Agenda item

The Chair welcomed the Elected Mayor and Chief Executive to the meeting and invited the Mayor to deliver his presentation.

 

The Mayor thanked OSB for the opportunity to appear before the Board. He explained this was his first appearance before OSB and the second would be as the portfolio holder for Adult Social Care and Public Health. As part of his portfolio the Mayor was also intending to appear at the Health Scrutiny Panel.

 

The Mayor identified the main areas of his presentation which included ‘Hot Topics’, the Council’s Section 24 Notice, with corresponding statutory audit recommendations, and the Council Plan. It was explained the Section 24 Notice had taken up a considerable amount of the Mayor’s time. It was important to address the concerns raised in the notice as non-compliance could have negative consequences for the Council.

 

Aside from working on the Section 24 Notice the Mayor identified four areas he described as ‘Hot Topics’. The first being the creation of a Poverty Strategy. By creating this strategy, the Mayor was hopeful life chances could be improved in Middlesbrough. The second ‘Hot Topic’ was the Social Value Charter. Intended for local businesses, and requiring the Council to lead on it, this was based on three tenets: to employ locally, use local suppliers and be involved with local communities.

 

It was important the Council embedded the Charter’s values, using tools such as the Locality Working model. Once embedded in the Council’s ethos the Charter would demonstrate its commitment to using local suppliers. It was hoped the Social Value Charter would be in place by the end of the year with all local businesses committing to the values contained in it. The Mayor also explained that, once businesses adopted the values of the Charter, they could adopt an optional third commitment. An example of an optional commitment was using the Council’s 50 Futures Programme to enhance a workforce. The Mayor was keen for businesses to adopt the Social Values Charter and to take ownership of its principles. The Mayor cited AXA as a recent example of a business demonstrating social values with their contributions to foodbanks. 

 

The Mayor explained his third ‘Hot Topic’, Health and Equality, crossed both his roles as Mayor and Executive Member for Adult Social Care and Public Health. Health was a crucial factor in people’s lives. It was pointed out Middlesbrough had some of the worst health outcomes anywhere in the UK. It was also explained there were significant disparities in health outcomes between Middlesbrough’s electoral wards, with some being considerably worse than others. An example was the Brambles Farm area. However, there was not the same focus on this area for poor health outcomes in the same way as other areas received focus for high levels of Anti-Social Behaviour. In some areas there were generational health inequalities, and it was important Members were able to identify such inequalities so they could be targeted, and improvements made.

 

The fourth ‘Hot Topic’ was the creation of Family Hubs which would help to improve health outcomes for communities. It was important the Council had a visible presence in local communities. There were currently four main Hubs with two satellites that were broadly based in the North, South, East and West of the Town. The Hubs would play a role in the early life of a child. The Hubs would act as early starting points for parents. Previous experience showed that contact with parents had been lost quite early in a child’s development. It was hoped the Family Hubs would help to maintain contact with families and children.

 

Moving to Executive decisions, the Mayor summarised the decisions that had been recently considered. The first concerned the Revenue and Capital Budget. The Mayor described how actions had been taken to address the projected overspend of £11.563m including the instigation of budget challenge meetings, which had been quite successful with officers now proactively suggesting ways to reduce their expenditure. Members were advised the projected overspend was not immovable and while picked up late, mitigations being put in place would result in the overspend not being repeated. The Mayor also commented that going forward the Council would need to spend within established budgets as there was little chance of those budgets increasing.

 

In terms of the Medium-Term Financial Plan, an important factor was the introduction of three-year plans rather than current approach of one-year financial planning.

 

The Mayor also described the Executive decision to approve the recommendations arising from the Culture and Communities Scrutiny Panel’s review into off-road bikes. He commented there was work to address this issue from a strategic rather than a reactive standpoint. For example, rather than just pursuing perpetrators there was a need to understand how the perpetrators got to that position in the first place.

 

The Middlesbrough Development Company closure was also discussed. The Mayor pointed out this had been quite challenging. There had been several instances of poor governance and closing the company met three of the statutory recommendations in the Section 24 report. It was noted that following the Company’s closure the Mayor had a better understanding of how an organisation of that nature should operate.

 

The Hemlington North disposal was the final Executive decision to be discussed. This was seen as a positive initiative as North Star could occupy the site and create affordable housing.

 

The Mayor moved on in his presentation to explain a timeline of events regarding the Council’s Section 24 Notice. The Mayor commented one criticism had been the process lacked pace and improvements with some recommendations not being followed up quickly enough. The issues surrounding the notice were exacerbated with the change in political administration. It was commented Members had received an extensive level of training following the local elections which had contributed to Members understanding of the issues surrounding the Section 24 notice. It was noted improvements to Member/ Officer relations had been seen. However, there was still work to do and there was a need for the Council to focus on how it improved itself going forward. The Mayor suggested that a special OSB meeting be convened when the Council’s Value for Money report was released as this would demonstrate if improvements had been made.

 

The Mayor moved on in his presentation and outlined areas of concern raised in the Section 24 report. It was commented work was underway to ensure each area of concern was addressed. The Mayor had met with the auditors to explain any actions and improvements, as this would help to provide context from which the Council could be assessed.

 

In terms of the Governance Improvement Strategy, there were two main themes: Cultural Transformation and Financial Recovery and Resilience and Recovery. In terms of Cultural Transformation this included improvements to the Constitution and Member/ Officer protocols. It was noted that, at the previous Council meeting, Members voted unanimously to accept the proposals of the Governance Improvement Journey. This theme would also see the re-introduction of the appraisal process for officers. In terms of the Financial Recovery and Resilience and Recovery theme, it was commented that any improvements to Governance processes required financial support. One of the initiatives for this theme was the creation of a Reserves Policy, which would help to top-up the level of Council reserves.

 

The Mayor proceeded to outline his vision for the town and how the improvement journey could fit around these. The general themes were, “A Successful and Ambitious Town”, “A Healthier Place”, “Safer and Resilient Communities” and “Delivering Best Value”. The Mayor provided some detail about each of the general themes including how protecting and improving our environment could lead to a healthier place to live. The Mayor stated the most ambiguous theme was “A Successful and Ambitious Town”. The Mayor commented it was important to focus on what Middlesbrough was going to do next, rather than focus on its past. Examples were provided which included Middlesbrough being the home for the development of a very successful computer game, as well as a prominent contractor for Sony. However, such examples were not widely known. It was important that Middlesbrough advertised its accomplishments to instil a sense of ambition in the Town’s young people.

 

The Mayor proceeded to describe how his plan would link with wider initiatives. Ultimately the underpinning element of this process was a strong cultural base with operational documents such as Service Plans and the Council Plan supporting the Mayor’s priorities.  The Mayor commented the Council was in a good place with more plans being created that would address the issues it was facing.

 

The Chair thanked the Mayor for his presentation and invited questions from the Board.

 

A Member asked how a Medium-Term Financial Plan could be created when it was unknown how much money the Council would receive as part of the Local Government settlement. The Mayor agreed with the Member that the settlement was agreed at a late stage in the budget setting process. He expressed concern that some Councils were approaching the government for financial assistance before the settlement had been agreed. The Mayor was keen for Middlesbrough to reach the settlement period before contemplating such an approach to government. The Member responded the Medium-Term Financial Plan should be seen as aspirational. It was clarified that creating the Medium-Term Financial Plan involved using information that was both current and projections. Based on this data the Council was able to make an informed prediction about its finances.

 

A Member stated that criticism continued to be levelled at the Council for its financial management despite agreeing a balanced budget for the previous financial year. The Mayor responded that not adhering to savings targets also contributed to Council’s current financial position. The Chief Executive commented the Medium-Term Financial Planning process was common across the local government sector and plans were made on the best assumptions. The Local Government Association and others had lobbied government to change the system but without success. The Chief Executive also stated a financial control period for local government would be preferable to the current system as Councils would know what resources they had to work with for a longer period.

 

A Member asked what had gone wrong with the Middlesbrough Development Company, as they felt not all of the relevant details had been made available. The Mayor confirmed there was a full audit report submitted to the Corporate Affairs and Audit Committee that detailed this issue. The Member clarified they were aware of the audit report and as such the Mayor suggested if any further detail could be brought back to OSB. The Mayor also suggested that a report regarding the Crown be brought back to OSB. The Chair commented it was important OSB did not trespass on the remit of Corporate Affairs and Audit Committee and that a report identifying lessons learned and how that could be used for policy development could be considered by OSB at a future meeting. The Mayor stated a lessons learned document was being created at his request. The Chair suggested that such documents could be brought to OSB when the Executive Member for Regeneration appeared before OSB in January 2024.

 

It was stated the Member Induction programme had been beneficial and well received. However, a Member also stated some expectations raised during the inductions were not always realised. The Member stated suggestions about how things could be done differently were not always taken on board. An example of a transformative approach was the Andy Man’s Group that supported men’s mental health. It was hoped this group was receiving additional funding as it could be saving money in other areas, such as healthcare.

 

Regarding the Council’s projected overspend, a Member asked where it had been spent and if plans were in place to prevent this happening in the future. The Mayor responded the overspend was a projection and work was being carried out to understand if services could be delivered differently to reduce this. The Mayor stated one of the most challenging elements of this year’s budget setting process was the unknown level of settlement received from government. If the settlement was more generous than expected this would help negate some of the Council’s financial challenges. Otherwise, the Council would have to make some difficult decisions going forward. 

 

A Member queried what the phrases “resilience”, “living within our means” and “mindset change” meant for Middlesbrough. The Mayor responded that “mindset change” meant how the Council could adapt its current ways of working to make sure everything in its control had been addressed. It was important the Council was able to strike a balance between delivering its statutory services and non-statutory services. In terms of resilience, the Mayor provided the example of assisting an individual with housing needs. He stated it was better to provide someone with the tools to maintain a tenancy on a home rather than having that person lose their tenancy because they did not have the tools to support it. On the whole reactive costs were much higher than preventative costs.

 

A Member queried if the numbers of Children in Care/ In Need could be made available since the central funding of Youth Services ended. The Mayor confirmed he would look into this and respond.

 

The Chair stated he was concerned about how the new Middlesbrough Development Corporation would operate and queried what the situation was regarding requests made of central government by the Chief Executive. The Mayor responded that issues stalling the process included asset transfers and the ongoing enquiry. Once the enquiry was completed it was expected a response to the Chief Executive’s letters of concern would be received. The Chief Executive commented he was still in conversation with the Combined Authority and undertaking benchmarking exercises against other Development Corporations to understand what good governance should look like for that kind of organisation. The Chair expressed concern about conflict of interests at the Middlesbrough Development Corporation, including the Mayor of the TVCA being the Chair of the Board. The Chair also expressed concern that assets could be transferred without the Council’s agreement and before any concerns had been addressed. The Chief Executive responded that it was unlikely any assets would be transferred before a response to the concerns was received. It was also clarified that assets could be transferred at nil value, but the Council had received confirmation that should it incur any financial losses because of such transfers it would be compensated. Due to its importance, the Chair suggested a Middlesbrough Development Corporation agenda item be included on every Council agenda as this would allow all Members to be updated with progress.

 

The Chair commented that in a recent meeting with local businesses a suggestion had been made for the creation of a Business Improvement District. Such a district could be funded by a levy from business rates. This had worked in other areas and would require a ballot of local businesses. The Mayor responded by saying it was important the Council work to reshape the Town Centre. Having a Business Improvement District would complement the Investment Zone and Historic Quarter. The Mayor welcomed the idea. The Chief Executive commented that Birmingham had a positive experience with a similar initiative.

 

A Member commented that similar initiatives had been attempted under the Town Centre Company previously and while supportive of the suggestion reminded Members such things came with a cost. The Mayor pointed out there was no dedicated bid writing function in the Council any longer, but not having that function may have cost the Council in lost revenue.

 

It was queried if there was a dedicated portfolio holder for business. It was clarified this was covered by several portfolios but largely sat with the Executive Member for Regeneration.

 

The Chair thanked the Mayor and the Chief Executive for their presentation and input.

 

ORDERED that:

 

1.     A future report on lessons learned from the closure of the Middlesbrough Development Company be considered for a future meeting of OSB;

2.     The number of Children in Care/ In Need since the central funding of Youth Services ended be made available;

3.     That the Chair of Council and the Head of Legal and Democratic Services be contacted to seek the inclusion of an MDC agenda item on all Full Council meeting agenda; and

4.     Consideration be given to balloting local businesses with a view create a business improvement district.