To consider the report of the Director Finance to be presented to the Executive on 6 February 2024.
Minutes:
The Director Finance presented the report considered at Executive on 6 February 2024. His responses – as well as the Leader’s where applicable – to Members’ queries set out in italics.
The Director Finance thanked Members and officers for proposing a balanced budget given the number - and difficult timing of - financial pressures. He also advised that the budget-setting process would change next year and that a new meeting of this Committee would take place in June 2024 where he would set out:-
This had been agreed at the previous Scrutiny Programme Board meeting.
Local Government Finance Settlement 2023/24
The Director Finance clarified that:-
The Leader responded to Members’ questions as follows:-
· Not all services were being treated as cost-neutral at the moment; and
· He was leaning on advice from officers regarding the commercial strategy.
New Homes Bonus
The Director Finance advised that:-
· there was little left (£59,000) of the £3,028,000 in the “Unused / Projects” column at paragraph 8.7.2; the money had been used entirely;
· all of the “Unused / Projects” money would be used by the end of the year; and
· he would enquire with the Director of City Development if there had been any update on the Community Infrastructure (CIL) review announced by the Prime Minister.
Medium-Term Financial Plan
The Director Finance responded to Members’ questions as follows:-
· On the issue of the Corporate Plan, the Finance Team’s role was to deliver options for funding to the leadership;
· Building homes was an HRA matter;
· There was a number of ways budgeting could be done so long as the Council’s statutory obligations were met; and
· Some of the proposals of One Exeter could offer solutions to the approach to financial planning.
The Leader responded to Members’ questions as follows:-
Business Rates
The Director Finance explained that:-
Spending Pressures
Council Tax Budget Requirements
The Director Finance clarified that:-
Housing Revenue Account
The Director Finance explained that:-
· despite the impact of the HRA financial challenges, tenants would continue to get repairs;
· additional staff had been required to cover new regulatory responsibilities for the Council as a landlord;
· maintenance was a challenging area;
· £16m would be made available for improvements to ECC’s housing stock;
· the retrofitting of properties did have an impact on the budget;
· budget was going up for housing rents.
General Fund Capital
The Director Finance clarified that:-
· Strata was wholly owned by three local authorities (Exeter, Teignbridge and East Devon);
· Strata was a limited company which didn’t pay dividends;
· IT hardware used by ECC was owned by the Council, while software was owned by Strata;
· Strata was not a company in the normal sense;
· it was cheaper for ECC to use Strata than to run its own IT.
Responding to a Member, the Leader explained that he did not want to contract out for IT solutions and felt that the Strata system was working.
Robustness of Reserves and Estimates
The Director Finance explained that:-
· commercial property income and car park income were regarded as “risky income;
· consequently, ECC was deemed to be a high-risk local authority as it relied on such income to deliver its statutory functions;
· the impact that the cuts from Devon County Council had on housing needs could be significantly be offset next year but would have a major effect in future years; and
· the cuts from Devon County Council caused unavoidable pressures (around £200,000; potentially £700,000 next year).
The Chair and Committee Members thanked the Director Finance for his report and answers. The report was noted.
Supporting documents: