For scrutiny committee to consider the report of the Head of Finance and make any recommendations to Cabinet (papers to follow).
The chair opened this item by thanking officers and the cabinet members for their work, including the briefings that had been held. He reminded committee that they should refrain from discussing items that were previously discussed in confidential meetings. If so, discussions would need to go to a confidential session if seen as necessary. The aim was to consider as much as possible in public. If any amends to the report were requested, this will be implemented before Cabinet review in a meeting being held tomorrow (if necessary).
The report brought together all relevant information to allow Cabinet to recommend to Council a revenue budget for 2022/23 and a capital programme for 2022/23 to 2026/27 and recommended the prudential indicators to be set by the council in accordance with ‘the Prudential Code’ introduced as part of the Local Government Act 2003. It contained the opinion of the council’s chief financial officer on the robustness of estimates and adequacy of the council’s financial reserves. It also contained the Medium-Term Financial Plan (MTFP) which provided details of the forward budget model for the next five years.
Cabinet member for finance introduced the report. Below are his key points:
· Principles and method of approach, in line with the Corporate Plan priority of financial sustainability, were discussed with officers and cabinet members. The finance team was now in-house, and they went through a forensic and detailed budget review process, and the Cabinet member thanked them for their work.
· Base budget savings had been achieved without reducing key services to residents but delivering them more efficiently instead. For example, work on a joint local plan, returning to in-house to make service savings, reduction of office rent.
· Thorough review of fees and charges.
· SODC was a low-cost operator but loses money on band D properties after council tax. We had not benefitted from the business rates retention scheme, but had benefitted from New Homes Bonus, but this may reduce due to government review.
· There was projected unsustainable use of reserves in 2021, so in 2022-23 the thorough base budget review has sought a more managed use of reserves. This had resulted in an improved revenue deficit than previously forecasted, as per the agreed approach with Cabinet.
· Transformation activities were central to tackling the budget gap. Provision given to Corporate Plan priorities and no cuts to services.
· There was a £5 increase to council tax for a Band D property, the maximum allowed under draft referendum rules.
· There was a lack of clarity from central government over the medium-term fair funding framework, and the current settlement is for one year only.
Committee asked questions of the Cabinet member. Chair then read out the proposed recommendations before the committee moved onto debate.
· A committee member suggested asking Cabinet for clarity on expectations for the capital receipts from the sale of Crowmarsh, during the years of the MTFP. Cabinet member responded that without a process in place, figures could not be reliably added to the MTFP, it was too early to say. An option list was going to be reviewed at Cabinet, for Crowmarsh.
· Some questions asked about the new office build costs. Cabinet member Cllr Rouane reminded that a financial envelope had been put forward but it hadn’t gone out to tender and so the final cost was not known. Cabinet member reminded that there was legal obligation to achieve best value.
South scrutiny committee note the report on Revenue Budget 2022/23 and Capital Programme to 2026/27 and agree that the recommendations on this report be left as they are for debate at full Council.