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 neighbouring authorities could also cause issues / risks in terms of delivering more shared services.     

The Council’s Overview and Scrutiny Committee (OSC) had considered the report at its meeting on 16 October 2023 and the Minute arising (Appendix 7 to the report) had been included within the updated report, together with the following recommendations made by the OSC:

1)     the Town Hall buildings currently not in use and in need of updating, be repurposed for use as temporary housing, using capital that had previously been set aside to purchase temporary accommodation;

2)     the Council’s commercial activities, such as parking enforcement, to be expanded further and the services marketed to others; and

3)     bulky waste charges remain the same and the service be promoted to residents via the MyAlerts system.

Cabinet considered the recommendations from the OSC and it was noted that:

1)     it was not financially viable to repurpose the empty Town Hall buildings for temporary accommodation purposes; options for the Town Hall complex following the cessation of the Town Hall Renaissance project were currently being put together and would be brought before Members in the new year;

2)     options for sharing / offering services were already being considered as part of the Fit for the Future work; and

3)     bulky waste charges needed to be set at a level that covered the actual cost of providing the service, whilst not being cost prohibitive resulting in increased fly-tipping. The need for improved communications about the services provided was acknowledged.

Members noted that the assumptions that had been made in terms of future central Government funding would not be confirmed until the Provisional Settlement was announced, the date of which was currently anticipated to be around the end of December 2023 and as such were subject to change. A further budget report would be submitted to Cabinet and Council in February 2024.

Whilst the Council’s reserves provided some level of comfort over the short term and had been used to address budget deficits previously, this was not a sustainable financial strategy for the medium to long term. The reserves would fall below the recommended £5m minimum level if ongoing savings were not delivered. Heads of Service and other budget managers were responsible for monitoring and delivering the savings required.  Substantial work had been undertaken through the budget savings exercise as part of the new Fit for the Future programme, which was looking to ensure future resilience of the Council’s finances and to ensure reserves were maintained above minimum levels. This had helped to offset the significant spending pressures which the Council was experiencing in relation to homelessness, inflationary pressures and increasing uncertainty around future funding levels, all of which were impacting on the medium-term projections.

Members were reminded that there would be difficult decisions ahead; the Council’s ability to generate income through its fees and charges would protect front line services.  The Council provided significant tourism infrastructure at a cost to the local council taxpayer, and it was fair that tourists visiting the area paid a contribution, through car park charges, to help cover these costs.

RESOLVED: That: 

1)            the financial forecast and proposed way forward be noted;

2)            the Council maintain its policy of maximising the annual increase in Council Tax within the Government’s referendum limit;

3)            the Council continues to be part of the East Sussex Business Rate pool in 2024/25 and that the Interim Deputy Chief Executive be granted delegated authority to finalise the necessary agreement with the Member authorities, in consultation with the Cabinet Portfolio Holder for Finance and Governance, if the pool remains financially beneficial;

4)            officers continue to develop proposals that will enable the Council to maintain or replenish its level of revenue Reserves to £5m;

5)            approval is given to consult on;

(a)    the draft savings proposals contained within Appendix 2 to the report and

(b)    the draft fees and charges contained within Appendix 4 to the report;

6)            the Interim Deputy Chief Executive be granted delegated authority, in conjunction with the Cabinet Portfolio Holder for Finance and Governance, to;

(a)    finalise the wording of the budget consultation literature; and

(b)    set and agree any fees and charges not covered by this report (excluding environmental health and licencing which go to a separate Committee); and

7)            the comments made by Cabinet in relation to the Overview and Scrutiny Committee’s recommendations be noted.

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