Issue - meetings

Councillors noted that the Council had agreed the 2023-24 budget in February 2023 with a £3.3m shortfall requiring further work to remove this gap, with the fallback position being the deployment of usable reserves.

The delayed audit of the 2020-21 accounts had identified errors relating to accounting for COVID grants and the Collection Fund, which took place in 2021. These were both sums which were due to be repaid to the Government in 2021-22 rather than sums which were available for use by the Council.

The impact of this was that the level of usable reserves was approximately £20m less than had been thought when the 2023-24 budget was set in February 2023.

The budget outturn position for 2022-23 had shown an overspend of £6.4m on the General Fund and this had therefore further reduced the sums available to the Council.

An updated MTFP position had been presented to the Council at its meeting on 25 July 2023, which had set out the key issues and the position in which the Council was now left. In summary, this was a remaining in-year deficit of £1.7m and a budget gap of £18.3m over the MTFP period to 2026-27.

The report had therefore concluded that the Council was facing a potential s114 report if actions were not agreed to bring this situation back in to balance. The deadline set for this was October 2023 and the progress to date was addressed within the report now before the Council.

The Interim s151 Officer had concluded that sufficient progress had been made to avoid the need for a s114 report to be issued at this point, but that significant work was still required to produce a balanced budget for 2024-25 and beyond.

The Council noted that the report had also been considered by the Executive at its meeting on 5 October 2023.  The Executive had endorsed the recommendations therein. 

TheLead Councillor for Finance & Property, Councillor Richard Lucas, proposed a motion to endorse the second issue of the Financial Recovery Plan, which was seconded by the Leader of the Council, Councillor Julia McShane.

During the debate, councillors raised a number of issues including:

·      Absence within the report of a schedule of all current spending for the rest of this year which would have given all members the opportunity of scrutinising spending that was still proposed and suggesting alternative or further savings.

·      Insufficient detail on savings generated, and overly optimistic estimate of car park revenue.

·      Concern regarding the withdrawal of grants to parish councils, and the proposal to charge parish councils for emptying rubbish bins.

·      Concern that there had been an unfulfilled commitment made in February 2023 to bring a revised budget before Council for scrutiny and adoption, instead of which the Council has only received a high-level update report for endorsement.

·      Concern over absence of councillor involvement in the decisions taken by the Financial Control Panel.

·      Lack of public consultation

·      Communications had reported  ...  view the full minutes text for item 55

Resolved:

That the Executive:

(1)       approves the second issue of the Financial Recovery Plan and recommends that it is endorsed by Council at its meeting on 10 October 2023;

(2)       approves the discontinuation of the Parish Councils Concurrent Functions Grants scheme from 1 April 2024; and

(3)       notes that the Interim s151 Officer has advised that sufficient progress has been made in the current financial year to avoid a s114 report being issued at this stage.

Reason for decision:

To enable the Council to protect the current level of reserves and to set a balanced budget and a robust Medium-Term Financial Plan.

Other options considered and rejected by the Executive:

None

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Executive noted that the 2023-24 budget agreed by the Council in February 2023 had included a £3.3m shortfall which required further work to remove the gap. The fallback position had been to deploy usable reserves. The Executive also noted that the delayed audit of the 2020-21 accounts had identified errors relating to accounting for COVID grants and the Collection Fund, which took place in 2021. These were both sums which were due to be repaid to the Government in 2021-22 rather than sums which were available for use by the Council. Consequently, the level of usable reserves was around £20m less than had been thought when the 2023-24 budget was set in February 2023. In addition, an overspend of £6.4m on the General Fund had further reduced the sums available to the Council.

An updated Medium Term Financial Position (MTPF) was presented to the Council in July 2023 which set out the key issues and the full financial position. In summary, there was a remaining in-year deficit of £1.7m and a budget gap of £18.3m over the MTFP period to 2026-27 and a potential s114 report if actions were not agreed to bring the situation back in to balance.

The Executive considered a report setting out progress to date which was introduced by the Lead Councillor for Finance and Property. The meeting heard that sufficient progress had been made since July 2023 to avoid the need for a s114 report to be issued at this point but that significant work was still required to produce a balanced budget for 2024-25 and beyond. The report included a proposal to withdraw the Parish Councils Concurrent Functions Grants scheme from 1 April 2024 which would contribute an annual saving of £90,000.

Effingham Parish Council had written to the Executive with regard to the proposed withdrawal of the grants scheme and ways and means in which parish councils generally could increase their income either via the precept or other funding opportunities were noted. It was further noted that most other councils had withdrawn this particular grant scheme some years ago and it was unusual for the Council to have maintained it for such a long period of time. The Council convened a regular liaison meeting with parish council clerks where such matters could be discussed. Under a s.114 notice situation Government commissioners would be installed to take such decisions.

There was praise for the Council’s Finance team, the interim s.151 officer and the lead councillor for having realised sufficient savings to bring the Council to a balanced budget in-year position. There was also recognition that there would be further difficult decisions ahead to maintain that position whilst continuing to deliver services to residents.

The interim s151 officer addressed the meeting to explain that not only had a balanced in-year budget been achieved but that the Council could have assurance around that work. A period 4 monitoring report had been delivered to the Corporate Governance and Standards Committee the previous week. The Executive  ...  view the full minutes text for item 27