Agenda item

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

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 a different approach was necessary.

(ix)      Reference to the challenge of recent years in maintaining front line services and balancing the budget and the considerable work needed on transformation moving forward.  All suggestions to assist that were welcomed.

(x)       Question as to why the shortfall now stated had not been identified earlier and services remodelled such that the shortfall did not exist at this stage and an MTFS could be presented in which expenditure and income were equal and savings did not need to be found?  Reference also to the Council having been in the position of having a shortfall for several years.  In response, the MTFS was updated on an annual basis with continual changes in circumstances being contended with.  Last year’s MTFS had indicated a surplus in year 3 based on the information and circumstances at that time.  Significant changes since that time meant that the Council now dealing with a different scenario and that was being recognised in the draft MTFS 2020-23.  It was likely that the position would continue to change moving forward.  The Council had managed to build up reserves despite the challenging environment in which it had been operating over recent years and that had improved its current position and provided it with a period of time to make the changes now needed.

(xi)      Processes by which suggestions for savings or income generation were considered and taken forward were briefly outlined, that depended on the source and/or nature of the idea.                          

RESOLVED that the Panel’s consideration of the approach taken by the Council to budget setting, summarised above, be noted.

Reason

To acknowledge the Panel’s consideration of this matter as part of its budget scrutiny role.

The Cabinet Lead Member for Finance and Property Services was thanked for attending the meeting and assisting the Panel with its scrutiny work.