Agenda item

The Interim Director of Finance presented the Medium Term Financial Plan (MTFP) - Tranche 1 Budget Update including Fees and Charges. During the presentation the following was highlighted for Members’ consideration:

 

·       The Council’s budget would be set in two tranches for the 2023/24 financial year as it had been in 2022/23. The final Council Tax Resolution would be approved by Council in February 2024. It was noted that the process would be more difficult in the 2023/24 financial year due to several factors including:

 

1.     the £637,000 overall deficit across the three years of the 2023/24 MTFP.

2.     The Council still needed to close its Accounts for the 2020/21 financial year.

3.     The loss of key staff.

4.     The cost of living crisis.

 

Some wider factors included:

 

1.     The war in Ukraine and the impact of inflationary increases.

2.     Climate Emergencies and associated costs to implement policies linked to these declarations.

 

Clarification was provided on some of these factors including the national shortage of audit resources to complete the closure of Local Authority accounts. It was estimated that currently there were 900 outstanding audits still to be carried out across the UK between the 2015-16 and 22-23 financial years.

 

It was anticipated that Central Government would have to look at Local Government funding in a different way going forward, potentially being more prescriptive, in light of the number of Local Councils who had issued S114 Statements as a result of being in significant financial difficulties.

 

Members were informed that there would be no service related savings during this tranche of the budget. These would be looked at more closely once the Local Government Settlement had been confirmed on 19^th December 2023 (the present expected date).

 

A number of assumptions had been made within the report: the increase of Council Tax by 2 per cent, no increase in Business Rates, an increase in properties as a result of the Local Plan of 150k houses (year 1), 200 (year 2) and 150 (year 3), no New Home Bonus funding pending any announcement within the Local Government Settlement, other Government Grants and pension fund assumptions are as previous years allocations.

 

Further assumptions were reported to Members, and it was detailed that the Staff Pay Award costs were approximately £770,000 more and that it was prudent to increase the Councils 2024/5 pay award impact from 2 per cent to 3 per cent given the significant increases that have been offered by the Employers during 2022/3 and 2023/4. The 2025/6 and 2026/7 pay awards were assumed to be 2 per cent.

 

In terms of inflation, it was explained that it was also prudent to include a 5 per cent budget for inflationary increases to contracts.

 

Officers informed Cabinet that some of these pressures could be partially mitigated as currently only 60 per cent of the additional Utilities budget was being utilised.

 

Fees and Charges were discussed, and it was highlighted that the proposed Fees and Charges increase for 2024/25 would be 7 per cent (in line with inflation) returning to 2 per cent for the financial years 2025/23 and 2026/27.

 

The Departmental Pressures were summarised for Members and in doing so they were informed that a target of £500,000 for reclamation of benefit payments had previously been set. However, due to more accurate information and improved processes the need for recovery had decreased.

 

In addition to this, it was highlighted that there was still no Government guidance on waste delivery in the future. This presented a potentially huge cost to the Council as it would possibly need to move to an electric or hydrogen fleet or increased use of Hydrogenated Vegetable Oil (HVO) to fuel the fleet vehicles. It was confirmed that this form of fuel was more expensive than diesel. This and other ‘Green’ targets would certainly put pressure on future budgets.

 

Further Departmental Pressures included:

 

·       Formalising the present pilot scheme on planning enforcement being delivered by Worcester Regulatory Services (WRS) within the Budget. This would equate to an ongoing cost of £72k a year.

·       An increase of £93,000 a year to continue the Service Level Agreement (SLA) between the Council and Wychavon District Council (WDC) for the management and enforcement of on and off street parking increases.

·       The result of a review of allocation of resources within the North Worcestershire Water Management (NWWM) SLA with Redditch and Wyre Forest would result in an increase from £66,000 per annum to £100,000 per annum.

Tranche 2 of the Budget would look to identify and fill any gaps within the Budget. This could include looking at the Commercial fees and charges, parking fees and new allowable increases in Planning fees. In order to meet the Strategic Priorities of the Council more funding was certainly required. It was reported that the following priorities would also be looked at in Tranche 2:

 

·       Recharges.

·       Debt costs – given the slippage in the Capital Programme.

·       Business Rates Re-baselining.

 

It was noted that the Capital Programme, as agreed at Council in February 2023, had been included in an appendix to the report. It included the information on Play and Parks improvement works. Members were informed that the £1.597m requirements for the Barnt Green Millenium Park Toilets had also been included. Officers explained that this was incorrect as the works had been completed and the costs should have been removed.

 

Following the presentation of the report the areas highlighted below were also discussed:

 

·       The contents of the Chancellor’s Autumn Statement which had been released on the day of the meeting.

·       The use of Task and Finish contracts within the Council’s operations and the potential risk to the Council. Although it was noted that refuse collectors operated a task and finish model of working this question had been raised at a meeting of the Audit, Standards and Governance Committee and had been addressed by Officers and a full response provided at that time. It was noted that the External Auditors had also raised this with relevant Officers previously. Officers undertook to look at this further if necessary.

·       The complicated and idiosyncratic way Local Government Budget were presented. These were explained to Members for future reference. Officers confirmed that there would be a detailed glossary and explanation of terms included in the Tranche 2 Budget papers.

·       The consultation period for Tranche 2 of the Budget – this was noted as February 2024. It was confirmed that Parish Councils would be able to take part in the consultation prior to the finalisation of Tranche 2.

·       Leisure requirements – it was queried where the Play Area cost and requirement information had been gathered. It was confirmed that this had been provided by Officers following work undertaken as a result of several Questions and Motions considered at Full Council meetings. However, it was clarified that some of these improvements would be funded by the UK Shared Prosperity Funding (UKSPF) received previously.

 

The Leader invited Councillor P. McDonald to speak in his role as Chairman of the Overview and Scrutiny Board. Members were informed that this report had been considered the previous evening by the Finance and Budget Working Group (FBWG) on behalf of the main Board. During this meeting there had been several detailed discussions regarding the Planning Enforcement proposal, and the proposed increase in costs in respect of NWWM and the Parking SLA with WDC.

 

Councillor McDonald stated that he and other Members were not aware that WRS had been carrying out enforcement duties on behalf of the Council’s Planning Department. It was raised that this should be a Planning function and therefore carried out in-house.

 

Officers explained that there was a national shortage of Planning Officers and Members were assured that numerous methods had been utilised to try to recruit and retain Planning Officers. This included apprenticeships, career graded roles, training and agile and remote working provision. However, the problem of retention and recruitment still remained partly due to the higher salaries available in the private sector.

 

Some Members felt that given the current situation in shortage of Planning Officers the formalisation of utilising WRS was the best way forward. They were not a third party provider and offered expertise in a complex area. The WRS Officers were able to triage enforcement matters to ensure the most expedient resolution to Planning enforcement matters resulting in a better and cost efficient service for residents. It was requested that the date the initial use of WRS Officers for Planning Enforcement had been agreed be provided to Members. Officers undertook to provide this information.

 

There was a very detailed discussion regarding the Parking SLA and Members had raised concerns. Councillor McDonald felt that some of the financial information included within the report should have been considered on confidential papers due to commercial sensitivity. Although this concern was noted it was clarified that none of the figures were confirmed at this point as this was part of the Budget building process. It was further reiterated by Officers that full details of any changes to the SLA could not be given at this time, as these were Departmental Pressures that had not yet been agreed. There would be a detailed report presented to Members later in the year once further discussion had been carried out and the information within that detailed report would be presented accordingly. 

 

The Interim Executive Director provided Members with a detailed overview of Parking Enforcement within the District. Highlighting the following areas:

 

·       The £242,000 costs for under the SLA had not been increased for a number of years. Therefore, any increase was in line with inflationary costs.

·       If there were not the full number of Civil Enforcement Officers (CEOs) available to carry out parking enforcement, then costs were not paid in full by the Council. Recruitment of new CEOs was currently underway to and due to the increase in grade following a job evaluation process it was hoped that the recruitment round would be successful.

·       Bromsgrove District Council carried out On-Street Traffic Regulation Orders (TROs) enforcement under an agency agreement with WCC.

·       WDC carried out on and off street enforcement and ticketing within the Districts car parks. Car park income generated approximately £1m per annum and income from Penalty Charge Notices (PCNs) generated approximately £100,000. All income generated from PCNs was used for enforcement costs. This income, however, did not cover the full cost of enforcement. Discussions were ongoing with Senior Officers at WCC to see if there was the potential for WCC to bridge at least some of the financial gap between the income of PCNs and the cost of enforcing TROs for the Council.

·       Notice periods for the cessation of the agency contract with WCC was two years and one year for the WDC. Although there was some discussion regarding the contractual obligations it was felt that nothing could be actioned at the current time.

·       Alternative providers could be approached to provide an enforcement service for the Council;however, this could lead to more targeted enforcement to gather income in a more commercial manner. It was noted that the relationship between WDC had been good over a ten year period and that they had provided the back office software needed for parking enforcement.

 

Some Members expressed that they felt that enforcement was not carried out efficiently, with CEOs driving long distances between areas within the District to carry out enforcement. Although it was stated that sometimes CEOs did not even get to the outer areas within the District. It was agreed that a review was certainly needed to look at the operating model for the future.

 

Members stated that the perception of residents within the District was that the enforcement service provided by the Council was below standard even though some of the enforcement tasks were undertaken on behalf of WCC.

 

Following the robust discussion, it was requested that a report be submitted to the Overview and Scrutiny Board to investigate this matter in more detail. This would provide an opportunity for Board Members to look at a breakdown of data including costs paid to WDC if not all CEOs were available to carry out duties and the cost of enforcement for both on and off street parking. It was suggested that information on specific areas within the District that had been enforced and the last time fees were increased should also be investigated.

 

This would be a time critical investigation with extremely tight deadlines due to the contract end date in March 2024.

 

Members then revisited the issues that had been highlighted earlier in the meeting regarding NWWM. Members were in agreement that NWWM provided a service that benefitted the District, particularly in more recent years. Members stated that it was hard to disagree with the increase in costs if the allocation of resources had been reviewed and it had been determined that NWWM were spending more time within the District than in previous years. Members queried how often the allocation data was reviewed and Officers confirmed that it would be reviewed on a two yearly basis going forward, to better understand resource needed across Bromsgrove. A more detailed appendix to the MTFP would be provided in respect of this matter for Members’ consideration when the Tranche 2 budget was considered in February 2024.  

 

RESOLVEDthat

 

1)         The Council’s Medium Term Financial Plan as at the start of October, and the associated risks and opportunities be endorsed.

2)         These inputs had been used, along with the 2023/24-25/26 Medium Term Financial Plan (MTFP) agreed by Council in February 2023, to project an initial “gap” to be closed.

3)         An initial Tranche of savings proposals, as set out in Section 3.12 - 3.25 and the associated Savings Proposal Document in Appendix A, would be published on 14^th November 2023 and any feedback be considered by Cabinet in January 2023 prior to seeking approval at Council in January 2024.

4)         Tranche 2 of this process would add further information such as the Local Government Settlement to give a final financial position for the Council.

 

RECOMMENDED that

 

5)         That the Play capital works for 2023/4 as set out in the report be approved and added to the Capital Programme.