• A SNAP SHOT OF ISLINGTON
• ISLINGTON COUNCIL AND ITS PRIORITIES
• ISLINGTON FINANCE DEPARTMENT

A SNAP SHOT OF ISLINGTON

Islington is London’s second smallest borough, covering an area of just over six square miles. The borough stretches from the City of London in the south to the edge of Hampstead Heath in the north. People from all over the world have made their home here.

Islington is one of London's oldest boroughs with a wealth of history. Islington's origins are in the distant past. It is mentioned in Doomsday Book in the 11th century, and in an earlier Anglo-Saxon charter. According to one early writer it was a savage place, a forest "full of the lairs of wild beasts", where bears and wild bulls roamed. In the Middle Ages, most of the land belonged to religious institutions. After the dissolution of the monasteries, much of it was given to aristocratic families, often friends of the Tudor monarchs. Islington grew slowly from a hamlet to a village, spreading along Upper Street and Lower Road, which later became Essex Road.

In time it became famous for its dairy herds and produce, supplying London with butter, cream and milk. As London grew, brick terraces began to take over the agricultural land. Local farmers turned to manufacturing bricks and developing property.

Islington is now a leader in modern developments as well including the N1 shopping and leisure centre, Arsenal Football Stadium Re-Development and the construction of new lofts and apartment blocks.

Islington is an area of tremendous diversity, not only in terms of the people who live here, but also the environment. It has some of the most famous Georgian squares, a canal system, the New River Walk, Arsenal Football Club and Highbury Fields - the largest and one of the oldest open spaces in the borough.

The majority of local residents live in council built homes. About a quarter of residents own their own home. Islington is a much sought after place to live and as a result, house prices are often very high.

Some general statistics about Islington include:

• In 2001 the population of Islington was 175,797 (84,229 male and 91,568 female)
• Islington is the second most densely populated local authority in the country with more than 118 persons per hectare
• About 140,000 people work here
• More than 66,000 people aged 16-34 live in the borough
• Almost two thirds of Islington residents in the 16-74 years age group are economically active
• More than 40% of Islington’s household now own a car
• About 50% of Islington’s families are in council or housing association tenants
• Almost one in four of Islington residents belong to an ethnic minority group (In 2001, about 28% of the population (49,000 people) classify themselves as belonging to non-white ethnic groups)
• There are 38 conservation areas and thousands of listed buildings
• Islington's oldest building, The Crypt at St John's Gate, Clerkenwell, is one of London's few remaining Norman buildings, built around 1140
• There are an estimated 370 restaurants in Islington
• There are six open markets in Islington
• There are eight leisure centres and swimming pools, eleven theatres and 125 open spaces, parks and playgrounds in Islington
• Some famous people associated with Islington include:

Charles Dickens, moved to Pentonville in 1837, at the age of 25. Like many authors and poets after him, his fascination with the borough is reflected in the amount of references he makes about Islington in many of his novels, including 'Oliver Twist'.

George Orwell moved to 27 Canonbury Square in 1944, after being bombed out of his home in St John's Wood. Shortly after moving to the area, Orwell found worldwide success with his political satire novel, 'Animal Farm'. In 1947, he began writing his most famous novel, '1984', about his nightmarish vision of the future.

Legend of the silver screen, Charlie Chaplin (1889-1977) had somewhat humbler beginnings when his family lodged in Arlington Way. His father and mother were music hall stars, with Chaplin Snr regularly appearing at Sadler's Wells.

One of the greatest directors of all time, Sir Alfred Hitchcock (1899-1980) began his legendary career at Islington Studios. Comedy actor Peter Sellers (1925-1980) was a pupil at St Aloysius College, in Hornsey Lane, from the age of 10. He returned to the borough in 1956, when he filmed the Lady Killers with Sir Alec Guinness in Frederick Street.

 

ISLINGTON COUNCIL AND ITS PRIORITIES

• Islington Council is one of 32 Greater London Borough Councils
• Islington is divided into 16 areas called wards
• Islington elected 48 councillors in May 2002. Elections will take place on 4th May 2006 for all wards
• Islington Council is by far the largest employer within the borough with about 7,000 employees (including education)
• The Council's budget for 2006/2007 is approx. £217 million. This will be collected through a combination of council tax, health authority grants and grants from central government

Islington Council offers a vast range of services to residents and visitors.  We make regular reviews of the services we provide (and they way we provide them) to make sure that we use our resources in the best possible way.

Islington Council is the fastest improving local authority in the country according to the announcement of the 2004 Corporate Performance Assessment (CPA) reports by the Audit Commission. Islington Council has been rated as ‘good’ only two years after it received a ‘poor’ rating. In 2005 we were “improving well” and demonstrating a 3 star performance overall

Islington Council has spent five years improving its services to local people and our CPA rating reflects and highlights our improvement across the board. This is an important milestone on our journey and we are determined to keep on getting better.

Our five key priorities (as set out in our corporate plan 2006/07) are:

Performance Improvement
To continually improve the quality of the services provided to residents, businesses and visitors, and to deliver value for money in all service areas

Sustainability
To work towards creating a borough that is environmentally sustainable. To seek to minimise harmful impacts on the environment and strive to create a greener, cleaner and healthier place to live and work

Regeneration
To work effectively in partnership with Islington’s diverse communities and local providers to regenerate the borough. The emphasis will be on tackling crime, health and educational issues

Customer Focus
To ensure local people are consulted upon developing their services so that they truly meet their needs. To continue to promote equal opportunities in such a diverse borough

Resources
To continue to build a diverse workforce to deliver high-quality services for the borough, and recruit and keep in place the best people to improve services and meet the needs of the residents and customers

 

ISLINGTON FINANCE DEPARTMENT

The Finance Department provide a wide range of Financial and Administrative services as well as monitoring a number of corporate financial budgets.

The service employs approximately 300 staff based within two locations
in Islington. Social Services Finance are located at Goswell Road and
The rest of the Finance Department is located at the Municipal Offices,
Upper Street.

 

What we do and the services we provide:

• accountancy services and financial advice for eight service areas.
• collection of miscellaneous income, council tax, business rates and residual poll tax.
• internal audit services.
• provision for the council and management advice.
• management of the council’s loans and cashflow.
• pension fund investment and administration of pension benefits.
• payroll services
• strategic financial and capital accountancy advice (control of the budget process, compiling accounts , setting and maintaining finance standards.

Purpose of the Finance Department

Finance plays a key role in the success of Islington’s improvement. In recent years the Finance Department has gone through a transformation. The journey continues with a steady overhaul of systems, structures, processes and procedures.

In order to improve our own performance, and to meet the challenges and targets set out in the council’s improvement plan, we have identified eight key corporate and departmental priorities for the coming year:

• manage the council's resources effectively.
• further integrate service and financial planning.
• develop and enhance financial capacity across the council.
• identify efficiency savings and value for money.
• improve asset management.
• risk management.
• empowering and developing our staff.

Financial Management

Financial Management encompasses the corporate accountancy function, financial systems, central services finance and the departmental business support unit.

 

Main service objectives

• ensure sound financial governance arrangements exist across the Council.
• effectively deliver corporate financial reporting and financial control.
• provide the Council with reliable, robust and user-friendly corporate financial systems.
• provide a comprehensive finance function to support the senior managers with the central service departments.
• support the Finance department’s senior management team in delivering the Departmental Performance Plan.

Strategic Finance

 

Strategic Finance is responsible for 3 key areas of Finance within the London Borough of Islington:

Strategic Planning - Taking a lead role in the council’s financial processes: managing and co-ordinating both the revenue and capital budgeting process, and the Medium Term Financial Strategy process.

Financial Advice - Offering expert and timely financial advice to all departments within the council.   This involves assessing the financial implications of council plans and provides ongoing support to the financial aspect of specific council projects.

Research - Maintaining an up-to-date knowledge of local government financial issues and developments, assessing the likely impact of these on LBI and communicating this information to colleagues within the council.   Strategic Finance also ensures that the council’s views are expressed in all relevant consultations.

 

Main service objectives

• to support service departments in developing sound financial plans and proposals.
• to safeguard the financial integrity of Council ventures such as the Building Schools for the Future project.
• to keep up-to-date with ongoing local government financial issues, and ensure the Council adapts accordingly to any changes.
• to engender continual improvement in the Council’s financial planning processes by listening to our customers and responding to their needs.

 

Key Highlights 2005-06

 

Some highlights of our achievements in the past financial year include the following:

• we managed the overall Council budget setting process for the current financial year 2006-07, with a zero increase in Islington's Band D council tax and a capital programme in excess of £167m.
• we have worked hard to develop and embed an integrated Revenue and Capital Service and Financial Planning process during the past financial year, commended by District Audit.
• we have produced a series of rolling three-year Medium Term Financial Strategies (MTFS).
• we have been actively involved in the procurement of big civil and school-based projects, including the initial stages of the Council's Building Schools for the Future (BSF) programme.
• we have provided support to the Council's existing and potential PFIs in Housing, Public Lighting, Highways.
• we have undertaken research on Government grant, including the impact on Islington of the recent formula grant review
• we have played a key role in the Council's CPA Assessment, in particular the Use of Resources and Value for Money (VFM) element.

Internal Audit & Risk Management

What is internal  audit and why does the council need to have it?

• the provision of an effective internal audit service is an essential component in giving assurance on the efficient provision of services that help to underpin the Council's One Islington Strategy.
• we play a key role in ensuring that the council conducts its business in accordance with proper standards of corporate governance and that public money is safeguarded and properly accounted for. To this end, we aim to provide an independent, objective, assurance and consulting activity, designed to add value to the council's operations.
• the Accounts and Audit Regulations 2003 sets down the statutory requirement for the council to provide an internal audit service. The Chief Internal Auditor (CIA) discharges this function on behalf of the Council's Section 151 Officer (The Director of Finance and Property Services).

What does internal  audit do?

• we help the council to achieve its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.  This contributes towards ensuring the proper, economic, efficient and effective use of resources within the authority.

What about fraud and corruption activity?

• the council is committed to ensuring that the risks to the council of fraud and corruption are minimised by having in place a Corporate Anti Fraud and Corruption Strategy, which sets out the approach to be undertaken. The responsibilty for preventing and detecting fraud lies with Management and Financial Regulations require that cases of suspected fraud are immediately reported to internal audit.

How do we operate?

• the internal audit service operates to relevant professional standards including the CIPFA Code of Practice for Internal Audit and its’ work is closely co-ordinated with the Council’s external auditor, the Audit Commission, through the Managed Audit process.
  
• the Managed Audit process is an arrangement whereby we audit  a number of areas that the external auditor wishes to see reviewed on an annual basis. These are usually key/fundamental systems such as Payroll, Creditors, Debtors, Council Tax etc.

• internal Audit services are currently provided by a combination of an in-house team working in conjunction with an external provider, PriceWaterhouseCoopers (PWC), who have contributed significantly to the assessment of risk and audit planning process.

What is the audit risk assessment and planning process?

• as part of the planning process for audit work within the authority, it is necessary to produce an annual plan of work which shows the emphasis of audit coverage, based on perceived areas of risk within the authority.  The audit plan is initially based on an assessment of the business risks facing the council and their potential impact on the Council’s reputation, strategic and financial systems, and service delivery.

• key risks identified in Departmental and Corporate Risk Registers are used in conjunction with audit’ s previous knowledge and experience of the robustness of the control environment in the service areas, supplemented by discussions with Service Management, to provide an overall audit needs assessment for the level of audit coverage for the year. Systems designated as high risk are accorded higher priority and more frequent coverage within audit plans.

• the factors used to assess risk and materiality include both objective criteria (budget, turnover, level of transactions, etc.); and also a judgmental element which takes into account audit’s previous knowledge/experience of the area, the adequacy of the control environment, management effectiveness and other issues such as vulnerability/impact on other systems. This is then supplemented with the results of the ongoing discussions held with Directors or their  Heads of Finance where they were requested to identify key business risks or areas of concern for inclusion within the plan.

• the process to produce the strategic plan, based on risk assessment, has been in accordance with recommended best practice as laid down by the CIPFA Code of Practice for Internal Audit. The adoption of this process also means that Internal Audit has fully met a recommendation from last year’s review by external audit that required plans to be more clearly aligned with an assessment of risks facing the Council.

• a key feature of this audit plan is the high level of joint working between the in-house team and PWC to maximise the strengths of both parties and underpin skill transference.

What information and reports do Members receive about audit?

• we regularly issue  progress  reports to Members on  the achievements of the audit plan and this also  serves to provide  assurance on key risks and control issues facing the Council

• this process is underpinned by an agreed working protocol with the Council’s external auditor, whereby both internal and external audit plans and progress are regularly reviewed and monitored to ensure that audit services are delivered in a properly planned and co-ordinated manner to achieve maximum efficiency and effectiveness.

• this gives the council confidence that internal audit work has been properly planned to reflect the risks and issues facing Islington and is being properly co-ordinated with the Council’s external auditor.

Risk Management

The main duties of the Risk Management team are to provide a comprehensive insurance service for the Council. To give advice to departments, schools, staff, and members of the public on ways to reduce accidents, also to prevent loss or damage to Council property.

 

The following services provided are as follows:

• a comprehensive insurance procurement service for the Council and Islington Schools.
• advice on insurance matters.
• advice on ways to reduce accidents to staff and the public and prevent damage or loss of property.
• promotion of Risk Management across the Council.
• maintain a register of risks, which could threaten the ability of the Council to achieve its objectives.
• promote the strategic risk management program ensuring the identification, recording and management of risk is embedded in the performance planning process.

Operations

Operations encompasses

• Accounts Payable – We pay the council’s bills.
• Income Collection – We collect income and recover outstanding debts due.
• Payroll and Pensions – We make sure that all of our staff past and present are paid every month.
• Revenue Services – We are responsible for the collection of council tax and business rates.
• Treasury Management – We manage the borrowing and investing of both the Council and the pension fund.

Main Service Objectives

• Improve collection of local taxes.
• Implement (with Human Resources) an integrated HR/Payroll System.
• Develop and maintain annual treasury management strategy.
• Improve pension fund performance.
• Improve income assessment, billing collection, recovery and credit management processes.
• Introduction of electronic authorisation of invoices.

Pension Fund

The Scheme

Islington pension fund is a local government pension scheme based on final salary. This means scheme members benefits are guaranteed and not dependent on investment performance.

Main Service Objective
           
The scheme’s investment objective are made on a long term view with a balance between good investment performance while considering the risk attached to those investment types.

• Market Value

The investment assets of the fund has grown from £530m in 2004/05 to around £662m in 2005/06

 

Asset allocation

As at March 2006 the fund is invested in the following assets:

Asset Class	Percentage %
UK equities	39
Overseas equities	36
Bonds	20
Property	4
Cash	1

 

Treasury

• the Council manages its banking, cashflow requirement, investment and long term debt portfolio through the treasury management function. These treasury management activities are strictly regulated by statute and CIPFA codes of practice. As at 31 March 2006 the Council had a long-term debt of  £701m and total investments of £149m.

Revenues: Council Tax & Business Rates

What we achieved last year

• improved Council Tax collection rates for the 6th successive year.
• implementation of additional payment methods, automated 24/7 telephone payment line, internet payment option and direct debit payments.
• The percentage of council tax collected within the year has risen to 93.3% in 2005/06. This marks Islington as one of the most improving authorities in the country over the last three years, which helps to keep the council tax levels down.

Payments

• in 2005/6 London Borough of Islington processed 186,000.

• the Accounts Payable Islington Team provides a 48 hour turnaround of payments to its customers and 24 hour in the case of urgent payments.

• the London Borough of Islington is looking to transform its accounts payable service as a way of making it more accessible, more convenient, more responsive and more cost effective.  To this end we are in the process of procuring an e-invoicing solution in order to improve the quality of services we provide to businesses by meeting BVPI8 targets -Invoices Paid within 30 days resulting in satisfied suppliers.

Central Income

Central income deals with the management and collection of miscellaneous debts. The Corporate Credit Manager is responsible for the Council’s Credit control and Debt Recovery policies and procedures.

 

Pensions Administration

The Pension Administration services approximately 5,500 current members of the LGPS and 4,400 former members with preserved rights.

The Scheme is set out in the Local Government Pension Scheme Regulations 1997, as amended, and the section must operate within those rules and other associated pension statutes.

• to improve efficiency, Pensions are introducing Document Imaging moving towards paperless working.
• attained Quality Management System Standard ISO9001:2000.

Payroll

• Payroll is responsible for processing Council employees and Pensioners pay on time.
• it is in the process of replacing its current system with an integrated web enabled HR/Payroll system from Northgate Solutions.
• the new system will allow employees to access their payslips, update personal details, e.g. bank accounts, change of address on line.

Housing Performance, Property and Social Services Finance

The Housing and Social Services Finance Division comprises of two teams, with responsibility for the efficient and effective provision of a comprehensive finance function for the Housing and Adult Social Services Departments.

This includes all aspects of the annual estimates process, budget maintenance, monitoring, control and reporting, and the year-end closing of accounts.

 In addition the Adult Social Services finance team is responsible for implementing all aspects of Adults Social Services charging and income collection.

 

Main Service Objectives

• to lead on financial planning to support the service departments in the medium term financial strategy process.
• to support effective financial management in the service department, to deliver the planned savings and growth and achieve a balanced general fund and HRA revenue and capital budget.
• to support the review and improvement of the financial systems and business processes in the service departments and implement improved monitoring and reporting.
• to ensure effective financial monitoring, management and reporting of partnership arrangements.