Agenda item

The Mayor and Executive Member for Finance and Governance will be in attendance to present the Council’s Budget for 2024/25 and the refresh of the Medium-Term Financial Plan.

 

The papers for this agenda item will also be considered by Executive on 20 December 2023 at 12.30pm. As such, any amendments made at the Executive meeting will be verbally noted at the meeting of OSB.

The Chair advised this item afforded Members the opportunity to ask questions about the budget proposals and that service specific budget proposals would be considered by the relevant scrutiny panel in early 2024. The Chair stated it was not the Board’s responsibility to set the agenda for individual panels. The Executive Member for Finance and Governance advised the Board that an all-Member briefing about the budget proposals would be taking place on the evening of Thursday 21 December.

 

The Chair commented the budget consultation process for 2023/2024 had been one of the most comprehensive the Council had undertaken.

 

The Chair invited the Mayor to present his information.

 

The principles behind the budget proposals were data driven, with a need to reduce demand and shape priorities. Initially the projected overspend for 2023/24 was £11.5 million but this had been reduced to approximately £7.4 million. Revenue reserves stood at £14.8 million but this was projected to fall.

 

Overall, even with all budget proposals taken into account and factoring in budget growth there remained a budget gap of £6.2 million. 

 

Each budget proposal was categorised and had been reviewed extensively. The Mayor provided the budget proposal for Levick Court as an example. While this was initially categorised as Stop, it was now seen as a transformative and categorised as T, or Transformation. Pieces of work like this could utilise monies raised from the asset review. There was a desire to reduce the number of S, or Stop, categories as much as possible.

 

Budget proposals that were categorised as Stop stood at £500,000 while proposals categorised as transformational or those seeking efficiency exceeded several million pounds.  

 

In terms of long-term objectives, Middlesbrough featured prominently in metrics such as high crime rates, anti-social behaviour, and poor school attendance. This was a cumulative effect, and such Middlesbrough faced several difficult challenges. The Mayor commented consultation on the budget was crucial, especially considering responses to the Resident’s Survey. Consequently, it was decided that certain budgets would be protected including those in Area Care, Community Safety and Crossing Patrols.

 

The Mayor also clarified the Council’s core spending power. While there had been a 10% increase in core spending power this was not all available from government grant but was instead generated locally. As Members had been supplied with the individual budget proposals the Chair invited the Board to pose questions to the Mayor.

 

A Member thanked the Mayor for his presentation and brought his attention to Appendix one of the report, containing proposals that did not require consultation. As the proposals in appendix one would still affect residents it was suggested consideration should be given to them. The Mayor responded that some services in Middlesbrough were out of step with other Councils and sometimes operating above its own policies so needed reviewing. For those proposals requiring review this needed specific pieces of work to ensure proposals were not disadvantaging residents.

 

The Executive Member for Finance and Governance stated that part of Scrutiny’s response to the budget consultation could be to suggest moving proposals between different appendices of the budget report.

 

A Member queried if the Resident’s Survey was available to view. It was confirmed this was part of the papers considered by Executive on 20 December 2023 and a link to those papers would be circulated to Members of OSB.

 

A Member reaffirmed that the budget consultation for 2024/2025 had been extremely thorough. It was asked if the Council would receive any funding from the uplift to the Local Government Settlement. It was clarified the Council had already accounted for this as part of the budget setting process.

 

It was asked if there would be investment in budgets to maintain waste collection. It was clarified investments would be made when required, citing the recent fleet review of waste lorries as an example.

 

The Executive Member for Finance and Governance stated that just over 80% of the Council’s net budget was spent on Children and Adult Services. It was important to support the intentions behind the budget proposals and potential exceptional financial support as the alternative was a Section 114 Notice. The Mayor stated if services were cut further there would be a need for significant investment to grow them back.

 

It was also commented that transformation programmes were required in large spending areas such as Children’s Services, as this would have more of an impact than the same process in smaller spending areas. There was also a need to reduce service demand to complement any reductions in spending.

 

There was a need to examine practice as well as policy against statutory duties. It was explained that in the event a Section 114 Notice was issued there would be a requirement to reduce statutory services down to a safe and legal minimum rather than transforming those services as was being planned.

 

For Councils in challenging financial positions, advice from CIPFA was to engage with the Department for Levelling Up, Communities and Housing to formulate relevant recovery plans. The challenge of saving approximately £20 million from a budget the size of Middlesbrough’s was significant. Some of budget proposals were not for consultation as it required to change practice rather than policy.

 

A Member queried budget proposal FIN 3456 regarding Council Tax collection and asked why it was included given the high percentage of Council Tax currently being collected. It was clarified that while collection rates were high, factors such as the Covid-19 pandemic had resulted in significant debt waiting to be collected. Therefore, investing in that area sought to speed up the collection process. It was also commented that additional resources were required in that area to tackle fraud, further increasing collection rates.

 

In terms of the proposal to review Legal Services, a conversation took place regarding if there was a culture of staff consulting with legal services by default and if this was necessary.

 

With regards to budget proposal 4109, a conversation took place regarding the proposal to reverse the deletion of a political assistant vacancy. It was confirmed that no new political assistants had been appointed. It was agreed the Executive Member for Finance and Governance would seek further information about this proposal and update the Board at its meeting of 10 January 2024.

 

A Member queried how transformation work would be carried out and be assured it would be robust. It was commented that work was being carried out with an external consultancy to explore opportunities to redesign services, including assessing demand management. Where applicable, business cases would be developed through the Council’s governance processes for inclusion into the budget framework. By doing this it would be demonstrated the Council had a planned approach to the budget.

 

With regards to the Captain Cook Birthplace Museum, the Chair asked what Council support was provided to people wanting to take over venues such as this. The Mayor intended to meet Captain Cook Birthplace trust to discuss this. Based on visitor figures it cost approximately £600 per visitor to run the museum. While there was a desire to keep the museum open it needed to be ran in a different way. In terms of support offered, this was dependent on what was requested. The Chair commented that areas of best practice should be approached to understand how this had been done in other places.

 

A Member commented that visitor numbers were not recorded on an individual, per visit, basis so actual costs per visitor could be different. A discussion took place regarding the number of school children visiting the museum and if they had been captured as part of the visitor numbers. It was commented that several budget proposals were focussed on cultural activities which required a transformative approach.

 

The Chair queried if other Councils who had applied for exceptional financial support were being contacted in the interests of best practice. It was clarified the government website showed which Councils had received support but not the circumstances surrounding the support. Councils receiving support were required to create a recovery plan, but each plan would be slightly different. The nature of financial support could also change, for example the government may only offer additional support provided the Council increased its Council Tax rate.

 

The Chair asked if Councils in that position could be seen as areas of best practice. It was commented Councils in such positions should not be seen as best practice examples. The Mayor stated that different Councils handled their circumstances differently, but the options being proposed would be challenging but potentially lead to a better Middlesbrough in future years.

 

The Chair also asked for those protected budget areas would they be reviewed to ensure they were working as efficiently as possible. This was confirmed and it was commented services needed to be closer to the community. Once services were located into locality patches, they would become more efficient by default. The Mayor commented that the budget proposals may move but that it would be preferable to seek exceptional financial assistance rather than lose front line services.

 

The Executive Member for Finance and Governance stated that transformation programmes took time and that some savings would be realised in the 2025/26 financial year. It was also stated that requests for exceptional financial support may be less than what was requested. It would be at that point a Section 114 Notice would be considered. If this were to happen all Members would be notified and a balanced budget would need to be set. The time scale for this would be 20 days.

 

ORDERED That:

 

1.    Further information be brought back to OSB regarding budget proposal to reverse the deletion a political assistant post.

2.    The information presented by noted.