Agenda and minutes

Budget Meeting, Overview and Scrutiny Committee (Regulatory, Compliance and Corporate Services)
Tuesday 9th February, 2021 6.30 pm

Venue: Remote Meeting

Contact: Paul Fraser  Senior Democratic Services Officer

Media

Items
No. Item

32.

Apologies for Absence

Minutes:

No apologies for absence were received.

 

 

33.

Declarations of Interest

Members are requested at a meeting where a disclosable pecuniary interest or personal interest arises, which is not already included in their Register of Members' Interests, todeclare any interests that relate to an item on the agenda.

 

Where a Member discloses a Disclosable Pecuniary Interest, he/she must withdraw from the meeting room by switching their camera and microphone off during the whole consideration of any item of business in which he/she has an interest, except where he/she is permitted to remain as a result of a grant of a dispensation.

 

Where a Member discloses a personal interest he/she must seek advice from the Monitoring Officer or staff member representing the Monitoring Officer to determine whether the Member should withdraw from the meeting room, including from the public gallery, during the whole consideration of any item of business in which he/she has an interest or whether the Member can remain in the meeting or remain in the meeting and vote on the relevant decision.

 

Minutes:

No declarations of interest were received.

 

 

34.

Minutes of the Previous Meeting pdf icon PDF 112 KB

Minutes of the meeting held on 12 January 2021

Minutes:

RESOLVED:

 

That the Minutes of the meeting held on 12 January 2021 be confirmed as a correct record.

 

35.

Prudential Indicators 2021/22 pdf icon PDF 124 KB

Report of the Executive Director of Corporate Resources and Customer Services

Minutes:

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services, which explained that the CIPFA Prudential Code for Capital Finance in Local Authorities was introduced following the Local Government Act 2003; and detailed measures / limits / parameters (Prudential Indicators) that were required to be set each financial year; and that the approval of these limits would provide a benchmark to measure actual performance against, to help ensure that the Council complied with relevant legislation, was acting prudently and that its capital expenditure proposals were affordable.

 

The report went on to explain that the Council was required to approve Prudential Indicators for the following items:

 

(i)      Capital Expenditure;

(ii)     Financing Costs/Net Revenue Stream;

(iii)   Capital Financing Requirement;

(iv)   External Debt;

(v)    Treasury Management Indicators.

 

These indicators were presented in the following within the report and summarised at annexe A.

 

The report concluded that having established the Prudential Indicators, the Executive Director for Corporate Resources and Customer Services would monitor them during the year and report on actual performance to the Audit and Governance Committee on a quarterly basis; and that an outturn report of performance against the Prudential Indicators would be presented to both Cabinet and Council following the financial year end.

 

This report would also be considered by Cabinet and Council at their meetings to be held on 11 February and 4 March 2021 respectively.

 

Members asked questions/commented on the following issues:

 

·        The increase in financing costs forecast during 2020/21 as a result of an upfront payment to Merseyside Pension Fund (MPF) (£43.623m) that was funded by borrowing; such payment made as a result of MPF offering the Council the opportunity to prepay (in April 2020) a proportion of the total expected contributions for the three-year valuation period at a discount which ensured that the Council made significantly reduced payments

·        A willingness to attend training sessions to provide Members with information on the budgetary and financial aspects of the Council’s activities

·        The impact of negative interest rates on the Council’s investments and the risks this may pose

 

RESOLVED: That

 

(1)             the Prudential Indicators, as detailed within the report, as the basis for compliance with The Prudential Code for Capital Finance in Local Authorities be noted;

(2)             it be noted that the relevant Prudential Indicators would be revised, as required, and that any changes would be submitted to Cabinet and then to Council for approval; and

(3)             it be noted that the estimates of capital expenditure might change as grant allocations are received.

 

 

36.

Treasury Management Policy and Strategy 2021/22 pdf icon PDF 289 KB

Report of the Executive Director of Corporate Resources and Customer Services

 

Minutes:

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services that set out the following proposed policy and strategy documents:

 

a)     Treasury Management Policy (Annex A);

b)     Treasury Management Strategy (Annex B); and

c)     Minimum Revenue Provision Policy Statement (Annex C)

 

The report concluded by requesting the Committee to provide any comments to the Council that would be considered as part of the formal approval of the Treasury Management Policy, Treasury Management Strategy and Minimum Revenue Provisions Policy Statement.

 

This report would also be considered by Cabinet and Council at their meetings to be held on 11February and 4 March 2021 respectively.

 

Members asked questions/commented on the following issues:

 

·        The advantages of a three-year budget plan as opposed to a one-year plan

·        The approval by Council of the Council’s Ethical Business Practices Working Group Final Report was referred to which included Ethical Investment and Procurement Policy statements; and the desire to see ethical business practices contained within the Treasury Management Policy

·        Concern was expressed about one of the three Brokers who could potentially be utilised by the Council for investments of over one month.  It was acknowledged that the Brokers were available to the Council via its Treasury Management advisors but that it was unlikely that these institutions would all be utilised during the financial year.  

·        Information was sought on the how surplus funds were invested on a daily basis ensuring security, followed by portfolio liquidity as part of the Council’s Investment Strategy; and details were provided about the dedicated team of three officers who carried out the day-to-day treasury management activities

 

RESOLVED:

 

That the report setting out the following proposed policy and strategy documents, namely, the Treasury Management Policy, the Treasury Management Strategy and the Minimum Revenue Provision Policy Statement be noted.

 

 

37.

Capital Strategy 2021/22 to 2025/26 pdf icon PDF 175 KB

Report of the Executive Director of Corporate Resources and Customer Services

 

Minutes:

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services that explained that the Capital Strategy set out the long-term context in which capital expenditure and investment decisions were made and considered the impact of these decisions on the priorities within the Council’s Core Purpose and Framework for Change Programme and the promises made in the 2030 Vision for Sefton; that at the heart of the Capital Strategy was the Council’s core objective to continue to deliver financial sustainability; and that as such a flexible capital investment programme was more important than ever as a method to stimulate and enable economic growth and strategic investment, ensuring best use of existing assets and of generating future income streams to pay for and deliver day to day services.  

 

Attached as Appendix 1 to the report was the Capital Strategy 2021/22 to 2025/26.

 

The report would also be considered by Cabinet and Council at their meetings to be held on 11 February and 4 March 2021 respectively.

 

A Members commented on the following issue:

 

·        In respect of the Southport Town Deal a comment was made that some local Councillors had expressed concern that they were not directly involved in the decision-making processes. It was noted that the Southport Town Deal was not solely a Council board; and that once the final deal was agreed and the Council became the accountable body decisions would be made in accordance with the Council’s governance arrangements  

 

RESOLVED:

 

That the Capital Strategy 2021/22 to 2025/26 be noted.

 

 

38.

Robustness of the 2021/22 Budget Estimates and the Adequacy of Reserves – Local Government Act 2003 - Section 25 pdf icon PDF 169 KB

Report of the Executive Director of Corporate Resources and Customer Services

 

 

Minutes:

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services, which explained that to comply with statute, the Chief Financial Officer was required to report to Council prior to the approval of the budget and the setting of the Council Tax, to give assurance that the budget was robust and that there were adequate reserves and balances.

 

The report explained that the budget for 2021/22 had been developed in the midst of the global pandemic which had consumed and impacted all areas of Council business since March 2020 and would continue to do so for years to come; that this not only applied to the impact on service delivery and the role of the Council, but on every aspect of financial management; that as such, developing a robust set of budget estimates for the financial year 2021/22 had been incredibly difficult and both these estimates and the risk profile of the Council would continue to change fundamentally over the next 12 months; and that the budget proposed however, represented the most accurate position that was available at the current time and like during the financial year 2020/21, regular updates would be required to be presented to Cabinet and Council in order that informed decision making could take place during the year in order to maintain financial sustainability.

 

With regard to the Council’s core budget the report provided information on pressures associated with the adult social care market, the significant increase in the Council’s looked after children numbers and the impact of an increased number and cost of packages for children with disability and home to school transport costs; the on-going impact of Covid; and the Council’s  Framework for Change programme.

 

The report detailed the following factors had been considered as part of the budget process for 2021/22:

 

·        Impact of Previous Years’ Budget - 2020/21

·        Central Government funding

·        Maintaining Service Delivery

·        Inflation and Annual Cost Increases

·        Financial Management

·        CIPFA Financial Resilience Index and the CIPFA Financial Management Code

·        Management of Risk

·        Capital Strategy and Strategic Investment

·        External Advice

 

Regarding the Reserves Strategy 2021/22 the report provided information on:

 

·        The General Fund

·        National considerations such as the impact of economic climate on Council costs and anticipated reductions in Government funding

·        Local considerations such as planned changes in service delivery methods / contracts; the impact of rising demand for services; and legal challenges

·        Budget setting assumptions such as sensitivity of the budget assumptions and the Council’s significant earmarked reserves

·        Management / Member actions including the provision of clear corporate / Member messages and the three-year Medium Term Financial Plan and One-year budget

·        Earmarked reserves

·        Capital reserves

·        School reserves

 

The report concluded that as a result of consideration of the issues contained within the report, the budget proposed was a robust budget package and the opinion provided was in accordance with Section 25 of the Local Government Act 2003. 

 

This report would also be considered by Cabinet and Council at their meetings to be held on 11  ...  view the full minutes text for item 38.

39.

Revenue and Capital Budget Plan 2021/22 – 2024/25 and Council Tax 2021/22 pdf icon PDF 272 KB

Report of the Executive Director of Corporate Resources and Customer Services

Additional documents:

Minutes:

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services that explained that on 4 March 2021, the Council would be asked to consider and approve the Budget Plan for 2021/22 – 2024/25 and the level of Council Tax for 2021/22; and provided the Committee with:

 

·        An assessment of the Council’s current financial position and approach to the 2021/22 Budget Plan and preparation for the three-year budget period 2022/23 to 2024/25

·        An update on the Government’s announcement of resources that are available to the Council for 2021/22

·        The Council’s current financial position and the assumptions built into the Medium-Term Financial Plan;

·        The proposed Budget for 2021/22; and

·        The proposed Capital Programme for 2021/22

 

The report set out the financial strategy of the Council and the national and local financial context within which it is operating. The Council had a statutory requirement to remain financially sustainable and to balance its budget every year; and that the Council’s Framework for Change Programme was a comprehensive and ambitious programme that sought to support the delivery of the Council’s core purpose.  As would be expected with a programme of this size and complexity that spanned a number of financial years, the detailed proposals had been and would continue to be the subject of change as they were developed and ultimately implemented. 

 

The following appendices were attached to the report:

 

Appendix A

Individual School Budgets 2021/22

Appendix B

Draft Council Budget Summary 2021/22

Appendix C

Capital Programme 2021/22 – 2022/23

 

This report would also be considered by Cabinet and Council at their meetings to be held on 11 February and 4 March 2021 respectively.

 

The report concluded by requesting the provision any comments to Cabinet regarding the Budget Plan for 2021/22 – 2024/25 and setting the Council Tax for Sefton Council for 2021/22.

          

Members of the Committee asked questions/commented on the following issues:

 

·        In respect of the Strand Shopping Centre information was sought on the anticipated reduction in income due to the impact of Covid-19 on retail businesses; and reference was made to the table in paragraph 8.1 of the report in respect of the years 2022/23 to 2024/25. Information was provided that a report to Cabinet on 4 February 2021 had indicated that the potential outturn deficit for the financial year 2020-21, as a consequence of the impacts of the COVID-19 pandemic, was expected to be between -£2.65m and -£3.18m. However, there remained factors that would influence this outcome for the financial year, including uncertainty on the end of the current lockdown and the nature of any reopening of retail; the continued uncertainty on the moratorium on landlords’ ability to pursue enforcement; and the ongoing pursuit of rent and service charge arrears

·        Information was sought on the income generated by increasing Council Tax by 1%. It was advised that a 1% Council Tax increase generated between £1.3/1.4 million

 

RESOLVED: That

 

(1)        the update of the Medium-Term Financial Plan for the period 2021/22 to 2024/25 be noted; and

(2)        the  ...  view the full minutes text for item 39.