Agenda item

Mr L. Breckon JP CC, Lead Member for Resources, has been invited to attend for this item.

The Commission considered a report of the Director of Corporate Resources, which provided an update on the 2021/22 revenue budget and capital programme monitoring position as at the end of period 10 (the end of January).  A copy of the report marked ‘Agenda Item 10’ is filed with these minutes.

Arising from discussion, the following points were made:

(i)              Since the last report to the Commission, the Council’s financial position appeared more positive, moving from a £2.6m overspend to a £3.5m underspend.  However, Members recognised that there were still three key areas of significant concern – Special Educational Needs and Disabilities (SEND), Adult Social Care (ASC) and the Capital Programme.

(ii)             Members questioned whether in light of the forecasted deficit of £28m on the High Needs budget, whether further Government funding would be forthcoming to help address this.  Members were disappointed to hear that this was unlikely and that whilst some additional funding had been provided to some authorities, this had been on a one off basis and did not match the ongoing level of growth and increased costs being seen.  Whilst a national problem, Members noted that this would most likely have to be managed locally.

(iii)           The High Needs budget deficit had grown for several years due to increased age range of children with SEND the Council was now responsible for (was up to 18 years, but was now up to 24).  The increased responsibly had not been matched with additional funding.  Members noted that there were also increased parent expectations and requests for children with SEND to be educated in a special school as opposed to a mainstream school which was significantly cheaper.

(iv)           The Leader Member for Resources reported of work being undertaken by external consultants Newton Europe to review SEND services.  Members noted that the Council currently provided what was considered a ‘gold’ standard, but that the grant was not sufficient to continue this.  It had to be recognised that a ‘silver’ or ‘bronze’ standard was still good and over and above the Council’s statutory responsibilities.  Mr Breckon assured Members that this was being looked at carefully by the Director and Lead Member for Children and Family Services.

(v)            Members noted that the planned transfer of £2m from the mainstream school grant to the High Needs budget did not go ahead as proposed as this had been rejected by both the Schools Forum and subsequently the Secretary of State.

(vi)           The underspend in the Public Health budget resulted from some public facing services having ceased or reduced temporarily as the Department focused on work required to respond to the Covid-19 pandemic.  The underspend would be kept in reserve to support such services as these were reinstated.

(vii)         ASC Services currently depended on a significant amount of NHS funding.  However, this was uncertain over the long term and so the position would be monitored closely.

(viii)        Members raised concern at the level of overspend on the Capital Programme and the slippage of two key projects (the Melton Mowbray Distributor Road and the A511) which whilst understandable, as explained in the report, increased the risks being faced by the Council in this area.  Members highlighted that added costs and inflationary pressures exacerbated by current events would likely continue and make the position even more difficult.  It was suggested that officer time spent designing schemes and bidding for funding might be a false economy if the Council was not then in a position to finance those schemes (providing match funding) over the long term.

(ix)           A member commented that securing the receipt of adequate section 106 developer contributions to fund growth infrastructure had always been difficult and that this would likely become even harder as developers were also affected by cost and inflationary pressures.   Members questioned if the viability of schemes were challenged by developers, reducing the section 106 contributions received by the Council, how this would be managed and what discussions were being held with district councils to share this risk.

(x)            Members were concerned that the Members Advisory Group (MAG), which was a partnership body, looked at and agreed growth requirements across the County, but that the Council was the sole provider of the infrastructure necessary to support this.  Members challenged how this was being managed and how such growth demands were being balanced with what the Council could realistically afford.

(xi)           The Director outlined the work of the Growth Service which had been established to provide oversight of large scale growth projects and how these were aligned with the Council’s financial plans and capabilities.   Members noted that the Service liaised with district councils on a regular basis, in particular as part of their local plan process, to ensure infrastructure needs were considered early.  It was noted that the Service also played a significant role in supporting the work of the MAG, working alongside the Joint Strategic Planning Manager for Leicester and Leicestershire.
 

(xii)         Members acknowledged that there were a number of factors to consider and suggested it would be right for the Commission to take a more holistic view of the Council’s Capital Programme and all the risk factors identified.

RESOLVED:

(a)  That the Medium Term Financial Strategy 2021/22 Monitoring report up to the end of January 2022 (Period 10) be noted;

(b)  That the Director of Corporate Resources be requested to provide the Commission with a more holistic view of the Council’s Capital Programme and the key risk factors affecting this in light of current national and international circumstances.