Agenda item

To consider and make any appropriate recommendations to Cabinet on:-

·         the Draft Medium Term Financial Strategy, Draft General Fund Budget 2022/23 and Draft Capital Programme 2022-2025 for consultation.

Councillor Mason informed the panel that there was a change to the agenda item orders with agenda item 7 - Revised General Fund Budget and Capital Programme 2021/22; Draft General Fund Budget Estimates 2022/23 and Draft Medium Term Financial Strategy (MTFS) 2022/23 to 2026/27; Capital Programme 2022 – 2025 being moved before agenda item 6 - Draft Business Plan 2022-23.

Members considered the Revised General Fund Budget and Capital Programme 2021/22; Draft General Fund Budget Estimates 2022/23 and Draft Medium Term Financial Strategy (MTFS) 2022/23 to 2026/27; Capital Programme 2022 - 2025 presented by Councillor Boden.

Members asked questions, made comments and received responses as follows:

• Councillor Mason thanked Councillor Boden for his presentation and noted that the Fenland Future programme was due for review at the March meeting. He asked if Mark Saunders had any further comments to make. Mark Saunders supported the points that Councillor Boden had made.
• Councillor Yeulett asked whether there will be more clarity between the relationship with Fenland Future before the Council meeting. Councillor Boden informed the panel that there would be an update before the Council meeting detailing more of the relationship between the Council and Fenland Future and how it will affect Fenland District Council’s budget figures across the coming year and in the future. He apologised that the business plan had not been completed for Fenland Future and that it had not been incorporated in the figures but that this would be rectified in the coming weeks.
• Councillor Yeulett questioned whether the Fenland Future arrangement would feed into the budget for the following years and help reduce the deficit over the coming years. Councillor Boden confirmed this stating that there would be a continuous flow of income from Fenland Future to help support the continuation of services provided by the Council. He explained that Fenland Future would initially focus on land development which is already owned by the Council but that this was not necessarily the long-term direction of Fenland Future.
• Councillor Booth noted that the long-term financial forecasting of Fenland Future had not been included in the report and asked when it would be included as it would affect the Council’s priorities. Councillor Boden explained that it had not been added yet as the figures would have been a guess at this point. Councillor Booth disagreed with this as all future forecasting required an element of educated guessing. Councillor Boden informed the panel that there was no requirement for the figures to be included until the budget is taken to Council.
• Councillor Wicks asked whether when the figures from Fenland Future are added into the budget calculations, they would be accompanied by a note of what the assumptions are and what the impact would be. Councillor Boden assured him that the impact of the Fenland Future figures would be clear due to their size and that it will be clearly set out as to what the assumptions are over the next 5 years. He noted that the business plan would also outline how the income will be generated.
• Councillor Cornwell noted his worries about the state of the report and the implications of some of the statements. He lamented that the report had been presented in an unfinished state and worried about what the public would make of the report. He informed the panel that he would hold his true worries back until the full report was published in hope that there would be more positive elements in the final version. Councillor Boden agreed with Councillor Cornwell’s remarks and noted that the report was worse than previous years since there was still a lot of work to be done before coming before Full Council. He explained that it was necessary to come before the panel at this point to allow any comments to be reflected upon before the budget was taken to Cabinet and Council. Councillor Boden noted that it was unlikely that many members of the public would have read the report at this point, suggesting that they would wait to see the full report taken to Council. He aired the view that this was not a major point of concern for the public at this point and that the expectation would be on the Council to sort these matters out.
• Councillor Cornwell accepted that the public may be more interested in the next stages and noted that the report takes a long time to read and understand. He asserted that later the public would be more interested when they learn what the expense to them would be over the next year. Councillor Boden agreed with this point and stated that the Council cannot continue forever with no Council Tax increase. However, he did also note that the Council does have the capability to proceed along a zero percent increase in Council Tax for a very long time if they maintained a strong control over their expenditure, improved the levels of income from other streams and had a level of luck.
• Councillor Miscandlon noted his worry that any person watching would see this as an incomplete report as had already been confirmed. He asked whether the Leader agreed that this was an incomplete report giving an incomplete picture on an incomplete future. Councillor Boden agreed with this statement and explained that this was why he had been candid around how it would be completed. He noted that the members of the panel were all experienced Councillors and that they would be able to read between and beyond the lines. He said that he hoped the information given during the meeting would be of some comfort and noted that the final report would make better reading.
• Councillor Booth noted that there was a zero percent inflation forecast for the Medium Term Financial Strategy which he disagreed with explaining that the governments target was 2.5 percent. He explained that there was a need to have the right level of inflation built into the calculations and asked why the net service expenditure had increased by approximately one million pounds if inflation had not been built into these calculations. Mark Saunders explained that a big factor in the increases in the service expenditure was due to staffing costs which make up around 60 percent of expenditure. He noted that there were significant reviews next year which result in significant pressures on the staffing bill. He explained that the changes in the cost of staffing and providing services are outside of their control. Councillor Boden added that he expected that the cost element on the revenue side would be lower and the income side would be higher than seen in the current report.
• Councillor Booth suggested adding a note to the zero general inflation to say that this excludes staff pressures to make it clearer. Councillor Boden and Mark Saunders accepted this recommendation.  
• Councillor Mason summarised the points within the report and noted that the deficits could be funded by reserves but that the reserves could only be used once. Councillor Mason went on to recommend that they approve the revised General Fund Budget and Capital Programme for 2021/22 to be taken before Cabinet and Council on the condition that Council Tax is increased by 1.97%. This recommendation failed on the vote.
• There was a debate regarding whether the panel should approve or note the report for the revised General Fund Budget and Capital Programme for 2021/22 with it eventually being resolved that it should be noted.

Members of the Overview and Scrutiny panel AGREED to:

• note the revised General Fund Budget and Capital Programme for 2021/22
• send the Draft General Fund Budget Estimates 2022/23 and the Draft Medium Term Financial Strategy 2022/23 to 2026/27 for consultation
• approve the Capital Programme 2022-2025.