To consider the recommendations from the meeting of the Cabinet held on 13th February 2019.
Cabinet Recommendations 13th February 2019
Environmental Services Business Cases for Investment in the Domestic Waste Service, Commercial Waste Services and Place Team
Councillor M. Sherrey, Portfolio Holder for Health and Well Being and Environmental Services proposed the recommendations for the Environmental Services Business Cases for Investment in the Domestic Waste Service, Commercial Waste Service and Place Team. These were seconded by Councillor G. Denaro.
In proposing the recommendations Councillor Sherrey explained that officers had drawn up three business cases to outline current pressures on Environmental Services, as well as opportunities for additional income generation.
The business cases reflected each area within Environmental Services and briefly consisted of:
· Commercial Waste – it was explained that having expanded its services significantly over the last two years and generated considerable additional income for the Council, the Commercial Waste Team now required additional investment to support continued growth. This investment was expected to generate additional income that fully balanced out the additional investment from year one, supporting the sustainability of the wider service at best value to the Council’s residents.
· Domestic Waste – Having seen an increase in new housing across the District in the last few years, the current service has expanded within existing resources to support this, but has incurred unsustainable overspends as a result of high Agency costs due to a lack of resilience to cover annual leave and sickness. This lack of resilience eventually resulted in service failure during August/September 2018. In order to address this, the business case sets out the case for additional investment to secure the service without a reliance on Agency staff to cover standard services over the next few years, whilst a full service review is carried out. This would consider how best to deliver the service in a sustainable manner for the future, taking into account increased housing in the district and changes currently being considered by Central Government to what services the Council has to supply to residents, such as a free garden waste service and weekly dedicated food waste collections. Both of these would require significant investment to be provided in addition to the current services.
· Place Teams – the cleaning and grounds maintenance services are carried out by the Place Teams across the District and as with the Domestic Waste, there has been a significant increase in their workload as a result of increased housing and traffic on the roads, which generate more litter and fly tipping. This takes considerable resources to manage and has limited the Council’s ability to deliver the full benefits of Place working, resulting in a more reactive focus to some areas of work and lower standards.
Councillor Sherrey highlighted that the business cases and recommendation had been reviewed by the Overview and Scrutiny Board and Cabinet had approved all the recommendations as set out in the covering report and business cases attached to the agenda papers.
Following presentation of the report Members discussed a number of areas in more detail, including:
· Members were grateful that this had been looked at following the issues that had arisen in the previous year and hoped that this would mean that a similar situation would be avoided in the future.
· Whether consideration could be given to the new vehicles purchased being electric or more environmentally friendly than those currently used. Councillor Sherrey confirmed that a number of alternatives were being considered.
· A full scale review of the service was welcomed and the possibility of generating more revenue. However, Members were concerned as to the reasons for the disruption the previous year as housing growth throughout the District was something which was not unexpected and therefore should have been planned for in advance. It was agreed that this was due to a lack of foresight and lack of planning for the long term.
· Members took the opportunity to thank Matt Austin, the Environmental Services Manager and Guy Revans, the Head of Environmental Services for taking the time to attend the Overview and Scrutiny Board meeting and giving a detailed honest view of the situation the previous year and presentation of the business cases recently.
a) that the Domestic Waste Collection Business Case and allocate £1456,646 revenue funding to Environmental Services to fund five members of staff, vehicle maintenance costs and running costs to support the service be approved;
b) that the Capital Investment of £137,000 for one new Collection Vehicle which will incur annual borrowing costs of £21,823 from 2020/21 on the corporate financing revenue account be approved;
c) that the Commercial Waste Business Case and allocate £184,558 additional revenue funding to Environmental Services to fund six additional members of staff, vehicle maintenance and running costs to support the service and the generation of additional income for the Council be approved;
d) that the Capital Investment of £340,000 for two new collection vehicles, which will incur annual borrowing costs of £54,162 from 2020/21 on the corporate financing revenue account be approved; and
e) that the Future Delivery of Place Team Working Business case, and allocate £166,697 additional revenue funding to Environmental Services to fund six additional members of staff to support the service on a phased implementation over the next three years be approved.
Alvechurch Parish Neighbourhood Plan
The recommendation from Cabinet in respect of the Alvechurch Parish Neighbourhood Plan were proposed by Councillor C. B. Taylor and seconded by Councillor G. Denaro.
In proposing the recommendations Councillor Taylor reminded Members that this matter had been well documented and discussed on numerous occasions. He advised Members that the referendum had received a good response, which was down to the hard work of officers and the Alvechurch Parish Council. Councillor Taylor reiterated the thanks which had been given earlier in the meeting to the Strategic Planning and Conservation Manager and his team.
RESOLVED that the Alvechurch Parish Neighbourhood Plan be ‘made’ (formally adopted) immediately, in accordance with the relevant legislation.
Medium Term Financial Plan 2019/20 – 2022/23
The recommendation from Cabinet in respect of the Medium Term Financial Plan (MTFP) were proposed by Councillor B. Cooper and seconded by Councillor G. Denaro.
In presenting the recommendations Councillor Cooper suggested that it might be of interest to members to put the Council’s position in perspective. He advised that the state of Local Government finance in England was challenging. A recent survey by the LGIU, had found that 80% of Councils were not confident that Local Government was sustainable. In the coming year 53% could only balance their budgets using cash balances, 30% were seeing a decline in their services, 25% were planning service reductions, and 97% were increasing Council Tax. 84% of Councils thought that it was a high priority, if not essential, that Councils explored other sources of income for example through commercialisation of council services, selling assets, investing in property. 53% of Councils had increased borrowing in the last year.
Councillor Cooper highlighted that in the Medium Term Financial Plan approved by Council a year ago, it was predicted that there would be an over spend of £625k at the end of the year 2019/20. The table 3.5 on page 181 showed Members how additions and subtractions were made across the table and it could be seen that the Council was now predicting a zero overspend; a great improvement on the prediction for the year. There were commentaries on each of the additions and subtractions in the text. However, Councillor Cooper highlighted the following points:
· Savings of £332k had been identified which would reduce the deficit.
· Other savings had not been identified in the past. In discussion with the auditors, it was feel that these unidentified savings should be included so £645k had been added to the deficit.
· The negative revenue support grant had not materialised so £740k could be taken out.
· As the Council had not built enough houses, the income from New Homes Bonus (NHB) was predicted to be less than envisaged in last year's MTFP, therefore £82k would be added to the deficit.
· For the same reason, as above the council tax income was predicted to be down by £140k.
In view of the Council's financial situation, particularly looking to years 2 to 4 of the MTFP, the Cabinet feel that it would not be prudent or responsible to leave the level of Council Tax unchanged. Therefore, it was with regret that Cabinet was recommending increasing it by 2.99%. The Council Tax paid on a Band D house would rise by £6.47 to £223 pa.
It was noted that the balanced budget had been achieved without the use of balances and without any reduction of services. Councillor Cooper suggested these were great achievements by the Council for the residents of Bromsgrove District, at a time when many other councils had reduced services or used balances or both to get anywhere near a balanced budget.
The Council’s auditors required it to produce a four year financial plan. Therefore, in addition to the figures for as 2019/2020, the figures for the three years 2020/21, 2021/22, 2022/23 were also included. The figures were of concern, particularly as by the last year of the MTFP, the general balances could have fallen to £1.1m. This was the level below which Members had determined that it would not be prudent to go.
The reasons for this position were summarised as being the consequence of not enough houses being built in Bromsgrove, uncertainty over the future of the NHB scheme, additional costs of borrowing for our capital programme and perhaps even more importantly, a complete lack of certainty from Central Government about funding for Local Government from 2020/21. As Members would know, there were national consultations this year on business rates retention reform and on the fair funding review of relative needs and resources. Members were reminded that up until recently the Council received £3m a year in revenue support from Central Government. From this current year onwards, it would receive nothing.
There would be increased borrowing costs and repayment of debt over the three years for the capital programme especially vehicles, and for the leisure centre, Parkside, and the Burcot Lane development and for contributions to the employee pension fund. However, Councillor Cooper stressed to members that the figures for years 2 to 4 of the MTFP represented the worst-case scenario and assumed that nothing would have been done to improve the situation. In the next year it would be important to review all costs and to identify more savings. The Council must reduce the total of what was currently described as unidentified savings and capital programmes might have to be reviewed. It was stressed that requests for new expenditure must be scrutinised very closely and be accompanied by a robust business case. The house building blockage needed be solved as it had led to a quadruple whammy - loss of Council Tax revenue, a reduction in NHB income, lower than expected income from planning applications, and the cost of Mott MacDonald to provide advice on infrastructure related to big planning applications. It was anticipated that projects such as Burcot Lane would generate income by the end of the four-year period. This income was not included in the MTFP. Councillor Cooper went on to advise Members that attached to the report were appendices which showed unavoidable pressures, new revenue bids, savings and additional income, capital bids, and the capital programme.
In conclusion, Councillor Cooper advised that whilst the three years after next would be challenging, he had no doubt that Members and officers would work together to ensure that the financial future of the Council would turn out to be not nearly as difficult as the MTFP suggested.
It was noted that the Council was required by law to approve a pay policy statement each year and this was included within the report. It was important to note that the Council complied with all current legislation in determining the pay and remuneration for all its employees. The policy took into account the changes to pay policy approved by Council at its previous meeting. The levels of remuneration were nationally determined by the National Joint Council. The salary points within a grade, up to grade 11, were nationally determined. The salary points above this were locally determined using an external assessor, West Midlands Employers, which was a stand-alone regional employers’ organisation co-owned by 32 West Midlands councils.
Members were advised that the papers in respect of council tax setting were included within the second supplementary agenda pack. The levels of tax documented in the report took account of the requirements of Bromsgrove District Council, Worcestershire County Council, the West Mercia Police and Crime Commissioner, Hereford and Worcester Fire & Rescue Authority and the various Parish Councils. The Council Tax resolutions that Council was asked to approve detailed the statutory approvals in relation to the 2019/ 2020 budget and the Council Tax to be recovered on behalf of WCC, the Police and Crime Commissioner and the Fire and Rescue Service
Councillor Cooper took the opportunity to pass on his gratitude for the input of the Members of the Finance and Budget Working Group to the budget process and also thanked Ms Pickering, Mr Forrester, Ms Goldey and the rest of the finance team for their hard work in putting together the budget and MTFP. He also paid tribute to the Heads of Service and their teams for engaging with and being supportive of the budget setting process, which had been much more robust this year than before.
Councillor M. Thompson responded to the presentation of the budget and advised that his Group would not be putting forward an alternative budget. However, he wished to highlight what he believed were a number of failures, including the estimated £1m given to the County Council for the Parkside offices, a failed IT system, unpaid rent at Sherwood Road and thousands of pounds wasted on an empty building at Burcot Lane. The £150k to be given to the Greater Birmingham LEP was questioned as the Council was also a member of the Worcestershire LEP. Councillor Thompson also raised concerns that the Council continued to pay Mott McDonald for work carried out to review planning applications, due to the Council’s lack of confidence in the WCC’s Highways Team and the models used. The amount of funds spent on legal consultants when the Council employed a Legal Team who should be able to advice the Council on legal matters. It was suggested that this wastage could be invested in frontline services and give back benefits to local communities, for example free swimming for the under 18s, rebuilding the sports hall and investment in green spaces and community gardens. Building cycle racks in the town centre and the reintroduction of pensioners’ and free parking for the disabled were also suggested.
Councillor Thompson went on to ask a number of rhetorical questions of the Portfolio Holder for Finance:
· Why did the budget not contain anything aspirational – there had been talk at previous meeting of Bromsgrove becoming a centre for business and innovation but there did not appears to be any plans within the budget which reflected this?
· Why was it now costing to run the market when Members had originally been advised that it would be at no cost to the Council and may bring in a small income stream?
· Why had the planned savings reduced from £625k to £300k?
· Why there was no mention that the building company was going to bring in an income?
· Why was there no mention of the Burcot Lane site development?
Councillor Thompson also questioned what would happen in future years when the reserves were taken below the recommended limit. He believed that the budget was balanced on the assumption that the Council did not have to pay the Negative Revenue Grant and was concerned as he understood that this was only guaranteed for one year and what would be the likely outcome should this be reinstated in future years. Councillor Thompson urged the Council to be more imaginative and find ways of reigniting the local economy. It was important to approach WCC and have an open and frank discussion with them around the Mott MacDonald issue and ask for them to refund the cost of this work. It was important that the Council made better use of its assets and not selling them off. He also urged the Council to carry out a review of the senior management, highlighting that a saving had already been made by the transfer of the Head of Leisure and Cultural Services, as he did not believe it was necessary for this vacant post to be filled, as the leisure asset was run by a private company. He believed that the budget did not add up and that services were being cut whilst senior management salaries remained at their current rates.
An amendment to the Medium Term Financial Plan (MTFP) were proposed by Councillor C. Hotham and seconded by Councillor S. Colella.
In proposing the amendment Councillor Hotham explained the Independent Alliance’s budget was a simple budget which was designed to maximise the financial stability of the Council. He believed that the current budget merely ran down the Council’s reserves with the hope that something would turn up in order to resolve matters. He explained that the Council needed to explore all possibilities to protect its position. As a recent CIPFA report had stated an attitude of “nowhere to run, nowhere to hide” was needed. Members were advised that the bulk of the proposals put forward were merely to deliver on previous promises. The current budget proposed running down reserves from £4.179m to £1.111m. Councillor Hotham believed that this was unacceptable and it was now time for action and for the Council to be ambitious in moving forward.
Councillor Hotham took Members through each line of the proposals, which were in the supplementary agenda pack 2 providing explanatory detail where necessary. He drew particular attention the New Homes Bonus Community Grants Scheme, which his Group believed had an important part to play in contributing to local communities and that they would also introduce a Member Ward Fund, to give Members the opportunity to fund small projects that they were aware of within their own Ward. He also confirmed that the budget allowed for any funds from the Business Rates Pilot Scheme to be invested back into communities in respect of community projects and further support for the Lifeline service. Councillor Hotham also made reference to the Efficiency Plan which had been completed at the request of Central Government, but which appeared to no longer be taken into consideration.
It was further explained that buried within the Medium Term Financial Plan, was financing for £20m of investment, but with no indication as to how this would be spent. It was proposed that by pushing for greater efficiencies, demanding the Council’s fair consideration from WCC, improving parking control and supporting the local community at the same time as improving the Council’s reserve position the Council would have a positive future.
In summing up, Councillor Hotham said he was proposing to push harder on achieving already promised efficiencies with an ambitious budget in order to try and secure the financial future of the Council with long term investment at the same time as supporting communities. If this was not supported he hoped that as had been suggested, some of the ideas put forward would be considered by Cabinet in the future.
In support of the amendment Councillor S. Baxter explained the ethos of her Group and how they had come up with the alternative budget, she had not presented this as it had been formulated by two of her Members who had taken part in detailed discussions through their roles on the Finance and Budget Working Group and therefore had a better understanding and knowledge of the Council’s financial position. She reiterated the concerns raised in respect of the continued use and cost of Mott MacDonald and the need for this cost be recharged to Worcestershire County Council. She also spoke in support of the increase to the New Homes Bonus Community Grants Scheme and the introduction of a Member Ward Fund, as it was important that projects continued to be supported and encouraged.
Councillor Cooper thanked the Independent Alliance and suggested that there were some interesting ideas within it which would need to be developed more fully into business cases before any agreement or consideration could be given to them. He hoped that the charges for Mott MacDonald in this coming financial year would be the last ones.
Members discussed a number of areas considered within the amendment in more detail, including:
· The introduction of an energy plant to support the District’s housing growth and where this would be located and more importantly the cost.
· The feasibility of such a plant.
· The importance of the Council having a vision and aiming to make improvements that would benefit all its residents.
· Councillor Colella asked for it to be minuted that he was disappoint with the ridicule that the Independent Alliance’s budget had received and found the comments childish.
· The ongoing infrastructure problems in the District and how these would be addressed.
· The importance of libraries and the role they played in the local communities.
· The need to give residents the reassurance that the Council was doing its best for them.
Councillor Hotham thanked Councillor Cooper for acknowledging that some of the suggestions within the budget were worth further consideration and he hoped that if nothing else, these would be taken forward. He stressed the importance for the efficiencies to be carried through and the need for long term investments to be made in order for the Council to become as sustainable as possible in the future.
As required under the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 a named vote was taken on the proposed amendment.
For the amendment: Councillors Baxter, Colella, Hotham, Peters, Turner, Van der Plank (6)
Against the amendment: Councillors Allen-Jones, Cooper, Deeming, Denaro, Dent, Glass, Jones, Laight, May, Sherrey, Taylor, Thomas, Mike Webb, Shirley Webb, Whittaker (15)
Abstentions from the amendment: Councillors Bloore, Buxton, Jenkins, Peter McDonald, Christine McDonald, Mallett, Shannon, Thompson (8)
The amendment was lost.
The Leader spoke in support of the substantive recommendation and highlighted that there were a number of investment projects which were underway, for example the Burcot Lane redevelopment, Homes England had agreed the Heads of Terms for this and discussions were underway in respect of developing the land, which was unfortunately at this stage confidential. Consideration was also being given to a digester system in partnership with Severn Trent Water.
Members discussed what the Council had achieved over the last three years, despite the cuts to its budget at a national level. Significant progress had been made and this had been recognised by the Auditors when the final accounts for the previous year had been presented to them. Councillor Colella commented that whilst the Auditors had been positive about the accounts, the Audit, Standards and Governance Committee had looked at the process which had improved and not the budget position. Councillor C. Bloore commented on the amount of cuts that had been made and that this level was unsustainable. The Council needed to stand up to Central Government to ensure that this did not continue, in order to ensure that services were not cut.
Councillor P. McDonald was concerned that cutbacks could impact on a number of areas and suggested that something similar to what happened at the Marlbrook Tip site could happen if the Council did not take the necessary action. He suggested that the removal of asbestos from local schools was of concern. The Deputy Leader responded that this was a matter for the County Council.
In summing up Councillor Cooper said the suggestions made had been taken on board and needed to be developed further. The budget was for one year and for the following years the Council needed to ensure that the necessary improvements and savings were made.
As required under the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 a named vote was taken on the Medium Term Financial Plan 2019/20 – 2022/23, the Pay Policy Statement and the Council Tax Resolutions.
For the recommendations: Councillors Allen-Jones, Cooper, Deeming, Denaro, Dent, Glass, Jones, Laight, May, Sherrey, Taylor, Thomas, Mike Webb, Shirley Webb, Whittaker (15)
Against the recommendations: Councillors Bloore, Buxton, Mallett, Peter McDonald, Christine McDonald, Shannon, Thompson, Turner, Van der Plank (9)
Abstentions from the recommendations: Councillors Baxter, Colella, Hotham, Jenkins, Peters (5)
a) that the Unavoidable costs as attached at Appendix1 be approved:
b) that the Revenue Bids as attached at Appendix 2 be approved:
c) that the Identified savings as attached at Appendix 3 be approved:
d) that the Capital Programme bids as attached at Appendix 4 be approved:
e) that the approval of the Pay Policy Statement as attached in Appendix 6 of the report be approved;
f) that the Council Tax Resolutions as attached at Appendix 1 (to these minutes) to include the increase of the Council Tax per Band D @ 2.99% be approved; and
g) that the release from reserves of £150k to fund Mott Macdonald in 2019/20 only be approved.
Cabinet Recommendations 27th February 2019
Council Tax Support Scheme
The recommendation from Cabinet in respect of the Council Tax Support Scheme were proposed by Councillor B. Cooper and seconded by Councillor G. Denaro.
In presenting the recommendations Councillor Cooper advised that the Council was required to review its Council Tax Reduction or Support Scheme for working age recipients each year and that support for pension age applicants was determined by Central Government.
Councillor Cooper reminded Members that last year there were several developments concerning the support scheme for working age applicants. In January 2018, Council approved the recommendation that there would be no change to the scheme for 2018/19 which gave up to 80% relief for working age claimants. It also passed a resolution promoted by Councillor Bloore, that a review was commenced to be concluded by September 2018 and at that time, a draft scheme would be put out to consultation to include an ‘in principle’ 5% increase in support. In April 2018, Council considered a resolution passed by WCC that all care leavers should have up to 100% Council Tax relief until the age of 25. This could not be incorporated into the scheme for the current year, so it was to be considered for inclusion in the next year’s scheme. In the meantime, it was agreed that care leavers would be paid out of the hardship fund. Councillor Cooper further advised that In the autumn, a revised scheme was drawn up which included up to100% relief for the care leavers and an increase in relief to a maximum of 85% for working age claimants which has gone out to consultation. The responses were shown within the report and indicated support for increasing the Council Tax relief up to 85%. The other preceptors, WCC, the Police and the Fire and Rescue Service did not support this increase. If the Council were to go ahead with the increase, it could cost the preceptors about £100k a year for the working age claimants and about £20k for care leavers.
Members were advised that a full review of the scheme in terms of its administration and the levels of support was thought to be necessary, particularly in view of the introduction of universal credit to Bromsgrove. Unfortunately, this review had not taken place last year in part because of the long- term sickness of the senior officer who was tasked to carry it out and it was therefore proposed that this would be done in the coming year.
Councillor Cooper clarified that In the meantime, Cabinet was proposing to Council that the Local Council Tax Support scheme was revised for 2019 / 2020 as detailed in the report.
that the Local Council Tax Support scheme is revised to provide:
a) Increase to maximum level of support for working age claimants from 80% of liability to 85% of liability;
b) Care Leavers under 21 years of age are treated as a protected group and provided 100% Local Council Tax Reduction (LCTR);
c) Care leavers aged 21 years or over and under 25 years of age are treated as a protected group and provided up to 100% LCT;
d) The scheme is uprated in line with national welfare benefits; and
e) Council Tax Hardship Scheme is amended to enable transitional support to be provided to care leavers under 25 whose income results in significant withdrawal of support