response to a project addressing unauthorised housing in multiple occupancy. Full Fibre broadband coverage in Enfield was significantly lower than the England average and the lowest in London. Private sector housing licensing compliance inspections were carried out against the target. The number of households in temporary accommodation had fallen slightly, with a reduction in families in Bed and Breakfast accommodation beyond six weeks. Unemployment rates in Enfield were higher than London and Great Britain averages, and a higher percentage of working-age residents had no qualifications. Active businesses registered had increased, but business start-ups had decreased. Complaints, FOI requests, MEQs, and SARs performance were below target, with work underway to review the complaints procedure and improve online reporting. Customer service telephony and webchat satisfaction ratings had increased and were exceeding set targets. Council tax collection rates were slightly reduced compared to the previous year, with an increase in council tax arrears. Business rates arrears had decreased.

2024/25 Quarter 3 (Q3) Capital Monitoring Report

The Cabinet agreed to approve the inclusion of £43.1 million of unspent 2024/25 capital budget in the 2025/26 capital programme for Council approval. This will be funded by £16.4 million borrowing and £26.7 million in grants and other external contributions. All proposed unspent budget carry-forward has been reviewed by the Executive Management Team Budget. The Cabinet also agreed to transfer £170,000 from the Pipeline to the Approved 2024/25 capital programme for corporate condition programme minor capital works.

The Cabinet noted the quarter 3 spend to date of £127.7 million, including £56.0 million on Priority Projects, with 34% of the September budget for Priority Projects spent to date. Significant spend is anticipated in Q4 for Meridian Water and the HRA Phase 4 Ladderswood programme. The quarter 3 full year forecast spend is £299.0 million, funded from £139.5 million in capital grants, £4.6 million in Section 106 contributions and CIL, £30.6 million in capital receipts (including HRA Right to Buy receipts), £27.8 million in earmarked reserves, and £96.5 million in borrowing. Management of key strategic capital and treasury risks by the Capital Finance Review Panel, Meridian Water Executive Board, and Executive Management Team Budget was also noted.

2024/25 Treasury Management Monitoring Report Quarter 3 (Q3)

The Cabinet agreed to note the borrowing and investments position as at 30 November 2024 and the Quarter 3 estimates for the financial year 2024/25. The estimated overall cost of interest, debt charges, and Minimum Revenue Provision (MRP) for the General Fund in 2024/25 is £28.2 million, forecasting an underspend of £3.2 million against the budget, primarily due to the deferral of voluntary MRP for Meridian Water. Gross external debt is forecast to reach £1.343 billion by 31 March 2025, remaining below the Loans CFR and within the Authorised Limit. Investments are forecast to average over £50 million during 2024/25, with investment returns estimated to exceed £5 million, a return of 4.91% on average. The report also noted the impact of mandatory changes in lease accounting (IFRS 16) from April 2024, which are presentational and have no impact on overall financial resources.

Council Companies - Half Yearly Report

The Cabinet agreed to note the 2024/25 forecast loan drawdown for each company, their 2024/25 performance at Quarter 2, and their current financial position. It was noted that Housing Gateway Limited (HGL) has implemented market rent levels on its owned portfolio and has taken transfer of a number of Temporary Accommodation (TA) units, as agreed in its Business Strategy. Solutions to address the changing nature of the cash flow position are being explored.

For Energetik, it was noted that access to further funding is contingent upon a refreshed business plan. A working capital facility of £3.5 million is in place to aid cash flow while connections are built out. The financial performance for the half-year and full-year forecast are presented in the report's appendix.

HGL has a loan balance of £142.3 million against assets of £161 million. The company achieved a profit of £1.25 million for the first six months, with a forecast profit of £2.34 million for the year. The bad debt provision has increased to £1.5 million due to a higher proportion of tenants being unable to pay market rent top-ups and adjustments to income collection strategies following the transfer of Temporary Accommodation. HGL has purchased 10 properties in the first half of the year, with 19 more in the pipeline. The report also detailed the capital programme for HGL and Energetik, and the potential for HGL to pay a dividend to the Council. Key risks identified include the impact of income collection rates on HGL's cash flow, potential reductions in property values, and rising interest rates affecting new debt.

Date of Next Meeting

The Cabinet noted that the next meeting was scheduled to take place on Wednesday, 26 February 2025, at 7:00 pm.