Issue - meetings

General Fund Budget update

Meeting: 25/07/2023 - Council (Item 32)

32 General Fund Budget update pdf icon PDF 338 KB

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Minutes:

The Council considered a comprehensive report that set out a revised General Fund budget statement for 2023-24. The annual budget had been submitted to full Council in February 2023, at which point a deficit had been identified and the Joint Management Team had been asked to undertake a comprehensive financial review to identify a set of measures to address this deficit and to present a restated budget for this meeting.  A number of factors had been identified in the report as having influenced the Council’s financial position and these were presently common to many other councils. Those factors included increasing demand for services, the state of the UK economy over the last year (with high inflation and rising interest rates), and a succession of government funding reductions over many years.  For Guildford, a significant factor was the effect of rising interest rates in regard to borrowing in support of various infrastructure and regeneration projects that had increased the Council’s overall debt.

The report had set out the findings of the comprehensive financial review and recommended actions to mitigate and reduce the risk of the Council reaching a declaration of a Section 114 notice and a financial recovery plan. A S114 Notice would require the Council to cease all non-essential expenditure and reduce operational and service delivery costs immediately. The report included recommendations to establish a task force to deliver the financial recovery plan.

The report had been considered by the Corporate Governance and Standards Committee (CGSC) at a specially convened meeting on 18 July and by the Executive on 20 July. The comments arising from those meetings were set out in the Order Paper including the provision of a business case for additional planning resources, which had been included on the Order Paper, and a suggestion that a cross-party Executive working group be created to operate in a support and councillor communication role to oversee the financial recovery process.

Upon the motion of the Lead Councillor for Finance & Property, Councillor Richard Lucas, seconded by the Leader of the Council, Councillor Julia McShane, the Council

 

RESOLVED:  

(1)              To approve the restated 2023-24 General Fund Revenue budgetincluding the business case for additional planning resources.

 

(2)              To approve the repurposing of earmarked reserves as detailed in the report submitted to the Council.

 

(3)              To endorse the findings in the report.

 

(4)              To note the response by the Chief Finance (Section 151) Officer to the S114(3) duty and his recommended immediate actions including a range of expenditure controls, which will be managed through a Financial Control Panel consisting of Senior Officers and chaired by the Section 151 Officer.

(5)              To note that a financial recovery plan is being developed by the Chief Finance Officer in liaison with the Joint Management Team, together with milestones and delivery targets, to be reported to October Full Council for approval.

(6)              To endorse the management action of establishing a task force to deliver the financial recovery plan at pace, to provide the capacity, skills, and capability to  ...  view the full minutes text for item 32


Meeting: 20/07/2023 - Executive (Item 13)

13 General Fund Budget update pdf icon PDF 209 KB

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Decision:

Decision:

To recommend to full Council on 25 July 2023:

(1)         To approve the restated 2023-24 General Fund Revenue budget, including the business case for additional planning resources.

 

(2)         To approve the repurposing of earmarked reserves as detailed in the report.

 

(3)         To endorse the findings in the report.

 

(4)         To note the response by the Chief Finance (Section 151) Officer to the S114(3) duty and his recommended immediate actions including a range of expenditure controls, which will be managed through a Financial Control Panel consisting of Senior Officers and chaired by the Section 151 Officer.

 

(5)         To note that a financial recovery plan is being developed by the Chief Finance Officer in liaison with the Joint Management Team, together with milestones and delivery targets, to be reported to October Full Council for approval.

 

(6)         To endorse the management action of establishing a task force to deliver the financial recovery plan at pace, to provide the capacity, skills, and capability to support recovery.

(7)         To note that the Executive will set up an executive working group for the following purposes:

a)       to receive and comment on regular updates on the Council’s preparations for the Medium-Term Financial Plan restatement in October and its implementation;

b)       to provide a sounding board for the Executive and officers on the options that are coming forward to close the projected financial gap; and

c)        to guide wider communication with councillors and beyond

(8)         To note that expenditure controls as a feature of how the Council conducts its business will remain in place until such time that the MTFP is balanced, and that such controls shall be determined by the Chief Finance Officer and the Chief Executive, in consultation with the Lead Councillor for Finance and Property.

 

(9)         To authorise the Chief Finance Officer and Chief Executive to draw down earmarked funding to provide capacity to address and deliver the financial recovery plan and note that the Chief Finance Officer will continue to engage with expert external assistance and advice.

 

(10)    To endorse the proposal to develop an asset disposal strategy to optimise the revenue impact from the divestment (via sale or otherwise) of the Council’s assets and address the need to pay off debt, utilising external advice and support to ensure that best value returns are achieved.

(11)    To agree that a revised Medium-Term Financial Plan be brought to the Executive and Council in October 2023 and then reported quarterly to the Corporate Governance and Standards Committee.

Reason:

To enable the Council to set a balanced budget, which is a statutory requirement 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.

Minutes:

The Executive considered a full Council report written by the Chief Executive and Chief Finance Officer that set out a revised General Fund budget statement for 2023/24. The annual budget had been submitted to full Council in February, at which point a deficit was identified and it was agreed that the Joint Management Team would undertake a comprehensive financial review to identify a set of measures to address this deficit and to present a restated budget in July 2023.  A number of factors were identified in the report as having influenced the council’s financial position and these were presently common to many other councils. Those factors included increasing demand for services, the state of the UK economy over the last year (with high inflation and rising interest rates), and a succession of government funding reductions over many years.  For Guildford, a significant factor was the effect of rising interest rates in regard to borrowing in support of various infrastructure and regeneration projects that had increased the Council’s overall debt.

The report set out the findings of the comprehensive financial review and recommended actions to mitigate and reduce the risk of the Council reaching a declaration of a Section 114 notice and a financial recovery plan. A S114 Notice would require the Council to cease all non-essential expenditure and reduce operational and service delivery costs immediately. The report included recommendations to establish a task force to deliver the financial recovery plan.

The report had been considered by the Corporate Governance and Standards Committee (CGSC) at a specially convened meeting earlier in the week. The comments arising from that meeting including suggested amendments to the various recommendations were set out in the Supplementary Information Sheet and proposed that the restated budget for 2023/24 include a budget for Planning resources and that a cross-party Executive working group be created to operate in a support and councillor communication role. The CGSC also proposed the Executive note the findings in the report rather than to endorse them.

The report was introduced to the Executive by the Lead Councillor for Finance and Property.

It was observed that the report was comprehensive, robust, and honest. The public and press had been informed of the content of the report as the council proceeded to address the financial issues with openness and transparency.

The CGSC recommendations were accepted in full with the exception of the recommendation to ‘note’ the findings of the report, the Executive preferred to revert to the original wording of the report and ‘endorse’ the findings.

Executive comments included the importance of the inclusion for the business case for additional planning resources as it was a priority for the Council to improve performance and would result in savings in the longer term.

The creation a cross-party working group was acceptable.

RESOLVED:

To recommend to full Council on 25 July 2023:

(1)         To approve the restated 2023-24 General Fund Revenue budget, including the business case for additional planning resources.

(2)         To approve the repurposing of  ...  view the full minutes text for item 13


Meeting: 18/07/2023 - Corporate Governance and Standards Committee (Item 10)

10 General Fund Budget update pdf icon PDF 338 KB

Additional documents:

Minutes:

The Committee noted that, at its budget meeting on 8 February 2023, the Council had approved the 2023-24 budget and the Medium-Term Financial Plan (MTFP), which had included an £18.3m projected deficit to be resolved, underwritten by an estimated £32m cash backed usable reserves and £3.75m General Fund working balance reserve. The reasonable worst-case scenario, at that time, was that the Council’s expenditure could be met by the resources currently available to it in the immediate term. Council asked the Joint Management Team to undertake a comprehensive financial review to identify a set of measures to address this deficit and present a revised budget and MTFP to Full Council in July 2023. That work had progressed, and the Committee considered the Section 151 Officer’s report which set out the findings and recommended actions to be taken, including a 2023-24 General Fund budget revision for Full Council approval.

The Committee had been asked to consider the report and submit its own comments to the Executive at its meeting on 20 July, and to the Council at its meeting on 25 July, in respect of the recommendations contained in the report.

The Lead Councillor for Finance presented the report to the Committee summarising the position the Council was in financially, including the recent historical background highlighting the various factors and circumstances that had contributed to that position, together with the serious implications for the Council. The Lead Councillor also outlined the remedial measures recommended in the report and the anticipated timeline for their implementation.

During the debate, the Committee asked a number of questions and made a number of comments on the contents of the report.  The Committee also made the following key points in the debate on this matter which it was proposed to put to the Executive on 20 July:

·      It was noted in the discussion on an accountancy treatment of a grant that these sums had been erroneously applied to a reserves heading and were otherwise correctly spent and disposed of.

·      It was suggested that the business case for investment in Planning Services should be circulated to councillors in advance of the Full Council meeting and added as a supplementary paper

·      It was felt that the findings in the report should be noted rather than endorsed.

·      It was suggested that, rather than having an informal cross-party reference group, the Executive should establish its own working group, to receive and comment on regular updates on the Council’s preparations for the Medium-Term Financial Plan restatement in October and its implementation; and to consider options to close the projected financial gap.

·      It was noted that the table in paragraph 7.12 of the report showing the increase in the capital programme since 2016 had erroneously shown the capital cost to the Council on the Ash Road Bridge project in 2024 as being £24.573m.  The correct figure would be reported to Council.

·      It was also noted that paragraphs 14.2 and 14.3 of the report (Climate Change/Sustainability implications) had erroneously repeated the earlier paragraphs 13.2  ...  view the full minutes text for item 10