Agenda and minutes

It was noted that apologies for absence had been received from Councillor Khadka.

There were no Substitute Members.

There were no urgent items.  However, the Chairman sought Members’ agreement to the withdrawal of item 13 (Council Tax Reduction Scheme 2023/24) from the agenda as it had been incorrectly included and, in line with the Constitution, could not be considered by this Committee.

RESOLVED:  That agreement be given to the withdrawal of item 13 (Council Tax Reduction Scheme 2023/24) from the agenda.

There were no Visiting Members.

There were no disclosures by Members or Officers.

There were no disclosures of lobbying.

RESOLVED:  That the items on the agenda be taken in public as proposed.

RESOLVED:  That the Minutes of the meeting held on 12 October 2022 be approved as a correct record and signed.

There were no petitions.

There were no questions from local residents.

There were no questions from Members to the Chairman.

It was noted that there were currently no items in the Forward Plan relating to this Committee’s terms of reference.

See Minute 51 above.

Councillor Perry, the Lead Member for Corporate Services, introduced the report setting out the financial and performance position for the services reporting into the Committee as at 30 September 2022 (Quarter 2), together with an update on corporate risks.  It was noted that:

·  A modest surplus was projected for the end of the year.  There had been a significant increase in the cost of temporary accommodation for the homeless, but it was offset by improvements in income areas.

·  This was a period of financial uncertainty, but the reserves remained sound.  High inflation posed a particular challenge for the Council.  Financial uncertainty was probably the biggest single corporate risk and areas such as the Public Works Loan Board and increasing interest rates would have an effect on the Revenue Budget and not just the Capital Budget and the Council’s borrowing.  Nevertheless, the position as at the end of Quarter 2 was sound.

In response to questions by Members:

The Lead Member for Corporate Services advised the Committee that:

·  Additional provision had been made within the 2022/23 budget for the expected impact of higher inflation and, at this stage, a small surplus was projected for the end of the year.  However, this was a period of financial uncertainty. 

·  The Executive was progressing delivery of the 1,000 Affordable Homes Programme and further information would be made available in due course.

·  Concerns had been expressed about the effect if any of the County Council’s financial situation on the Borough Council.  The Borough Council did not have the same constraints as the County Council which had high spend areas such as education and adult social care.  The Borough Council’s finances were sound, and it had a good level of unallocated reserves which met the CIPFA standards.  The Borough Council also had a strong balance sheet which meant that it was in a good position for the future, and he wanted to maintain that.

The Director of Finance, Resources and Business Improvement advised the Committee that:

·  MPH (Maidstone Property Holdings) Residential Properties was the housing company where the Council held its private rented sector housing.

·  Reference was made in Table 5 of the report to the issues currently being experienced in getting up to date information from the managing agents in respect of Sundry Corporate Properties, the Phoenix Park Units and the Boxmend Industrial Estate.  The Council had sub-contracted the role of managing agents, but consideration was being given to taking the service in-house.

·  In accordance with the Council’s commitment to transparency and recognised good practice, virements (the transfer of funds between cost centres after the overall budget has been agreed by full Council) were reported to the Committee on a quarterly basis.  The virements made in Quarter 2 were set out in Table 9 of the report and consideration would be given as to how the information might be better presented in future to provide more detailed explanations.

·  For example, the Bereavement post had been established using funding from various cost centres as the service  ...  view the full minutes text for item 62.

Councillor Perry, the Lead Member for Corporate Services, introduced the report setting out the framework for the Medium-Term Financial Strategy (MTFS) explaining that:

·  The Council had to prepare and produce a balanced budget and, at the same time, ensure that its finances were on a sound base moving forward.  Financial uncertainty was the main risk.  Council Tax was the major source of income and until now a 2% Council Tax referendum limit had been assumed, but that could change with the Chancellor’s Autumn Statement the following day.  This was a period of very high inflation and dealing with that was a top priority.

·  Given the uncertainty, as in previous years, several possible scenarios had been considered for the future.  The draft MTFS attached to the report used Scenario 4 as the base case and it also included Scenario 5 to understand what the possible situation would be if inflation continued to remain high with consequential pressures on costs.  The budget gap between Scenarios 4 and 5 was very significant.  The Council had the option to use reserves but should not do so because reserves were used for emergencies, as a one-off.  To use reserves would affect the future base level of the Council’s finances and it was important to ensure that the Council’s finances remained sound.

·  In terms of the capital budget, any investment appraisals would have to factor in a higher cost of capital.  It would be necessary to reassess the capital budget and some prioritisation of schemes would be required.  The cost of borrowing would be higher and that would affect the Revenue Budget as well.

·  New Homes Bonus (NHB) had been used to support strategic planning and policy work because of the Local Plan and this would continue.  Part of the NHB would also be used to fund the 1,000 Affordable Homes Programme.

·  The overall position would become clearer with the Chancellor’s Autumn Statement, but at present a 2% Council Tax referendum limit had been assumed.  With inflation running at 11%, a 2% increase would be a major reduction in real terms.  All budgets would be reviewed to identify opportunities for savings or increased income.  Specific provision had been built in for major known pressures such as the likely additional costs arising from the reletting of the waste collection contract.

·  He would like to thank the Director of Finance, Resources and Business Improvement and his team for their work in managing the Council’s finances.

In response to questions by Members:

The Lead Member for Corporate Services advised the Committee that:

·  As part of the process of developing the MTFS, consideration would be given to the use of reserves, but there would need to be a plan to replenish them taking into account inflation projections.

·  There was no certainty about the future of NHB.  If it was reduced or withdrawn, alternative sources of funding for strategic policy and plan making and to subsidise the Affordable Housing Programme would need to be identified.

The Director of Finance, Resources and  ...  view the full minutes text for item 63.

6.30 p.m. to 7.35 p.m.