Agenda and minutes

A webcast of the meeting can be viewed at t http://www.leicestershire.gov.uk.

The minutes of the meeting held on 8 November 2024 were taken as read, confirmed and signed.

The Chief Executive reported that no questions had been received under Standing Order 34.

The Chief Executive reported that no questions had been received under Standing Order 7(3) and 7(5).

There were no urgent items for consideration.

The Chairman invited members who wished to do so to declare any interest in respect of items on the agenda for the meeting.

All Members of the Commission who were also members of district councils declared an ‘Other Registerable Interest’ in the Medium Term Financial Strategy (minutes 49 to 52 refer).

Later in the meeting (minute 51 refers) Mrs A. Hack CC declared an Other Registerable Interest as she was a GMB Union Member.

There were no declarations of the party whip.

The Chief Executive reported that no petitions had been received under Standing Order 35.

Mr N. J. Rushton CC, the Leader of the Council and Mr L. Breckon CC, Lead Member for Resources, have been invited to attend for this and all other MTFS related items below.

The Commission considered a report of the Director of Corporate Resources which provided information on the proposed 2024/25 – 2027/28 Medium Term Financial Strategy (MTFS) as it related to Corporate and Central items.  The report also provided an update on changes to funding and other issues arising since the publication of the draft MTFS and provided details of a number of strategies and policies related to the MTFS.  A copy of the report marked ‘Agenda Item 8’ is filed with these minutes.

The Chairman welcomed the Leader of the Council, Mr N. J. Rushton CC, and Cabinet Lead Member for Resources, Mr L. Breckon CC, to the meeting for this item.

In presenting the report the Director commented that this was the hardest budget he had ever had to present so far and that unfortunately the forecast was that the pressures on the County Council and local government generally would likely continue for the foreseeable future.  In the last three years, the Council had been able to balance at least two years of the MTFS when this had been presented for approval.  Unfortunately, this had not been possible this year and for the first time, the budget next year could only be balanced with the use of reserves.  Members noted that for 2025/26 the Council had a £33m funding gap and urgent action was therefore needed to address this.

The Director reported that since the report had been circulated, the Government had announced an additional £600m for local government, £500m of which would be to support social care services.  It was not yet clear how much would be specifically allocated to Leicestershire, but this would be confirmed following the final local government finance settlement which was expected in early February.  Members noted that whilst the additional money was welcomed, this would simply be used to reduce the Council’s current shortfall.

Arising from discussion, the following points arose:

Corporate and Central Items

(i)               The Council budget for income from ESPO was approximately £800,000 for the current year, with a stretch target of £900,000 for 2024/25.  It was on track to meet ese targets.

(ii)              The contingency for inflation and national living wage was expected to be used each year. This was currently an estimate and so was held centrally until the pay award, and other factors had been confirmed.  It would then be allocated to departments as appropriate.   Members noted that the contingency was reviewed and reset each year.  Any amount not spent would be released to departments in year.

Earmarked Reserves

(iii)            Concern was raised regarding the cumulative deficit of £112m, forecast for the final year of the MTFS, in the dedicated schools grant (DSG) High Needs budget.  It was noted that the Government had implemented a statutory override but that this was temporary until 2026.  It was not yet clear whether this would be extended.  Members noted that this was a national issue and that there was some uncertainty as to how the Government intended to deal with this.  At present the deficit was held off the Council’s balance sheet but without the statutory override in place, it would be a liability that would need to be paid by the Council.

(iv)            The Director reported that much was being done within the Children and Family Services Department to address the rise in demand and costs associated with SEN Services.  Good progress was being made and a targeted reduction in annual spend of £10m had been set.  However, the DSG would still not meet the level of spend in this area which was entirely demand led. 

(v)             Some members commented  ...  view the full minutes text for item 49.

In addition to the Leader and Lead Member for Resources, the following Lead Members have been invited to attend for this item:

-         Mrs D. Taylor CC (Regulatory Services)

-         Mrs P. Posnett CC (Community and Staff Relations)

The Commission considered a joint report of the Chief Executive and Director of Corporate Resources which provided information on the proposed 2024/25 – 2027/28 Medium Term Financial Strategy (MTFS) as it related to the Chief Executive’s Department.  A copy of the report marked ‘Agenda Item 9’ is filed with these minutes.

In addition to the Leader and Lead Member for Resources, the Chairman welcomed the Lead Member for Regulatory Services, Mrs D. Taylor CC and the Lead Member Community and Staff Relations, Mrs P. Posnett CC, to the meeting.

Arising from discussion and questions, the following points arose:

Proposed Revenue Budget

(i)               Members noted that Strategy and Business Intelligence covered a broad area of work including business intelligence, the Communities and Policy teams, the Resilience service (the County Council acting as host to the Leicester, Leicestershire and Rutland Local Resilience Forum and Partnership), and the Growth Service.  These helped to secure funding, supported the delivery of large scale projects, such as Broadband rollout, and worked with partners and the voluntary sector.   A Member commented that these were not statutory services and this section generated the highest cost for the Department but was not expected in the current MTFS to deliver any savings.  It was suggested that an update on this service area would be beneficial to better understand the breadth of work delivered.

(ii)              The Council’s contribution to the Leicester and Leicestershire Place Marketing Team was included within the Strategy and Business Intelligence budget.  This amounted to approximately £60,000 per year as well as two seconded officers.  A Member commented that tangible examples of what this partnership delivered would be helpful.  It was noted that these would be provided in the next annual report on the performance of the organisation as had been previously requested by the Commission.

(iii)            In response to questions raised, the Director confirmed that the Department currently employed approximately 250 FTE staff excluding registrars on zero hour contracts. 

(iv)            Members welcomed the work of the Trading Standards service and noted that, in light of the Government’s recent announcement to ban the sale of disposable vapes, the work of the service would increase further. Some additional funding had been allocated to enable the service, in conjunction with East Midlands Airport, to tackle the import of such products.  However, members noted that the service was already stretched and had limited staff to cover all areas of enforcement.  A triage approach would therefore be adopted to prioritise those areas that gave rise to the most risk.

(v)             It was noted that Trading Standards was responsible for food standards whilst district councils were responsible for food hygiene.  The service worked closely with district council environmental health officers given there was some cross over in this work, particularly when coordinating inspections.  It also worked closely with other partners, such as the police, in tackling doorstep crime and rogue traders, and East Midlands Airport border force and HMRC to tackle issues such as illicit tabaco.

(vi)            It was noted that the recruitment of solicitors continued to be an issue, particularly in areas such adult and children’s social care, with some posts having to be readvertised a number of times.  Case levels had also significantly increased.  Members recognised the need to ensure legal cases were continuously being managed and therefore any gap in service had to be temporarily filled through the use of locums or by outsourcing work to the private sector, both of which were costly to the Council.  The Director confirmed that the corporate incentive programme had been used to enhance salaries to make the positions advertised more competitive.  This had  ...  view the full minutes text for item 50.

Mr L. Breckon CC, Lead Member for Resources, and Mr P. Bedford CC, Lead Member for Recovery and Transformation, have been invited to attend for this item.

The Commission considered a report of the Director of Corporate Resources which provided information on the proposed 2024/25 – 2027/28 MTFS as it related to the Corporate Resources Department.  A copy of the report marked ‘Agenda Item 10’ is filed with these minutes.

The Chairman welcomed the Leader and the Lead Member for Resources who remained present for this item.

Arising from discussion and questions, the following points arose:

Savings

(i)               A Member raised challenged the scale of the savings required to be made by the Department given that some of the services it provided were discretionary, not statutory.  The Director commented that the overall budget for the service was £30m, and an ongoing saving of £3m had been identified which was therefore significant given that this would be a year-on-year reduction in spend of 10%. The identification of further savings was also being considered for future years.

(ii)              Ways of Working – A Member questioned if the planned capital investment of more than £5.5m on the Ways of Working programme was justifiable against a forecasted saving of £70,000 in 2024/25 rising to £780,000 from 2025/26 onwards.  The Director commented that this was the additional saving from 2024/25 and that savings had also been made in previous years. The current MTFS showed what was a short term capital investment to support this saving.  However, this would be balanced against the generation of an increasing, long term revenue income stream, as well as long term reduced costs to the Council.  Members noted that most of the investment costs included within the MTFS related to improved IT infrastructure which would be necessary to support improved service delivery.  Improvements in IT related to updating staff laptops, which had a natural life cycle, and improvements to the network infrastructure. 

(iii)            Members noted that the Programme delivered a range of benefits in addition to the financial benefits outlined.  These included increased productivity of staff, the improved recruitment and retention of staff, and a reduction in carbon and overall operating costs.  It was noted that an update on the Ways of Working Programme would be provided to the Commission in April.

(iv)            The models of IT were changing and there was a gradual move from capital investment to a revenue cost as more was hosted off-site with third party providers.  Members noted that a significant amount of spend was now targeted towards security.  The Director undertook to address this as part of the Ways of Working update to be provided in April.

(v)             A Member questioned what options had been assessed as part of the business case for the Programme and whether there were any opportunity costs being lost in retaining the current office space.  The Director commented that a balance had been struck between the capital value of the County Hall campus against the cost and disruption to services of relocating staff to a new site. 

(vi)            Review of mobile phones – A tender exercise had been undertaken 3 to 4 years ago which had significantly reduced the cost of mobile phones used by staff.  The use of handsets had increased during the covid pandemic (from approximately 2,300 to over 3,000).  Efforts were now being made to reduce those numbers where possible.  However, it had to be acknowledged that working arrangements had changed during that time, particularly in the field of social care, and staff were using devices more regularly to engage differently with service uses including, for example, by using WhatsApp.  This was proving beneficial and so the savings had to be balanced against a new service need.

(vii)          Union Representatives – Some Members  ...  view the full minutes text for item 51.

The purpose of this item is to enable consideration of the responses of the following Overview and Scrutiny Committees to their respective areas of the Medium Term Financial Strategy:

·        Health Overview and Scrutiny Committee (meeting held on 17 January)

·        Highway and Transport Overview and Scrutiny (meeting held on 18 January)

·        Adults and Communities Overview and Scrutiny Committee (meeting held on 22 January)

·        Children and Families Overview and Scrutiny Committee (meeting held on 23 January)

·        Environment and Climate Change Overview and Scrutiny Committee (meeting held on 24 January)

The Commission considered extracts from the minutes of the Overview and Scrutiny Committee meetings held to consider the Medium Term Financial Strategy for 2024/25 – 2027/28 so far as this related to the County Council departments.  A copy of the minutes extracts is filed with these minutes.

The Lead Member for Resources reiterated the financial pressures faced but emphasised that the Council had taken prudent decisions year on year and it was therefore in a strong position compared to many.  Scrutiny had played a key role in challenging these difficult decisions which provided a good level of assurance.  The Lead Member emphasised that the Director of Corporate Resources as the Council’s section 151 officer was able to give assurance that the budget estimates were robust and earmarked reserves adequate. 

The Lead Member further thanked officers and the Chairs of each scrutiny committee for their input into the process which had been in depth and valuable.

The Chairman and the Chairs of the scrutiny committees thanked officers that worked well under tremendous pressure and had continued to deliver change in the face of considerable financial constraints. 

RESOLVED:

That the comments now made be submitted to the Cabinet for consideration at its meeting on 9^th February 2024.

A presentation by Hymans Robertson will be provided as part of this item.

The Commission considered a report of the Director of Corporate Resources which sought members views on the revised Investing in Leicestershire Programme Portfolio Management Strategy 2024-28 which set out the proposed approach to future asset management and investment.  A copy of the report marked ‘Agenda Item 12’ is filed with these minutes.

The Chairman welcomed Mr Phillip Pearson, of Hymans Robertson, to the meeting.  Mr Pearson provided a presentation on the external review of the Council’s property portfolio performance, and a copy of the slides is attached to these minutes.

Arising from discussion, the following points arose:

(i)               A member raised concern regarding the underperformance of the Council’s rural estate which despite good capital appreciation, showed a net income of -1.7%.  Mr Pearson commented that rural property had an important part to play in the Council’s portfolio.  Hymans Robertson had recommended maintaining the current allocation on the basis this was proportionate for Council’s portfolio and it aligned with the non financial aims of the Strategy.  However, it was important that every property in the portfolio contributed and where this was no longer the case, a plan would be put in place to address this, which might result in a disposal.

(ii)              The Lead Member for Resources highlighted that a lot of the Council’s rural estate fell within district council emerging local plans and had been allocated for projects such as the Melton Mowbray Distributor road. 

(iii)            In response to a question, the Director advised that the Snibston Café did not fall within the IILP Portfolio but formed part of the Council’s Country Parks estate.

(iv)            Carrying out repairs or refurbishments to properties could be costly.  Consideration would therefore be given to whether, once those works had been carried out, a property would likely generate an acceptable financial return or have an otherwise positive impact in line with the Strategy’s aims.  If this was not the case, the property might simply be sold.

(v)             Costs relating to the sale of a property or the costs to repair, maintain or refurbish, would be reflected in any business case put forward when considering whether to carry out works.  This ensured all options were properly costed and assessed before a decision was taken on the appropriate way forward.

(vi)            Selling a property placed significant demand on officer time.  The Council therefore operated a rolling programme of asset reviews to ensure the whole portfolio was reviewed and actions taken over a long term to spread the costs and resource demand.

(vii)          A Member challenged what social benefits were being delivered by the Programme given that most investments within it were of a commercial nature.  It was noted that the Council would not seek to compete with the private sector but looked to maximise the use of its existing assets to help generate economic growth (its development at Leaders Farm being an example), particularly where external funding was available (for example, Airfield Farm had benefited from European Development Funding).  In turn it was hoped that such economic investment would then bring about wider social benefits.

(viii)         The Programme was reaching its capital investment limit.  Consideration was therefore being given to increasing the focus on the existing estate, including some invest to save projects.  A key area of focus was, for example, the purchase of residential properties to support adult and children’s social care accommodation needs, although this fell under the Social Care Improvement Programme (SCIP).

(ix)            In response to questions raised the Director confirmed that the Programme consisted of a mix of treasury management and directly owned property investments, and a significant amount of the  ...  view the full minutes text for item 53.

The Commission considered a report of the Director of Corporate Resources which provided an overview of the themes explored in the Leicestershire Traded Services (LTS) Scrutiny Commission workshop held in October 2023 and an interim update on the performance of Services during 2023/24.  The report also set out some suggested criteria for how the Council’s traded services might be evaluated, beyond financial performance alone. A copy of the report marked ‘Agenda Item 13’ is filed with these minutes.

The Lead Member commented that the report set out an honest assessment of where LTS was currently.  The Commission’s concerns raised at the workshop last year had been taken on board, and the Lead Member now welcomed its views on the criteria for evaluating each service and the prioritisation to be awarded to these. Plans were in place to address those Services that were not currently performing and over the next 12months if circumstances did not improve, alternative options would be considered.  The criteria to be applied would be key in considering those options. 

Arising from discussion, the following points were made:

(i)               A Member criticised LTS, suggesting that despite the Commission receiving several reports suggesting that services would be improved, most continued to make a loss. 

(ii)              A Member commented that the financial contributions made by the cafes was minimal and questioned whether outsourcing these had been considered, similar to the café at Snibston Country Park.  The Director reported that an assessment had been undertaken but this had shown that the return likely to be generated by outsourcing would be comparable with current income levels. 

(iii)            In response to questions raised, the Director advised that if the country parks cafes were to be operated by the private sector, this would be on an internal repairing only lease.  The external parts of the property would therefore continue to be a liability to the Council.  Given their location, the sale of the cafes would not be an option.

(iv)            A Member argued that the capital repair costs for Beaumanor Hall would be high, particularly as the long access road would soon require work which they suggested could cost in excess of £1m.  This would outweigh the financial returns likely to be generated even if performance improved, noting that the service currently made a loss and had done for some years.  The Director reported that the scale of repairs needed to the access road to Beaumanor Hall had been estimated to be significantly less than £1m, more likely patching works would be in the region of £100,000.  Members were reminded that whilst the Hall was required to generate an income, it also generated wider benefits, such as the outdoor activities for school children, which needed to be considered when assessing the future of the service.

(v)             The School Food service had resulted in significant financial losses and forecasted income was still expected to be below target.  The Director reported that good progress was being made, the service having gone through an extensive review which had significantly reduced costs.  A return to the service generating a profit, as it had done before the Covid- 19 Pandemic had hit, was looking more likely.  In terms of timing, the Director confirmed that this year a loss had been forecast due to contract renewal cycles.  However, the service was expected to make a contribution the following year.

(vi)            A Member expressed serious concern regarding the Council’s contracts for the School Food Service, as he felt these should have been drafted to ensure that all increased could be passed onto the user.  The Commission was assured that legacy contracts  ...  view the full minutes text for item 54.

The next meeting of the Commission is scheduled to take place on 13^th March 2023 at 10.00am.

RESOLVED:

It was noted that the next meeting of the Commission would be held on 13^th March 2024 at 10.00 am.