Agenda and draft minutes

Budget Scrutiny Panel
Wednesday, 25th September, 2019 6.00 pm

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

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

Items
No. Item

1.

Disclosures of Pecuniary and Personal Interests

Minutes:

No disclosures were made.

2.

Declarations - The Party Whip

Minutes:

No declarations were made.

3.

Questions under Scrutiny Committee Procedure 11.17

No questions were submitted.

Minutes:

No questions had been submitted.

4.

Draft Medium Term Financial Strategy 2020-23 pdf icon PDF 761 KB

A report of the Head of Finance and Property Services setting out the draft Medium Term Financial Strategy 2020-23, to be considered by Cabinet on 19th September 2019, for scrutiny by the Panel.

 

Scrutiny to include a review of the underlying assumptions and the implications of the calculations for efficiency plans and future budgets, together with the policy background to and the rationale behind the MTFS being proposed (in particular, what scenarios have 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 chosen).

 

Possible outcomes of Panel discussion are recommendations to Cabinet regarding changes to the Medium Term Financial Strategy (to be considered when the final version of the Strategy is submitted following consultation) or recommendations to Cabinet regarding preparation of the draft budget 2020/21.

Minutes:

Considered a report of the Strategic Director of Corporate Services setting out the draft Medium Term Financial Strategy (MTFS) 2020-23, to be considered by Cabinet on 19th September 2019, for scrutiny by the Panel (item 5 on the agenda filed with these minutes).

 

Assisting with consideration of the report: The Cabinet Lead Member for Finance and Property Services, the Strategic Director of Corporate Services, the Head of Finance and Property Services.

 

The Cabinet Lead Member briefly set out the key issues and risks for the MTFS 2020-23, highlighting in particular the value of having put aside reserves, the uncertainty of the environment in which the Council was operating and the need for transformation/efficiency plans to deliver.  He considered that the MTFS was as accurate as it could be based on the information currently available.

 

For context, the Chair referred to there currently being considerable activity taking place in the area of the Council’s finances, including the new Capital Plan for 2020-23 due to be considered by Cabinet (and this Panel) in December 2019 and the Investment Strategy agreed by Cabinet in September 2019 that and the Treasury Management Strategy for 2019/20 (part of Capital Strategy) agreed by Council in February 2019, both of which were of crucial importance and included changes in approach.  All illustrated a new environment in which to manage and move forward with the Council’s finances, taking as a starting point the position stated by the Cabinet Lead Member that the Council wished to maintain front line services.  The role of this Panel was to scrutinise the budget being proposed to achieve that. 

 

Councillor Baines arrived at 6.10pm.

 

Summary, key points of discussion:

 

(i)           All suggestions to assist the Council with achieving the outcome needed were welcomed by the Cabinet Lead Member.

(ii)          Agenda page 9, reference to proposed use of £1.1m of reserves in 2020/21 assuming delivery of £0.5m of transformation and delivery savings.  Confirmed that this was a separate matter to the proposed request for funding of £220,000 from the Reinvestment Reserve to facilitate the mobilisation of the Council’s Transformation Programme that had recently been notified by a General Exception Notice.  The latter was a new request, further explanation of the funding for which was provided.    

(iii)      Reference to the challenge presented in finding required savings, together with the concern expressed by the Corporate Services Scrutiny Committee at its last meeting when considering the 2019/20 Period 4 revenue position that budgeted for managed savings were not yet being achieved.  Very important to continue to monitor the position in that respect.

(iv)      The settlement from the Government for 2020/21 had not yet been confirmed.  Brief discussion regarding the uplift anticipated, together with the likely direction towards adult social care and children’s services. 

(v)       Agenda page 17, reference to MTFS assuming maximum permitted annual increase in Council Tax of 2%.  If the Council did not have reserves, that increase would not be sufficient to maintain front line services.  Question as to whether consideration had been given to  ...  view the full minutes text for item 4.

5.

Approach to Budget Setting

To enable discussion with the Cabinet Lead Member for Finance and Property Services on the approach taken to budget setting.

Minutes:

Discussed, the approach taken by the Council to budget setting.

 

Assisting with the discussion: The Cabinet Lead Member for Finance and Property Services, the Strategic Director of Corporate Services, the Head of Finance and Property Services.

 

Summary, key points of discussion:

 

(i)           The budget setting process was briefly outlined.  The Council’s objective had been to maintain front line services whilst achieving a balanced budget, through a mix of commercialisation and efficiency savings.  The existing service provision was considered to be appropriate, but the financial challenge ahead may require that to change.  

(ii)          Substantial savings had been achieved in recent years and further substantial savings would be needed over the next three years.  Achieving those would become increasingly difficult and transformation and investments to produce income were also being looked to.

(iii)         Reference to budget information being net (of income) rather than gross.  The gross figures had been provided to the Panel and were useful in illustrating true costs and how much was being spent to produce the income.

(iv)      Elements of the Council’s costs could not be touched as part of the process, for example contract costs which were increased by the contract inflation amount each year.  Such costs amounted to around £10m.  There were approximately £6m of costs that could be targeted for savings.

(v)       Question as to whether crowdsourcing within the Council has been undertaken to identify potential savings/income generation?  In response, previous year’s concept of Big Ideas within the Corporate Management Team and the outcomes of that were briefly outlined.  Reference was made to the use of crowdsourcing by the Coalition Government that followed the 2010 General Election and the good ideas that had generated from many sources, including the public.  A member of the Panel considered that input from members of the public could be useful.

(vi)      Reference to the benefit of a properly resourced audit function in identifying efficiencies and cost savings in commercial organisations and whether the new internal audit shared service arrangement at the Council might contribute to that through its Value for Money work?  In response, the Council’s internal audit remained a small team and was primarily tasked with assurance.

(vii)     Question regarding non-statutory services and how those were considered in the budget process?  Also, how spending was considered and evaluated against other spending?  That was undertaken by relevant Cabinet Lead Members, the aim being to maintain front line services.  Reference to a good starting point being a list of statutory and non-statutory services and the income and costs relating to those.  That exercise had been undertaken, further details of which were outlined.  The information from that could be provided to Councillor Baines to assist his work as Chair of the informal scrutiny panel on generating commercial income, if he so wished.

(viii)    The Chair referred to the approach of maintaining current services and whether budget scrutiny should ask for clearer information on the long-term direction of travel, as that affected the questions the Panel needed to ask, also to consider whether  ...  view the full minutes text for item 5.

6.

Effective Budget Scrutiny

To enable the Strategic Director of Corporate Services to provide information and advice to the Panel to assist its effective scrutiny of the draft budget 2020/21.

 

For information, further meetings of the Panel have been scheduled as follows (both at 6.00pm):

 

Wednesday, 4th December 2019 (to consider the draft budget 2020/21 and draft Capital Plan 2020/21 - 2022/23);

 

Wednesday, 8th January 2020 (to agree the Panel’s report).

Minutes:

Discussed, information and advice from the Strategic Director of Corporate Services to assist effective scrutiny of the draft budget 2020/21, following a request by the Chair that this be provided to the Panel.

 

The following information was circulated at the meeting and explained in brief: The Comprehensive Income and Expenditure Statement and the Balance Sheet as at 31st March 2019 (as set out in the Council’s Statement of Accounts 2018/19).

 

The Director also presented a more detailed analysis of the General Fund budget to assist the Panel with a more in-depth understanding of gross expenditure and budget challenges.  He agreed to send that information by email to members of the Panel, together with a similar analysis of the Housing Revenue Account, for use moving forward.

 

RESOLVED that the information and advice from the Strategic Director of Corporate Services to assist effective scrutiny of the draft budget 2020/21 be welcomed and noted.

 

Reason

 

To acknowledge the Panel’s consideration of the information and advice as part of its budget scrutiny role.