Agenda item

To consider the following finance related reports scheduled for Cabinet consideration on 11 November 2020:

·       2020/21 Budget Monitoring and Medium-Term Financial Plan Update

The O&S Board is asked to scrutinise the reports and make recommendations to Cabinet as appropriate.

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

The Cabinet report is attached for consideration by the Overview and Scrutiny Board.

Medium Term Financial Plan (MTFP) Report - The Leader of the Council and Portfolio Holder for Transformation and Finance introduced the report, a copy of which had been circulated and which appears as Appendix ‘G’ to the Cabinet minutes of 11 November in the Minute Book. A number of issues were raised by the Board in the subsequent discussion, including:

·       A Board Member asked whether the £3.8 million - tranche 4 funding referenced in the report was the same funding of £3 million which the Leader of the Council referenced in his Twitter feed regarding the programme of food parcels being delivered over half term for those entitled to free school meals. The Leader confirmed that this was the case and that some of the funding had been used for the provision of meals during the half term holiday. The Leader commented that central government had been clear that local authorities were best placed to understand local needs.

·       In response to an enquiry regarding what provision had been removed in order to fund free holiday meals it was explained that nothing had as yet, and needs were changing frequently as to where the funding would be best spent. In response to a further question the Board was advised that the funding wasn’t ringfenced and spending it in this way was no different to any other way of spending Covid funding. It was noted that funding of under £100k could be agreed by officers and other material spends were recorded in the MTFP report to Cabinet. In response to how much was actually allocated the Board were informed that there were approximately 6000 children entitled to free school meals in the BCP area and each food parcel cost £15, so a maximum of approximately £90k. The take-up over half term was good but not full and there was work underway on how to promote the provision for the Christmas holidays. The Chief Financial Officer advised that the in-year financial position of BCP Council Covid-19 grant allocation was outlined within the report.

·       A Councillor asked about the change in review from £50m to £13.4m large swing and whether that included any sale of assets or whether that was later consideration. The Leader advised that there would be no sale of assets to fund black holes in Corona Virus impacted budgets, but the Council was looking at more creative ways of using assets.

·       A Board member noted that funds previously received from central government had been inadequate to meet requirements leaving the council with a significant Covid funding hole. There was concern about the funding required to support the provision of free meals during the holidays and asked if the Council would be proactively contacting families in advance of the Christmas holidays. The Leader of the Leader of the Council stated that feeding children was a priority and confirmed that the programme at Christmas would be done in consultation with schools and businesses.

·       It was noted that the number of children engaged with children’s Social care were increasing month on month and becoming more expensive. The Leader advised that standards within Children’s Services was one of the administration’s top priorities and following the recent Ofsted inspection supporting the long-term improvement of the directorate. The Chief Financial Officer informed the Board that the Children’s Services Corporate Director would provide a separate Report to the December Cabinet meeting setting out the mitigations which were being put into place.

·       A member raised concerns about the large funding hole which needed to be addressed, there was need to find £50m in transformation savings and it was suggested that further priorities should not be added into the budget. It was noted that the first two tranches of funding of £22million in total covered the initial Covid spending. The Council had now put in a claim for 12 million in terms of fees and charges lost. The Leader confirmed that he felt that it was important that political priorities should continue to be included.  A Board member noted that the rules were that only 70 percent of lost income could be covered, and most Council leaders raised concerns about the level of support from central government.

·       A Board member raised a query regarding the use of reserves – whether this was general or earmarked reserves and whether there were any changes in terms of planning assumptions which have been used. The Councillor applauded additional borrowing provided it was being used for investment. The Councillor commented that the paper was building on the good position left by previous administration. The Leader confirmed that it was earmarked reserves. Some assumptions had changed in year 2 and year 3, 100 percent impact next year and 50 percent in the following two years. The Leader commented that this may be too prudent but would need to see.

·       A Councillor commented on point 64 of the report that things moved forward and changed with covid, particularly in relation to outdoor green/ spaces. New plans were working up significant investment into green spaces and asked when a report would be seen on this.

·       The Leader noted that there would be a report on unlocking green spaces within the first one hundred days and was keen to see things brought forward. It was noted that the covid crisis was affecting lots of areas and asked members to please come forward with any ideas on this and looked forward to working with O&S in future on this.

·       The Leader was asked about the sale of assets, in particular Christchurch Civic Centre which if not being used would be a prime site for development.

·       The Leader advised that capital receipts from Poole Civic Centre sale were going to fund redevelopment. But it had now been possible to remove this from the budget. However, both the Poole and Christchurch sites would need to come forward, the Council were committed to keeping the listed section of the civic site. There was a massive regeneration opportunity, but it was noted that the Council had been able to step back from an immediate requirement to sell assets.

·       A Board member asked for the opportunity to correct some of the statements made by the Leader of the Council to confirm that the previous administration didn’t bring forward a paper with any detail on what would be happening with sale of Poole and Christchurch civic centres.

·       The Chief Financial Officer explained in response to a question that there were elements of the capital programme where we would be purchasing assets and creating assets. With regards to the borrowing caps it was within the gift of council to revise the caps each year.  It was put to the Chief Financial Officer that he would not allow the Council to set up an unsustainable level of borrowing. The Board was advised that comparisons with other local authorities of a similar size would be set out for Councillors to consider.

·       In response to a question the Leader of the Council confirmed that he would not be selling civic centres to pay for developments but would be looking at gaining best value whether through sale or dealing with the site ourselves or as a joint venture.

·       In response to a question the leader advised that he had a strong plan of work for the first 100 days. The Leader of the Council advised that he wanted to place members at the heart of its administration and residents at the heart of Council and welcomed input from Overview and Scrutiny.

·       The Chairman asked about the Dedicated Schools Grant deficit of £9.6m next year. The Chief Financial Officer explained that from 2021 onwards, there had been an update on guidance from government on how the Council would need to deal with the Dedicated Schools Grant. Reserves were no longer required to be held to balance the Dedicated Schools Grant Position. The Council recognised the deficit and was working with the department of education to recover it over a period of time and to reduce the deficit going forward.

·       In response to a question regarding the £9.4m shortfall in the organisational design budget, it was explained that this meant that any expected costs would be taking into account for the budget setting process for each year so that spending was matched to the year where the benefit would arise from it. The Leader advised that the external auditors had confirmed that the Council’s current borrowing levels were low.

Following the debate and questions raised by the Board, a Councillor moved the following:

“Recommend the cabinet prioritises the balancing of the General Fund rather than spending funds on political priorities.”

The motion was duly seconded. The Monitoring Officer advised that the wording of the motion may be ambiguous and suggested that it should be amended to read:

“That the Cabinet prioritises the balancing of the General Fund before any other funding priorities”

The motion was debated before being put to the vote. Some members raised concerns with the new priorities which were being introduced by the new administration ahead of balancing the budget when there were significant financial pressures, Other Councillors indicated that the new administration should have the opportunity to move their priorities forward.

The vote on the motion was lost by 6 votes to 9. Councillor Farquhar requested to be recorded as voting in favour of the motion.