Agenda item

Iain Watters, Head of Finance – Financial Planning, Capital, Treasury & Systems, introduced the 2022/23 budget proposals report for services within the remit of the Corporate, Finance and Property Select Committee.

Members were informed that, following consideration by Cabinet on 16 December 2021, the budget proposals were now out for public consultation and were being presented to the relevant Select Committees in January 2022.

In terms of the Budget Strategy, the Committee heard that funding levels were based on the outputs set out in the Chancellor’s spending review in October 2021. Based on a 1% per annum increase in the Social Care Precept and a 1.8% per annum uplift in core Council tax, funding available to support service expenditure in the Borough was projected to grow by £32,034k to £270,279k between 2021/22 and 2026/7. However, it was noted that, over the same period, there would be increased demand on services (partly related to the Covid-19 pandemic), additional inflationary pressures and a need to support capital investment which would add some £66m to the Council’s costs. In light of this, there would be a gap of approximately £34m to bridge over a 5-year period. Members heard that work to date had identified some £30m of savings to balance the budget leaving a gap of £4,735k to be identified in later MTFF cycles. There was no reliance on General Balances to bridge the gap.

The Committee was informed that Covid-19 had had a significant impact on the budget; pandemic related costs over and above planned service expenditure had totalled over £32m in 2020/21 and approximately £19m in 2021/22. These additional costs had been funding through external Government support to date; however, it was recognised that the pandemic would continue to impact on services in the future and it was not expected that further funding would be forthcoming.

It was confirmed that General Balances were set to stay within the recommended range at £26m over the five-year MTFF period. The draft budget outlined £383m of proposed capital expenditure over the MTFF period including substantial investment in local infrastructure, delivery of additional high needs school places, redevelopment of the Civic Centre and £25m for the carbon reduction agenda. Members heard that the peak level of borrowing in the MTFF period would be £311m; this had been factored in to the budget plans.

The Committee was advised that a significant inflationary increase was expected between 2021/22 and 2022/23 which would particularly impact on the services under the Corporate, Finance and Property Select Committee since the centralised energy and fuel budgets sat within its remit. In terms of savings, £10,381k of savings proposals had been incorporated into the draft budget for 2022/23, with £1.9m falling within the remit of the Corporate, Finance and Property Select Committee.

Members enquired how the inflationary increases set out in Table 2 had been calculated as these were not consistent. Members also noted that the figure for fuel inflation seemed low. It was confirmed that different levels of inflation had been applied to different areas of spend hence the variations in inflation levels. In terms of the 14% for fuel inflation, the Committee was informed that an inflationary uplift of 7/8% from the previous year had been included with another 14% being built on top of this.

Members noted that the budget report appeared shorter than previous reports with less information provided regarding the strategy, calculations of changes and details of the proposed savings. Moreover, there appeared to be a lack of detail regarding capital projects. Some Councillors felt that the lack of information provided could discourage meaningful consultation especially for residents who did not have the opportunity, as elected members did, to ask questions. 

Further to the Committee’s queries regarding the inflation figure for workforce expenditure (1.5%) which seemed low given current levels of inflation and those projected for the future, it was confirmed that the figures had been based around Bank of England projections and would be kept under review - any future changes would be factored in.

With regards to the savings set out on page 34 of the agenda pack, Members noted that a review of the Exchequer and Business Assurance function was expected to secure £200k efficiency savings.  Concerns were expressed that, if this involved a reduction in the Corporate Fraud Team, there was a risk that the amount recovered could go down. In response to this, the Committee was informed that most of the savings would come from the Exchequer area of the service – particularly from the planned service review following on from robotics automation work within the Council. It was further clarified that the planned £150k savings from streamlining of transactional financial processes were separate to this – they were also linked to automation but related to purchase to pay systems etc.

In respect of the £100k savings to be made from measures to minimise damage to the Council’s vehicle fleet, Members enquired how this could be achieved at no extra cost. It was confirmed that these savings related to measures including training and the refocussing of training budgets within the fleet service to apply them in different ways. Investment in trackers in vehicles would enable management to direct training better.

In relation to technical administration and customer contact, Members noted significant planned efficiency savings and requested clarification as to the total budget for these services and how the savings could be achieved. The Head of Finance - Financial Planning, Capital, Treasury & Systems confirmed that technical administration savings would be achieved by bringing together disparate functions. In terms of customer contact, in future residents would be able to source information more readily online without needing to call in. He agreed to check the budget figures and confirm to Democratic Services for the minutes (following the meeting it was confirmed that the 500k planned efficiency savings from the on-going review of technical administration represented 13.5% of the current £3,712k service budget and the 415k savings linked to the in-hand review of customer contact represented 13.3% of the current £3,129k budget for the Customer Contact centre).

In response to queries regarding the £300k savings to Democratic Services, it was confirmed that these would be achieved by a reduction in the number of Councillors following upcoming elections and reductions in back office support.

Councillors noted a budget of £35m for Civic Centre work and enquired what this entailed. In response to this the Committee was advised that this budget was for planned modernisation of the Civic Centre which would lower its carbon footprint – the intention was to make better use of the land on the site which would generate income to offset most of the costs. The £35m was an indicative figure only at this stage. It was confirmed that the additional budget of £25m for carbon reduction as set out in the report was to support the Council’s wider net zero ambition by other means. Extra Government funding was also expected to support this.

In response to Councillors’ further requests for clarification, it was confirmed that a facility for watersports was still planned to replace HOAC. This would be funded by HS2 funding and the figures represented the latest and best budget estimates. In relation to funding for Botwell Leisure Centre, an error on page 39 of the agenda pack was noted and it was confirmed that there was a budget of £200k for this as shown on page 37of the pack.  Members heard that the Woodside Development budget of £2.575m in 2023/24 related to a planned housing development.

The Chairman read out the following proposed budget comments to be submitted to Cabinet on behalf of the Corporate, Finance and Property Select Committee “The committee notes and welcomes the overall budget from officers and recognises their ongoing work in delivering a balanced budget following the continued inflationary and demand-led pressures from the Covid-19 pandemic. 

With regards to the areas within the Corporate, Finance and Property Select committee’s remit, savings will be achieved through streamlining of transactional financial processes and automation of business processes.  Not only will these deliver savings, but also deliver technological enhancements that will improve efficiencies in services.  The Committee also notes the significant capital investment planned to deliver facilities across the north and south of the Borough for our residents, as well as major steps to reduce the Council’s carbon footprint.”

Members were happy with these comments but requested the addition of an opening sentence to highlight the fact that there was less information provided in the budget reports this year than had previously been the case. It was agreed that the wording of this additional sentence be delegated to the Democratic Services Officer to sign off with the Chairman in consultation with the Labour Lead.

RESOLVED:

1.    That the Committee noted the budget projections contained in the report and commented as appropriate on the combined budget proposals affecting the relevant service areas within the Property & Infrastructure, Finance and Corporate Services & Transformation Cabinet Portfolios, within the context of the corporate budgetary position; and

2.    That the final wording of the additional sentence relating to the Select Committee’s budget comments be delegated to the Democratic Services Officer to sign off with the Chairman in consultation with the Labour Lead.