Agenda item

The Commission has invited guests to address the meeting before considering key issues and discussing how to prepare for the upcoming budget proposal consultation.

·        Sue Halliwell, Chief Executive will set out strategic priorities in which the budget is framed. 

·        Councillor Heydon, Executive Member for Transformation and Finance will provide an introduction and context setting of the budget. 

·        Stuart McKellar, Executive director: Resources will provide an update on strategy and policy and budget monitoring as presented to the executive in October. (Please note, a presentation updating the current position will follow as this can’t be provided ahead of the Government announcement on 31 October.)

Evidence pack

·        Budget monitoring – 2022/23 End of Year projections from July 2022 actuals

·        Strategy and policy – Revenue budget update

·        Budget Planning and Monitoring - Cash Budget Book 2022-23

The commission invited Sue Halliwell, Chief Executive, Councillor Heydon, Executive Member for Transformation and Finance and Stuart McKellar, Executive Director: Resources to address the meeting and present the strategic context in which the budget was set.  The following points were made:

·        The challenging external financial context was highlighted, noting that the difficulty was being experienced by all local authorities at the current time.

·        The Council had strong and robust financial management processes in place which helped it maintain a strong financial position despite these pressures.

·        The final settlement would not be received until Christmas 2022 therefore time scales to prepare the budget would be tight for readjustment and recalculations to be made.

·        The Council were waiting for fair funding to be resolved which will give greater control for local authorities.

·        Approximately 70% of spend goes towards supporting residents.

·        A major item of expenditure was staff salaries with a two percent rise planned for, but the agreed four percent increase had resulted in an additional £2m cost.

·        An overspend of around £1.1 million was predicted which included drawing down £1.5 million from inflation reserves to meet the pay award.  This overspend was unusual for the Council and highlighted the pressures being faced.

·        Factors to consider in 2023 included changes to government policy.  Possible reforms to social care would have a significant financial cost.  It was hoped there would be further clarity around the issue within central government around levelling up.

·        It was anticipated that there would be an update on public spending on 17 November 2022.  It was anticipated that Local Government Finance settlement would be available before Christmas 2022.  It was predicted that it would be unlikely that there would be any changes around the fair funding review or business retention scheme.  Therefore, the Council were working on the assumptions that the grants would remain broadly similar.

·        An additional key factor in the budget was whether the Council would be given the ability to increase council tax by 2%.  

·        The council predicted a challenging £16.4m budget gap over the next few years.  Reserves in place helped manage a transition to a more sustainable position which enabled delivery the services to continue.

The following questions were asked:

·        A query was raised about the effect of increasing interest rates on reserves and whether a windfall from this could be used to help residents. The Executive Director: Resources, explained that the Council was not in a borrowing position.  Although higher interest rates were slightly favourable the impact had already been included in the financial monitoring and had helped to manage the position, ensuring the council was closer to balancing rather than significantly overspending.

·        A question was raised about whether vacancies were being left open to save budgets to which the Executive Director: Resources explained that there wasn’t a moratorium on filling posts.  However, managers were asked if there were alternative ways to share workloads within vacant posts.

·        A comment was made about a point in the budget monitoring report which stated there was ‘A reduction in supplies and services budgets following a review of services provided by external advisors.’  The query was whether the council had used external providers when looking at what cuts should be made.  It was explained that extensive treasury advisors were engaged.  They gave advice about the most appropriate places to go for borrowing and investment requirements as this was a technical market.   Savings highlighted that this engagement had been reduced, and only happened once a quarter.

·        Pressure relating to unbudgeted ICT project costs was questioned, specifically the process of migrating council servers into a cloud-based approach.  Budget was set up to manage the cost impact of this and it was noted that the money ran out at the end 21/22 financial year, but the work was not finished.

·        A comment was made about Heathlands and whether the income was affected by it being placed in special measures as people were no longer being referred there. It was explained that rather than income being affected impact was from spending on alternative placements that needed to be found.  Heathland’s market rate for placing people was significantly lower than alternative placements.

·        A point was raised around the impact on income that resulted from the increasing number of schools that became academies.  It was confirmed that this income was at risk and would be a factor of the 23/24 budget. 

·        A comment was made around high demand for local government services combined with austerity and concerns in relation to government financing.  Whilst residents were engaged as much as possible through consultation a point was raised that not many people fully understand the budget process so alternative and innovative ways to engage residents should have been sought.  This approach would have enabled the council to make informed decisions about the services that were provided locally and how these were paid for.  The question arising from this was, whilst there was a need to maintain a prudent budget with reserves should we have been working with other local authorities to urge a change to the system which enabled local government finance to be controlled by local councils.

·        In response to this query, it was acknowledged that the Local Government Association (LGA) were directly appealing to the government and lobbying on a cross party purpose, specifically in relation to changing their proposed policies to social care.  It was suggested that all members had the opportunity to lobby.

·        In response to a query around the staffing budget for educational psychologist and how many posts the £0.114m spend covered, Executive Director: Resources stated that he was hesitant to put an exact number against this but stated that it was fewer than 10. It was also added that there were a range of pressures on SEND including staff.

·        Clarification was sought around savings from the new transport model.  It was explained that income was generated by charging developers for use of the software which assessed the traffic impact of planning applications.  Action:  Councillor Turrell and Executive Director: Place, Planning & Regeneration to expand on this.

·        Concern was raised about reduced management at a child development centre which was shown as a post deleted.  This was explained as being a delivery of the savings that were identified and approved as part of the 2022-2023 budget setting and the document being referred to tracked delivery of agreed savings.

·        A comment was made that service level agreements with schools needed to be tracked to ensure they didn’t become non-viable and run at a loss due to a lack of people subscribed to them.  It was agreed that there were risks these services could run at a loss and there would be pressures on the 23/24 budget due to the increasing number of academy conversions.

·        Concern was raised about how schools with a deficit budget were monitored.  It was confirmed that this was closely monitored through regular reports that went to the school’s forum, with detailed information on budgets and tracking of reserves held.

·        A query was raised around the allowance for inflation being 7.5% despite the news stating it could be 10.1% or more.  This was addressed by the Executive Director: Resources who explained that a worked assumption of 7.5% would consider pay prices and income.  In response to a question of whether the Council could afford to add more to inflation, it was noted that significant pressure needed to be seen in the context of other budget proposals.

·        A query was raised about the pressure of energy costs, specifically in relation to sports centres and if this would be a problem.  It was explained that Bracknell Forest participated in a national framework, bought into by the leisure board, which forward purchased energy to significantly lower costs.

·        The transformation programme came under scrutiny with a question asked of why it was still in place due to the high cost.  It was explained that services needed to be transformed to ensure costs didn’t keep rising year on year.  Sue Halliwell, Chief Executive, added to this by suggesting that rather than it being referred to as transformation it could be rephrased as continuous improvement which ensured the best value was being delivered to residents whilst also being responsive to new legislation or statutory requirements.  It was confirmed that in the longer-term budget the need for continuous improvement was paramount.

·        Further clarification was sought around a question that individual directorates should be responsible for streamlining services.  It was explained that the transformation programme was managed through the corporate management team as a corporate response and function being delivered across all the directorates.  An aim of transformation programmes was to generate revenue with a focussed approach to alternative ways of running things.

·        In response to a query over a contract for a business manager within social care that cost £200 000 for the year, the Executive Director: Resources confirmed that this was incorrect and nearer £40 000.  Further clarification was sought regarding why there are not skilled people within the council to cover this role, which was answered by confirming that it had brought in additional capacity to support a service.

·        A question was asked about whether the commercial property portfolio was generating revenue.  The response was that the Council had overachieved targets.  These assets wouldn’t be kept forever and received regular valuations which stood within a 10% excess of purchase price.  If there was a significant need to spend capitol monies, the Council might dispose of a property as it would cost less than borrowing.

·        In response to a query about whether Council tax rises being capped would remain the same, it was confirmed that the settlement would set out the maximum cap.

·        It was asked if there would be a range of options on the inflation level and would the contingency amount be revised.  The response was that the council were working with service areas regarding applying inflation indices for all contracts, but it was too early to give a view of what it would look like.

·        A query was raised regarding the lock in of energy prices until April 2023 and whether this affected the leisure centre.  It was explained that 50 % of energy costs had been purchased and therefore whilst still an element of risk position was positive.

·        A further query was raised around the transformation programme and apparent costs and what the benefits were.  It was explained that the original target set in 2016-17 of delivering £11.6m was achieved in 2019 and since that time there had been further significant savings.  It needed to be made clear what the expectations were regarding the investment for additional staff who supported business change.  The commission was reminded that the CPOR report seen on a quarterly basis provided updates regarding the business change programme.

·        A comment was made about the increase of adults over 65, 21% nationally and 32% in Bracknell and the impact on adult social services.  The response to a query about if this was being taken into consideration was that the actual number of adults in social care was used at the point the budget allowances were made.

·        A question was raised about the impact energy prices had on stretched school budgets; it was confirmed that schools under the LEA were protected by the energy cap.

·        A concern was raised around the size of the deficit forecast for the high needs block regarding who the debt rested with.  Up to 31 March 2023 this was DFE rather than local authorities. A specific question was whether there had been an update from the government to confirm if this deficit would become the responsibility of the council.  In response it was confirmed that this would be announced soon and that it could still pose a risk for the 23/24 budget.  Work was taking place with a consultancy to help the council work through plans and advise of improvements which would give confidence to the DFE that the program was delivering best value in an area of increasing demand.