Agenda item

In attendance for this item were:

Michael Hudson, Chief Financial Officer

Steph Simcox, Head of Finance

Paul Smith, Transport Operations Manager

The Chief Financial Officer set out the main headlines of the 2020/21 draft budget from the Agenda, including movement in budget expenditure, achieving a balanced budget in 2019/20, council tax 2020/21 and reserves. Regarding the budget planning timeline for 2020/21, figures had been slightly revised due to changes to the adult social care formula grant and recharges as a result of directorate restructuring and the new Directorate of People.

The Head of Finance referred to the headlines for economy and environment (E&E) growth which were taken from the 20 December 2019 report to Cabinet – these included pay and contract inflation, waste tonnage estimated increase, a £0.3m one-off funding to further progress of the North Cotswold Line rail development, additional £200k to support the Worcestershire Public Transport Strategy and £100k to support a woodland planting scheme.

Work was ongoing in the Economy and Infrastructure Directorate to make savings. Regarding E&E revenue savings, the £830k directorate organisational re-design was around staff.

Scientific Services had closed although there remained a budget to purchase services and information would still be provided to this Panel.

The £30k efficiency saving against County Enterprises was the last stage of the Service becoming fully self-funding.

Regarding the E&E current Capital Programme, before any further adjustments the budget for the year was £125m. As set out in the report to Cabinet, the Council was looking to invest further in capital, for example in footways and streetlighting.

Main discussion points

In relation to the woodland planting scheme, the Panel Chairman pointed out that Heart of England was also engaged in planting trees, which could present an opportunity for shared working and efficiency.

It was confirmed that it was not yet known how the £830k savings would affect Directorate operations, however further information would flow through to the Panel as part of performance and finance monitoring.

Regarding streetlighting costs and savings, Cllr Kent (Chairman of the Corporate and Communities Overview and Scrutiny Panel (C&C Panel)) highlighted that some scrutiny was being carried out through the C&C Panel to look at energy costs.

The Chairman believed the budget information for E&E showed that the budget was well managed and on target, however he did not feel that the Council’s budget was subject to effective Scrutiny, for which more detailed figures and comparisons were needed. Rationalisation of cost codes also made it difficult for the Panel to compare like for like.

A discussion ensued about the Budget Scrutiny process. The Chief Financial Officer said that he was keen to understand the information needs of the Scrutiny Panels. He referred to service budget information included in the 20 December Cabinet report (appendix B) and advised that further comparative information could be provided for the previous three years but it was important to understand the purpose.

The Chairman pointed out that the Panel needed an understanding of the figures in order to be able to better scrutinise the budget, which in his view would work better through informal meetings with a small task group of Panel members.

Panel members expressed frustration that they were scrutinising out of date figures, since those in the recently published budget report for the 30 January Cabinet differed to those from the 20 December Cabinet report, which had been the basis for the Panel’s preparation. The Finance Officers explained that this was mainly due to the new directorate structure, which was effective from January and changes to grants from Central Government. Members did not feel equipped with the latest information.

In summing up, the Chairman put forward the following comments on the draft 2020/21 budget for Economy and Environment, which were endorsed by the Panel:

• The Panel was satisfied that the budget for Economy and Environment (E&E) Directorate was good and well managed and the extra capital expenditure on highways, footways, street lighting, flood mitigation and especially the £5m to reduce congestion were all welcome.
• Scrutiny of the draft budget had been hindered by the fact that members’ preparation had been based on the 20 December budget report, and some figures had changed in the recently published budget report for 30 January Cabinet. Whilst acknowledging that changes were largely due to directorate restructuring and changes to grants from Central Government, members did not feel equipped with the latest information.
• Rationalisation of cost codes, and changes in recharges also made it very difficult to compare year on year trends. Also, the proposed saving in 2020/21 of £830,000 for the Directorate Organisational Re-design and a further £500,000 for the Directorate Organisation Lean could not be scrutinised as the various savings had been arbitrarily allocated across the departments as nothing was known at this time how this will affect E&E.
• For future Budget Scrutiny, the Panel would like more transparency, and more information on budget trends for services, and comparison with other local authorities, which would be scrutinised by an informal E&E mini Scrutiny Task Group comprising at least three members of the Panel.

The Chief Financial Officer pointed out that the Panel need not wait until the following year’s Budget Scrutiny to look at this information, which was available to them to see at any point during the year, and it was agreed to follow up discussion about what was required for future Scrutiny outside of the meeting.