Agenda and minutes

Budget Scrutiny Panel - Wednesday, 8th December, 2021 6.00 pm

Venue: Virtual Meeting - Zoom. View directions

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

Media

Items
No. Item

30.

MINUTES OF THE PREVIOUS MEETING pdf icon PDF 228 KB

The Panel is asked to confirm as a correct record the minutes of the meeting held on 6th October 2021.

Minutes:

The minutes of the meeting of the Panel held on 6th October 2021 were confirmed as a correct record.

31.

DISCLOSURES OF PECUNIARY AND PERSONAL INTERESTS

Minutes:

No disclosures were made.

32.

DECLARATIONS - THE PARTY WHIP

Minutes:

No declarations were made.

33.

QUESTIONS UNDER SCRUTINY COMMITTEE PROCEDURE 11.17

No questions were submitted.

Minutes:

No questions had been submitted.

34.

REVENUE MONITORING POSITION (GENERAL FUND AND HRA) PERIOD 7 pdf icon PDF 263 KB

A report of the Head of Financial Services setting out the revenue position for the General Fund and HRA at the end of period 7.

Minutes:

A report of the Head of Financial Services setting out the revenue position for the General Fund and HRA at the end of period 7 was considered (item 6 on the agenda).

 

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

 

Summary, key points of discussion:

 

  • The actual spend was £10,807,000 against a budget of £10,907,000 – giving an underspend of £100k.  This included a major underspend of £97k regarding salaries, expenditure and other income shortfalls associated with the Town Hall.  Depending on the success of shows at the Town Hall, the income would not be known until Period 9.  Some schools had been cancelling attendance at pantomime shows due to Covid-19 concerns and this may affect income.
  • The managed vacancy savings profile budget was £295k with an actual saving of £381k.  The Council were £86k ahead of Target in Period 7 and this was reflected in the outturn forecast.
  • The current year-end forecast was a £260k overspend in addition to the £847 use of budgeted reserves for the year, this was looking to be mitigated.
  • £276k had been claimed back for DCLG compensation and this was included in the £260k overspend.
  • The Loughborough Special Account had a projected year end £12k underspend.
  • The Housing Revenue Account (HRA) had a net overspend of £53k primarily due to income losses.  However, this was mitigated by a salary underspend.

 

The Chair thanked the Head of Finance for including the Period Spend to date and making the figures clear.

 

 

RESOLVED to note the report

 

Reason

 

Members were satisfied with its reflection on the General Fund and HRA monitoring.

 


35.

DRAFT 2022/23 GENERAL FUND AND HRA BUDGETS pdf icon PDF 403 KB

A report of the Head of Finance advising members of the projected base budget position for 2022/23 including the savings and growth proposals put forward for the year and provide the basis for the budget consultation.

Minutes:

A report of the Head of Finance advising members of the projected base budget position for 2022/23 including the savings and growth proposals put forward for the year and provide the basis for the budget consultation was submitted (item 7 on the agenda).

 

Assisting with consideration of the report: Lead Member of Finance and Property Services, Strategic Director, Environmental and Corporate Services and Head of Financial Services.

 

Councillor Parton entered the meeting during the discussion of this item.

 

Summary, key points of discussion:

 

  • Savings of £1million had been generated in addition to the savings made in 2021/22. 
  • The budgets would depend on the Government Settlement and it was anticipated that more information on the settlement would be released on 13th December 2021.
  • There were projected balances of £4.5million at the end of 2022/23 with a commercial income of £886k included int the budget and £200k reserves to cover losses.
  • Difficulties faced included the New Homes Bonus being reduced from £3million to £1million in 2022/23 with a further loss of the remaining £1m income in 2023/24.  This and other factors create a major uncertainty in the total government funding that the Council may receive of £2.7million in 2022/23, with a further £1m reduction New Homes Bonus due in 2023/24. 
  • However, there was room for cautious optimism within the Spending Review 2021 outlined by the Chancellor in October and it was hoped that total government funding in 2022/23 would be similar to that of 2021/22.
  • Other issues which had impacted the budgets included the inflationary pressures which were £700k more than envisaged in the Medium-Term Financial Strategy (MTFS).  All major contracts were linked to inflation.
  • If the Government settlement was not what was expected, further measures would need to be taken.
  • It was assumed that £2.7m of funding would arise in some form based on funding received in the previous financial year.  Further to this it was hoped that the total precept income would be similar to the £17.6m figure as presented in the draft budget.
  • Regarding the savings to be determined of £500k, savings ideas had been discussed by officers, however, it was hoped that these would not be required.
  • It was necessary to ensure that the total use of reserves was below £500k, and it was considered that £224k would be a reasonable use of reserves, however, this would depend on the settlement.
  • In the context of a minimum working balance of £2m, the £4.563m working balance in the draft budget was considered reasonable.
  • The re-investment reserve and Capital Plan reserve were earmarked for spend-to-save.  Revenue reserves could be used to bolster the balance if needed.    Whilst there was no room for complacency, there was a reasonable level of reserves.
  • There was a risk surrounding the increase in garden waste collection charges due to the upcoming Environment Bill which was likely to be finalised in March 2022.  There had been lobbying to allow councils to charge for the service and it was thought that money could be raised through  ...  view the full minutes text for item 35.

36.

DRAFT CAPITAL PLAN 2022/23 TO 2024/25 pdf icon PDF 198 KB

A report of the Head of Financial Services considering the Draft Capital Plan 2022/23 to 2024/25 as well as possible sources of funding and to begin a period of consultation.

Minutes:

Considered a report of the Head of Financial Services considering the Draft Capital Plan 2022/23 to 2024/25 as well as possible sources of funding and to begin a period of consultation (item 8 on the agenda).

 

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

 

Summary, key points of discussion:

 

  • The plan spanned the next three years.  £3.54m had been identified for the Loughborough Town deal monies and £0.9m had been identified for the Shepshed Public Realm project. The total funding for the HRA was £23.3m.  Every scheme had been noted and every project had been allocated.  Plans that had been committed but not costed would be submitted for due process.
  • There was a new Capital Plan every two years for a three-year period, so the first year of the new plan was also the last year of the previous plan, so in order to get the context of the next financial year it was necessary to read both plans.  If money was not spent on the current plan it could be rolled over to future years and would end up with a merger Capital Plan for the ensuing three years.  The new plan had a limited set of proposals reflecting overall funding and most proposals concerned looking after existing assets.  The biggest item in the new plan concerned continuing funding for Disabled Facilities Grants (DFG), which was government funding within the General Fund.
  • It was noted that the cost of the Bedford Square project had increased, however, the scheme was also expanding in order to attract Town Deal funding.  This meant that additional Council funding was a relatively small amount.  It was added that the Bedford Square project had been based on quotes that were over one year old.
  • Regarding the Shepshed Bullring, a Senior Leadership Team meeting had taken place to discuss contingency.  There was a potential of feasibility work and costs could be revisited, producing different numbers to the plan, which members could then vote on if there was a significant change.  It was added that the £0.9m in the plan for Shepshed Public Realm was on top of 0.5m in the current plan, which made a total of £1.4m.  Current plans would roll forward.
  • Of the £6.3m of external funding, £3.5m was coming from the Loughborough Town Deal and £600k was coming from the Leicester and Leicestershire Local Enterprise Partnership (LLEP), the balance then came from the DFG.
  • Expenditure was profiled, and then funding was profiled to match it.  Projected receipts were based on profiling Right to Buy (RTB) receipts, and that Limehurst Depot was possibly also contained within the funding projections. 
  • There was no capital in new expenditure for commercial property.  The purchase of commercial properties and the reduction in the treasury would not have an impact on capital planning.  There was a new prudential code coming out that would contain new rules on borrowing.  As such, whilst it was not  ...  view the full minutes text for item 36.

37.

VIEWS ON THE SETTLEMENT pdf icon PDF 433 KB

A presentation of the Strategic Director; Environmental and Corporate Services providing information and comments on the settlement.

Minutes:

A presentation by the Strategic Director, Environmental and Corporate Services, outlining views on the settlement, was considered (item 9 on the agenda).

 

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

 

Summary, key points of discussion:

 

Bodies such as the Local Government Association and the District Councils Network as well as Pixel, a firm of consultants, had read the statement of the Chancellor of the Exchequer it order to predict what may be in the Government Settlement.

 

It was thought that the total amount going to the Local Government Sector would be increasing, and as such the Medium-Term Financial Strategy and the budget assumption of having a similar amount of money to previous years was seen as realistic, although there was still a distribution risk.

 

Government discussion of real terms increases in Local Government Funding assumed that Councils would maximise Council Tax increases.  It was thought that the cap on increases would be 1.99% or £5, whichever was the larger figure, in line with previous years.

 

It had previously been thought that there was a good chance of a multi-year settlement, however, business rates were not being considered in the short-term so this may mean a single-year settlement.

 

It was hoped that more information would be released on 13th December 2021.

 

38.

POSSIBLE BUDGET SCRUTINY PANEL RECOMMENDATIONS

To consider any recommendations the Panel may wish to propose for inclusion in the draft report to be considered at its next meeting;

 

or to agree a process by which recommendations will be proposed for inclusion in the draft report before the next meeting.

Minutes:

Considered any recommendations the Panel wished to propose for inclusion in the draft report and to agree a process by which recommendations would be proposed for inclusion in the draft report before the next meeting (item 10 on the agenda).

 

The Chair noted that no recommendations had been drawn up at this point.

 

The Strategic Director suggested that the relevant Heads of Service be invited to the next meeting if Panel members had any specific areas they wished to look at.  However, any invitations would need to be issued within a very short time period given that the final meeting of the Panel is effectively to endorse the final recommendations.

 

RESOLVED

 

1. that Panel Members forward proposed recommendations and observations to the Chair in a timely manner via email.

 

2. that a draft of the agreed Panel report is made available for publication with the agenda for the consideration of the report at its meeting on 5th January 2022.

 

Reasons

 

1-2 to enable proposed recommendations and observations to be agreed by Panel members and to ensure that the Panel report reviewed at its meeting on 5th January 2022 requires minimal amendment before submission to the Scrutiny Commission at its meeting on 10th January 2022.