Issue - meetings

RECOMMENDATIONS:

That:

1.    It is recommended that scrutiny committee comment on the proposals within the attached cabinet report, which can then be considered by cabinet prior to its meeting in February 2024.

2.    It is noted that the committee will be presented with an updated General Fund Budget report at its meeting on the 6th February 2024 prior to Cabinet on the 8th February 2024 and Full Council on the 22nd February 2024.

Councillor Cutler, Deputy Leader and Cabinet Member for Finance & Performance introduced the report, ref CAB3430 which set out proposals concerning the General Fund Budget Options & Medium-Term Financial Strategy (available here). The introduction included the following points.

1.    The public sector faced significant financial challenges and demand pressures, with many upper-tier and unitary authorities warning that they might have to issue section 114 notices in the near future. Moreover, 52% of district councils were warning that they would have to utilise reserves to produce a balanced budget. The City Council's immediate financial position until 2026 was sound and stable, outlined in a strategy to manage limited financial resources to protect the core Council service.

2.    However, the medium-term Financial Plan in Appendix 1 showed a projected annual budget shortfall of £3.4 million per annum, increasing to £5.7 million in 2029.

3.    There was an increased deficit over the medium-term financial strategy published last year. The gap reported primarily resulted from new responsibilities placed on district councils, particularly focusing on significantly increasing recycling rates.

4.    There was a window of opportunity to steer the Council towards financial sustainability in the future, and robust measures were being put in place to address medium-term budget challenges.

5.    The paper outlined some aspects of TC25, an organisation-wide transformation program aimed at delivering changes and achieving £3.5 million in savings within three years. The aim was to transform services to save money, digitise, and reduce the carbon impact of service delivery. Efforts were being made to make services more accessible, simplifying online access while enabling the majority of customers to access services as required.

6.    Investments were planned to digitise and modernise services, alongside allocating additional funding to address unavoidable budget pressures like providing temporary accommodation.

7.    The paper also detailed assumptions concerning service income budgets, emerging capital budgets, and the adequacy of reserves.

The committee was recommended to comment on the proposals within the attached report, ref CAB3430 which had been considered by the cabinet at its meeting on 21 November 2023. Comments and any resolution of the committee would be tabled at the Cabinet Member Decision Day on the 4^th of December 2023.

The report contained several recommendations, which covered a range of issues including the following:

1.    To note the assumptions outlined in Section 13 of the report and the projections detailed in Appendix A.

2.    To approve the Medium-Term Financial Strategy in Sections 13 to 17 of the report.

3.    To approve the preparation of a detailed budget to present to the Council in February 2024. This budget would be based on the assumptions from the Medium-Term Financial Strategy, final spending review announcements, and specific options including financial allocations for carbon reduction, digital transformation, service funding adjustments, Council Tax increase, and reserve establishment.

4.    To approve an inflationary increase in the Waste Collection contract cost, necessitating a corresponding CPI rate increase to Garden Waste subscriptions from March 2024 onwards, resulting in charges rising to £45 for small bins and  ...  view the full minutes text for item 7

1.       That the assumptions set out in section 13 of report CAB3430 and the projections set out in Appendix A of the report be noted.

2.       That the Medium-Term Financial Strategy be approved as set out in sections 13 to 17 of the report. 

3.       That a detailed budget be prepared for consideration by Council in February 2024 based on the assumptions set out in this MTFS; final spending review announcements; and including the following options:

a.  That, in relation to Greener Faster and carbon reduction priorities:

                    i.     £200,000 per annum be included for the carbon reduction measures on waste and recycling vehicles to enable the change to HVO fuel (as set out in paragraph 15.2 of the report).

                   ii.     £1,400,000 per annum (less assumed 80% government funding) be included to expand recycling services to include food waste collections (as set out in paragraph 15.2 of the report).

                 iii.     £400,000 per annum be included to implement other changes to the collection of recyclables (as set out in paragraph 15.2 of the report).

                 iv.     £500,000 be reduced in the annual waste income budget to reflect proposed changes to the Hampshire Inter Authority Agreement on waste (as set out in paragraph 15.2 of the report).

b.  That, in relation to the council’s TC25 digital transformation programme:

                    i.     £100,000 per annum be included for the support and coordination of digital channel shift work across the council’s services.

c.  That, in relation to services:

                    i.     An additional £100,000 per annum be included to fund the increased external audit fees.

                   ii.     NNDR budgets be reduced by £177,000 per annum to reflect the reduced liability on corporate properties.

                 iii.     An additional £20,000 per annum be included to fund the increased costs of temporary accommodation.

d.  That, in relation to service income annual budgets, amendments be made as follows, in response to revised estimates (see also paragraph 15.3 of the report):

                    i.     Building control fees reduced by £100,000

                   ii.     Land charges income reduced by £100,000

                 iii.     Legal services reduced by £50,000

                 iv.     Pest control reduced by £50,000

                  v.     Garden waste service income increased by £90,000

                 vi.     Car parking income increased by £100,000

e.  That Council Tax will increase in line with the Government referendum limits (currently a maximum of 2.99% for a Band D property).

f.    That the annual contribution to the IT reserve be increased by £100k to support critical infrastructure and the digitalisation theme of the transformation programme.

g.  That a Future of Waste and Recycling reserve of £1m is established (using funds from the Major Investment Reserve) to support the implementation of the new recycling offer for residents.

4.       Due to the inflationary increase in the Waste Collection contract cost, approve a corresponding September 2023 CPI rate increase to Garden Waste subscriptions with effect from March 2024, resulting in charges increasing to £45 for small bins and £69 for large bins (but maintaining the concessionary price at £29).

Councillor Cutler introduced the report including outlining TC25, the council’s organisation-wide transformation programme to seek out and to deliver transformational changes to the way services are provided to save £3m a year within 3 years.

At the invitation of the Leader, Councillors Wallace and Godfrey addressed Cabinet as summarised briefly below.

Councillor Wallace

He believed it would have been preferable if the report had been considered by the Scrutiny Committee prior to Cabinet.  He also highlighted the lack of inclusion of the council’s nature emergency declaration despite the commitment to include consideration in all future plans.  He asked the following questions: a) whether it was still the intention for the garden waste collection service to be cost neutral; b) queried the apparent proposal to freeze car parking charges; c) requested a more detailed analysis of projected waste collection costs; d) requested evidence of the ability of the TC25 programme to deliver the significant savings required.

Councillor Godfrey

He did not have confidence that the proposals currently available within the TC25 programme would be sufficient to address the predicted budget deficit and asked when councillors would be supplied with more information regarding the programme?  He believed it would be unwise to rely on increased government grants to address the budget deficit.  He considered that there appeared to be a focus on increasing council reserves rather than seeking new sources of income. He welcomed the action to reduce business rate spending on empty buildings but considered much more needed to be done to address the budget situation.

Councillors Cutler and Tod responded to the points raised above, including emphasising that this report was a part of the budget process and that both Scrutiny Committee and then Cabinet would consider the final budget proposals prior to submission to Council in February 2024. 

Cabinet agreed to the following for the reasons set out in the report and outlined above.

RESOLVED:

1.       That the assumptions set out in section 13 of the report and the projections set out in Appendix A of the report be noted.

2.       That the Medium-Term Financial Strategy be approved as set out in sections 13 to 17 of the report. 

3.       That a detailed budget be prepared for consideration by Council in February 2024 based on the assumptions set out in this MTFS; final spending review announcements; and including the following options:

a.  That, in relation to Greener Faster and carbon reduction priorities:

                    i.     £200,000 per annum be included for the carbon reduction measures on waste and recycling vehicles to enable the change to HVO fuel (as set out in paragraph 15.2 of the report).

                   ii.     £1,400,000 per annum (less assumed 80% government funding) be included to expand recycling services to include food waste collections (as set out in paragraph 15.2 of the report).

                 iii.     £400,000 per annum be included to implement other changes to the collection of recyclables (as set out in paragraph 15.2 of the report).

                 iv.     £500,000 be reduced in the annual waste income budget to  ...  view the full minutes text for item 8