Agenda item - Targeted Budget Management (TBM) 2017/18: Month 2

Report of the Executive Director, Finance & Resources

1)        That the Committee note the forecast risk position for the General Fund, which indicates a budget pressure of £1.375m. This includes a break-even position on the council’s share of the NHS managed Section 75 services;

2)        That the Committee note that total recurrent and one-off risk provisions of £1.500m are available to mitigate the forecast risk if the risks cannot be completely eliminated by year-end;

 

3)        That the Committee note the forecast for the Housing Revenue Account (HRA), which is currently a break-even position;

 

4)        That the Committee note the forecast risk position for the Dedicated Schools Grant which is an overspend of £0.242m;

 

5)        That the Committee note the forecast outturn position on the capital programme and approve the variations and slippage in Appendix 4 and the new schemes as set out in Appendix 5;

 

6)        That the Committee approve a virement within the ring-fenced HRA transferring £0.750m from the revenue repairs and gas services budgets to investment in the HRA capital programme (paragraph 3.11);

 

7)        That the Committee approve the allocation of the available 2016/17 outturn underspend as set out in the revised paragraph 3.26;

 

8)        That the Committee approve the allocation of the additional £0.250m Concessionary Fares saving as set out in paragraph 3.27.

 

9)        That the Committee approve a virement allocating Improved Better Care Funding of £4.643m to Health & Adult Social Care and £0.450m to Families, Children & Learning (see Adult Social Care section of Appendix 2)

 

10)     That the Committee note that the Chief Executive exercised urgency powers in accordance with the constitution, after consultation with the Chair of this Committee, to provide £0.030m of short term loan financing to the Saltdean Lido Community Interest Company (paragraph 6.3).

 

11)     That the Committee agree that £100,000 is committed to the Madeira Terrace crowdfunding campaign from the i360 reserve, subject to the crowdfunding target being achieved; and

 

12)     That in addition to the funding set out at 2.11 above, the Committee agree to earmark a further £1m from the i360 reserve to support the regeneration and refurbishment of Madeira Terrace, subject to the approval of a business case by Policy, Resources & Growth Committee.

10.1      The Committee considered a report of the Executive Director for Finance & Resources in relation to Targeted Budget Management (TBM) 2017/18 Month 2. The report set out an early indication of forecast risks as at Month 2 on the council’s revenue and capital budgets for the financial year 2017/18.

 

10.2      Councillor Sykes noted the significant potential overspends for legal support services and enquired what impact that may have upon the Orbis Partnership.

 

10.3      The Executive Director, Finance & Resources stated that this related to increased demand on legal services associated with child safeguarding. It was a part of a wider issue that would need to be returned to during the budget process relating to increase demand related pressures on central services that had reached tipping point. The Executive Director, Strategy, Governance & Law clarified that Orbis was not yet an integrated service and supplemented that the increase in demand for legal services was a national trend.

 

10.4      Councillor Janio asked what the variance of the final outturn position could be predicted to be based on previous years’ experience.

 

10.5      The Executive Director, Finance & Resources explained that in previous years, TBM Month 2 had forecast a larger outturn and higher overspend than the eventual result. In previous years, there had been a need for the finance team to intervene and implement service recovery plans where an overspend had been forecast. The above had meant historically, the forecast had gradually reduced through the year. The Executive Director, Finance & Resources explained that based on historical evidence and new approaches such as clearly identifying expected service pressures through the budget process, he would expect the forecast to similarly decrease through this financial year.

 

10.6      Councillor Hamilton noted that the TBM forecast table on page 34 of the addendum clearly demonstrated that monthly forecast variances had decreased toward year end in each of the past three years. Furthermore, £14.2 million had been set aside for service pressures in this financial year, something that had not been possible in the previous year.  

 

10.7      On behalf of the Labour Group, Councillor Hamilton moved a motion to add a recommendation 2.11 and 2.12 as shown in bold italics below:

 

2.11   That the Committee agree that £100,000 is committed to the Madeira Terrace crowdfunding campaign from the i360 reserve, subject to the crowdfunding target being achieved; and

 

2.12   That in addition to the funding set out at 2.11 above, the Committee agree to earmark a further £1m from the i360 reserve to support the regeneration and refurbishment of Madeira Terrace, subject to the approval of a business case by Policy, Resources & Growth Committee.

 

10.8      Introducing the motion, Councillor Hamilton provided an apology that the recommendations had been omitted from the report stating that they should have been included in the allocation of 2016/17 outturn underspend. Councillor Hamilton noted that crowdfunding campaign had been identified at the previous committee as one of the methods in driving investment in Madeira Terrace. The second amendment was a commit to the residents of Brighton & Hove that action to refurbish and restore Madeira Terrace was being actioned and the investment would be subject to a business case being approved by the committee.

 

10.9      Councillor Mitchell formally seconded the motion.

 

10.10   Councillor Wealls expressed his concern that the motion had been received by the committee an hour and a half before the meeting. Furthermore, his group intended to move a motion to amend the recommendations on the back of the motion put forward by the Labour Group.

 

10.11   Councillor Mitchell countered that their motion had been emailed to the Leader of the Conservative Group the day before the meeting.

 

10.12   Councillor Wealls noted that the motion set out £1.1 million of funding and he did not believe an email to the Leader of his Group, which had not found its way to the other committee members, was a sufficient way to make decisions. Councillor Wealls added that in that context, his group would also be tabling a motion to amend to the recommendations

 

10.13   The Chair requested legal clarification on the procedural rules on tabling a motion.

 

10.14   The Executive Lead, Strategy Governance & Law clarified that the Constitution set a deadline of 10am on the day of the meeting for the submission of motions to amend the recommendations. If that deadline was not met, it was the discretion of the Chair whether to accept the amendment or not.

 

10.15   The Chair stated that sufficient time had been provided for submission of the amendment and therefore he would not use his discretion to accept the motion.

 

10.16   Councillor Peltzer Dunn asked for clarification as to what time the Labour Group motion proposed by Councillor Hamilton had been circulated to the committee.

 

10.17   The Executive Lead, Strategy Governance & Law confirmed that all motions relating to Item 10 with the exception of the motion tabled by Councillor Wealls had been received and accepted before the 10am deadline.

 

10.18   Councillor Peltzer Dunn asked what time the Labour Group motion had been circulated in print to the members of the committee.

 

10.19   The Democratic Services Officer confirmed that the all motions received by the 10am deadline had been circulated to committee members in print at approximately 2.45pm on the day of the meeting. Furthermore, all the motions had been published on the council website and emailed to committee members at approximately 12.45pm that day.

 

10.20   Councillor Peltzer Dunn stated that he did not believe the Labour Group motion had been circulated in sufficient time for Members to consider.

 

10.21   On behalf of the Conservative Group, Councillor Janio moved a motion to amend recommendation 2.7 and add an additional recommendation 2.7.1 as shown in bold italics below:

 

2.7     That the Committee approve the allocation of the available notes the 2016/17 outturn underspend as set out in paragraph 3.26 and, in light of the projected 2017/18 overspend outlined in 2.1, agrees that the money be held in reserve until such time as the Council’s overall financial position becomes clearer later in the year, subject to 2.7.1 below.

 

2.7.1 That the following items be funded from the net capital receipt surplus of £7.5 million identified in paragraph 3.69 of item 9 on this agenda:

·           Shoreham Memorial contribution

·           Saltdean Lido loan

·           Madeira Terraces project costs

·           Parks and playgrounds improvements

 

10.22   Introducing the amendment, Councillor Janio explained that he strongly believed in responsible financial management. Councillor Janio stated that the underspend from the previous year should have been discussed with the opposition groups as a mini budget round and agreed by all members of the Council. Councillor Janio noted that the outcomes of the recent LGA Peer Review were currently confidential. However, there appeared in the motion an attempt to address the outcomes before a wider discussion had taken place. Councillor Janio stated that the end of year financial position was unknown and therefore, the motion would, with the exception of important, specific issues, hold the underspend in reserve until the end year result was known

 

10.23   Councillor Wealls formally seconded the motion.

 

10.24   The Chair stated the underspend had been discussed by the three group leaders and he had spoken directly with Councillor Janio at the recently held Urgency Sub-Committee.

 

10.25   On behalf of the Green, Councillor Sykes moved a motion to amend recommendation 2.7 with the insertion of the words “the revised” in the second line as shown in bold italics below and to amend paragraph 3.26 and the table that appeared in the report with the deletion of text as struck through and the insertion of wording in bold italics as shown below:

 

2.7  That the Committee approve the allocation of the available 2016/17 outturn underspend as set out in the revised paragraph 3.26.

 

Amended paragraph 3.26 of the report:

 

3.26  The allocation of the available one-off 2016/17 outturn underspend resources of £0.642m is proposed as follows set out in the table below:

 

 

 

10.26   Introducing the amendment, Councillor Sykes stated that whilst a ward member community budget scheme may have its merits, it should be a pilot scheme and therefore begin at a reduced budget until a judgement could be made on its success or otherwise. Furthermore, Councillor Sykes stated that his group had disagreed with many of the decisions made at Budget Council in February 2017 and the current underspend position should be used to redress some of those decisions, specifically the Third Sector Investment Programme.

 

10.27   Councillor Mac Cafferty formally seconded the motion.

 

10.28   Councillor Mitchell welcomed the reported that demonstrated good financial management and the fact that the committee were discussing allocation of an underspend should be a position welcomed by the opposition groups. Councillor Mitchell noted that LGA Reviews consistently assessed the role of ward councillors and the support they received and introducing a ward member community budget was an attempt to respond to that. Councillor Mitchell added that the other items proposed demonstrated a responsive attitude to address need and demand where that occurred. One such issue was increased seasonal grass cutting and further staff in the cities busy parks. Councillor Mitchell relayed that she would be support the Green Group motion in full. In relation to the Third Sector, Councillor Mitchell noted that in the autumn, thousands of residents would be affected by the introduction of universal credit and although contingency funding had been identified in the council’s budget, she would encourage the third sector to mitigate those particular measures wherever possible.

 

10.29   In reference to the proposed motion that had not been accepted, Councillor Wealls stated that this would have sought to amend the proposals for Madeira Terrace and for the committee to receive a business plan before allocating funding on the basis that the funding levels required were unknown until a business plan had been undertaken. Councillor Wealls noted that there was still a great deal of uncertainty about the delivery of the savings plan and with an overspend forecast, it was not correct to allocate the underspend. Councillor Wealls stated that there had not been a reasonable consultation process between the political groups ahead of the committee and on the decisions to be made. Councillor Wealls noted that ward member community budgets had not been discussed or reported to the Neighbourhoods, Inclusion, Communities & Equalities Committee as portfolio holder and he could not understand how the figure of £5,000 per Member had been reached. Furthermore, Councillor Wealls queried the intention behind deferring the 2017/18 budget saving relating to Trade Union facility time. Councillor Wealls expressed his belief that the administration had acted entirely inappropriately and the correct action for the committee to undertake was to adhere to the commitments made and review the financial position later in the year.

 

10.30   In relation to Madeira Terraces, the Chair explained that the council had received legitimate lobbying and complaints from residents to halt and reverse the decline and neglect of the Terraces. In response, the council had pledged to come forward with a solution. The previous meeting of the committee had agreed a strategy for Madeira Terrace and one of those options was to initiate crowdfunding. The £1 million of funding identified was subject to a business case coming before and agreed by the committee and no extra money would be spent before then. The Chair added that Heritage England viewed such initiatives and commitments favourably and that could bring further benefits.

 

10.31   Councillor Sykes thanked the Chair for providing further clarification on the financial commitments made regarding Madeira Terraces that had provided him with assurance. Councillor Sykes stated that given the historical budget trajectory from TBM Month 2 to the outturn position, it was appropriate to address budget cuts where that could be done and therefore, he would not be supporting the Conservative Group motion.

 

10.32   In relation to Madeira Terraces, the Executive Director, Economy, Environment & Culture explained that the aim of the crowdfunding campaign was to raise sufficient resource to allow for the first few arches to be restored and that had a specific target of £400,000. In committing the first £100,000, the council would be signalling their support and the investment would only be spent if the target was reached. Furthermore, there was evidence to show that public funding bodies looked favourably upon crowdfunding campaigns when considering bids as it demonstrated a positive public response to the project.

 

10.33   Councillor Yates stated that it was entirely reasonable to place a figure upon potential investment as it would provide a clear demonstration of commitment to the regeneration of Madeira Terrace and would be subject to the agreement of a business case defining the precise figure necessary.

 

10.34   Councillor Janio expressed his disappointment that the details of a private conversation had been brought up in a public meeting by the Chair. Councillor Janio stated that the approach of the administration with regard to governance processes for the committee meeting had been very flawed. Councillor Janio noted his confusion in that the committee report identified £80,000 of funding to Madeira Terraces and the Labour Group motion identified an additional £100,000 and he could not distinguish whether the final commitment was £100,000 or £180,000. Councillor Janio stated that it was unreasonable and irresponsible to discuss such a level of investment at such short notice.

 

10.35   The Executive Director, Economy, Environment & Culture clarified that the £80,000 figure identified at paragraph 3.26 of the report was for project funding for the entirety of the Madeira Terraces project. The Madeira Terraces was a long-term, capital regeneration project and the necessary support was required to deliver it.

 

10.36   Councillor Bell stated that committees were often given insufficient time to make decisions that often requested significant resource and as an opposition member of the council; he did not feel he was being provided a full picture of information.

 

10.37   The Chair then put the Labour Group motion to the vote which was carried.

 

10.38   The Chair then put the Conservative Group motion to the vote which failed.

 

10.39   The Chair then put the Green Group motion to the vote which was carried.

 

10.40   The Chair then put the recommendations as amended, to the vote which was carried.

 

10.41   RESOVLED-

 

1)        That the Committee note the forecast risk position for the General Fund, which indicates a budget pressure of £1.375m. This includes a break-even position on the council’s share of the NHS managed Section 75 services;

2)        That the Committee note that total recurrent and one-off risk provisions of £1.500m are available to mitigate the forecast risk if the risks cannot be completely eliminated by year-end;

 

3)        That the Committee note the forecast for the Housing Revenue Account (HRA), which is currently a break-even position;

 

4)        That the Committee note the forecast risk position for the Dedicated Schools Grant which is an overspend of £0.242m;

 

5)        That the Committee note the forecast outturn position on the capital programme and approve the variations and slippage in Appendix 4 and the new schemes as set out in Appendix 5;

 

6)        That the Committee approve a virement within the ring-fenced HRA transferring £0.750m from the revenue repairs and gas services budgets to investment in the HRA capital programme (paragraph 3.11);

 

7)        That the Committee approve the allocation of the available 2016/17 outturn underspend as set out in the revised paragraph 3.26;

 

8)        That the Committee approve the allocation of the additional £0.250m Concessionary Fares saving as set out in paragraph 3.27.

 

9)        That the Committee approve a virement allocating Improved Better Care Funding of £4.643m to Health & Adult Social Care and £0.450m to Families, Children & Learning (see Adult Social Care section of Appendix 2)

 

10)     That the Committee note that the Chief Executive exercised urgency powers in accordance with the constitution, after consultation with the Chair of this Committee, to provide £0.030m of short term loan financing to the Saltdean Lido Community Interest Company (paragraph 6.3).

 

11)     That the Committee agree that £100,000 is committed to the Madeira Terrace crowdfunding campaign from the i360 reserve, subject to the crowdfunding target being achieved; and

 

12)     That in addition to the funding set out at 2.11 above, the Committee agree to earmark a further £1m from the i360 reserve to support the regeneration and refurbishment of Madeira Terrace, subject to the approval of a business case by Policy, Resources & Growth Committee.