Agenda item

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)

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 efficiencies would be explored as part of service rationalisation.
• Questions about the sale of assets and whether the timetable for 2022/23 was achievable. The Leader reported that as a short term measure the sale of non-core assets was the right thing to do to address the budget position. There was confidence in meeting the timescales but the CD could meet any shortfall if required.
• It was noted that the Council’s external auditors did not share the same confidence in the Council’s ability to achieve a balanced budget.
• Although not detailed in the report, it was confirmed that the service-based savings below the sub total line in Figure 3 had been ‘identified’. It was hoped to avoid taking these more challenging steps.
• The Section 151 Officer agreed to seek clarification from the Director of Children’s Services on the detail of the £1.9m transformation costs charged to Children’s Services.

RESOLVED that under Section 100 (A)(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act and that the public interest in withholding the information outweighs such interest in disclosing the information.

The Committee referred to Appendix B of the report which provided a schedule of non-strategic asset sales. The Committee was advised that the schedule did not constitute a final list but rather gave notice of options being considered. Once finalised, the list of assets for sale would require full Council’s approval. Committee members had the opportunity to ask questions and make comments on the contents of the appendix.

The meeting then resumed in public session

The Committee agreed to retain the proposed date of 21 November 2022 for a further special meeting to consider the next Cabinet budget report, with the most suitable representation attending to respond to questions should the Leader no longer be available as now indicated.

There were no formal recommendations from the Committee to Cabinet on this report.