Agenda item

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

The Commission considered a report of the Director of Corporate Resources the purpose of which was to provide members with an update on the 2023/24 revenue budget and capital programme monitoring position as at the end of period 6 (the end of September2023).  A copy of the report marked ‘Agenda Item 9’ is filed with these minutes.

Arising from discussion, the following points arose:

(i)               A Member raised concerns that the Council was struggling in its negotiations with the ICB (Integrated Care Board) regarding payments for social care which would normally be made, and were made, by the NHS in other areas.  The Member urged Cabinet Lead Members to put pressure on the ICB to ensure the County Council was funded in line with other social care authoritie, noting that the current position disadvantaged Leicestershire residents.

(ii)              It was noted that under the Council’s Vehicle Replacement Programme the vehicles being purchased were traditionally fuelled (diesel), not electric.  The Council did, however, have a future capital scheme to look at more energy efficient alternatives.  A Member questioned if the warranties on the new vehicles would preclude them from being adapted to use other, cleaner fuels.   The Director undertook to consider the warranty provisions on the new vehicles being purchased. 

(iii)            A Member questioned if the rental income generated by letting parts of County Hall was significant against the capital cost of delivering the Workplace Strategy.  It was suggested that more detail was needed to understand if the Strategy was still the correct approach.  The Director confirmed that an update on progress to deliver the Ways of Working Programme had been scheduled for April 2024 and undertook to include more financial information regarding capital costs balanced against revenue income within that update.  It was suggested that this update could be done by way of a formal report or briefing for the Commission.

(iv)            It was noted that the introduction of spending controls was being considered across all areas given the funding gap of £10m which was currently forecast for the year end.  These might include recruitment controls (requiring senior approval to recruit), expenditure and procurement controls (for example where new tendering opportunities arose), and stronger controls over non-essential spend.  Members noted that this would be a matter considered by the Council’s Corporate Management Team for implementation imminently. The Lead Member provided assurance that all Members would be updated as appropriate.

(v)             A Member commented that the two budget areas consistently overspending were Children’s and Adult’s Social Care Services.  It was noted that some spending controls had already been put in place across these service areas with panels now established to look at new social care packages and reviews of existing packages to more closely assess if these met an identified need.  The Director assured Members that spend across both Departments was being monitored very closely.
 

(vi)            A Member questioned the indirect property investments held within the Investing in Leicestershire Programme (IILP), noting that these appeared to have generated a low level of return (2.3%).  The Director advised that there was an error in the report and that the overall return on such holdings had been 4%.

(vii)          Members noted that indirect property investments were held to spread the Council’s risk across a number of different asset types within the IILP.  This had followed advice received from independent financial consultants some years ago.  The Director commented that whilst there were always risks, the Council targeted those types of investment that were at the lower end of the risk scale.  The Council also benefited from the added assurance and due diligence undertaken by the Pension Fund which also invested in these asset types.

(viii)         In response to a question regarding where the funds to invest in the IILP came from the Director advised that this was the working capital of the Council and investing in indirect property was essentially a treasury management investment.  It was noted that if these funds were used to deliver local infrastructure, this would create a hole in the revenue budget of approximately £3m through loss of income.

(ix)            Social Care was a demand led service and much had been done in recent years to address and reduce this across Adult’s and Children’s services.  Growth was beginning to plateau.  However, the cost of care, particularly given private sector competition, had increased, as had the complexity of care needed.  These were national issues affecting all local authorities.

(x)             A Member commented that there had been a significant uplift in residential care need. The private sector dominated this area pushing up prices.  It was questioned whether the IILP could be used to build more in house capacity and if it would be cost effective for the Council to borrow money to deliver that capacity more quickly, noting the saving this might generate in revenue costs.  The Director confirmed that the Council had a social care investment programme focused towards increasing internal provision in partnership with the private sector.  This was a priority for the Council and had been included in the capital programme.  However, a key challenge would be recruiting the staff needed to support this.

(xi)            The recruitment and retention of staff continued to be an issue across all service areas.  A Member commented on the use of agency staff at great expense to the Council.  It was noted that this was a risk included on the Council’s Corporate risk Register which was considered on a quarterly basis by the Council’s Corporate Governance Committee.  It was suggested that an update on work taking place to manage this risk would be beneficial either to the Commission or the Corporate Governance Committee as the Director considered appropriate.  

(xii)          A Member commented that local authorities were in a dire situation financially.  The County Council had been well managed financially and so was in a better place than many.  It was noted that for the current financial year, money set aside for risk contingencies could be used to bridge the funding gap.  However, this would be used as a last resort.  For the future, early planning for the delivery of savings would be key to facing the challenges ahead. 

(xiii)         In response to questions raised, the Director confirmed that responsibility to issue a section 114 notice rested with him as the Council’s designated Section 151 officer.  There were no formal mechanisms in place except the need for the Director to first consult the Chief Executive and the Monitoring Officer before issues the notice.  The Director said it was imperative that the Council sought to avoid issuing such a notice as it delivered no benefits to the Council’s financial position, but instead added a layer of cost and restrictions which would result in a loss of control for the Council to determine where best to make savings.

RESOLVED:

(a)  That the update now provided be noted;

(b)  That the Director of Corporate Resources be requested to:

(i)              Check if the warranty provisions on new vehicles purchased under the Council’s Vehicle Replacement Programme would prevent them being adapted to use cleaner alternative fuels.

(ii)              Include in the planned update on progress to deliver the Ways of Working Programme in April 2024 more detailed financial information regarding capital costs balanced against revenue income and that this update be provided by way of a formal report or a briefing for Commission Members, as considered appropriate by the Director.

(iii)            Provide an update on work taking place to manage risks relating to the use of costly agency staff across the Authority either to the Scrutiny Commission or the Corporate Governance Committee, as the Director considered appropriate.