Agenda item

This item is due to be pre-scrutinised at a meeting of the Budget Scrutiny Working Group scheduled to take place on 2^nd January 2024.  Any recommendations in respect of this report, subject to the endorsement of the Overview and Scrutiny Committee, will be reported to the Executive Committee in a supplementary pack for this meeting.

Due to the length of this report and to the fact that much of the content of this report was previously considered at the meeting of the Executive Committee held on 31^st October 2023, only the covering report has been included in the main agenda for this meeting of the Executive Committee.  The full report, including both the covering report and the appendices, will be published in a supplementary pack for the meeting.

The Portfolio Holder for Finance and Enabling presented the Medium Term Financial Plan 2024-25 to 2026-27 Tranche 1 (following consultation) report.

The Committee was informed that this report was almost the same as the report considered in October 2023 prior to consultation. It outlined that the Council set out a 3-year Medium Term Financial Plan every year, with the final Council Tax Resolution being approved by Full Council in February.

Due to the Cost of Living Crisis and inflationary pressures the process had been more difficult than in previous years and therefore the MTFP had been split into two tranches.

Members were informed that the approved Tranche 1 position included some base assumptions which were as follows:

·       Council Tax – Figures assume the full 1.99% allowable increase over all years of the 3 year MTFP and no increase in numbers of properties.

·       Business Rates Increases – business rates assumed no growth in the base.

·       New Homes Bonus/Government Grants – It was assumed that levels would be the same as previous years.

·       Pension Fund assumptions took into account the latest triennial valuation which was received in September 2022.

The following “generic” pressures and savings were included in Tranche 1:

·       The impact of the 2023/4 pay award had been considered. This was an estimated increase of £805,000, however, the Council had already accounted for a pay award of 2% which reduced this amount to £575,000.

·       There were savings following budgets set in 23/4 not being required as inflation had reduced therefore the utilities budget reduced by £228,000 a year and the Inflation budget of £260,000 could also be released.

·       The £1,140k utilities reserve was transferred to the General Fund.

·       A 7% increase in fees and charges had been approved (apart from Dial a Ride where registration fees were reduced from £16.50 to £15, but journey fees increased by £1).

·       Inflation on fees and charges is 2% in 2025/6 and 2026/7.

Departmental pressures were also highlighted for Members attention:

·       There was presently a target of £500,000 for the reclaiming of Benefit overpayments.  Following receipt of more accurate information and processes this amount would now only deliver £300,000 of income.

·       The Council’s Carbon pledge was to a carbon neutral position on the fleet over time.  The £20,000 increase in budget allowed for, prices dependent, a 30% use of HVO fuel and an estimated savings of 154 tonnes of greenhouse gases from the fleet.

·       The HR structure reported into one post.  This funding added a second senior post to relieve pressure in this service area.

Finally, it was reported that the appendices to the report set out all saving proposals and also included a feedback form on the Tranche 1 proposals. To date there had been no feedback forms received. 

As highlighted earlier in the meeting, this report was reviewed by the Budget Scrutiny Working Group on the 2^nd January 2024 whereby no recommendations were made to the proposals contained within the report.

Following the presentation of the report some Members queried whether it was prudent to release the Utilities reserves given that the price of energy was increasing once again. Officers explained that although this was the case across many areas, the Council was part of an energy buying consortium where the cost of purchasing energy was lower and provided a better deal than those paying for energy individually.

There were also some queries in respect of the increase in cost of Dial-a- Ride services. The Portfolio Holder for Finance and Enabling explained that the decision to increase the journey fees had been from the service and had not been a Finance decision. He read out the following statement which had been received in respect of this:

“All trips are increased by £1 but we reduce the registration fee back to £15.  (The current charge is £4 per single journey with concessionary pass and £16.50 for the registration fee).

Based on current registered customers we would only lose £688 per annum in the registration fee money but increase income through fees and charges by £18k per annum.  To note this still does not make the service pay for itself.  Full cost recovery is nearer £9.50 per journey.  As Members will be aware from the new Council priorities, reducing the cost of the Dial A Ride has been set out in the plan and Officers are currently working on this proposal through increased income generation by increasing the number of daily passenger details through a more efficient delivery method.

The rationale for this £1 increase (which equates to 20%) is that many of the Community Transport (CT) schemes charge an admin fee per journey.  By increasing our journey charges, we would be more in line with what other CT schemes charge.  We find the customers who use us regularly take up a lot of despatchers time booking, changing, cancelling appointments so we can recoup some of this by charging more per journey.  All customers pay the same registration fee however many journeys they take, which can seem unfair to those customers who don’t use us as often or can’t get booked on their requests due to the regular group bookings using up the slots/taking priority.

Regarding the cost being closer to a taxi fare, the Dial A Ride services offers the following additional benefits to service users

-        A wheelchair accessible vehicle, that allow direct access on the vehicle via a ramp.

-        A front door service, with drivers assisting service users to secure their property and to assist with carrying shopping etc.

-        The mental well-being aspect of travelling with other services users and building connections and friendships. This reduces loneliness and improves mental well-being.”

In respect of the target of £500k for the reclaiming of Benefit overpayments it was noted that this had been amended following more accurate information being received and was attributed to residents becoming more familiar with completing the appropriate forms when informing the Council of a change in circumstances. 

RECOMMENDED that:

1)    The inputs into the Council’s Medium Term Financial Plan as at the start of October, and the associated risks and opportunities be endorsed.

2)    These inputs had been used, along with the 2023/24-25/26 Medium Term Financial Plan (MTFP) agreed by Council in February 2023, to project an initial “gap” to be closed.

3)    An initial Tranche of savings proposals, as set out within the report and the associated Savings Proposal Document, had been published on the 24^th October 2023 and any feedback will be considered by Executive at this meeting on the 9th January prior to seeking approval at Council on the 29th January 2024.

4)    That fees and charges be increased by 7% as part of these proposals.

5)    Tranche 2 of this process will add further information such as the Local Government Settlement to give a final financial position for the Council.