Agenda item

MTFS Update – Budget Strategy 2023/24 – 2025/26

1.1 Each scrutiny board in January will receive a report outlining the budget proposals identified within their respective portfolios for the period from 2023/24 to 2025/26.

1.2 The report outlines the forecast budget position in respect of this portfolio in more detail, explaining the pressures identified over the period to 2025/26 and the actions proposed to mitigate them.


The Assistant Director of Finance & Property Services presented the report, which outlined the forecast budget position in respect of the resources Portfolio, further explaining the pressures identified over the period to 2025/26 and the actions proposed to mitigate them.


Members were informed that the task of presenting a balanced 3-year budget was very challenging in the current fiscal climate.  Budget plans have been established for 2023/24, with some options identified in relation to the 2024/25 and 2025/26 financial years.


Attention was drawn to the detail in the report addressing the Council’s key pressures, mitigating actions, proposed savings and identified efficiencies and to risks relevant to the Resources Portfolio’s budget position. Members were further informed that the Resources Directorate had identified £9.149M savings over the MTFS period, which was comprised of one-off savings of £5.610M in 2023/24, £1.212M in 2024/25 and £1.450M in 2025/26 and ongoing savings of £877,000 in 2025/26.


The report identified key risks relevant to the budget proposals for the Resources Portfolio, with the Assistant Director, Finance and Property Services, drawing Members attention specifically to the cost of living crisis impacting across various areas, including Income and Awards, the increase in the age of outstanding debt, increased ICT operating costs in the form of higher licensing and hardware costs, fiscal pressures placed on catering services through increased food costs and pay settlements and finally wider economic pressures  across the general retail sector which can lead to higher business failures.


Councillor Sleigh OBE noted that the Council was in a unique position in being able to deliver a balanced budget for 2023/24, with strategic savings also identified going forward to 2025/26 via the MTFS which is satisfactory to the Councils external auditors.


Having received the introduction to the report, Members of the Scrutiny Board raised several related questions, which in summary received the following replies and clarification from Officers present:


Ø  An on-going review of the Communities and Partnerships staffing structure would not lead to any redundancies.


Ø  In respect to the reported recruitment and retention issues currently experienced by the Resources Directorate, part of the issue lay with the increased workloads in the areas of finance, Human Resources and ICT support, which compounded the retention issue to a degree.  The current recruitment and retention scenario has been the case since the commencement of the Covid pandemic lockdown. Furthermore, the Council and wider public sector was competing with the private sector for suitably qualified and experienced staff. The Council’s HR service was reviewing how the Council could best present its offer to potential new employees in terms of the benefits arising from working for the Council. However, the working population was generally now more transient post pandemic, and this was mirrored across local authority’s and the West Midlands region in general.


Ø  Regarding the Councils Court costs in relation to Council Tax and Business Rates actions and the liability cost to the Council of £95 against the Council’s subsequent charge of £57.50 against the other party, the Finance Manager advised that further information would be provided to Members of the Board outside of the meeting, which would provide detail as to why the recommendation was not to increase these charges further.


Ø  Regarding Charges on premises (licensing and gambling), the Board noted that there was no detail provided against the statutory parameters and queried what they were and queried whether the Council undertook benchmarking against neighbouring local authorities in respect of such charges. The Board was advised that the regulatory services charges and Council costs were set against statutory parameters for delivering such services and that it could be the case that the maximum charges could not be applied to avoid excess charging (as defined against the statutory parameters). It was confirmed that the Council did undertake benchmarking exercises against other local authorities in respect of its fees and charges on a cyclical basis.


Ø  The Scrutiny Board referenced the Finance Act 2000, recognising that it determined local authority licensing functions could not make a profit, but noted that neighbouring council’s appeared to charge significantly more for licensing services than Solihull and questioned when these charges were last reviewed by the Council.  The Finance Manager clarified that the Council did review its charges across different regimes, which formed the annual precept. The Licensing Committee also regularly considered some of the fees and charges detailed within the report before the Scrutiny Board.


Ø  The Scrutiny Bard queried the future status of the current Age U.K contract and were advised that the current contract had been supported via a financial contribution from the Income and Awards Service, which would cease at the end of the 2022/23 fiscal year. The future budget requirement had not been accounted for after this point in time, but mitigation had been identified for the contract in the 2023/24 financial year.


Ø  The Scrutiny Board highlighted the current pressures faced by the Catering Service as detailed in the report and questioned whether it was still a viable, on-going service.  The Scrutiny Board was advised that there were finite costs against the provision of school meals and that the service was facing inflationary pressures (food supplies) and was managing the recent pay award to lower paid staff within the service.  Every school had a choice available to re-tender for a school meals service. 


Ø  In response to a question concerning the amount of alcohol procured by the Council, the Scrutiny Board was informed that it was minimal and procured for a small number of specific civic events hosted by the Council.


Ø  Clarification was sought by the Scrutiny Board as to whether the Council pro-actively delivered any enforcement action against fly-tippers, and if so, what amount of income this brought into the Council. It was confirmed that the Council did operate enforcement services to counter fly-tippers in the borough and to date the projected income arising from fly-tipping enforcement fines was £200. The Scrutiny Board would be advised how many fines had been successfully secured outside of the meeting.


Ø  The Scrutiny Board questioned whether the £59,000 for the appointment of a Media Officer on a 3-year contract was required. The Scrutiny Board was advised that there was one dedicated Media Officer to each Council Directorate. Demand in Children’s Services for media support had become particularly high which led to the most recent appointment on a contract basis. Members were advised that Public Health was an additional area requiring close media support.


Ø  Members highlighted reported annual fiscal pressures on the Touchwood centre at £151,000, whilst the centre was currently at 95% occupancy.  The Scrutiny Board sought clarification as to whether the £151,000 fiscal pressure was accurate and whether this was likely to improve moving forward. The Assistant Director advised Board Members that information to further clarify the position could be provided subject to third party confidentiality clauses. Members were further advised that it was not unusual for commercial retail centres to offer financial incentives for new tenancies, which had potential to impact reported income. The Council received an income share from the Touchwood Centre and if its profits are below projections this in turn impacts the Councils fiscal pressures.


Ø  The Scrutiny Board referenced Appendix C to the report, noting that mandatory licensing for HMO’s had increased from £870 to £950 in line with the rate of inflation.  The rise of new developments had led to higher volumes of license applications. The Scrutiny Board queried whether the fee was still too low.  The Finance Manager confirmed that the level of charging for HMO licensing had been reviewed and had taken account of the increase in Council costs.


Ø  Board Members drew attention to the Catering Service’s inflationary pressures and questioned whether provision of the service moving forward continued to be viable and whether there was a statutory obligation placed on the Council to provide a school meals service.  The Assistant Director Finance & Property Services clarified that there was no statutory requirement placed on the Council to provide any such service. Some Council’s did not provide a direct schools meals service, which led to schools engaging a private provider. In the case of Solihull, Members were advised that there were approximately 75 schools located within the borough, all of which had engaged private contractors to provide a school meals service. 


Ø  The Scrutiny Board was further advised that two financial models were available to support the delivery of school meals services. The Cost-Plus model entailed all costs associated with delivery of the meals service being billed the school with an element of an additional management fees and, secondly, the Hand Back model which entailed the Council retaining all monies.  Councillor Sleigh highlighted that there were wider issues involved, other than that of a model of service provision.  There were community well-being implications involved in the provision of any schools meals service, particularly in relation to Early Years pupils.


Having considered the report, the Resources and Delivering Value Scrutiny Board:




i)  To note the pressures and mitigating actions detailed in Appendix A and savings proposals detailed in Appendix B and to feed back the Scrutiny Boards comments detailed above to Full Cabinet scheduled for 9th February 2023; and,


ii)  To note the Schedule of Fees and Charges proposed for 2023/24 and to feedback the Scrutiny Boards comments detailed above to Full Cabinet scheduled for 9th February 2023.


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