Agenda item

Finance Task and Finish Group Update

This Paper is ‘to follow’ and will be published after Members have considered the ‘Medium Term Financial Plan and Capital Strategy’ Cabinet Report that will be published on 25.10.21.

Minutes:

The Finance Task Group’s draft for submission to the 2nd November 2021, Cabinet Meeting; Agenda Item 10. Medium Term Financial Plan/Capital Strategy had been published for Members to comment on at this meeting before it was submitted.  

The Chair clarified that the Task Group was a cross-party group of Members and that if the Commission agreed the report contents and any amendments it would be submitted to Cabinet the following day.

A Member said they thought the report was comprehensive and endorsed the comment on commercialisation although he wasn’t sure if commercialisation was the right word to use.  As council budgets are very stretched and this is about improving services his view was that this should still be on the Council’s agenda and it was his view that this could be expressed in an even stronger way.

The Chair agreed and said that the Council sometimes didn’t know how much it cost to provide a service and whether what it charges residents was value for money.  He said that the previous Member Working Group had looked at case studies where officers didn’t have the full information.  It was also possible for the Commission to include commercial service delivery on their Work Programme if required. 

The above Member suggested the Commission could offer support in looking at how this can be revised and reviewed and agreed that it was about improving service delivery and not always about how much was charged or savings that could be made.

The Chair agreed and suggested the report should refer to ‘alternative service delivery’.

Further questions and points raised by Members were as follows:

  • Was there an increase in the Councils reserves from current 9% to 10% next year?
    • Officers said no this was a misunderstanding of the figures and that the additionality being referred to was earmarked for specific new investments, project support or services if they were taken forward as they would require some initial investment.

 

  • Could the Council still afford its statutory responsibilities and could the earmarked reserves be released? 
    • Officers said the Council must have reserves and not all of those outlined are useable. The final proposals will come through as part of budget process. The figures give an indication of the emerging pressures and what is required to set a balanced budget and ensure sustainability. Reserves must not fall below a level required to meet our liabilities or like any business we would in effect be bankrupt. The MTFP at this point shows what funding is required to meet these pressures and the budget process will identify what is affordable.

 

  • Which earmarked reserves are being increased and was this the £5m increase? Reserves are to cover potential risk and are set aside for projects that have been identified.  But how is the decision taken to provide earmarked reserves and when?
    • Officers said there wasn’t a detailed breakdown in the meeting paper. But the Capital Strategy states there should be a feasibility fund (revenue source) prior to an approved business case for Capital and the other example given was the Councils Transformation Programme. Decisions will be taken in the budget.

 

  • A Member asked about the feasibility funding and if it is used and then funding is found, was it then reimbursed?
    • If the project went into Capital Programme then there would be option to reimburse yes.

 

  • Another Member commented that the process sounded like the basis of a revolving loan fund. I.e., money gets put in, saved and then you can put back into a programme. It was understandable not all funding will be returned. But not maintaining assets meant the Council was always looking for ways to replace the funding. He said he was raising this with Cabinet. He also added that the Council could be separately reporting carbon reduction budgets, saying that they interact but are not always well connected. Other local authorities have done the modelling and assessment.

The Director of Finance said that this is difficult to achieve but if the Member could point them in direction of local authorities that have done this, they could review them.

  • Some councils were said to imbedding this into their budgets but the Local Government Information Unit (LGIU) was said to be supporting this way of working and have the necessary information.

 

  • The Chair concurred that with regards to climate related issues and mitigating the effects of the climate emergency, he had no knowledge of what percentages of projects fell into that category.  He had not expected this information to emerge straight away but highlighted the importance of understanding how projects fall into those categories.

Officers said that with regards to the Capital Strategy, governance processes were being enhanced.  There was a potential development pool for approved capital projects but prior to this more work will be done at an earlier mandate stage to look at potential funding streams and risks etc. The Feasibility Fund will be utilised for this so that risks such as carbon footprints are much better understood and before decisions are made by Cabinet.

The Chair said it would be useful to have an idea of what percentage of projects falls into those categories and would be good to get some additional understanding and an indicative figure.

Officers said this was an evolving piece of work and once concluded could seek to present this information going forwards.

The Chair asked the other Commission Members if, bar the amendment the wording on commercialisation, they were happy to submit the report to the Cabinet meeting? The Commission Members all agreed the contents of the report for submission.

The Chair said that Finance Officers had done an excellent job in presenting information to Members, and he wanted to convey his thanks to them.

The Vice-Chair of the Commission expressed their thanks to the Chair for drafting the report.

Resolved: that the Finance Task Group’s Report be submitted to the 2nd November Cabinet Meeting.

 

 

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