Agenda and draft minutes
Venue: Scaitcliffe House, Ormerod Street, Accrington. View directions
Contact: Ben Caulfield, Policy and Scrutiny Officer
Apologies for absence, Substitutions, Declarations of Interest and Dispensations
Apologies were submitted on behalf of Councillors Patrick McGinley and Scott Brerton. Doug Hayes, Co-optee, also submitted his apologies. Councillor Bernard Dawson substituted for Councillor Scott Brerton.
There were no declarations of interests or dispensations.
Minutes of Last Meeting PDF 157 KB
To submit the minutes of the Resources Overview and Scrutiny Committee on 15th December 2022 for approval as a correct record.
Recommended - That the minutes be received and approved as a correct record.
The minutes of the last meeting on 15th December 2022 were submitted and approved as a correct record.
Resolved - That the minutes from the Resources Overview and Scrutiny Committee meeting on 15th December 2022 be approved as a correct record.
Medium Term Financial Strategy 2023/24 - 2025/26 PDF 1001 KB
The report informs the Committee of the 3-year projections of income and expenditure for the Council ahead of formulating its 2023/24 Revenue and Capital Budgets.
Recommended - That consideration be given to the report.
The Leader of the Council reported that this sets out the forecast financial position of the Council over the next 3 years.
The purpose of undertaking this exercise is to ensure that in setting the budget for 2023/24, the Council has regard for its overall medium term financial prospects and does not take a narrow one year view of the funds it has and the spending pressures it faces, and that it takes a mature prudent view, so that it is able to maintain the Council’s finances in a stable condition year on year going forward.
The Leader reported that making three year forecasts over the last decade has been difficult due to the Government’s commitment to austerity and its drive to reduce public spending, which has led to a series of large reductions in funding to local government on a regular basis. The COVID 19 pandemic and the war in Ukraine have now added additional dimensions to trying to accurately forecast what will happen economically over the next 3 years.
From the announcements made by the Government in December, we know the local government settlement this year will provide some of the funds the Council needs to maintain its services, but also that no commitment has been made to maintaining these funds in future years. Major reform to local government finances remains a strong possibility for 2024/25 and beyond.
The report indicates that the Council potentially faces a fork in the road in terms of its financial position over the next three years. If the Government decides not to embark on reform to local government finances and largely continues to fund the Council as they do currently, the Council will face the need to undertake some cost savings in 2024/25 and 2025/26 along with applying increases to council tax at 2% and achieve some growth in the tax base in both business rates and council tax.
If the Government, however, choose to implement large scale changes in its funding of local government, which sees the amount the Council receives in direct Government grant reduced or even abolished, or the amount we retain from business rates reduced, the Council would face the need to make significant savings. We should receive some more clarity from the Government in late 2023. Therefore, the Medium Term Financial Strategy indicates the Council should remain cautious in its decision taking around any major financial commitments until future funding levels for local government are clear.
The Leader also highlighted several sections of the report including a 0.8% in year savings target, total staffing costs and the 2022/23 pay award, pension costs and the positive position of the Council’s reserves.
The Chair thanked the leader for the report and opened it up to the Committee for questions.
Ken Moss asked how much the Council retain from the collection of business rates. The Executive Director for Resources responded. The Council collect approximately £24 million in business rates. We currently retain 40% of this. However, this 40% is then ... view the full minutes text for item 292.
Prudential Indicators and Treasury Management Strategy 2023/24 PDF 386 KB
To set out the Council’s policy and objectives with respect to treasury management, to explain how it will achieve its objectives and manage its activities; and to agree an investment strategy for 2023/24.
Recommended - That consideration be given to the report.
The Leader of the Council reported that this is produced to comply with the statutory requirements around the Council’s effective management of its resources, its cash management position, borrowings, loans and investments. It follows the advice issued by the Chartered Institute of Public Finance and Accountancy for the sector and in so doing, meets the requirements and provisions of the Local Government Act 2003. The key purpose of the production of this strategy is to ensure the Council takes all relevant decisions in relation to capital spending and financing only after ensuring that such commitments are prudent and sustainable.
The Code requires the Council to clearly set out a number of performance indicators so that it can monitor and evaluate its activity in these areas and ensure it remains on track in the management of its overall financial position.
In terms of our cash investments, we continue to take a defensive position around institutions where we place deposits and sacrifice slightly better interest rates on our deposits for a better covenant over our cash. We use various outside analysis and professional advice in this area to assist our decision making. The report also details our Treasury Management Practices, Minimum Revenue Provision Strategy and various other policy statements which guide the Council’s activities in this area.
There were no questions from the Committee.
Resolved - That the report be noted.
General Fund Revenue Budget 2023/24 PDF 400 KB
This report sets out proposals for the 2023/24 General Fund Revenue Budget. It also provides an overview of key issues arising from the Medium Term Financial Strategy.
Recommended - That consideration be given to the report
The Leader reported that the Council is effectively managing its budget position during 2022/23 and the overall finances of the Council allows it to set a balanced budget for 2023/24 without having to draw upon reserves or make substantial reductions to services or staffing levels. Cost pressures and uncertainty over the future of Government grants which make up over £2million of the £14.38million the Council intend to spend next year contribute to a difficult environment in which the Council must operate.
While the impact from COVID-19 looks to have waned, the economic impact from the war in Ukraine has effected energy costs. We are conscious in setting the budget for next year that the continued impact of the war is unlikely to disappear, so the Council may once again be called upon to undertake necessary actions and deploy extra resources as needed to protect the local population and limit the spread of any new surge.
Cost pressures have added over £2million to the previous year’s budget and we have been able to finance most of the increases from a mixture of extra Government grants, increased business rate growth and some increase in the council tax base. These extra spends will tackle the rising cost and inflationary pressures already being encountered and provide additional funding for the predicted rise in energy costs once the Government’s compensation scheme is removed at the end of March.
The impact of high inflation and the need to ensure the Council’s workforce is maintained and jobs are protected through fair pay awards and pensions has resulted in an almost £900k increase in pay and benefit costs.
The budget also includes growth to continue the Council’s commitment to climate change and reducing emissions through a move towards cleaner fuel across the vehicle fleet. The report also gives details of the anticipated council tax increases of Lancashire County Council, the Police and Crime Commissioner and the Lancashire Combined Fire Authority. Final confirmation of these increases should be known prior to the Council meeting on 23rd February.
The Leader drew attention to Altham Parish Council freezing its portion of Council tax, maintaining free parking in the borough, surpluses achieved and value for money across key operations.
The Committee were invited to ask questions of the Leader.
Councillor Andrew Clegg asked the following:
Whilst I understand the Council’s decision to freeze Council tax due to the cost of living crisis, is this a wise decision given the numerous risks listed in the medium term financial strategy of reduced future funding through government grants and business rates etc for the Council?
The Leader responded. The administration feel that the impact of increasing Council Tax in 2023/2024 will put additional pressures on the local tax payers in a time of high inflation and significant increases in other household costs. The decision has been made to propose a one-off freeze for 2023/2024. The medium term financial strategy standard model assumes that Council Tax there will increase by 2% for the future years. ... view the full minutes text for item 294.
New Scheme Additions to the Capital Programme in 2023/2024 PDF 127 KB
To invite the Committee to consider the Council’s capital investment priorities for 2023/24.
Recommended - That consideration be given to the report
The Leader of the Council reported that the new scheme additions to this year’s Capital Programme would add new projects totalling £8.38 million. This investment adds to the almost £38 million of projects already approved and will increase the Council’s current ongoing investment to over £46 million for 2023/24.
New additions include the redevelopment of Hyndburn Leisure and ensuring the Councils commitment to climate change at the newly planned leisure site to meet the zero carbon build standards. These projects will have continued reliance upon the expertise of Sport England to guide us through a process of determining what is required to best serve local residents and how to access external funding to help finance the improvements required. This addition will take the total investment in the Capital Programme for the leisure estate to over £18.5 million, ensuring that there are top class facilities available in Hyndburn that everyone can make use of to become active and stay healthy.
The Leader said that we will continue our programme of supporting those in need through £1.1 million of disabled facility grants. This year there will also be investment in play areas across the borough, including Milton Close and Mercer Park, whilst redevelopment will take place a Memorial Park and the pavilion and pitches at King George V Playing Fields. The Council must also continue to invest in its operational assets and the welfare facilities at our cemetery, and will develop ICT systems and equipment to improve our methods of service delivery.
The Leader highlighted the near £66 million investment planned for the borough through levelling up and other funds and emphasised that this should be welcomed by all.
The Chair reminded those present that there was a meeting of the Special Scrutiny Committee on 23rd March where detailed discussions on levelling up would take place.
Questions were submitted initially through the Chair.
This Council has previously stated a policy of reducing funding to Hyndburn Leisure in order that they become sustainable and not reliant on the Council for money. However, once again, the 2023/24 Capital Programme shows significant investment of over £5.6 million in Hyndburn Leisure in addition to years of previous capital investments.
When will Hyndburn Leisure actually become self-sufficient?
Other organisations who operate out of our buildings provide vital services to our residents, for example the Civic Arts Group or Community Solutions to name just a couple. Why does the Council not consider investment in these organisations in the same way it does Hyndburn Leisure?
The Leader responded.
The Council own all the assets that Hyndburn Leisure operate from and the capital investment in these assets benefits the council in enabling a provider to deliver the essential health and wellbeing services for the residents of Hyndburn. The provider model used with Hyndburn Leisure enables increased options for the drawdown of funding streams to enhance our assets. The Council alongside Hyndburn Leisure will have generated over £7.2m in external funding to fund the works in the current programme and ... view the full minutes text for item 295.
Alternative Budget Proposals
Opposition groups are invited to table any budget proposals for 2023/24 for consideration by the Committee.
Recommended - That consideration be given to any alternative budget proposals submitted.
The Chair invited Councillor Munsif Dad, Leader of the Labour Group to submit any alternate budget proposals on behalf of his group. Councillor Dad said he wished to thank the Executive Director for Resources for providing him with time and guidance, and that he will be submitting a number of amendments which have been thoroughly costed to the Council meeting on 23rd February. However, due to the time taken to ensure these amendments are robust, he is not in a position to present them to the committee.
The Chair, as Leader of the Green Party Group, said he will not be submitting any alternate budget suggestions to the committee, but may propose amendments at Council.
Resolved - That the item be noted.
Representations and Questions on the Budget
The Leader of the Council to receive and respond to representations and questions from members of the public and individual members of the Council relating to the 2023/24 budget proposals.
Recommended - That the committee give consideration to the questions submitted and the responses from the Leader of the Council.
The Scrutiny and Policy Officer reported that 7 valid questions had been submitted by members of the public or individual members of the Council. None of those who had submitted questions were in attendance. The questions would be asked through the Chair.
The Chair submitted the 7 questions and responses were provided by the Leader.
Response - The Council owns all its operational buildings with none of them being subject to loans or borrowing
2. Public - How much per head has been spent in each of the townships?
Response - The Council spend is not always in relation to the areas where it is raised i.e. High business rates are collected in Altham although the cost of services provided will not be at the same level. There is no specific information for how much is collected or spent in individual areas and spend is allocated on a basis of identified need.
3. Councillor - Can a review of events funding take place, allowing the council to pay for 1 event per townships per year to the tune of £3000 per township. (Tenders would need to be made by groups the year by December the year before) if nobody tenders for that year, then no event is held?
Response - This is an interesting idea that could be looked at in formulating future budgets. There would need to be clear identification of the need for funding and the type of events to be undertaken to ensure any potential funding was going to achieve desired objectives such as increasing the footfall on the high street. The Leader also added that this has already happened to some degree with the recent invitation to apply for events funding including events in other towns and successful bids in Great Harwood and Rishton.
4. Public - Over the past 12 months, how much money has been provided to Hyndburn Leisure and Accrington Stanley/Stanley Community Trust?
Response – Hyndburn Leisure
Pass ported Grants include Total Payments of; Household Support Fund £360k (most of which was distributed to eligible residents), Self-Isolation Grants £10k, Covid Marshalls & other £1k, Sport England £71k, LCC – Weight Management £101k.
Accrington Stanley Community Trust - £400 for Veteran Family Day and £200,000 out of a total grant of £236,000 towards the cost of an extension to the sports hub.
5. Public - £250k has been allocated to King Georges Playing Field. Has there been any financial cost to the Council now Accrington Stanley no longer wants this site? Also if Livingstone Road land is to be made available to the Club how much will it cost to terminate the current leaseholders lease? Will HBC then sell it at market rate or give it away like they did with Highams?
Response - The Council’s priority is to invest in new drainage and grass playing surface at the King George V Playing Field in order ... view the full minutes text for item 297.
Scrutiny Comments and Resolutions to be submitted to Council
As part of the Council’s budget setting process, any comments or recommendations from the Resources Overview and Scrutiny Committee relating to the budget will be submitted to Council on 23rd February 2023.
Having given consideration to all of the information received in this meeting, this Committee should summarise its comments and any recommendations to be submitted to Council.
The Chair wished to thank all those who had taken part in today’s meeting. He explained the role of the Resources Scrutiny Committee in the Council’s budget setting process, and that, having considered all the information provided at the meeting, the Committee can submit comments to Council regarding the revenue and capital budgets.
Councillor Bernard Dawson proposed that the Committee noted the contents of the budget reports and provided no further comments. The Chair proposed that that the Committee noted and supported the content of the budget reports as outlined. This was seconded and voted on with 5 in favour and 1 against.
The Committee also wished to put on record their thanks for those Councillors who took part in the meeting and to commend the officers involved for the work in producing the budget.
That the Committee notes the content of the reports relating to; Performance Indicators, Treasury Management and Investment Strategy 2023/24 – 2025/26, Medium Term Financial Strategy 2023/24 – 2025/26, General Fund Revenue Budget 2023/24 and New Scheme Additions to the Capital Programme in 2023/24;
That the Committee thanks the Leader of the Council, Portfolio Holder for Resources and Leader of the Labour Group for their participation in the Scrutiny meeting and debate;
That the Executive Director Resources, and all other officers involved, be commended for their work in producing the budget.
That having reviewed and debated the budget submitted, the Committee supports the content of the revenue and capital budget reports as outlined