Agenda item

Consideration was given to a report of the Director of Finance which provided the Select Committee with the forecast budget reduction requirement and the Administration’s budget proposals for 2021/22 together with forecast budget reduction requirement estimates for the period 2022/23 to 2023/24 having regard to the Provisional Local Government Finance Settlement published on 17 December 2020.

 

The Cabinet Member for Finance and Corporate Green and the Director of Finance presented the report and addressed the enquiries of the Select Committee.

 

This report set out proposals for the Council’s Revenue Budget for 2021/22 and Medium Term Financial Strategy for 2021/22 to 2023/24. The report advised Members of the key financial challenges and issues which would be faced by the Council over the forecast period and set out the Administration’s revenue budget proposals for 2021/22 together with updated budget reduction requirement estimates for the period 2022/23 to 2023/24.

 

The report presented the purpose and scope of the Medium Term Financial Strategy and how it had a vital role to play in enabling the translation of the Council’s ambition and priorities into action.

 

It also advised of the national policy landscape and economic context in which the Council was setting its revenue budget for 2021/22 and Medium Term Financial Strategy to 2023/24.

 

The report highlighted the local strategies and policies relevant to the Medium Term Financial Strategy and set out developments in Local Government Finance.

 

Policy announcements and implications arising from the Government’s 2020 Spending Round published on 25 November 2020 and the Provisional

Local Government Finance Settlement (LGFS) published on 17 December 2020 were highlighted.

 

Key items of funding confirmed in the 2021/22 Provisional LGFS were:

·         Continuation of the expected Improved Better Care Fund Grant at a value of £10.858m;

·         An increase to the Social Care Support Grant of £1.993m taking the total allocated to £8.947m. The £1.993m had been used to support the budget by offsetting assumed pressures in the children’s and adults social care budgets;

·         A new 2021/22 allocation for Lower Tier Services Support Grant (£0.407m). This new grant had been used to support the 2021/22 budget;

·         A Local Tax Income Guarantee grant for 2020/21. A sum of £1.000m was anticipated and would be incorporated into the accounts for 2020/21. This would then be taken forward as a reserve to support the budget for 2021/22;

·         The notification of a new Local Council Tax Support Grant at a sum of £3.183m. This had been used in full to support the 2021/22 budget;

·         The allocation of unringfenced COVID grant of £7.737m. This had been used to finance COVID related pressures that had been anticipated of £3.741m. The balance offsets anticipated further pressures;

·         The continuation of Sales, Fees and Charges grant compensation in 2021/22. The availability of this potential funding stream was part of the budget strategy to address COVID;

·         The switching of unringfenced homelessness grant funding of £0.358m to a new ringfenced grant, the Homelessness Prevention Grant of £0.532m; and

·         A reduction in the Business Rates Top Up grant of £0.399m, leading to a reduction of Grants in Lieu of Business Rates of £0.697m.

 

Members noted the Provisional LGFS confirmed referendum limits for a general purpose Council Tax increase and the Government would permit rises of up to 2% per annum for 2021/22 without the need to hold a referendum.

 

The Government had also confirmed the continued ability to charge an Adult Social Care Precept allowing a combined increase of up to 3% in Council Tax across 2021/22 and 2022/23 (ringfenced for use for Adult Social Care).

 

The Council Tax referendum limits for 2021/22 applicable to the Council therefore allowed an overall increase of 4.99% without requiring a referendum.

 

Members recalled that the Council Tax policy approved within the 2020/21 budget was that for 2021/22, the Council would revert to its previous policy. The Council would therefore increase Council Tax by 2% for the Adult Social Care Precept (ASCP) and 1.99% for general purposes; an overall increase of 3.99%. The referendum limits for 2021/22 as advised above would permit this approach. However, mindful of the financial position of the Authority but also the impact of a further increase in Council Tax on the citizens of Oldham, a revision to Council Tax policy was therefore proposed. Whilst the 2% increase in relation to the ASCP would continue, Council Tax for general purposes would increase by 0.99% rather than 1.99%. Subject to confirmation at the Council meeting on 4 March 2021, in overall terms the Oldham Council Tax would increase by 2.99%.

 

The Government proposed not to set Council Tax referendum principles for Mayoral Combined Authorities in 2021/22 but did intend to set referendum principles for Police and Crime Commissioners (including the GM Mayor) capped at a value of £15. As such, Mayoral intentions with regard to the Police and Crime Commissioner and Mayoral General precept were

yet to be notified.

 

The report advised of the proposal to leave the Council Tax Reduction Scheme for 2021/22 unchanged from 2020/21. However, during 2020/21, working age Council Tax reduction recipients had benefitted from support of £150 from a Government Hardship fund. This scheme would not continue in 2021/22 and it was recommended that the Council reviewed its financial position during 2021/22 to determine if it was able to provide any additional hardship relief.

 

The report summarised the Month 8 2020/21 revenue budget forecast outturn position and highlighted a current adverse projected variance for 2020/21 of £8.330m (including COVID pressures). A reduction in this overspend position was anticipated as a result of further funding being provided by Central Government and contributions from partners alongside management actions. Members noted that any remaining overspending at the end of 2020/21 would need to be funded by the use of reserves.

 

Key budget adjustments and expenditure pressures underpinning the forecasts that provided the backdrop for the Council’s Medium Term

Financial Strategy including the mid-year adjustment to estimates from a budget reduction requirement of £23.251m to £29.940m (rounded to £30.000m) were detailed. The major elements of this adjustment were addressing budget reduction proposals for 2020/21 (some approved in the

budget for 2019/20) that could not be achieved (£2.089m), reduced treasury management income of £6.600m and an assumption that Flexible Use of Capital receipts at a value of £2.000m would support the budget. Key

expenditure adjustments following the mid-year review and key income pressures were set out. A Collection Fund deficit of £25.463m was noted that must be charged to the General Fund.

 

Members were informed that, based on the latest estimates, the budget reduction requirement for 2021/22 has decreased from the previously reported figure of £29.940m to £27.908m, increasing to £53.371m after

the technical adjustment.

 

The report detailed the Administration’s budget reduction proposals. There were a total of 43 proposals expected to deliver savings of £8.920m (of which one was a use of reserves), leaving recurrent budget reductions of £8.793m.

 

In 2021/22, if approved in full, these recurrent proposals further reduced the budget reduction requirement to £44.578m for 2021/22.

 

The report explained the approach to balancing the 2021/22 budget. Importantly, the budget strategy of using £29.000m of reserves to support the budget over a two year period (2021/22 and 2022/23) was outlined together with the use of the opportunities provided by the ability to use Capital Receipts to support spending on transformational projects up to a value

of £2.000m in 2021/22.

 

A number of specific and corporate reserves would be used to address the balance and there was a reserve held at a value of £12.012m to support the 2022/23 budget if required.

 

Approval of the proposals set out in the report in full by Budget Council would deliver a balanced revenue budget for 2021/22.

 

Other key sections in the report:

•      summarised the forecast reserves and balances position supporting the Council’s financial resilience;

•      set out the Administration’s proposals in relation to Fees and Charges; and

•      detailed the Council’s Pay Policy Statement (as required by sections 38 to 43 of the Localism Act 2011).

 

The final section of the report set out the Councils MTFS covering the period 2021/22 to 2023/24, a shorter timeframe than was usual practice given the uncertainties created by COVID and the lack of clear direction of Government funding intentions for future years.

 

Members noted that, as the Government had only provided grant funding notifications for 2021/22, the MTFS estimates for 2022/23 to 2023/24 were based on a series of assumptions and therefore must be considered indicative only. This had generated significant uncertainty and hindered effective planning by the Council both financially and operationally, as future Government funding intentions were difficult to assess. This position, together with the transformational and organisational plans for change that the Council would implement to address the financial challenge, were outlined in Section 17 of the report.

 

Having addressed the £27.908m (adjusted for the technical Business Rates issue), the budget reduction requirement for subsequent years was forecast to be £32.185m for 2022/23 and £21.564m for 2023/24.

 

The MTFS highlighted the plan to deliver significant savings from 2022/23 onwards. Whilst it was anticipated that the Council would continue to rely on the use of reserves to support the revenue budget in 2022/23 at a value of £12.012m, additional budget reductions were expected to be achieved as part of the Council’s transformation programme. The 2021/22 budget reductions had implications for future financial years, with savings of £6.050m (2022/23) and £4.756m (2023/24) already assumed.

 

Having allowed for the use of reserves and already assumed budget reductions, the targets to be addressed were £14.123m for 2022/23 and £16.808m for 2023/24.

 

The Council’s approach to balancing its budget was the transformation programme which would deliver savings over four programme areas:

•      Place Based Working/Communities

•      Children’s Services

•      Health and Care

•      Economy

 

In addition, there were a range of Cross Cutting initiatives that had been identified that would complement the transformational programmes and support the achievement of the significant financial challenge.

Indicative targets had been assigned although there had to be some flexibility given the uncertainty that underpinned financial planning for the future years.

 

Given the importance of delivering budget reductions and embedding the programme of transformational change, during 2021/22, there would be a regular review of the progress of existing change programmes against the delivery milestones and financial targets. It would also ensure that there was continuous emphasis on the delivery of change and the achievement of the budget reductions required in line with the three year strategy.

 

Members sought and received clarification on the following:

•      At what point would the Council run out of reserves – the programme proposed would deliver a three-year balanced position. It was accepted that a lot would change and Members would be updated. This was a roust plan and balanced budget for now. It was noted that the increasing pressure for adult social care, for which there was no additional funding, could only be managed by reducing other services.

•      How did residents pay for adult social care – if 1% was added to the Council Tax, it raised £957K, but there was no current provision for this precept to continue beyond the 2021/2022 financial year. The Council passported the precept to social care and this gave additional funding.

•      Covid support for businesses – no support beyond 31^st March 2021, but this was a flexible situation. The Council operated as the Government’s agent in this and there was no impact on the budget. The Council had received some support for the loss of business rates. Whilst it was unknown if this would continue, the deficit relating to Council Tax and Business Rates could be carried across 3 financial years.

 

The Select Committee examined the budget reduction proposals.

 

The Cabinet Member for Health and Social Care and the Managing Director, Community Health and Social Care Services (DASS) were in attendance to introduce the following proposals:-

 

CSA-BR1-423   Maximising independence through alternative models of care                      CSA-BR1-424   CHASC Workforce Reduction

CSA-BR1-425   Out of Hours Call Centre Support for Community Health   Services

CSA-BR1-426   Carers Personal Budgets

CSA-BR1-427   Brokerage

CSA-BR1-429   Keyring

CSA-BR1-430   Achieving Better Outcomes: Supported Living & Learning Disabilities

CSA-BR1-431   Wellbeing Service

CSA-BR1-433   Adult Social Care Sheltered Housing

CSA-BR1-434   Adult Social Care Prevention and Early Intervention Service                                              

CSA-BR1-435   Residential Enablement Redesign (Medlock Court)

CSA-BR1-436   To cease the funding of the Men in Sheds service

Members were informed that it was a difficult balance between supporting the vulnerable, performing statutory duties and cost. It was accepted these were difficult times and hard decisions had to be made. The savings were set in a national context of integrated provision and a need to redesign the way services were provided, whilst meeting statutory requirements.

 

Members asked for and received clarification on the following:-

·         Were the savings deliverable – there could be no guarantee as circumstances were beyond the Council’s control, however there was a commitment to ensure delivery. There was a need to change the conversation with Oldham residents. The Council had a legal duty to ensure its residents were safe. It may not be able to achieve all the savings and the needs of the residents came first.

·         How could savings be delivered without having a huge impact on service users in assisted living – the Council was committed to ensuring service users were not disadvantaged. Outdated commissioning models prevented the achievement of potential and supported housing models especially needed to be revised. People placed out of the area needed to be brought back, support for children at transition needed to start earlier, the enablement offer needed to be improved. The Council had developed a great housing with care facility at Holly Bank, which could provide an emergency response facility in Oldham rather than having to pay for a facility elsewhere.

·         Cessation of Grass Roots project – day services were going through a revolution in terms of learning from Covid. Digital platforms were being used effectively and many people now wanted a different type of day service. Going forward, the Council needs to look for cost-efficient and effective way to offer daytime occupation. Those currently using Grass Roots would have the opportunity to transfer to Chadderton Park if they wished. There would also be funding for those who wated to connect with communities and undertake meaningful daytime occupation in different ways.

·         Loss of personal budgets for carers may reduce number of people willing to be carers – there had been a huge increase in the number of carers accessing support. With 2200 carers being supported, the current model was not sustainable and the Council was looking at different approaches to bring sustainable support to carers. Some of these approaches would run alongside a personal budget and occasionally a payment may be increased to enable independence rather than paid-for care.

 

The Select Committee gave consideration to proposals REF-BR1-422 Sport Development and REF-BR1-428 School Swimming, on which there were no questions.

 

The Cabinet Member for HR and Corporate Reform, the Strategic Director Communities and Reform, and the Director of Workforce and Organisational Design were in attendance to introduce the following proposals on which the Select Committee had no questions:-

 

REF-BR1-416   Districts Realignment

REF-BR1-418   Reduction in Members Ward Budgets

REF-BR1-432   Review of Elected Member Reserves

REF-BR1-438   HR Staffing Review

 

The Cabinet Member for HR and Corporate Reform and the Managing Director of Children and Young People (DCS) were in attendance to introduce the proposal CHS-BR1-445 Early Help Remodelling. The savings would come forward in future years and this was remodelling the service around the five clusters, with a front door service integrated with Children’s Services. The numbers were put forward with caution as the demand for Children’s Services was very high and there may be a lot of issues to come out of Covid, especially hidden safeguarding issues. There were no questions.

 

The Cabinet Member for Neighbourhoods and Culture and the Director of Environmental Management were in attendance to introduce the following proposals on which Members had no questions:-

 

PPL-BR1-408   To re-align grounds maintenance to support core service functions and reduce the traded offer

PPL-BR1-407   Transfer of client officer to Unity

PPL-BR1-406   Review of Street Lighting Contract

PPL-BR1-409   Restructure of Neighbourhood Enforcement Team

 

Members asked for and received clarification of the following:-

·         Details of the street lighting savings – there had been over-provision in the budget and the position was better than previously, so the saving was offered.  

 

The Cabinet Member for Children and Young People, the Strategic Director Communities and Reform and the Assistant Director Youth, Leisure and Communities were in attendance to introduce the proposals:-

 

REF-BR1-415   Mahdlo Funding Reduction

REF-BR1-417   Youth Service Kerching

 

Members asked for and received clarification of the following:-

·         Long-term commitment to funding for MAHDLO – commitment made in 2012 for 3 years.

·         Previous reduction since 2012 – reductions had been put forward and not been taken before. Due to the major challenge this year, the saving was being taken now.

·         Discussed with MAHDLO – officers had met with MAHDLO and discussed with them how support could be offered in the future.

 

The Cabinet Member for Children and Young People and the Managing Director of Children and Young People (DCS) were in attendance to introduce the following proposals:-

 

CHS-BR1-442   Early Help Staffing Efficiencies

CHS-BR1-443   External Placements Cost Avoidance

CHS-BR1-440   Quality and Effectiveness Support Team - Service Efficiency/Review

CHS-BR1-441   Special Educational Needs & Disability (SEND) Education Provision

Members asked for and received clarification of the following:-

·         Accommodation for currently out of borough placements – the Council was looking to remodel the residential estate to place children appropriately locally. There were no guarantees the savings could be fully realised but it was believed substantial savings could be made.

 

The Leader of the Council and Cabinet Member for Economy and Skills, the Head of Lifelong Learning, Employment and Skills Service, the Director of Legal Services and the Director of Economy were in attendance to introduce the following proposals:-

 

CHS-BR1-437   Reduction in Traineeship Programme

CEX-BR1-410   Corporate Priorities - CEX

CEX-BR1-420   Legal Staff Reductions & Reduction of post in Democratic Services

CEX-BR1-447   Registrars Service Restructure

PPL-BR1-403   Digital Mail

PPL-BR1-401   Creating a Better Place - Projects & Assets

PPL-BR1-402   Creating a Better Place - Service Review

 

Members were informed that the reduction in funding for the Traineeship Programme would be mitigated by additional funding to the Kickstart programme, which was successful in creating new jobs for young people. A number of staff in the Creating a Better Place team had come forward with proposals about being redeployed to use their expertise in other ways to support the efficiency programme.

 

Members asked for and received clarification of the following:-

·         The confidence surrounding the achievement of £8.2M savings in relation to Creating a Better Place – Members noted that the details had been brought to the Select Committee previously. The Committee had helped establish the principles and the findings had been brought back in detail. Much of the saving would be achieved by making better use of assets, enabling brownfield land to be brought forward to be redeveloped to create jobs and opportunities.

 

The Cabinet Member for Housing and the Director of Economy were in attendance to introduce the following proposal on which there were no questions:-

 

PPL-BR1-404   Printing Reduction - Digital Platform Roll Out

 

The Cabinet Member for Finance and Green, the Deputy Chief Executive, the Chief Operating Officer Unity Partnership, the Strategic Director Commissioning/Chief Operating Officer and the Director of Finance were in attendance to introduce the following proposals:-

 

PPL-BR1-439   Internal Efficiency Initiatives (Unity Partnership)

PPL-BR1-421   Transformation of the Contact Centre

COM-BR1-411  Procurement Staffing Reduction

COM-BR1-412  Financial Services Redesign

 

Members were informed that, apart from the Transformation of the Contact Centre, these were back office functions. There was confidence that these could be delivered with no impact on frontline services. The proposal in relation to the Contact Centre was a radical move and assurance had been given about this proposal.

 

Members asked for and received clarification of the following:-

·         In relation to the Contact Centre, how would equal levels of service and access be ensured - Access Oldham had been closed due to the pandemic and different ways of offering the service had been found. The proposed way forward was to take the face-to-face element to the localities as part of place-based working. For the public, this would be an improvement in the service, as it could be accessed locally and could be offered as an appointment of phone call. The online provision would also be much smoother and relevant to public needs.

·         Would updates be provided – the Committee would be updated in six months.

 

RESOLVED that the Select Committee accepted and commended to Cabinet:-

1.       The policy landscape and economic context in which the Council was setting its revenue budget for 2021/22 and Medium Term Financial Strategy to 2023/24.

2.       The impact of Oldham Council Policies and Strategies on the Council’s budget setting process and the development of its Medium Term Financial Strategy.

3.       The financial forecasts for 2021/22 to 2023/24 having regard to the Provisional Local Government Finance Settlement and associated funding announcements.

4.       The key issues to be addressed in continuing to respond to the financial challenges facing the Council.

5.       The proposal that the Council reviews its financial position during 2021/22 to determine if it is able to provide additional Council Tax hardship relief.

6.       The reaffirmation of the Council’s commitment to the modified Housing Benefits scheme, a discretionary local scheme which allows the Council to disregard the value of any War Disablement Pension or War Widows Pension over and above statutory disregard limits.

7.       The recurrent 2021/22 Budget Reduction Proposals at a value of £8.793m.

8.       Flexible Use of Capital Receipts at a value of £2.000m.

9.       The proposed use of £42.578m of reserves to balance the 2021/22 budget including £0.127m for a one off budget reduction.

10.    The proposed use of £12.012m of reserves to support the 2022/23 budget.

11.    The approach to managing the budget during the COVID pandemic and the continuation of budget management measures introduced in 2020/21 as outlined in Paragraphs 12.6 to 12.11.

12.    The proposed fees and charges schedule included at Appendix 7.

13.    The draft pay policy statement included at Appendix 10.

14.    A proposed 2021/22 Council Tax increase of 2.99% for Oldham Council services resulting in the charges set out at paragraph 15.3 and Table 29 of the report.

15.    The proposal to draw on the Collection Fund for major preceptors of £115.669m for Borough Wide services and £98.552m for Council services.

16.    The proposed net revenue expenditure budget for 2021/22 for the Council set at £253.944m.

17.    Revised estimated budget reduction targets of £32.185m for 2022/23 and £21.564m for 2023/24 before any use of reserves and indicative budget proposals.