Agenda item

Medium Term Financial Strategy and Budget Proposals 2022/23

To consider the Medium Term Financial Strategy and Budget Proposals 2022/23.

Minutes:

The Chair said that although all the budget was important, he thought that given the circumstances of the budget reduction this would be the Committee’s focus in terms of how to proceed with the necessary cost cutting and revenue enhancement. 

 

Councillor Hargreaves presented the report and said he would concentrate on the General Fund and Council Tax, the MTFS for the next 5 years and matters that were discussed at the Investment Board which took place yesterday.

 

He said that the Commercial Strategy had been discussed at the Investment Board meeting and had provided an update on the Council’s investments along with the change of rules from the Government in December and how this would be dealt with. One area of risk that had not been included was the possibility of a debt cap from the government, who could mandate that a Council could not borrow over a certain amount.  He said that this risk was low, and the new rules were being followed, but this would be added to the main risk list document.

 

He said the Local Plan had a budget of £6.8m which had been set aside over a 5-year period.  He said that this budget already existed but had been brought together to make it clearer and to show how it would be spent over the years.

 

He said there were problems with Uttlesford Norse, this had been identified as a risk but did not present a financial risk.  He said that if money needed to be spent to resolve this problem it would come from the Housing revenue account.

 

The Chair asked if the 4.9% increase in rent offered value for money for the tenants considering there could be problems with service levels for repairs and maintenance.

 

Councillor Hargreaves said that he thought the increase did offer good value and had been agreed with the Tenants Forum.  He said that there was also the option of applying for Housing Benefit if residents were not able to afford their rent.

 

The Chair agreed to take this issue out of the meeting to discuss further.

 

Councillor Hargreaves continued with his presentation, he said that Council Tax would be rising by £5 a year which equated to an increase of 3.09%.  This would raise an extra £190,000.

 

He said it was a balanced budget with a small surplus of £346,000.

 

He highlighted the table on page 144, item 19 which was a comparison table showing the changes from last years Council Tax requirement 2021/22 to this years 2022/23.  He said the inescapable growth figure of £1.9m included costs for Little Canfield, increased agency costs for driver shortages, staff increases and transformation costs. The service growth figure included the S106 IT system for process control and a new system for monitoring IT system vulnerability. 

 

He said the fair funding and business rates reforms had not been carried out, and there was a further one-year extension of the New Homes Bonus with no legacy payments.

 

He said the MTFS showed in paragraph 7 how the Commercial Strategy had to be changed.  He said the Council would continue to develop the Chesterford Retail Park (CRP) with the option of buying the other part Stane Retail Park under the new rules. 

 

Finally, he highlighted the table on page 87 the General Fund 5 Year Summary and the deficit of £5.6m in 2026/27. He said that the intention would be to partly offset this by selling one of the commercial assets and using the profits for capital expenditure in order to bring the deficit amount down to £2.6m.

 

In response to Members questions the following responses were given: -

 

The Director of Finance and Corporate Services said that the pay award offer for 2021/22 had been turned down by the Union.  He said there was a process in place to try and resolve this and the 2022/23 award could not be finalised either.  He said there was money in the budget to cover this but thought it unwise to declare the percentage put aside at this point.

 

Councillor Hargreaves said that there was publicity on the website regarding the ward initiative, he suggested that the best way to publicise was locally. 

 

He said that out of 300 Councils there were only 10 Councils with investments of serious concern, but the new rules effected all Councils.

 

The Chief Executive said there was a modest driver vacancy challenge.  He said it was a tough market to recruit and there were agency drivers being used which cost more.  He said there were initiatives to train up drivers within the Council and there were currently 4 members of staff undergoing a programme of training.

 

Councillor Hargreaves said that he thought the finance department was effectively structured, but he appreciated that there were only a few senior members of Finance staff.  He said that the department was efficiently run but this did mean that there was a risk if something happened to one of the staff members.

 

The Chief Executive said that it was a very lean organisation which meant there was a challenge with resilience issues.  This was the same across all departments in the Council and he was aware of the problems it raised. 

 

Councillor Hargreaves said there was a plan to provide long term sustainability of the Council, but this was a work in progress, and he could not give any assurances or a definitive answer yet. 

 

He said he was not aware that an equality impact assessment had taken place in terms of the rise in rent charges but said that the rise had been reviewed with the Tenants Forum.  He said that he would investigate this further and would consider carrying out the relevant assessment.

 

Councillor Hargreaves said there were discussions at the Investment Board meeting on how to increase revenue.  He said it was difficult to raise much extra income through regular services, but car park charges could be an option, however this would be balanced along with the need of local businesses.  He said that the focus would be through the commercial investment side and the renting out of the London Road offices. 

 

He said the Council owned the land at Chesterford Retail Park which meant a higher rate of return could be achieved.

 

The Assistant Director – Resources said that there was a typing mistake on page 161, and the contract end date for North Essex Parking Partnership (NEPP) should be March 2022.  Other inconsistencies in the car parking data on page 50 which stated the income was assumed to be returning to normal levels and on page 145 and 153 stating a reduction in the budget would be investigated.  She said the uptake in car parks differed across the district, but she would provide a breakdown by e-mail to the Committee. 

 

The Chair thanked Councillor Hargreaves and the team on an enormous amount of work.  He said there needed to be urgency on taking the necessary steps to find the revenue enhancing and cost cutting measures required and asked for early visibility.  He suggested an update and progress report before the summer. 

 

He said that it was important that the burden should fall on those most able to bear it.  The Committee agreed to remit the report to Cabinet with appropriate comments.

 

AGREED: That the report be remitted to Cabinet with appropriate comments.

 

 

The meeting ended at 9.00pm.

 

 

 

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