Agenda and draft minutes

Extraordinary, Corporate Overview and Scrutiny Committee - Thursday, 23rd January, 2020 7.00 pm

Venue: Committee Room 2, Civic Offices, New Road, Grays, Essex, RM17 6SL.

Contact: Lucy Tricker, Democratic Services Officer  Email: Direct.Democracy@thurrock.gov.uk

Items
No. Item

21.

Items of Urgent Business

To receive additional items that the Chair is of the opinion should be considered as a matter of urgency, in accordance with Section 100B (4) (b) of the Local Government Act 1972.

Minutes:

There were no items of urgent business.

22.

Declaration of Interests

Minutes:

There were no interests declared.

Councillor Rigby arrived 19.02

23.

Draft General Fund Budget and Medium Term Financial Strategy Update pdf icon PDF 228 KB

Additional documents:

Minutes:

The Director of Finance, Governance and Property introduced the report and stated that an updated version of Appendix 2 had been provided to Members, as the table had been realigned. He described how the report explained the Council’s current financial position, and had been discussed by Cabinet last week. He then outlined that in the previous six month’s there had been considerable pressures in some areas, and highlighted one area of pressure as children’s social care, which had received additional funding and improved their OFSTD score at the last inspection. The Director of Finance, Governance and Property also highlighted that adult’s social care was under financial pressure, which was common on a national scale, and pressure on the Housing General Fund, which was due to increased numbers of people presenting themselves as homeless.

The Director of Finance, Governance and Property then moved on to the forecasted financial position in 2020/21 and clarified that an indicative financial assessment had been carried out before Christmas, but the Council were still waiting on the final allocations of this due to purdah delays. He explained that preliminary findings from this appeared hopeful, and budget allocations had already increased, so he felt the Council were in a good financial position. He added that last year the Council had undertaken a Spending Review and Fair Funding Review, but due to only one-year spending agreements from central government, these were not at the forefront, although the Council could make an estimate for the next two to three years. He stated that additional funding received would go towards adult and children’s social care, and increased homelessness grants.

The Director of Finance, Governance and Property then moved on to discussing council tax and the governance process for setting this. He explained that the Cabinet recommendation to increase council tax would go to the relevant scrutiny committee for comment, which would then feedback into Cabinet in February, and would be sent to Full Council for decision. He stated that the proposed budget would see an increase in 2% for the adult social care precept, which was the maximum it could be raised by, and an increase in general council tax by 1.49%, which was not the maximum of 1.99%. He commented that this would increase the Council’s base going forwards, as tax was a more stable income compared to investments.

The Director of Finance, Governance and Property drew the Committee’s attention to paragraph 4.4 on page 9 and clarified the figures outlined in the table, including the current council tax banding, total number of properties, and average net charge, which took into account discounts, tax schemes and support provided. He stated that council tax bands A-C made up 70.4% of all properties, and a 1% council tax rise would equate to an additional 19p per week. He then drew the Committee’s attention to the Medium Term Financial Strategy (MTFS) on page 13 of the agenda, which outlined that the increase in council tax and adult social care precept would increase  ...  view the full minutes text for item 23.

24.

Capital Strategy 2020/21 pdf icon PDF 76 KB

Additional documents:

Minutes:

The Director of Finance, Governance and Property outlined the report, and stated that the Capital Strategy was a new requirement for 2019/20 and incorporated the Treasury Management Strategy. He stated that the main purpose was set out on page 27 and provided a high-level overview of capital expenditure levels, capital financing and treasury management activity. He highlighted a number of tables to the committee which set out the summary figures including capital expenditure, capital financing, the Capital Financing Requirement, borrowing, and a summary of the overall treasury position. He described the significant press interest since Cabinet had considered the six-month position last week, and he addressed some of the comments that had been published, so the Council’s position was clear. The Director of Finance, Governance and Property explained that although Thurrock were quoted as having the highest level of short-term borrowing, Thurrock were by no means the highest borrower. He outlined the reasons for short-term borrowing, which explained that Thurrock had taken the approach since August 2010. He clarified that the Local Authority and related Treasury Market had between £20billion and £30billion of cash available that had to be lent or deposited somewhere, and estimated that had all of the Council’s borrowing been through the Public Works Loan Board, Thurrock would be paying on average additional £15million per annum. He highlighted that the Local Authorities money markets were not linked to the bank base rate, and so were not as open to interest rate fluctuations, and was simply about the amounts of surplus cash available, and how much others needed.

The Director of Finance, Governance and Property then described some facts and figures from 2018/19 and described how the Council had taken out loans from a number of different Local Authorities, the duration of which were between one month and one year, with rates ranging from 0.4% to 1.15% depending on the duration. He then outlined what the Council used the funds for, mainly being capital expenditure on buildings, infrastructure and IT; and investments that were made relating to assets that Thurrock had security over and were repayable, which were mainly bonds on renewable energy assets that raised additional income that the Council could reinvest in frontline services. He described how three-quarters of the Council’s borrowing was repayable on maturity, which was currently between three and eight years, but the bond issuer had the right to make early repayments. He stated that based on this, even if long-term borrowing had attractive rates, it would not be prudent to borrow for longer terms when the need was for a shorter period.

The Director of Finance, Governance and Property then drew the Committee’s attention to Table 1 on page 27 of the agenda which set out projected capital and investment expenditure, and clarified that these were not always uniform as opportunities did not arise in that fashion. He clarified that over two years investments were forecasted as an average, and the prudential indicators had been adjusted in the budget report in February  ...  view the full minutes text for item 24.

25.

Draft Capital Programme pdf icon PDF 83 KB

Additional documents:

Minutes:

The Director of Finance, Governance and Property introduced the report and stated that an updated Appendix 3 had been provided to Members, which removed the summer carriageway drainage works, and replaced it with the Ship Lane redevelopment programme.

Councillor Churchman returned 20.24

He outlined the capital programme and stated it was made up of a variety of areas of expenditure including IT, housing stock, and projects. He described how there had been a need to invest in housing stock and the Council’s approach had now changed to being a corporate landlord. He outlined that there were three ‘pots’ which were digital, property, and service review, all of which received numerous bids. The Director of Finance, Governance and Property described the variance between how much people thought they needed for a project, and how much was actually needed, and described how a separate budget had been set up for feasibility studies and business cases to reduce this variance. He then highlighted Appendix 1 of the report that outlined the existing capital programme, and Appendix 2 that outlined that future and aspirational projects. He clarified that the Committee were not agreeing the individual projects listed as these were only examples, but just the overall amount of spending. He then highlighted Appendix 3 which were actual projects not included in ‘pots’, but allocated funding in their own right.

The Chair opened debate and highlighted page 58 of the agenda and the proposed project relating to the Integrated Medical Centre in Tilbury, and asked what the phasing for the project was, and if this was certain to go ahead. The Director of Finance, Governance and IT replied that it had been double-counted as its funding had been agreed, but was still going through the process of business case and feasibility. He explained that this project was complicated as it involved a number of external partners who all had different accounts processes, and factors such as rent charges and spacing was still being negotiated. Councillor Fletcher asked why only the Tilbury IMC was considered in the report, and the Director of Finance, Governance and Property replied that it was because it was the only IMC that the Council were responsible for delivering. He clarified that the other IMCs were being run by external partners, and the Purfleet IMC was included as part of the Purfleet regeneration project.

RESOLVED: That:

1. The Committee commented on the specific proposals set out within this report.