To authorise the Leader to sign the Minutes of the meeting held on 9 October 2023 as a correct record of the proceedings.

The Chair was authorised to sign the Minutes of the meeting held on 6 October 2023 as a correct record of the proceedings.

An apology for absence was received from Councillor T.J.C. Byrne.

To receive any disclosure by Members of personal and disclosable pecuniary interests in matters on the agenda, the nature of any interest and whether the Member regards the personal interest as prejudicial under the terms of the Code of Conduct.  Members are reminded of the need to repeat their declaration immediately prior to the commencement of the item in question.

Declarations of interest were made by Councillors in the Minutes as indicated below:

Coupar                        Agenda Item 12 and 14 – Personal Interest as a Council appointed Director on Rother DC Housing Company.

Field                             Agenda Items 8, 9 and 11 – Personal Interest as an elected Member of East Sussex County Council and a member of the Planning Committee that considers Traffic Regulation Orders.

Mrs Kirby-Green         Agenda Item 11 - Personal Interest as an elected Member of East Sussex County Council and a member of the Planning Committee that considers Traffic Regulation Orders.

Maynard                      Agenda Items 6 and 11 – Personal Interest as an Executive Member of East Sussex County Council.

Thomas                       Agenda Items 12 and 14 – Personal Interest as Chair of Rother DC Housing Company.

The following item includes material which is exempt from publication by virtue of Part 1 of Schedule 12A of the Local Government Act 1972, as amended, and it is recommended that the press and public be excluded.  The relevant paragraph of Schedule 12A indicating the nature of the exempt information is stated after the item and is reproduced in full at the end of the agenda.  In all the circumstances of each case, it is considered that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED: That the press and public be excluded whilst matters containing exempt information, as prescribed by Part 1 of Schedule 12A of the Local Government Act 1972, as amended and relating to Minute CB23/41 was under consideration.  Appendix 5 submitted in connection with this item and which contained information exempt from publication by virtue of Part 1 of Schedule 12A to the Act shall remain confidential if and so long as, in all the circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Cabinet received Minute OSC23/29 arising from the meeting of the Overview and Scrutiny Committee held on 16 October 2023 that had considered a report on the proposed Discharge of Homelessness Duty to a Suitable Private Rented Property Policy.  The Cabinet Portfolio Holder advised that the Policy regularised the processes that were already in place as part of the solution to combat homelessness.  The Policy enabled the Council to make transparent offers of private sector tenancies to all households where a suitable property had been identified.  The Private Sector Housing Team worked hard to secure suitable properties with reputable landlords each month.   

RECOMMENDED: That the Discharge of Homelessness Duty to a Suitable Private Rented Property Policy be approved and adopted;

AND

*RESOLVED: That the Head of Housing and Regeneration be granted delegated authority to make any further changes that may be required to the Discharge of Homelessness Duty to a Suitable Private Rented Property Policy in the future.

*The RESOLVED parts of these Minutes are subject to the call-in procedure under Rule 16 of the Overview and Scrutiny Procedure Rules.

Consideration was given to the report of the Interim Deputy Chief Executive on the Revenue Budget and Capital Programme Monitoring as of 30 September 2023.  The Revenue Budget and Capital Programme statements were summarised in Appendices A and B respectively to the report, together with the impact of the forecast on the Council’s Reserves at Appendix C.  The report also included a brief update on the Collection Fund performance.

The forecast outturn for the 2023/24 financial year, indicated a forecast deficit position of £2.961m at 31 March 2024, against a budgeted deficit of £2.221m which was a variance of £0.74m.  The updated Medium Term Financial Strategy looked to address the financial position of the Council, considered elsewhere at this meeting (see Minute CB23/42 below). 

The Revenue Budget forecast as at the 30 September 2023 indicated a deficit of £0.656m against the approved budgeted drawdown from Reserves of £2.045m resulting in a forecast reserve drawdown of £2.701m.  The main reasons for the variations were detailed in the report, although it was noted and agreed that the descriptions of the main variances would be more explicit in future reports.   

The Council’s Net Financing Costs had reduced due to a review of several schemes within the Capital Programme to ensure deliverability of anticipated outcomes and affordability. As a result of the review, the anticipated borrowing had not been required and interest due to be paid was lower than expected by £471k.  Interest income from investments was expected to yield an additional £730k, of which £530k was in respect of an increased focus on treasury management activity and higher interest rates since the budget was calculated and £200k due in interest on loans to the housing company.

The revised 2023/24 Capital Programme budgets had been derived from reviewing the project cashflows and assessing the expected position at this time. There were a number of additions to the Capital Programme including unexpected replacement boiler costs at the Town Hall; the refurbishment of five tennis courts at Egerton Park as part of grant acceptance conditions; potential payments in respect of contributions towards dilapidations at Rye Swimming Pool and Bexhill Leisure Centre and Pool; an additional Disabled Facilities Grant allocation and changes to the Changing Places Toilet schemes approved previously.  The current budget for the Capital Programme’s for the year was £28.4m, with the forecast outturn for the year as at Quarter 2 being £19.9m, a variance of (£8.5m) or 30% of the programme. 

It was noted that the collection rate as at the 30 September 2023 for the Council Tax and Business Rate parts of the Collection Fund was 57.10% and 58.62% respectively of the collectable debit, which was 0.21% and 0.43% lower respectively than the corresponding figures in 2022/23.  It was considered that the collection rates had held up well despite the squeeze on finances following the pandemic and the cost-of-living crisis, but a future decline in collection rates would have an adverse impact on the Council’s income.

RECOMMENDED: That:

1)        the scheme to meet  ...  view the full minutes text for item CB23/40.

Members considered the comprehensive report of the Director – Place and Climate Change which provided an update on the progress of the Blackfriars Infrastructure and Housing project and the latest financial position. The report also outlined some recommended amendments to the Shareholders Agreement between the Council and Rother District Council Housing Company Ltd (the Company) and the Company Articles of Association.  The report demonstrated that positive progress had been made with the infrastructure scheme on this historically stalled site, however, the biggest risk to the project was the marginally viable status of the site, compounded by increased infrastructure costs and challenging market conditions.

At the time of reporting, the Company Board’s approved housing delivery option of 130 affordable homes and 70 open market sale, was now not viable.  This would leave no surplus available to help absorb the deficit on the infrastructure delivery or to manage the ongoing project risk of further cost increases.

Whilst the Company had considered various options to demonstrate a profit-making scheme required of a commercial entity, the only viable option to provide sufficient business justification to continue the housing project at this stage, was to formally submit a Financial Viability Assessment to Planning to determine the removal of the s106 planning obligation, with the view to delivering 100% open market sale.  This enabled the Company to proceed with a scheme and to secure the necessary loan funding arrangements for continued business justification and to achieve the business aim of increasing supply of housing.  The various options considered by the Company were detailed in the financial appraisal contained within confidential Appendix 5 to the report; Members did not go into confidential session to discuss the confidential Appendix.   

It was noted that the option to sell the whole site to a registered provider for 100% affordable housing had been considered and ruled out as an unviable option but had not been included in the options appraisal; details of this option would be circulated separately to Members to demonstrate why it was not viable.  It was further noted that if this option was viable, the Council would not lose nomination rights, however, many registered providers had curtailed their building programmes due to the current economic viability constraints. 

The local Battle Members were disappointed that the affordable housing element had been removed and that this would not be a popular decision locally within Battle, where there was a real need for affordable homes.  However, positively, it was noted that all the housing in the new scheme would be Energy Performance Certificate rated B and A, if economically viable.

Members were reassured that the delivery of an element of affordable housing on this site was still very much the intention of the Housing Company and that every effort possible would be made to achieve this at some point.      

The Council and Company continued to work collaboratively to improve the overall financial performance of the project and the key activities and resources involved in this process were explored in detail in  ...  view the full minutes text for item CB23/41.

Members considered the comprehensive Medium Term Financial Strategy (MTFS) which outlined the financial issues affecting the Council and the impact on the financial forecast over the coming years.  The MTFS was attached at Appendix 1 to the report, there was a budget gap of £3.8m next year, and a proposal to meet £3.3m of this from the new savings programme and the balance of £0.5m to be funded from reserves.

The MTFS aimed to:

Ø   provide a high-level assessment of the resources available and outlined the projections for the following four financial years;

Ø   refresh the financial projections considering local, national, and global factors including known spending pressures and commitments, along with forecast future funding reductions and the impact of the national economic outlook;

Ø   provide preparatory work for the following year’s budget;

Ø   explore the demands on the Capital Programme, both in terms of ambition and resources, along with the impact on the revenue account and reserve levels held by the Council; and

Ø   address the sustainability of the Council’s financial position.

Members were appreciative of the very comprehensive report that had been compiled and paid tribute to the Interim Deputy Chief Executive for his work in providing this new style of report, that pulled together all relevant issues and was clear and easy to read. 

The savings and efficiencies totalling £3.3m that the Council had identified to help support the 2024/25 budget could be found within Appendix 2 to the report. The draft capital budget was included within Appendix 3 to the report, while the fees and charges proposals for the next year were covered by Appendix 4, which could be amended in light of further work and consultation responses and would be agreed as part of the budget setting in February 2024.  Appendix 5 to the report included a risk assessment for the next year’s budget, along with a sensitivity and scenario analysis at Appendix 6.  Members aired some concerns over some of the proposed increases in car parking charges but were pleased to see the proposed reintroduction of a range of length of stay options at some Camber car parks, following the trial of a fixed tariff in the summer season.

Members were reminded that all the budget proposals, including the level of fees and charges, were being consulted on during November and December and feedback would be considered in February 2024 when setting the council tax; the Council’s consultation and budget planning cycle was set out in detail within the report.

Some Members were concerned at the projected level of staff pay increases within the report and the impact this might have on recruitment and retention.  Each additional 1% on the wage bill cost the authority an additional £100k; historically there were issues in recruiting to professional roles such as planning and environmental health.  The Council’s People Strategy would also focus on the holistic benefits for working within the district to attract future employees, rather than just focusing on financial reward.  Differing pay levels between  ...  view the full minutes text for item CB23/42.

Cabinet received Minute OSC23/31 arising from the meeting of the Overview and Scrutiny Committee held on 16 October 2023, that had considered a report on the planned consultation on proposed changes to the Council Tax Reduction Scheme (CTRS) to take effect from 1 April 2024.  The proposed changes to the scheme for 2024/25 were to increase the working age maximum to 100% and to remove the £5 per week minimum payment.  This would mean that those residents on the lowest of incomes would not have to pay any council tax.     

The Council was required to undertake a consultation with both the public and the Major Precepting Authorities when changes to the CTRS were proposed. It was therefore proposed and agreed to run a six-week consultation exercise during November and December taking the form of an online stakeholder survey. Details of the consultation documentation were attached to the report at Appendix A and the consultation results would be reported to Members in early 2024. 

It was requested and agreed that contact be made with support services such as the Citizen’s Advice Bureau and Foodbanks to raise the profile of the consultation and assist residents in responding.  It was further requested that plain English be used throughout the consultation document and simplified wherever possible to aid completion.   There was a general plea that all consultation documents should be seen by the relevant Cabinet Portfolio Holder prior to publication. 

It was noted that the imminent Royal Assent of the Levelling Up and Regeneration Bill would allow the Council to reduce the minimum period for the implementation of a premium for empty premises from two years to one year, with effect from 1 April 2024; and allow the introduction of a second homes premium of up to 100% with effect from 1 April 2025.

It was acknowledged that moving to a 100% working age CTRS and the removal of the £5 per week minimum level, would inevitably lead to an increase in the cost to the tax base, however, the increase in the tax base generally (estimated at around £230k) and the change to the empty property premiums with effect from 1 April 2024 could offset the majority of the additional costs.

RESOLVED: That consultation with the public and Major Precepting Authorities on proposed changes to the Council Tax Reduction Scheme for working age applicants with effect from 1 April 2024 be approved.

(Councillor Field declared a personal interest in this matter as an elected Member of East Sussex County Council and in accordance with the Code of Conduct remained in the room during the consideration thereof).

Consideration was given to the report of the Interim Chief Finance Officer on Treasury Management activities up to 30 September 2023.  The report provided an update on several financial areas as follows:

·           Financial Investments: Total investments were predicted to yield approximately £555,000 in 2023/24; the budget for the year was £586,000 (94% achieved).

·           Borrowing: Total borrowing as at 30 September 2023 was £31.8m; £11.6m lower than the Capital Financial Requirement.

·           Treasury and Prudential Indicators:  During the financial year to date, the Council had operated within the treasury and prudential indicators within the Council’s Treasury Management Strategy Statement and in compliance with the Council's Treasury Management Practices.  The ratio of Net Financing Costs to the Net Revenue Stream in the original budget was 5.06% but was now predicted to be -1.15%; this was a welcome change as investment income had exceeded financing cost.

·           Non-Treasury Investments: Return on investment after notional interest applied was 4.36% (average) in respect of existing assets and properties purchased through the Property Investment Strategy.

It was noted that the IFRS9 statutory override that allowed councils to disregard changes in the value of their pooled investments and protect taxpayers from market volatility had been extended for a further two years until March 2025, following the recent Government consultation. 

Inflation was significantly eroding the Council’s spending power; at its 20 September 2023 meeting, the Bank of England’s Monetary Policy Committee (MPC) updated projections which showed the annual CPI inflation rate falling back from its very high level (10% since the summer of 2022 up to March 2023) to around 7.9% in June, then 6.7% in August and September but the fall was not as sharp as previously hoped for.   At the recent meeting of the Bank of England’s MPC, it was agreed to keep the bank base rate at 5.25% to help control inflation in September 2023.

The economic outlook remained uncertain due to the ongoing war in Ukraine, the highest inflation for the last 40 years, rising interest rates, uncertainties over Government policy and possible adverse impacts from the recently reignited conflict in the Middle East.

Cabinet noted that investment activities conformed with the approved strategies and the Council had no liquidity difficulties.

RESOLVED: That the report be noted.

Civil Parking Enforcement (CPE) was brought in within the Rother District in 2020 and East Sussex County Council (ESCC) were in the process of creating one Parking Board to include all areas with CPE.  This would ensure that ESCC looked at the county as a whole, where appropriate, had a consistent approach across all areas and made best use of the time of all those attending.

The Council was therefore invited to confirm its representative on the Parking Board and it was recommended that the Cabinet Portfolio Holder for Parking, currently Councillor Timpe, be appointed.

It was proposed to hold one collective meeting for all CPE areas, twice a year (May and November) with representatives from all four CPE areas in attendance.  The meeting in May would receive service updates and enforcement activity reports and November would include a review of the Annual Parking Report and financial performance, starting in 2024.

Members were pleased that Rother had been given the opportunity to be represented on the newly established Parking Board and the appointed representative would ensure consultation with Members prior to attending each meeting, particularly the Cabinet Portfolio Holder for Regeneration and Economic Development.  It was noted that, historically, the Parking Boards worked extremely well and were operationally focused.

RESOLVED: That the Cabinet Portfolio Holder for Parking, Councillor Timpe, be appointed to the East Sussex County Council’s Civil Parking Enforcement Parking Board.

(Councillors Field and Mrs Kirby-Green each declared a personal interest in this matter as elected Members of East Sussex County Council and members of the Planning Committee that considered Traffic Regulation Orders and in accordance with the Code of Conduct remained in the room during the consideration thereof).

(Councillor Maynard declared a personal interest in this matter as an Executive Member of East Sussex County Council and in accordance with the Code of Conduct remained in the room during the consideration thereof).