Agenda item

For Scrutiny Committee to consider the report of the Head of Finance on Budget Setting 2024/25, and make any recommendations to Cabinet (report to follow).

The Cabinet member for Finance introduced the report, supported by the Council Leader and Head of Finance. He explained this was a continuity budget and was to maintain services, not cut them. Leader mentioned the corporate plan and financial sustainability – the finances were built on the current corporate plan (there will be a way to update this with the new corporate plan). The bottom line was that the deficit was halved compared to the previous iteration Medium Term Financial Plan (MTFP), so the transformation work had led to a more sustainable position.

·       Additional waste costs: page 20 Appendix A2. £200k of additional costs? Also Appendix A4? It was responded that in A2, figures were removed for previous one-off support for waste contract work, then brought back into Appendix A4, because officer support was needed/brought back in for the next stages of contract negotiation/retendering. Row 24 was an inflationary increase in contract costs. It was the Council’s biggest and most public-facing service, so the figures were relative to the size of the service and was appropriate for the tendering exercise. It was noted by the Leader that retendering was delayed by two years due to uncertainty from central government on what was expected from councils for waste collection services.

·       Homelessness – referring to item 12 on page 29, and page 37 on homelessness prevention. Do we consider this figure to be enough? Cabinet member for Finance explained it was government funding not our own budget. Cabinet member for Community Wellbeing provided detail - we were currently unsure of future funding, it may rise but this was unknown, there were pressures as some councils were close to bankruptcy due to rising demand of temporary accommodation. We do get some money back from temporary accommodation costs, but the gap was getting wider between what it costs and what we get back.

·       Appendix A2 line 30, a member wanted to understand costs regarding the community hub, activity grants and corporate plan staffing. Cabinet member explained that this was for 2025/26 onwards, community hub was becoming permanent and was in the budget as ‘business as usual’ and part of the overall revenue budget. Regarding Didcot Community Centres, a member suggested that centres could be part of community provision and which could help to raise income.

·       Talked about transition savings – a member asked for examples: transformation programme was becoming permanent to invest in making savings and efficiencies. Examples given included IT efficiencies, and the office move away from Milton Park saved money. A study into Cornerstone can save money in the long-term by investigating how to improve its financial situation. Recruitment of a grant applications officer has been a big boost to securing funds.

·       A member asked about contributions to the pension fund with Oxfordshire County Council (OCC) as investment. Officer responded that £5 million was invested twice in the past, such investment was evaluated twice recently and wasn’t showing as a good investment this time around, but can still be reevaluated in future.

·       Discussion about the Gateway site and the office building. Cabinet member and officer explained that if approved, the building would make money from rental income as well. The current view showed when money on the project was expected to be spent. Use of our own funds and potential borrowing costs for this project were considered in the MTFP. It was unknown currently, but the options had been considered in the budget.

·       Future Oxfordshire Partnership (FOP) £100k per year for our own support staff. A member raised that there was concern about duplication of work from those who were involved in the Partnership and sub-groups, and whether we should spend this. How do we ensure their accountability? Council Leader explained core work of FOP was covered but there was more officer work supporting sub committees or advisory groups. For example, senior officer support for members regarding the paperwork that was generated for reviewing on these advisory groups. Some of this work was viewed as very helpful and was commissioned at a larger scale (FOP partners) to enable access to a higher level of research. We needed to manage the work done and whether it was value for money. It was important that the costs were highlighted.

·       A member asked to see the detail of reserves - what amounts were reserved and for what purpose, and how they were held. Cabinet member referred to page 43. Officer added that there were three specific reserves lines – general fund balance, then earmarked reserves (of revenue in nature), then capital receipts, which was the existing balance. The member used the example of a skatepark, and the officer explained that this was infrastructure so would be capital in nature, possibly the member could ask the Community Infrastructure Levy (CIL) team/working group on specific project suggestions. Member then asked how do we choose our reserve policy? Officer explained that £50 million was ringfenced, the balance was keeping things going with interest raised for supporting running services. Considered that this was a future discussion, post new corporate plan. This budget was based in current policy.

·       Page 39 drainage works – item 10, a member asked were we sure the £36k for drainage was scoped correctly? Then referred to £102k for a pumping station – the member asked whether we can put these together to make savings by purchasing together? Cabinet member mentioned that the drainage item was originally CIL but dropped out because it was no longer eligible, so it now appears here. Details of schemes was operational information and not part of the budget. Cabinet member would further reply in writing.

·       A member discussed whether transformation projects could bring forward the in-year savings and the impact of contract renewal. Cabinet member explained that those contract costs were unknown, but the assumption in the MTFP was to take the costs as they were now and any known costs.

·       National infrastructure project – what was this?  It was confirmed as EV charging.

·       Contracts  - how had assumptions been factored? Cabinet member referred to paragraph 57 for contract renewals. Five Councils Partnership (5CP) costs were well understood but there were transition costs factored in. The car park operator, waste and leisure services were the other contracts. Officer confirmed that the waste contract extension had been built in. The working assumption was it costed the same, but the real number will be dealt with when known and there was no guarantee that the cost would rise as normally assumed.

·       Business rates consultants were being kept, to continue the work completed so far and this was acknowledged as a good decision, leading on from the previous success of claiming additional business rates. This was highlighted as excellent work by a committee member for the income brought in.

·       A member questioned whether there was savings in housing benefit? Officer explained it was not a saving, this was a correction to an estimate made previously.

·       Appendix D2 regarding cemetery refurbishment – a member asked do we get revenue for refurbishments? The member questioned why this was only for two cemeteries. Cabinet members explained that the sites listed were in use hence the refurbishment was needed. Burial costs may help the cemeteries to break even. Historical arrangements were involved, and we had asked those two councils about changing this, and they’ve not wanted to change the current arrangement. It was mentioned that there was cost related to poor access roads at those sites as well.

·       Covid scheme had been fully refunded. Homes for Ukraine scheme was fully funded externally. A member asked was there an audit trail? Cabinet member for Community Wellbeing replied that detailed reports were made and can be sent to members. Deputy Chief Executive (Transformation/operations) explained that for some cohorts we make returns to County Council (OCC), for them to report to central government. Other cohorts, we as a district report into central government.

·       Business rates schemes – reconciliation process for every scheme. They used a reimbursement formula for council staff time.

·       A member suggested there was a tension with the corporate plan and declaration of a climate and ecological emergency and that we need to be explicit in our choices of where we deposit money. How will that progress through the budget setting / treasury management processes? Officer explained that the treasury management strategy gave options for putting money to best use, including ESG (environmental, social, governance) strategy. We’ve committed to reviewing current investment as well.

·       Additional Head of Service? This was confirmed as being for Communities. Confirmed that the Community Hub was now a permanent fixture.

·       Page 32 Corporate plan priorities - capital expenditure by theme. A member felt that the range was large from £11.7m for theme 5 down to £112k for theme 1 and zero for theme 2. Cabinet member explained it was a new view and hoped it was helpful. Heads of Service were asked to identify key spends per theme (although some spends could cover multiple themes). It was considered a helpful indicator however and subject to refinement. Leader explained it was just for capital spend – ‘protect and restore the natural world’ theme would spend more on revenue. Revenue had not been split in the same way.

Recommendation:

Scrutiny Committee considered the report of the Head of Finance on the revenue budget 2024/25 and capital programme 2024/25 to 2028/29 and made comments as stated above, for the relevant Cabinet members to consider and respond to.

Chair thanked the officers and Cabinet members involved.