Agenda and minutes

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The Chair referred Members present to agenda item 1 in respect of filming at the meeting.  Members noted the information contained therein.

Apologies were received from, Yvonne Denny, KanuPriya Jhunjhunwala & Anita Jakhu

There were no items of Urgent Business

None.

None.

To receive and note the minutes of the following Scrutiny Panels and to approve any recommendations contained within:

Adults and Health – 10^th December 2020

Environment & Community Safety – 10^th December 2020

Housing & Regeneration – 15^th December 2020

Children & Young People – 17^th December 2020

RESOLVED

That the minutes of the following Scrutiny Panels were noted and any recommendations contained within were approved:

Adults and Health – 10^th December 2020

Environment & Community Safety – 10^th December 2020

Housing & Regeneration – 15^th December 2020

Children & Young People – 17^th December 2020

The Committee received a cover report which set out how budget proposals detailed in the draft 5 year Medium Term Financial Strategy (2021/22 – 2025/26) had been scrutinised and the draft recommendations that had been reached by the Overview and Scrutiny Committee (OSC) and Scrutiny Review Panels. Attached to this report was the: 2021-22 Budget and 2021-2026 Medium Term Financial Strategy as considered by Cabinet on 9^th December; A summary of General Fund Revenue 2021/22 Budget and Medium Term Financial Plan 2021-2026; a list of all new savings proposals, along with the Total Savings Proposals for each priority and a pro-forma outlining each saving; the proposed capital programme plan for 2021/22 – 2025/26, along with a description of the key proposed capital investments; and a copy of the savings tracker for each of the priority areas of the budget.

Members of the Committee were asked to consider and agree recommendations

contained within this report so that these could be considered by Cabinet on 9th

February 2021, when they were scheduled to  agree the final MTFS proposals that will be put to Council on 22nd February 2021. The report and its appendices were introduced by Cllr Adje, Cabinet Member for Finance and Strategic Regeneration and Jon Warlow, Director of Finance, as set out in the report pack at pages 41-142. Also present for this item were Frances Palopoli,Head of Corporate Financial Strategy & Monitoring & Thomas Skeen AD for Finance.

The following was discussed in response to the report and the revenue budget:

1. In response to a question, officers advised that the report set out that a balanced budget would be achieved subject to the use of reserves to meet the £5.4m budget gap, as it stood at the time of writing the report. The Director of Finance advised that the direction of travel since December had been positive so it was envisaged that this gap may come down in the February report. In response to a follow-up, the Committee was advised that which reserve this money came from, and how it would be funded would be detailed in the report to Cabinet in February. Officers confirmed that there was a budget resilience reserve within the existing budget of around £7m.
2. In response to a question around the High Needs Block and the extent to which the Director of Finance was comfortable with the overspend involved, the Director of Finance advised he could not say that he was comfortable with the position but commented that the overspend was a result of successive underfunding by central government. The Committee was advised that the net overspend was around £4m and that the service was working hard to keep the overspend down. Funding for the High Needs Block was ring fenced so that even if the authority wanted to, it could not use General Fund Reserves to meet this budget gap unless the Secretary of State gave approval. Officers advised that the government had given an indication some months ago that it was looking  ...  view the full minutes text for item 26.

The Committee received a cover report along with the Treasury Management Strategy Statement (TMSS) for 2021/22,  before it was presented to Corporate Committee and then Full Council for final approval. The report was introduced by Dapo Shonola, Head of Pensions & Treasury as set out in the agenda pack at pages 143-167. The following points were raised in discussion of the TMSS:

1. The Committee sought clarification around borrowing levels going forwards. In response officers advised that borrowing for the current year was £530m against a borrowing limit of £957m and that in 2024/25 borrowing would rise to £1.8b against a borrowing limit of £1.89b. Officers advised that the operational boundary was set as part of the budget framework and that there was still a projected £90m gap in the operational headroom for 2024/25.
2. In relation to a question, officers advised that the TMSS set out how the authority was going to borrow money, which was largely used to fund its capital programme.
3. In response to a request for assurances, officers advised that Treasury Management was audited as part of the final accounts and that there had been no concerns raised. Furthermore, the authority had not exceeded and of its Treasury Management indictors in the current year. 
4. The AD for Finance elaborated that the annual accounts were audited every year, and these were signed off by Corporate Committee, whilst the internal audit of the treasury management functions was conducted every two years. No concerns had been raised about any of the transactions within treasury management in the most recent internal and external audit processes. The external audit for 2019/20 had not yet been completed so the AD for Finance advised that he could not say for certain that there were no issues but he advised that he was not aware of any issues arising during the work undertaken to date as part of the external audit.
5. In relation to a question around LOBO loans, officers advised that there had been an objection to the accounts raised in previous years around LOBOs but this objection was dismissed by the external auditor. Officers advised that Committee that there were 4 LOBO loans currently held by the Council and that the average rate of interest on these loans was 4.73%. In response to a follow-up question, officers advised that the relative borrowing costs of these loans was monitored regularly and that to date it had not been financially beneficial to the Council to restructure these loans. Officers assured the Committee that the interest rate was lower than an equivalent long term loan at the time from the Public Works Loan Board. Officers also gave assurance to Members that there was no risk of the lenders calling in these loans in the short-medium term as interest rates would not exceed 4.73% and so it would not be in their interest to do so.  
6. In response to a question, officers advised that the authority held £125m in LOBO loans and although an average interest rate of 4.73%  ...  view the full minutes text for item 27.

N/A

15^th March 2021

15^th March 2021