Agenda item

Director of Finance and Support Services to provide an update on work towards setting the Budget and savings proposals for 2021/22, and a verbal update on the comprehensive spending review.  The attached Medium-Term Financial Strategy report was presented to Cabinet on 24 November.

The Committee is asked to scrutinise the content of the report setting out the budget position of the County Council and make any recommendations for action to the Cabinet, relevant Cabinet Member, or Director of Finance and Support Services. Key areas for scrutiny include:

·       The updated budget position, including the financial implications of COVID-19 and recognition of the service areas impacted;

·       The actions being considered to address the budget pressures in order to set a balanced budget for 2021/22 and beyond, i.e.

a)   the savings as presented in the report and

b)   how to resolve the remaining £23.4m gap;

·       Consider how the budget will meet the priorities to be agreed in the West Sussex Reset Plan.

94.1  The Committee considered the budget update report by the Director of Finance and Support Services (copy appended to the signed minutes).

94.2  The Cabinet Member for Finance introduced the report, and highlighted for Members that the council’s comprehensive spending review was published recently which provided more detail and confirmed the Local Government finance settlement awarded to the council.  The spending gap for 2019/20 was over £40m; £20m in potential savings have been identified but this leaves a funding deficit of £23m.  Concerns expressed about the savings identified do not take into account the £600m invested in supporting the council’s aims, and focus should instead be on what the council can do with its budget.

94.3  The Director of Finance and Support Services introduced the report, highlighting the aim to create a sustainable budget over the next four years.  Achieving value for money remains important.  The Comprehensive Spending Review, fair funding review and Busines Rates Review which is expected next year will provide some certainty for future years, however it is likely not be favourable to the council due to our council tax raising powers.  There is great uncertainty on whether costs will decrease or remain high post-Covid. Initial information on the council’s Local Government finance settlement is expected mid-December with final confirmation in January.

94.4  The Committee made comments in relation to the budget update report including those that follow. It:

·       Queried whether initiatives whose Government funding had ceased will be maintained by the council funding them or if they will be closed.  The Cabinet Member for Finance explained that once central government funding for grants and initiatives is removed that funding cannot be sustained as this widens the budget gap. 

·       Queried whether the Cabinet and officers are confident the Government will meet the council’s Covid-related costs.  The Leader confirmed the council is lobbying the Government directly as well as via the County Council Network (CCN) and MPs network.  £1.5bn has been set aside by the Government so this council will continue to monitor and report its costs to central Government.  

·       Reiterated the links between the aims in the Reset Plan and the savings in the budget update, and how the budget will meet the Plan’s priorities.  The Cabinet Member for Finance welcomed any suggestions from Members during the budget process or directly.  The Leader highlighted that of the £600m revenue collected from council tax, the council spends £200m to support adult social care and £100m to support children’s social care, so it is important to deliver effective services.

·       Expressed concern regarding the proposed removal of the Community Infrastructure Fund (CIF).

·       Discussed the opportunities offered from increased home working to review county building assets, balanced with the need for services to retain a team dynamic.  The Cabinet Member for Finance confirmed that all county sites will be reviewed. 

·       Commented on the possible consequences for staff welfare of closing the Martlets canteen at County Hall. 

·       Suggested that it would be helpful for the business as usual savings [page 161] to be detailed by portfolio area, and encouraged the scrutiny committees to consider how the savings trends have impacted the performance of services over recent years.

·       Queried what happens if further service savings cannot be made and the council is unable to balance its budget.  The Director of Finance explained the legal requirement to deliver a balanced budget and the process if this is not possible.  The Cabinet Member for Finance clarified this council is some way from being unable to balance the budget, but the process does illustrate the importance of replenishing council reserves to plan ahead for times of need.

·       Recognised that the setting of the council’s budget is an incredibly difficult task and expressed thanks to the Cabinet Member for Finance and Director of Finance and Support Services for their work.

94.5  Resolved:

1)   That the Committee notes the ongoing uncertainty around the detail to bridge the gaps to deliver this balanced budget due to the lack of clarity and detail as yet in the funding reports from central Government;

2)   That the Committee notes the budget details to treat the priorities are difficult and acknowledges the need for flexible options at present;

3)   That the Committee notes the savings currently being worked up and requests further detail on these in due course;

4)   That the Committee supports the continued lobbying of government on funding;

5)   That the Committee recognises the need for the budget to meet the priorities in the Reset Plan and welcomes the detail of this at the appropriate time; and

6)   That the Committee suggests it would be helpful for the business as usual savings to be detailed by portfolio area, and encourages the scrutiny committees to consider how savings trends have impacted the performance of services over recent years.