Agenda item

To enable the Cabinet to consider the recommendations made by the Resources and Services Overview & Scrutiny Committee following that Committee’s scrutiny of the Updated Financial Forecast/Budget Proposals 2022/23 and Housing Revenue Account Budget Proposals 2022/2023.

RESOLVED that the recommendations made by the Resources and Services Overview & Scrutiny Committee be noted and that the responses of the Corporate Finance & Governance Portfolio Holder thereto be endorsed.

Cabinet was aware that, at its meeting held on 12 January 2022 (Minute 50 referred), the Resources and Services Overview & Scrutiny Committee (“the Committee”), in accordance with the requirements of the Budget & Policy Framework Procedure Rules, had undertaken an enquiry into:-

 

(1)    the updated financial forecast and proposed budget position for 2022/23; and

 

(2)    the Housing Revenue Account (HRA) Budget for 2022/23 including the movement in HRA Balances, the level of fees and charges for 2021/22 and the HRA Capital Programme.

 

This enquiry had considered the above in the light of the Council’s Medium Term Financial Strategy and its Treasury Strategy.  

 

The Committee’s enquiry had been assisted by the Leader of the Council and by individual Cabinet Members who had also outlined the Cabinet’s initial highlight priority actions for 2022/23 and the synergy of those with the proposed Budget for 2022/23.  A number of officers had also supported the enquiry.

 

The enquiry had been conducted through a private evidence gathering stage on 5 January 2022 followed by a public meeting during the day of 12 January 2022.

 

After a detailed discussion the Committee had RECOMMENDED to Cabinet:-

 

“In respect of the financial forecast and proposed General Fund budget position for 2022/23

 

1.      That the issue of the level of carry forward amounts each year, as highlighted several times by the external auditors in their annual audit letters to the Council in recent years, be addressed urgently by the Cabinet.

 

2.      That the intentions for developing a Corporate Investment Plan in order to establish a process for considering proposals for investment against the Corporate Plan Priorities and developing a prioritisation framework for investment over the coming year and into the medium term be welcomed and:

 

a.      That the schemes set out in the current reserves, provisions and one-off sums be reassessed as part of that Corporate Investment Plan process in order to avoid sums of money being allocated for schemes that are no longer to be pursued and thereby hampering investment in schemes that can deliver real benefit to the District;

 

b.      That, further to (a) above, the approvals to establish a reserve for a Residents Free Parking Scheme (£221K in reserves) and to allocate funds for a Clacton Town Centre Fountain (£159K as a one-off sum) be reversed immediately (as they are not required/being pursued) and the sums reallocated to fund the posts of 6 Community Ambassadors, 4 Street Rangers and 1 Technical/Administration (at a total cost of £352K) for 2022/23 with the remaining £28K from the released funds being ring-fenced to support training, equipment and supplies costs associated with those posts in 2022/23.

 

c.      That the Plan should identify a range of seafront enhancements, developed in conjunction with seaside communities (including where relevant Town/Parish Councils) on the basis that these are funded by an expansion of beach huts in those communities.

 

d.      That the Plan should deliver on the intentions of the Public Conveniences Strategy by improvements in those continuing facilities (particularly in view of the saving of £72,200 from the Government’s backdating of business rate relief to the start of 2020/21 and the absence of business rates on those facilities since the Strategy was adopted).

 

e.      That the Plan clearly identifies how it will integrate with the priorities for investment through funding secured through the Community Infrastructure Levy (CIL) and the monitoring of the investment through that funding route.

 

3.      That progress with the procurement of the new cremators for the Weeley crematorium and the significant loss of income in 2021/22 and 2023 while the cremators are out of action, be monitored, very closely, and councillors and the public be kept informed about the process.

 

4.      That internal procurement processes be re-examined with a view to strengthen those processes and addressing the risk of failure by companies who are major suppliers to the Council (given recent example of the company maintaining the cremators and other examples in recent years).

 

5.      That the planned events for the platinum Jubilee and associated funding for them, be approved as a matter of urgency.

 

6.      That the problem of littering along the A120 be highlighted and the Council pursues with Essex County Council and Highways England, frequent cleaning of the road, and verges next to it, with waste bins that are suitable for the level of use be installed and maintained in the laybys between Ardleigh Crown and Harwich, so that this major route through the District is kept clean.

 

In respect of the Housing Revenue Account 2022/23

 

1.      That, in respect of the Housing Revenue Account, stretch targets be introduced for void levels given the impact on the budget in lost rental income and Council Tax (including the proposed surcharge for empty homes being introduced for 2022/23) and the demand for housing that could be met by bringing void homes back into rental.

 

2.      That the Council commences setting aside funds to meet the costs that will arise from the housing stock condition survey (albeit that the full extent of those sums is not yet known).

 

In respect of the proposed highlight priorities for 2022/23

 

1.      That the Cabinet reassess its highlight priorities for 2022/23 and include in them, with appropriate budget and milestones or otherwise implement the following:

 

a.    Progress with the various steps that will be part of the Stock Condition Survey to be undertaken in 2022/23 – in view of the important role the Council has as a major local landlord and the need to prepare for the implications of the Hackett review and revisions to the Decent Homes Standard.

b.    Delivery of key elements of the emerging Sports and Leisure Strategy – given the need to take forward the range of actions to improve activity levels notjust among those who are currently not active but also among those who are moderately active and across all parts of the District. 

c.    As part of the growing and Inclusive Economy Theme, Tourism Officers/ events proposed priority, include measures to increase the numbers and extend the percentage of visitors to the area that can (and do) stay overnight and thereby increase dramatically the spend locally by visitors.

d.    In respect of the proposed priority of carbon reduction/climate action:

i.     as and when initiatives are brought forward, details should be provided as to how the relevant carbon reduction measures affect the Council and its partners financially (and is there a consequence for job numbers/skills of the individual measures).

ii.     the proposals for Electric Vehicle charging points across the District be worked up and the consequential budgetary issues for the Council be established and shared widely.”

 

The Cabinet had before it the responses of the Corporate Finance & Governance Portfolio Holder thereto as follows:-

 

“Firstly, I would like to thank the Committee for the really positive and constructive approach they took to the scrutiny of the budgets. There was some challenging questions along with some really helpful discussions that support the development of the budgets. 

 

In terms of the issues raised by the Committee, comments are set out as follows taking each point in turn:

 

In respect of the financial forecast and proposed General Fund budget position for 2022/23

 

1&2) As mentioned directly at the Committee’s meeting, this will form part of the emerging Corporate Investment Plan, which in turn will be supported by an existing budget to provide increased capacity in the right places to deliver against the Council’s ambitious agenda. Although the Corporate Investment Plan will be a ‘live’ and on-going process, the first phase is planned to be presented to Cabinet in February.

 

a.      The Committee’s support for the Corporate Investment Plan is welcomed and I can confirm that it will take into account the current level of reserves and one-off amounts as highlighted by the Committee. In terms of the Committee’s proposals for what the plan should include, additional comments against each further point raised are as follows:

 

b.    The Resident’s Free Parking Reserve referred to by the Committee is no longer available as this was committed to the current cliff stabilisation works along Clacton and Holland that was agreed by Cabinet back in March 2021. However, the one-off funding for the posts referred to by the Committee has been identified within the overall GF budget presented later on the agenda.

 

c.    This commitment is already set out within the Council’s Tourism Strategy and would therefore naturally form part of the Corporate Investment Plan approach going forward.

 

d.    As an existing strategy, actions to enhance / improve public conveniences would naturally form part of the Corporate Investment Plan. Funding would need to be considered within the Council’s wider financial position as the business rates relief referred to has already been built into the base budget as part of delivering a sustainable budget and forecast going forward.

 

e. Although subject to a future decision, a Corporate Investment Plan would be expected to be an important and overlapping element of a Community Infrastructure Levy approach and would therefore be developed on that basis.

 

3)       Agreed, and as set out within the GF budget report later on in the agenda, the cost of the cremators is expected to be lower than initially expected which can provide a financial ‘offset’ against the loss of income.

 

4)       This echoes the similar comment that was raised when the Council’s housing maintenance provider fell into administration several years ago. It was highlighted at the time that existing procurement processes do address this issue through a number of checks, such as the economic / financial standing of potential contractors, but it was recognised that it is impossible to completely remove this risk. However, as part of the new collaborative procurement arrangements with ECC, the issue will be revisited to identify if there are any changes that can be made to existing processes that add additional resilience against this risk.

 

5)       This will from part of the Corporate Investment Plan mentioned above, that is planned to be presented to Cabinet in February.

 

6)       The matter highlighted by the Committee will be raised with ECC [Essex County Council].

 

In respect of the Housing Revenue Account 2022/23

 

1)     As previously highlighted, it is good to see void rates returning to more historic levels following a number of interventions and managed responses. In terms of a stretched target, we aim to reduce void rates to a minimum whilst recognising the need to undertake remedial work etc. before properties are relet. With that in mind, it would not necessarily be right to work towards an absolute target but more about keep driving the number down to a level that is both achievable and sustainable as measured against the current historic level of 2%.

 

2)     As set out later on in the agenda, the HRA surplus for 2022/23 of £0.333m has been set aside within the capital programme to support the investment in existing tenant’s homes, which will reflect the outcome of the proposed stock condition survey.

 

In respect of the proposed highlight priorities for 2022/23

 

I want to welcome the feedback from the Committee on the initial proposals for highlight priorities from 1 April 2022 and thank them for the time taken to consider those initial proposals.  The feedback will be considered by Cabinet on 25 February alongside feedback from the Community Leadership Overview and Scrutiny Committee and the submitted views from the public and partners.  I am aware that we have had over 160 responses to the online survey on this subject. It is only right and proper that we look at priorities to highlight for 2022/23 on 25 February having considered all those responses and the feedback from the two Overview and Scrutiny Committees.”

 

Having considered the recommendations of the Resources and Services Overview & Scrutiny Committee, together with the responses of the Corporate Finance & Governance Portfolio Holder thereto:-

 

It was moved by Councillor Stock OBE, seconded by Councillor P B Honeywood and:-

RESOLVED that the recommendations made by the Resources and Services Overview & Scrutiny Committee be noted and that the responses of the Corporate Finance & Governance Portfolio Holder thereto be endorsed.