Agenda and minutes

Budget Scrutiny Panel - Tuesday, 2nd October, 2018 6.00 pm

Venue: Committee Room 2, at the Council Offices, Southfields, Loughborough. View directions

Contact: 01509 634781  Email: democracy@charnwood.gov.uk

Link: Click here for sound recording

Items
No. Item

8.

Minutes of the Previous Meeting

The Panel is asked to confirm as a correct record the minutes of the meeting held on 26th July 2018.

Minutes:

The minutes of the meeting held on 26th July 2018 were confirmed and signed.

9.

Disclosures of Pecuniary and Personal Interests

Minutes:

The following disclosures of interests were made:

 

(i)            by Councillors Miah and Seaton – personal interests as members of Leicestershire County Council.

10.

Declarations - The Party Whip

Minutes:

No declarations of the existence of the Party Whip were made.

11.

Questions under Scrutiny Committee Procedure 11.17

No questions were submitted.

Minutes:

No questions had been submitted.

12.

Draft Medium Term Financial Strategy 2019-2022

A report of the Head of Finance and Property Services setting out the draft Medium Term Financial Strategy 2019 to 2022, which was agreed by the Cabinet on 13th September 2018, is attached.

 

The process for undertaking scrutiny of the budget agreed by the Scrutiny Management Board identifies the following issues for the Panel to consider:

 

·         a review of the underlying assumptions

·         a review of the implications of the calculations for efficiency plans and future budgets

·         the policy background to and the rationale behind the draft being proposed.  In particular, what scenarios had been considered, for example a strategy based on statutory requirements, a strategy based on maintaining services or a strategy based on providing additional services to meet the Corporate Plan, and the reasons for the option then chosen.

 

Possible outcomes of Panel discussion:

 

·         recommendations to the Cabinet regarding changes to the Medium Term Financial Strategy, to be considered when the final version of the Strategy is submitted following consultation

·         recommendations to the Cabinet regarding preparation of the draft 2018/19 budget.

Minutes:

A report of the Head of Finance and Property Services setting out the draft Medium Term Financial Strategy 2019 to 2022, which had been agreed by the Cabinet on 13th September 2018, was submitted (item 6 on the agenda filed with these minutes).

 

Members of the Panel expressed their extreme disappointment that the Cabinet Lead Member for Finance and Property Services had given his apologies for the meeting.  At its previous meeting the Panel had identified specific issues that it wished to question the Lead Member on.  The recent scrutiny review had highlighted the importance of Lead Members being present at meetings to answer scrutiny questions and it was noted that the Lead Member had also not attended the Panel’s first meeting.  The Panel did not know the reason for the Lead Member’s absence and there might be good reasons for it; however the minutes should reflect the Panel’s views regarding the matter.

 

Having discussed the options for proceeding with its scrutiny of the draft Medium Term Financial Strategy the Panel decided to proceed with the meeting but to identify issues during the course of its scrutiny of the Strategy that it wished the Lead Member to respond to.

 

The Strategic Director of Corporate Services assisted with consideration of the item and provided the following responses to issues raised:

 

(i)            Net service expenditure was projected to increase over the three years covered by the Strategy.  A significant part of that increase was due to the ending of the first extension period of the environmental services contract and the requirement to replace the refuse fleet alongside the second extension period.  It would be more cost effective for the Council to purchase the new fleet than for the contractor to do so because the Council could borrow money more cheaply than the contractor.

(ii)          It had been known when preparing previous Strategies that a new contract or contract extension would be required and that would result in an increase in costs.  However the size of the increase had not been expected and that had resulted in a higher projected net service expenditure than in previous Strategies.

(iii)         The Strategy also now included an assumption that there would be annual pay rises of 2% rather than 1%, which had been assumed in previous Strategies.  These were examples of the Strategy being developed each year as more information became available.

(iv)         The Council was looking at the possibility of offering some services on a more commercial basis.  In particular the Council was looking to provide a trade waste collection service.  The projections in the Strategy were based on the need to fund set-up costs in 2019/20, the service beginning and breaking even in 2020/21 and generating a small profit in 2021/22.  It was expected that the service would produce greater returns in subsequent years.

(v)          The projections relating to the interest the Council would receive were based on a number of factors.  Previous projections had assumed a quicker increase in interest rates and the  ...  view the full minutes text for item 12.

13.

Further Panel Meeting Dates 2018/19

Further meetings of the Panel in 2018/19 have been scheduled as follows:

 

·         Wednesday 12th December 2018 at 6.00pm – to consider draft budgets for 2019/20

·         Tuesday 8th January 2019 at 6.00pm – to consider the Panel’s draft report.

Minutes:

At its previous meeting the Panel had agreed to bring forward its scrutiny of the draft General Fund and HRA budgets to its December meeting and make that a formal meeting.

 

RESOLVED that in preparation for the Panel’s next meeting, scheduled for 12th December 2018, officers circulate details of the draft General Fund and HRA budgets to members of the Panel when the Cabinet report is published on 30th November 2018.

 

Reason

 

To enable members of the Panel to identify areas of focus and witnesses to invite for the Panel’s next meeting.