Issue - meetings

Report by the Chief Executive.

Report by the Chief Executive.

22.1     The Deputy Chief Executive introduced the report and the Chief Finance Officer provided an update on the Council’s financial position. In summary, throughout the year the Council has forecast a significant deficit in the Medium Term Financial Plan (MTFP). In September Cabinet received a report that the Committee then considered on the Council’s financial and policy outlook and a proposed response to some of the challenges the Council was facing. At the end of October, the Budget was announced which contained a number of changes in the policy and financial outlook for the Council. The Government is expected to publish a more detailed Local Government Finance Policy Statement shortly, and the Provisional Local Government Settlement is expected to be announced on 19 December 2024.

22.2     In November Cabinet received a further update report on the Council’s financial position and details of a range of potential savings, which is contained within the meeting papers. The RPPR report provides the Committee with the opportunity to consider the savings proposals, the changes in the planning and policy context, the updates to the MTFP and capital programme set out in the Cabinet report, and to identify any further information or work for consideration at the Committee’s RPPR Board later in December.

22.3     The Chief Finance Officer gave an update on the Council’s financial position. The MTFP for 2025/26 contains a budget deficit of £57 million which with a number of planned scenarios takes the deficit down to £29 million. The potential savings put forward by all departments comes to a total of £16 million, which leaves a budget gap of around £13 million.

22.4     The Budget announced on 30 October contained a number of increases in revenue and capital funding, with around £1.3 billion for local government. Included in this figure is £600 million for social care, of which the Council would expect to get around £6 million. A further £700 million was announced of un-ringfenced expenditure which will be allocated to meet need aligned to deprivation. This has been the focus of some lobbying work with MPs and central Government as East Sussex is not a typical southeast council in this respect. One concern is that if the methodology of the allocation of grants changes this could be to the detriment of the Council. There is also an impact from the increase in the National Living Wage and the National Insurance increases on the care sector to consider, both in terms of the level and threshold at which employers start to pay National Insurance.

22.5     The level of inflation modelled within the MTFP is based on the Office for Budget Responsibility (OBR) predicted rates. The current MTFP uses March 2024 rates, and the October Budget contained higher than predicted rates of inflation, as the expected fall in inflation has slowed down. This will need to be factored into the MTFP.

22.6     Overall, there appears to be a greater number of negative changes than positive ones in the Budget announcement and therefore the  ...  view the full minutes text for item 22

12.1     The Chief Executive introduced the report which continues the Committee’s consideration of the Reconciling Policy, Performance and Resources (RPPR) process. The Chief Executive highlighted that the situation the Council faces is extremely significant. There are two reports that Cabinet is due to consider on 26 September 2024, one is about the in-year performance which indicates the Council is facing a significant overspend. The other report details the implications for planning for the next financial year (2025/26), which is the report the Committee is being asked to consider. Cabinet is not being asked to make any decisions at this stage but is being asked to agree to go out to public consultation on a number of savings proposals, in order that as much information as possible is available on the savings proposals.

12.2     The Committee was invited to consider and comment on the report and identify if there was any further information the Committee would like to help in their consideration of the RPPR process. There will also be a Whole Council Forum on the afternoon of Wednesday 25 September 2024 to allow all councillors to consider in detail the information contained in the Cabinet RPPR report.

12.3     The Committee discussed the report, and a summary of the comments and questions raised is given below.

Impact of savings proposals

12.4     Committee members commented that the savings proposals affected some of the most vulnerable people in the community and would like to see an assessment of the impact on individuals of the proposed changes to services. The process of making savings needs to be fair and transparent. Committee members also commented that the Council would need to be careful not to have a knock impact on the District and Borough councils by increasing their costs (e.g. through changes to housing support) and it would be important to understand the reasons behind the proposals, why those services were selected, and the impact of the proposals in their entirety.

12.5     The proposed changes to services may also increase future demand for other East Sussex County Council (ESCC) provided services such as care services (e.g. changes to the drug and alcohol service). It may also lead to the increased ‘gatekeeping’ of care services and the departmental impact of changes to service will need to be understood.

12.6     The Chief Executive outlined that work had been done on the impact of the proposals on individuals, partners and services. The public consultation will add more detail to this work. Officers have been talking to the District and Borough councils and ESCC is acutely aware of the pressures on housing services. The provision of housing support is not a statutory requirement under the Care Act.

12.7     The Council would not normally be advocating changes to the services covered by the savings proposals, but they are the least worst option. The Council is aware that the proposals, if they go ahead, will likely lead to increases in demand for services in the medium term.

Council Tax

12.8     The  ...  view the full minutes text for item 12

Report by the Chief Executive.

5.1       The Deputy Chief Executive introduced the report which starts the Committee’s consideration of the budget setting process. The report provides an opportunity for the Committee to look back at the Council’s performance through the year end Quarter 4 Council Monitoring report, and a look forward via the State of the County report. The key theme is the financial challenge the Council is facing through increases in demand for services and increasing costs. The State of the County report sets out in more detail the nature of the challenges for services in terms of cost and changes in policy. The report also asks the Committee to identify areas of interest or focus, and where it would like further information as part of its RPPR work and work programme.

5.2       The Chief Finance Officer outlined in more detail the Council’s financial position and that at the end of the financial year 2023/24 the Council had an overspend of over £30 million. After the use of corporate funding this was reduced to £10.5 million and required the use of one-off grants, collection fund surplus and corporate financial reserves to mitigate this and achieve a balanced year end budget position. This was the first time the Council has had to use the financial management reserve to balance the year end position.

5.3       The State of the County report contains the three year Medium Term Financial Plan (MTFP) which before scenario planning shows a forecast financial deficit of £55.3 million rising to £83.6 million by 2027/28. There are unallocated financial reserves of £16.7 million. However, even with scenario modelling there is a budget gap of around £26.6 million for the next financial year. Officers are seeking opportunities in all areas within departments to reduce this budget gap. This includes a review of the capital programme to reduce borrowing by scaling back projects as the cost of borrowing, which is £750,000 for every £10 million borrowed, has an impact on the revenue budget. There is a high degree of uncertainty regarding future funding, including from central Government, and different scenarios will continue to be modelled.

5.4       The Committee discussed the report and raised a number of questions and comments. A summary of the discussion is given below.

5.5       Councillor Hollidge asked for clarification on whether the Long Term Plan for Towns funding for Bexhill (page 76 of State of the County report) could be listed under Bexhill as the area rather than Rother District Council so it is clear which town the funding is for. The Director of Communities, Economy and Transport (CET) outlined that the funding may be listed by local authority area, but he could look at the way the funding is listed.

5.6       Councillor Hollidge also asked for clarification on the bathing water quality chart in the State of the County report as the Bexhill beach water quality (Edgerton Park outfall) has only been reported as ‘sufficient’ since 2019 according to Environment Agency data and this is not reflected in the chart  ...  view the full minutes text for item 5