Agenda and minutes

To authorise the Chairman to sign the minutes of the meeting of the Overview and Scrutiny Committee held on 23 November 2020 as a correct record of proceedings.

The Chairman was authorised to sign the Minutes of the meeting of the Overview and Scrutiny Committee held on 23 November 2020, at a later date, as a correct record of the proceedings.

The Chairman to ask if any Member present is substituting for another Member and, if so, to declare his/her name as substitute Member and the name of the absent Member.

There were no apologies for absence.

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.

There were no Declarations of Interest.

Members gave consideration to the report of the Assistant Director Resources on the draft Revenue Budget, which outlined the likely financial position and key issues that Members needed to consider as part of the budget setting process.  The Committee had been requested to consider the draft budget and make recommendations to Cabinet, to be considered at its meeting on 8 February 2021.

Appended to the report were details of the summary draft Revenue Budget (Appendix A), the summary information for each service area (Appendix B), main changes from the 2021/22 budget (Appendix C), the Council’s revenue reserves and identified savings and additional income (Appendix D).

All budgets were shown as “Net Operational Expenditure Levels” which excluded capital charges, central costs and support service recharges.  In addition, budgets were shown on a departmental basis which provided Members with a clear identifiable cost for each service.

The following key issues were highlighted: 

-           as the Council no longer received any Revenue Support Grant it was wholly reliant on revenue from business rates, council tax, specific grants, charges for services and income generation in meeting its net budget;

-           the draft settlement announced by Government in December confirmed that the Council’s share of business rates remained unchanged from 2020/21, a specific additional COVID-19 grant of £519,000 to support the ongoing effects of the pandemic in 2021/22 would be received and additional support to extend the extra support for residents through the Council Tax Reduction Support Scheme (CTRS) amounting to approximately £146,000;

-           New Homes Bonus grant was expected to be £271,770 and would be incorporated into the draft budget to reduce the use of reserves, with no ongoing reliance;

-           further work to refine the business rate estimate in time for the final approval of the Revenue Budget in February was on-going;

-           the 2021/22 council tax base had been calculated at 37,606.6 and showed a reduction of 518 Band D equivalents, mostly due to an increase in the number of CTRS claimants expected in 2021/22 as a result of the pandemic; the in-year recovery rate for Council Tax had reduced to 98.2% from 98.5%, taking into account the increased risk of non-payment due to the effects of the pandemic on employment;

-           the council tax referendum principle for Rother would allow an increase in council tax of £5 or 2% whichever was the highest; it had been assumed that the Council would increase Council Tax by the maximum allowed before a referendum was required;

-           for 2021/22, to ensure the Council remained within the referendum limit, it was assumed that an increase of £4.94 to £189.04 would be agreed for a Band D property, resulting in additional income of £90,000; and

-           the Chartered Institute of Public Finance and Accountancy (CIPFA) considered an authority to be at high risk if the reserves were at less than 5% of net spend; the Council was a long way from this position.

The financial risks that may affect the Council’s finances were highlighted within the  ...  view the full minutes text for item OSC20/40

Members received and considered the report of the Finance Manager on the Revenue Budget and Capital Programme Monitoring Quarter 2 2020/21 that had been considered by Cabinet on 14 December 2020.  The report updated Members on the Council’s finances as at the end of September 2020 and projected a provisional outturn for 2020/21.  A comparison of Quarter 1 to Quarter 2 figures had been disseminated to Committee Members before the meeting and was available on the website.

Since the Quarter 1 Monitoring Report, there had been one reportable virement regarding the transfer of a Business Support officer from Housing and Community to Resources.

At the end of Quarter 2, the Council was predicted to incur a deficit of £2.788m of which £1.871m was unplanned.  This represented an improvement of £97,000 since Quarter 1.  The cost of services showed a deficit of £3.595m and non-service budgets increased the forecast overspend to £4.692m.  This was reduced by £2.821m mainly due to additional grant income from the Ministry of Housing, Communities and Local Government (MHCLG).

The Council’s response to the COVID-19 pandemic had inevitably put the budget under enormous pressure despite some costs being partially offset by non-ringfenced grants from the MHCLG. The net impact of the virus was forecast to be £1.767m at the end of Quarter 1.  Quarter 2 forecast showed a net reduction of £658,000 to £1,109m.

Since the last report, the forecast for non-COVID related costs had increased by £561,000.  Overall, the £3.595m deficit on the cost of services was attributed to various overspends/deficits including staff restructuring, vacancies, reduced planning fees and land charge income, consultancy advice, grants, purchase of new car parking equipment and signage, supporting leisure services, housing benefit overpayments and additional accountancy services.

It was noted that a provision for property rental income shortfall of £200,000 had been included in the forecast due to the impact of the pandemic; to date no rents had been written off.

Cabinet had previously agreed to provide financial support to Freedom Leisure until 31 March 2021; the estimated cost to a maximum of £415,000 was included in the forecast.  The Department for Digital, Culture, Media and Sport would be making £100m available for local authority leisure services via an application process and Rother would be applying.

Interest income from investments was expected to be £98,000 below budget (an improvement of £50,000 on the previous forecast).  Further lockdowns may mean that returns would fall again and result in a further reduction of income.

The Council had received a total of £2,372,000 to date from the Government to fund the cost of the pandemic impact.  An additional £22,000 had recently been received to help fund the administration costs of the Council Tax hardship and Business Rates reliefs.  It was not known at this stage whether further Government funding support would be forthcoming as the national pandemic situation continued.

The net impact on Reserves was forecast to be a reduction of £4.627m against the planned figure of £2.276m.

The Council Tax part of  ...  view the full minutes text for item OSC20/41

Consideration was given to the Overview and Scrutiny Committee’s Work Programme, and the following additions were made:

•           Review of the Disabled Facilities Grant Policy – 15 March 2021.

•           East Sussex County Council Nurseries in Bexhill – Items for Consideration.

•           Post-COVID Recovery Plan – Items for Consideration.

RESOLVED: That the Work Programme attached at Appendix A, as amended, be agreed.