Verbal Report
Minutes:
The Chair invited the Mayor to make his statement.
Council was advised there were two pressing issues, namely the Council’s vision and the budget. Members had been approached about what the strategic strapline should be, and approaches had been to group leaders about the budget. It was important to understand why the Council was in its current financial position. One of the main questions was how the Council could get its plans back on track. Members were also advised the Council’s financial reserves were critically low and there was a need to transform services in order rescue the Council from its financial and governance issues. There was also a need to re-set what the Council did.
One of the more financially challenging issues was the Council was acting as a landlord with property maintenance fees exceeding £5 million. The Council could not maintain buildings it could no longer afford. There was a need to focus on properties such as Community Centres and Family Hubs.
There was a need to reduce demand in Children’s Services and the appointment of a new Director of Children’s Services was a sign of stability in that area. At the point Children’s Services were operating within budget other Council Services would see the benefits of this.
A Member asked of peppercorn rents had been considered. The Mayor clarified that all rents had been reviewed as part of the fees and charges review. There had been some rent increases, but this would be managed on a gradual basis. Rents were largely on a consistent footing.
The Mayor responded to a question about consulting group leaders. The Mayor stated he would be prepared to do consult with group leaders on the budget. It was also clarified the budget setting process had included a categorisation process that made identifying savings and transformation programmes easier. There was also an opportunity to use any income from capital receipts to fund transformation and growth. A live update process had been created so any budget items disliked by groups could be withdrawn in real time. There was a need to move to a lower operating model, but the Council could not achieve this with its current levels of reserves.
A Member asked what progress had been made since May 2023 to open more children’s homes in Middlesbrough. The Mayor clarified purchased two properties that could be adapted as children’s homes, but they were not yet ready to open as children’s homes. It was also clarified that demand in Children’s Services needed to be reduced. It was hoped the Council would benefit from those homes by the end of 2024.
A question was raised about closer monitoring requirements for the Council’s charge card system. It was clarified the processes around this were being examined and improvements had been made.
A question was raised about asset sales and the income that could be generated from them. Reassurance was sought that the Council would not conduct a fire sale of assets. The Mayor stated that any income from capital receipts would be used for transformation projects, but that the Council was not currently providing a satisfactory service to residents. In terms of accusations surrounding a fire sale, there was a need to understand what the Council’s priorities were and what assets it owned. There was little need in holding onto assets if this meant hindering progress for the Council.
The Member responded that even small assets could be community assets. It was also stated greater levels of communication and consultation should be wider on this issue. The Mayor responded the term used was asset review as there was a need to understand what assets the Council held.
A Member commented the Council delivered a good service to residents despite its challenging financial circumstances.
ORDERED that the Mayor’s statement be noted.