The Overview and Scrutiny Committee of Newham Council met on Tuesday 22 July 2025 to discuss the council's financial position, its work programme, and the non-statutory Best Value Notice issued by the Ministry of Housing, Communities and Local Government. Key decisions included the approval of the annual scrutiny work programme for 2025-2026 and a review of the July finance report, which highlighted significant financial pressures and the need for further savings.

July Finance Review

The committee reviewed the council's financial performance for the previous year (2024/25) and the first quarter of the current year (2025/26), alongside an updated Medium-Term Financial Strategy (MTFS) projecting to 2028/29. Conrad Hall, Corporate Director of Resources and s151 Officer, presented the report, highlighting a £40.6 million overspend in the General Fund for 2024/25, largely driven by increased costs in temporary accommodation (TA), which rose to £69 million. Despite this, the outturn was £4.9 million better than initially forecast due to successful negotiations on accommodation rates.

The council's budget for 2025/26 was balanced through the use of capital receipts, amounting to £51.2 million, as part of an Exceptional Financial Support (EFS) request to central government. However, the MTFS projects a widening funding gap, estimated to reach £115 million by 2028/29, primarily due to rising TA and social care costs. The report indicated that a further EFS application for 2026/27 is probable.

The committee discussed the impact of the government's Spending Review and Fair Funding Review 2.0, which are expected to redistribute funding across local authorities, potentially benefiting Newham due to its high deprivation levels, but also possibly reducing London's overall allocation. The council plans to lobby for the use of the most recent population data in funding calculations.

Significant savings targets are in place, with £80 million identified for delivery between 2025/26 and 2027/28. However, further savings of approximately £50 million would be needed in 2026/27 to eliminate the EFS requirement. The report detailed the MTFS savings tracker, showing that 85% of the 2024/25 savings target was delivered, with 6% slipped to future years and 9% undelivered.

The committee also noted the council's capital programme outturn for 2024/25, which was £384.9 million against a budget of £655 million, representing a £270 million underspend. This slippage was primarily attributed to delays in the Housing Revenue Account (HRA) programme (£108.5 million) and general fund schemes, particularly in Resources (£67.4 million) and Inclusive Economy & Housing (£35.3 million).

MHCLG Non-Statutory Best Value Notice

The committee reviewed a report concerning the Non-Statutory Best Value Notice (NSBVN) issued by the Ministry of Housing, Communities and Local Government (MHCLG) on 8 May 2025. Abi Gbago, Chief Executive, and Rob Whiteman, Chair of the Newham Transformation & Improvement Board, presented the council's response. The Notice cited concerns regarding value for money weaknesses in governance, cultural and governance issues, and significant delivery concerns, particularly in housing services.

The council acknowledged these concerns and highlighted ongoing improvement efforts, including the development of an Integrated Improvement Plan. The response will focus on three key themes: Governance, Culture & Capability; Financial Sustainability; and Improving Services for residents, with specific attention to Housing and Adult Social Care.

Regular quarterly meetings with MHCLG officials are planned to provide updates on progress. The council also noted its participation in a government evaluation of Best Value interventions. The report emphasized the council's commitment to transparency, resident engagement, and working collaboratively to address the identified issues.

Work Programme

Councillor Lester Hudson, Chair of Overview and Scrutiny, presented the draft Annual Scrutiny Work Programme for the municipal year 2025/2026. The programme was developed through research, consultation, and workshop sessions. Key topics for scrutiny include the July Finance Review, the Best Value Notice, Transformation progress, Grants Funding, Organisational Performance, and reviews of specific services such as Waste Management, Crime Fighting, Road Safety, and Adult Social Care. The committee agreed to approve the work programme.

Appointments

The committee confirmed the membership of the Overview and Scrutiny Committee, its Scrutiny Commissions, Working Parties, and joint scrutiny bodies for the 2025/26 municipal year. This included appointing Councillor Lester Hudson as Chair of the Overview and Scrutiny Committee and confirming Councillor Anthony McAlmont as Chair of the Relationship Between Black Boys and the Borough Scrutiny Commission. Paul Leslie was confirmed as a co-opted member for the Overview and Scrutiny Committee and other scrutiny commissions.

Scrutiny Chairs' Updates

Scrutiny Chairs provided updates on their respective commissions' work programmes. Councillor Masters, Chair of the Health and Adult Social Care Scrutiny Commission, outlined plans to focus on the outcomes of the CQC report, safeguarding, and a cross-cutting piece of work titled Close to Home, examining hospital pinch points and service integration. Councillor Shah, Chair of the Education, Children and Young People Services scrutiny commission, mentioned plans to visit key services and expressed enthusiasm for the work programme. Councillor Hudson, Chair of the Overview and Scrutiny Committee, noted the approval of the informal budget meetings, which had been successful in the previous year.

Forward Plan of Key Decisions

The committee reviewed the Forward Plan of Key Decisions, which is available online. Members were reminded to regularly review this document and raise any issues requiring clarification with the lead officer.

Date of Next Meeting

The next meeting of the Overview and Scrutiny Committee was scheduled for 16 September 2025.