Agenda item

Strategic Plan and Quarter Two Outturn Report


The Head of Strategy, Information and Governance was in attendance at the meeting to present the Strategic Plan 2020-2023 – Progress at Quarter Two 2020/2021 report.  The Head of Financial Planning and Support was in attendance to present the Revenue and Capital Budget – Projected Outturn Position as at Quarter Two 2020/2021 report.  The Director of Finance was also in attendance.


The Head of Strategy, Information and Governance delivered a presentation to the Board.


The submitted report updated on the Strategic Plan approved by Council on 15 January 2020.  As previously raised at OSB, COVID-19 had resulted in a serious impact on the Council’s planning, which had resulted in a currently ongoing refresh of the Strategic Plan, with consultation activity being carried out.  A revised document would be submitted to Council at the end of February 2021, and a Strategic Plan work plan to Executive in March 2021.


Details were provided in relation to the Council’s ‘People’ Strategic Objectives, with reference being made to the impact of crime and Anti-Social Behaviour (ASB) and the trends that had been seen in Middlesbrough, which were reflected nationally (i.e. crime had decreased during lockdown and increased post-lockdown; the opposite had been seen in respect of ASB).  It was difficult to take a long-term view of crime and ASB in Middlesbrough, but various initiatives were being implemented to help reduce this, e.g. installation of additional CCTV cameras; granting of new powers to Neighbourhood Safety Officers; and a grant funding scheme for household CCTV.


A Green Strategy consultation had been launched, which would address how the co2 emission gap would be met in following the reversal of the decision to implement fortnightly residual waste collections.


Children’s Services had continued to see the number of children subject to statutory intervention rise, although Looked After Children did peak in July 2020 and had been reducing since.  Reference was made to the Ofsted improvement plan and the achievements made to date, with positive feedback being received from the Commissioner and Department of Education.


Recovery work within the Town Centre had been paused due to tier three restrictions and subsequent lockdown


With regards to the ‘Place’ Strategic Objectives, it was indicated that the Investments Prospectus remained on target, but there were potential risks to it due to the economic downturn following COVID-19.


Regarding ‘Business’ Strategic Objectives, the economic impact of COVID-19 was still awaited to be seen, but claims had increased between May and September 2020.


Reference was made to the ‘End Child Poverty Campaign’ report, which had identified Middlesbrough’s Local Authority area as the one where child poverty had increased most significantly in the years since 2014.


It was highlighted that all of the matters raised had been picked up as part of the COVID-19 Recovery Plan.


In terms risk management issues, a risk review had been undertaken.  Reference was made to the Brexit trade and security deal, the impact of which would continue to be monitored and reviewed.


The Head of Financial Planning and Support delivered a presentation to the Board.


Regarding the revenue position, the total projected outturn at Quarter Two was £4.405m; COVID-19 and non-COVID-19 elements had been split to enable the effects of COVID-19 to be seen.  There was a £9,000.00 underspend on the non-COVID-19 elements and an estimated financial effect in 2021 of £4.414m.  The report detailed the non-COVID-19 elements of this, with the main variances per directorates being illustrated. 


The main non-COVID-19 area was Children’s Services; details of the current position were provided in the report.


COVID-19 spends pertaining to both Government funding and the costs were detailed in the report, however, it was noted that these figures did change rapidly.


Pressures / reductions on income to the Council, such as car parking and culture activities, were indicated, with details being provided in the report.


The Council had not been able to achieve some planned savings and there were also some pressures on Council Tax and Business Rates income.


In terms of the capital position, there was an underspend of circa. £4.6m against a revised budget of £55m, which was largely due to a delay in schemes as a result of COVID-19.


Details regarding reserves and borrowing reserves were provided.  In terms of borrowing reserves at Quarter Two, the Council had £27.4m total reserves.  It was highlighted that not all of this was available for use; the figure to observe concerned the general fund, which was £10.6m.  A minimum level of £9.4m had been set for 2020/2021.  Reference was made to a report to Full Council on 2 September 2020, which detailed planned coverage of the projected overspend on COVID-19, and the use of the general fund reserve in that regard.


Appendix 1 of the report detailed virements, and Appendix 2 provided details of the schemes on the investment strategy.


The Director of Finance indicated that the position will have progressed since the end of Quarter Two; work was currently taking place in respect of Quarter Three, which would be submitted to Executive on 16 February 2021.  It was noted that an Extraordinary OSB meeting would be taking place to consider the current budget consultation.


Following the update, Members were afforded the opportunity to ask questions.


A Member queried the process and flexibility of transferring funds between different budgets.  In response, the Head of Financial Planning and Support explained that the mechanism to achieve this would be to either identify the transferred fund as a virement appended to Executive reports, or to action it as part of the Council budget report, which was submitted annually in February.


A Member referred to Children’s Services and expenditure in relation to Looked After Children, and queried progress regarding the expansion of the Authority’s own care homes.  In response, the Head of Financial Planning and Support explained that there had been a slight delay due to COVID-19 in some instances; reference was made to one care home that currently supported five children although had provision for nine.  It was anticipated that nine children would be supported by 30 April 2021, which was positive progress.  Reference was made to the recent declining number of Looked After Children, which was also positive. 


The Director of Finance advised that the impact on Children’s Services was a good example of how uncertain the impact of COVID-19 had been on individual budgets.  Consideration was given to vulnerable families and individuals and the variables involved in providing support, particularly during the pandemic.  It was indicated that the opening of new facilities was delayed by the first lockdown when all building work ceased, but all were now up and running, e.g. Daniel Court and the Future for Families Hub.  Reference was made to Quarter Three results, which were currently being processed, which appeared to show a sustained reduction in the number of Looked After Children, and in the cost of placements of children.  It was felt that this was reflective of the improvements in practice that had been achieved.  Members were advised that when the budget was set, a £2.913m central demand pressure reserve had been allocated, which was part of the underspend on central budgets.  This had been held against Children’s Services as required, therefore those figures would vary slightly at Quarter Three.


A Member referred to page 38, paragraph 53 of the report, and raised concerns regarding the Council’s estimated payment of £1.1m to SLM.  It was explained that because SLM was a Leisure Trust, the Council would not be able to claim reimbursement from a Government fund.  In response, the Head of Financial Planning and Support explained that this situation had now changed and the Council would be eligible to claim under the DCMS (and therefore that figure would reduce at Quarter Three).  In follow-up, the Member queried the Council’s responsibility for the buildings if SLM could not manage the three leisure centres.  In response, the Chief Executive advised that the buildings were still under the Council’s ownership; SLM purely managed the delivery of leisure services under a Council-issued contract.  If SLM went out of business, those services would either be re-contracted or returned back in-house.  Restrictions set by the Government had forced closure of the centres, which had affected income levels; there were no operational issues.


A Member referred to paragraph 15 of the report and Public Health’s projected budget savings of £266,000 due to reduced activity for demand-led services, such as stop smoking, etc., which was felt to be a large figure.  It was queried whether any concerns had been raised in relation to this reduction, and whether there were any wider Public Health impacts anticipated through reduced uptake.  In response, the Head of Financial Planning and Support advised that services had not been taken up due to COVID-19 restrictions; this was an issue that would need to be monitored by the service area.  The Chief Executive noted the impact from both a financial and health service perspective.  Reference was made to the COVID-19 Recovery Plan; a six-month piece of work to understand the impact of COVID-19 on public health outcomes, particularly where already existing gaps had widened, would be undertaken as part of this.  It was anticipated that the finalised report would be released in circa. eight months’ times.


A Member referred to paragraph 87 of the report and queried the criteria and expectations around financial expenditure for the £235,000 that Middlesbrough Development Company had set aside for the Council’s Empty Homes Initiative.  A response from the respective service area would be sought.


A Member requested clarification in relation to budgets and underspends.  The Director of Finance advised that, as a basic rule, this followed the rule for key decisions.  If £150,000 was to be moved from one area to another, this required Executive approval; a process that could be undertaken throughout the year.  From a financial perspective, the bottom line would be monitored to ensure that underspending did not result in a negative position.


The Chair thanked the Head of Strategy, Information and Governance, the Head of Financial Planning and Support, and the Director of Finance for their attendance and contributions to the meeting.


The Chair reminded all in attendance of the Extraordinary OSB meeting in respect of the budget consultation, which had been scheduled for 27 January 2021.


AGREED that the information provided be noted, and the agreed action be undertaken.

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