The Leader confirmed that Redditch Borough Council had received a Section 24 Notice in relation to its financial sustainability from 2020/21. She advised members that this was due to Redditch Borough Council not having the levels of balances and reserves at a level that enabled them to fund their £1.5m budget deficit that they had to find over the next 3 years. It was highlighted that whilst Bromsgrove had to make savings of £1.2m over the next 3 years, if necessary, it had sufficient balances to meet that shortfall.
Both Councils therefore had to reduce costs and generate additional income in order to address the budget gap that was faced. It was vital that the funding reductions were met to enable services to be delivered to all the Council’s communities.
In assessing Redditch Borough Council, there were a number of services that it provided that were chargeable only to Redditch; any savings from these services would only be attributable to Redditch. As Members were aware officers had already been asked to look at the split of charges between the 2 Councils and any resulting savings from these reviews, together with the aim to reduce enabling costs would be split between the 2 organisations.
The Leader advised that she had spoken to the leader of Redditch Borough Council, Councillor Matt Dormer, and had been assured that they would take the difficult decisions that were required to balance their budget. Members were assured that the financial difficulties Redditch Council found itself in would not impact on the delivery of this Council’s services. However, the Leader reaffirmed the position that this Council had to make significant savings to mitigate the impact of funding reductions in the medium term.
Members discussed the following areas in respect of the Leader’s announcement:
· The regrettable situation and any impact on Bromsgrove services arising from it.
· Whether, if the Council had not already been in the shared services partnership with Redditch Borough Council, this Council would have considered such an agreement. The Leader advised that she was looking at the current situation, not looking back.
· Clarification in respect of the potential impact on this Council and whether it would be appropriate for the Overview and Scrutiny Board’s Finance and Budget Working Group to look at this matter in more detail.
· The need to be proactive in looking at how the Section 24 order could impact on this Council.
· The role of the Finance and Budget Working Group in being set up to consider situations in more detail and the need of this Council to be aware of any impact on its services at the earliest possible stage.
· The amount of savings that this Council needed to make over the next two years was clarified by the Section 151 Officer.
The Leader initially did not feel it was necessary at this stage for the Finance and Budget Working Group to consider the matter; however, after some debate she conceded that she had no objection to the Working Group looking into the matter in more detail should it so wish.