Issue - meetings

Medium Term Financial Plan (MTFP) Update

Meeting: 16/11/2022 - Place Overview and Scrutiny Committee (Item 7.)

7. Impact of Budget on Services within the remit of Place O&S Committee pdf icon PDF 321 KB

The Committee are asked to consider the latest MTFP Cabinet report in relation to issues within the remit of the Place Overview and Scrutiny Committee.

Please note that the focus of this item is the impact of the budget on services within the operations directorate. The Leader of the Council and Service Directors have been invited to attend for discussions on this item.

Please note that this report contains an appendix with exempt information as defined in Paragraph 3 in Part I of Schedule 12A of the Local Government Act 1972. If the Committee wish to discuss this information it may decide to exclude the press and public.

(Paragraph 3 - Information relating to the financial or business affairs of any particular person (including the authority holding that information)

 

Additional documents:


Meeting: 26/10/2022 - Cabinet (Item 64)

64 Finance Strategy Update Report pdf icon PDF 321 KB

In response to the Councils request for a £76m Capitalisation Direction covering a three-year period, the Department of Levelling Up, Housing and Communities (DLUHC) issued a minded to £20m offer for 2022/23 only, subject to various conditions. This included the requirement for the Council to produce a full plan for addressing its budget gap in 2023/24 and share that with DLUHC by the end of September 2022. It was subsequently acknowledged this position would be set out in this October report.

This report demonstrates that the Council has made further good progress in prudently positioning itself to deliver, and also sets out how it would achieve, a balanced budget for 2023/24. The challenge now will be translating this work into a detailed implementation workstream and strength testing the deliverability of the assumptions that have been made particularly those around service savings and efficiencies and to avoid double-counting savings across the transformation programme.

In addition, the report sets out that work is now being undertaken to determine if the Council can avoid drawing down on a capitalisation direction for 2022/23 by bringing forward in the region £20m of non-strategic asset disposals by 31 March 2023.

[PLEASE NOTE: Should the Cabinet wish to discuss the detail of Appendix B the meeting will be required to move into Confidential (Exempt) Session]

Additional documents:

Decision:

RESOLVED that Cabinet: -

(a)       Acknowledges the materially improved financial position for 2022/23 which is now expected to produce a surplus of at least £7.8m, excluding transformation costs. This is in the context of an additional c£25m of in year cost of living pressures;

(b)       Acknowledges the plan to deliver a balanced budget for 2023/24 and that its deliverability will now be tested as part of the implementation process;

(c)       Authorises officers to commence the work to ensure the deliverability of the budget including any necessary consultations as required;

(d)       Acknowledge the intent to consider the extent to which a capitalisation direction can be avoided in 2022/23 by bringing forward the disposal of non-strategic assets; and

(e)       Agree that the current expenditure controls remain in place to generate additional in-year savings.

 

RECOMMENDED that Council: -

 

(f)        Approve £1.9m of investment in 2022/23 in a specific transformation workstream in Children’s Services as set out in appendix A; and

(g)       Approve the further release of earmarked reserves as set out in appendix C.

Voting: Unanimous

Portfolio Holder: Leader of the Council

 

Reason

Further to a recommendation agreed by Cabinet on the 7 September 2022, an update on the Councils financial strategy will be a standing item on the Cabinet agenda until such time as there is a balanced budget for 2023/24.

 

Minutes:

The Deputy Leader of the Council presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

Cabinet was advised that in response to the Councils request for a £76m Capitalisation Direction covering a three-year period, the Department of Levelling Up, Housing and Communities (DLUHC) issued a minded to £20m offer for 2022/23 only, subject to various conditions which included the requirement for the Council to produce a full plan for addressing its budget gap in 2023/24 and share that with DLUHC by the end of September 2022. It was subsequently acknowledged this position would be set out in this October report.

Cabinet was informed that this report demonstrates that the Council has made further good progress in prudently positioning itself to deliver, and also sets out how it would achieve, a balanced budget for 2023/24.

In relation to this Cabinet was advised that the challenge now will be translating this work into a detailed implementation workstream and strength testing the deliverability of the assumptions that have been made particularly those around service savings and efficiencies and to avoid double-counting savings across the transformation programme.

In addition, Cabinet was informed that the report sets out that work is now being undertaken to determine if the Council can avoid drawing down on a capitalisation direction for 2022/23 by bringing forward in the region £20m of non-strategic asset disposals by 31 March 2023.

 

The Chair advised that there had been productive discussions at the Corporate and Community Overview and Scrutiny Committee the preceding evening.

A non-Cabinet member referred to the disposal of assets at this time and raised concerns that this was not a good time financially to be making these decisions. The Councillor also raised concerns regarding a number of schemes which were no longer able to progress due to the current hold on many items of revenue expenditure. In response to a comment the Chair confirmed that the Council was in a better position than many other Councils, and were ahead in a number of areas in addressing inflationary pressures in comparison with other Councils. The Chair also advised that any income generation from potential asset disposals had been taken into account and at present negative equity was not expected to impact the disposals.

 

RESOLVED that Cabinet: -

(a)         Acknowledges the materially improved financial position for 2022/23 which is now expected to produce a surplus of at least £7.8m, excluding transformation costs. This is in the context of an additional c£25m of in year cost of living pressures;

(b)        Acknowledges the plan to deliver a balanced budget for 2023/24 and that its deliverability will now be tested as part of the implementation process;

(c)         Authorises officers to commence the work to ensure the deliverability of the budget including any necessary consultations as required;

(d)        Acknowledge the intent to consider the extent to which a capitalisation direction can be avoided in 2022/23 by  ...  view the full minutes text for item 64


Meeting: 25/10/2022 - Corporate and Community Overview and Scrutiny Committee (Item 41)

41 Scrutiny of the Medium Term Financial Plan (MTFP) Update Cabinet report pdf icon PDF 321 KB

To consider the Medium Term Financial Plan (MTFP) update report scheduled for Cabinet consideration on 26 October 2022.

 

The Committee is asked to scrutinise and comment on the report and if required to make recommendations or observations as appropriate.

 

Cabinet members invited to attend for this item: Councillor Drew Mellor, Leader of the Council and Portfolio Holder for Finance and Transformation.

 

Please note that this report contains an appendix with exempt information ‘as defined in Paragraph 3 in Part I of Schedule 12A of the Local Government Act 1972. If the Committee wish to discuss information in relation to this appendix it may take a decision to exclude the press and public.

 

(Paragraph 3 - Information relating to the financial or business affairs of any particular person (including the authority holding that information)

 

Additional documents:

Minutes:

This item was restricted in part by virtue of Paragraph 3 of Schedule 12A of the Local Government Act 1972.

 

Exempt information – Category 3 (Information relating to the financial or business affairs of any particular person (including the authority holding that information))

 

The Leader and Portfolio Holder for Finance and Transformation presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book. The Leader and Officers responded to questions and comments from members on a number of issues, including:

 

  • Base budget staff costs apportioned to Transformation related to core staff, not redundancies.
  • Concerns that the £42.6m of total savings and efficiencies required to achieve a balanced budget for 2023/24 were unrealistic. The Leader outlined the current administration’s approach to those savings already achieved and the level of confidence in those to be delivered. It was clarified that £12m of the £27m scheduled service-based savings for 2023/24 related to Adults and Children’s services.
  • Whether Future Places should be suspended temporarily until the Council’s position was back on track. The Leader explained why this was not considered necessary financially or in terms of ambition of place. It was clarified that Future Places was not directly funded from reserves and that funding would only become an issue should Council not accept the business cases.
  • Questions on the rationale for avoiding a Capitalisation Direction (CD). The Leader reported that the purpose of a CD was to fund transformation, it had no direct impact on the Medium Term Financial Plan (MTFP). The consequences of accepting a CD could/should be avoided if alternative funding methods became available.
  • It was noted that there was a balance of pros and cons between funding via the CD and the sale of non strategic assets.
  • Concerns at the lack of detail in how the figures contained in the report would be delivered and the difficulty this presented for effective scrutiny. The Leader reported that the required level of detail was now being worked up in conjunction with Cabinet, CMB, senior officers and a December budget café prior to the budget report in January 2023.
  • The Section 151 Officer advised that it was reasonable to include assumed government funding streams in resource level figures, although this was not without an element of risk.
  • Whether there were plans to drop projects approved but not yet implemented, for example the funding of lifts at Pokesdown Station. This would be considered on a case-by-case basis and may depend on the level of commitment already made. The Section 151 Officer agreed to make enquiries with regard to Pokesdown Station and include a response in the minutes, as follows: “I can confirm that the proposed budget for 2023/24 as currently drafted continues to make provision for the financial implications of the contribution Council agreed to make towards the lifts at Pokesdown Station”.
  • It was confirmed that there were no plans to stop non statutory services but  ...  view the full minutes text for item 41