Agenda item

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The Financial Services Manager presented the Budget Monitoring Report – 30 June 2023 and drew attention to the following sections:

 

•           Summary.

•           Revenue Budget 2023/2024.

•           Capital.

•           Reserves.

•           Age Debt Analysis.

•           Council Tax and Business Rates.

•           Treasury Management 2023/2024.

•           Conclusion.

•           Appendix A – Budget Monitoring Variances June 2023.

•           Appendix B – Capital Programme 2022/2027.

•           Appendix C – Age Debt Analysis, 30 June 2023.

 

The Chair thanked the Financial Services Manager for the report and invited questions and comments from the Committee, a summary of which is set out below.

 

Councillor Dark provided clarification on the Internal Drainage Board (IDB) levy received by Government.  The Committee was advised that the Council was one of the local authorities to receive additional grant from DLUHC to help with the increase in IDB levies due to the unprecedented rising in energy costs.  £205,451 had been paid to the Borough Council as a one-off recognition of the difficult circumstances affecting local authorities.  Councillor Dark commented that the work undertaken by IDBs was commendable but added that did take 42% of the authority’s available Council Tax.  Councillor Dark provided an overview of the work led by South Holland District Council which got a number of Councils to start a cohesive voice to central Government.  The Borough Council proactively went in when generated a one-off payment which was either the second or third largest payment made to a local authority.  In conclusion, Councillor Dark stated that clearly this was not enough and that Councillor Morley had similar concerns.

 

Councillor Morley, Portfolio Holder for Finance commented that the previous Administration was to be commended on addressing the various issues associated with the IDB’s including taking forward lobbying the 15 or so districts effected by IDB levels and added the current Administration had undertaken to carry this work forward.  The Committee was informed that the MPs Liz Truss and James Wild were aware of this sensitive issue in West Norfolk and could also lobby Government.

 

Councillor Morley, Portfolio Holder for Finance responded to questions from Councillor Bearshaw on the costs both within the Borough and other areas of the country.

 

Councillor Bearshaw asked what the Borough Council did to liaise with the IDB Consortium to bring more money back in.  Councillor Morley, Portfolio Holder for Finance explained that officers were undertaking an exercise to check the figures for Water Management Alliance  as they were not consistent with the Borough Councils.

 

In response to questions from Councillor Coates on Balances and Reserves in relation to section 4.1, 3rd bullet point – to set aside funding for anticipated investment or projects and asked if they were anticipated why were they not included in the budget.  In response, the Assistant Director, Resources explained that this was called prudential management of finances and it may be something to be spent in  2 to 3 years’ time and that money would  be set aside in equal amounts each year to undertake the project when required and gave Elections as an example held every 4 years.

 

Following questions from Councillor Coates on the minimum level of reserves £1.1m required by the Council, the Assistant Director, Resources explained that the Borough Council’s policy was to have a minimum reserve level of 5% of the revenue budget  and was part of CIPFA’s Code of Practice.

 

In response to further questions from Councillor Coates on ring-fenced reserves the Assistant Director, Resources explained that these reserves  are based on where there is a legal requirement, terms and conditions or a contract in place. 

 

Councillor de Winton referred to the legal costs of £668,300 and the variance reported in budget monitoring.  In response, the Assistant Director, Resources explained that previously the legal service had been outsourced to Eastlaw and this had now ended.  A Council decision had been made to bring the legal service back in-house and the variance reported was therefore a saving on the transitional cost of the legal service. 

 

Councillor Dark provided an overview as to why it had been the Council’s decision of the previous Administration to bring the legal service back in house.

 

Councillor Dark commented in the IDB’s which carried out good work and took on board the comments made by the Finance Portfolio Holder on how much the area put into the community and the UK economy and the fact this was a burden to the tax payer seemed wrong.  Councillor Dark highlighted that Liz Truss MP and James Wild MP were fully aware of the situation and added that going forward he would support the new Administration.

 

Councillor Dark made a plea in relation to major projects in the capital programme ensure that the scheme going forward was overlaid with Cabinet e.g. Appendix B – car parks proposed spending £1m over the next 4 years and the significant spend and added that the previous Administration had started developing a Car Park Strategy etc. and the review which was still ongoing to ensure money was not spent on car parks for specific items which stopped options be considered at the end of the review and expressed concern that budgeted items were purchased at the wrong time. Councillor Dark gave another example of the Oasis being in a difficult financial situation and the commitment of £200,000 in the budget. Councillor Dark also commented on the £3m allocated in the budget to spend on projects to generate revenue and referred to the Walks, Crazy Golf equipment £120,000 allocated in the capital programme for the current year and asked if this should be Alive and not the Council and justifying the spend added that there were a number of retail vacant premises and why not consider Crazy Golf operating in one of those premises so that it was not weather dependent and available as an all year facility.

 

The Chair, Councillor Ryves commented on the above points made by Councillor Dark and stated that it was the responsibility of the Audit Committee to identify any risks/action(s) required.

 

The Chair, Councillor Morley invited the Portfolio Holder Finance to respond to Councillor Dark.

 

Councillor Morley repeated that Cabinet was in discussions with officers to identify any projects that would generate income and it was hoped that the information could be collated by October/November.  Councillor Morley outlined the current situation with Alive and added that the Council should be doing all it could to drive up revenues and explained that there was money available to do so.  Councillor Morley added that people had less disposable income with the increase in the cost of living.  In conclusion, Councillor Morley commented that there was a whole raft of projects, expenses, etc. which may not fit where West Norfolk stood at the moment.

 

With regard to car parking Councillor Morley explained that resurfacing works, back office, etc.  and that Council had committed to supporting other districts and this venture coming between low and high risk.  Councillor Morley added that Councillor Dark had made some good points and it was hoped that officers and Portfolio Holders would work together.  Councillor Morley confirmed that the capital expenditure would be rigorously monitored.

 

The Chair, Councillor Ryves commented that Appendix B – revised budget was work in progress as set out on page 73 of the Agenda. 

 

Councillor Morley, Portfolio Holder for Finance explained that this was work in progress but highlighted there was a long way to go.

 

The Chair, Councillor Ryves stated that it would be useful for the Audit Committee to be kept informed of any changes.

 

Councillor Dark commented on the wider issues made one of those things for all sides of the Council was for an idea/project to go through the democratic process which slowed things down and budget allocated if moved at a quicker pace the officers might have already committed to spend therefore what Council do was irrelevant and gave an example of car parking.

 

Councillor Morley, Portfolio Holder for Finance explained that weekly cost management discussions were held by Management Team and any issue was brought to his attention if there was a requirement to spend an amount.

 

General comments were made by the Committee on the importance of closely monitoring the Council’s financial position.

 

Councillor Morley, Portfolio Holder for Finance committee that delegated decisions did not get past his scrutiny and provided an overview of how the process had changed to enable Officer Delegated Decisions to be called in.

 

In response to comments made on the capital programme, the Assistant Director for Resources explained that a review of the capital programme was being undertaken and any changes would be reported in the Quarter 2 Budget Monitoring Report and added that the current total of the capital programme was £66m but during Quarter 2 it was anticipated £30m would be rephrased and a number of the projects mentioned by Councillor Dark would be subject to a further review.

 

Councillor de Whalley, Portfolio Holder for Environment and Biodiversity reminded the Committee that delegated decisions could be called in.

 

Councillor Bearshaw commented that as Chair of the Regeneration and Development Panel, the Panel would be looking at reports to set the criteria at an earlier stage to ensure it was budgeted correctly in the first place.

 

In response to questions from the Chair, Councillor Ryves on staff turnover savings, the Assistant Director, Resources explained that this was built into the budget process on an annual basis and had previously been set at £550,000 but when it was brought back to Council in February for approval, it had been increased to £1m for one year only on the basis of carrying a higher level of turnover as it had been difficult to recruit to some areas.

 

Following further questions from the Chair, Councillor Ryves on the increase on spend in leisure facilities to replace fitness equipment on page 77 where revised budget was £108,000 but actual spend to date as at 30 June 2023 £531,000, the Assistant Director, Resources explained that this was the actual cost to replace fitness equipment across all sites and required reallocating.

 

Councillor Jones stated it was cheaper for equipment to be bought in bulk for all three leisure sites rather that for a single site.

 

In response to a question from the Chair on local authority crematoriums having to pay business rates, the Assistant Director, Resources advised that it was normal practice for all crematoriums to pay business rates on the basis that it is a chargeable service being provided from the site.

 

The Chair, Councillor Ryves referred to page 72 – Forecast revised to reflect the revised estimate of Housing Benefit, etc. and asked if it was likely that the budget changes would be set out in each quarterly report.  In response, the Assistant Director, Resources explained that each year the estimated level of subsidy was made that the Council was likely to receive and submit a return to the Department of Work and Pensions (DWP) but added that during the year the Council had to carry out a review and revise the subsidy estimate and send a return to the DWP.  A discussion was being held with the Housing Team to see if there was any funding available to offset the charge.  The Assistant Director, Resources said this could change as part of the next monitoring update which would come back to the Audit Committee.

 

RESOLVED:  The Audit Committee noted the contents of the Budget Monitoring Report June 2023.