Agenda item

Any member of the public wishing to submit a question must serve two clear days’ notice, in writing, of any such question to the Borough Council

A member of the public, Mr N Jones submitted the following questions for consideration by the Committee and was present at the meeting to present his questions and to engage in further discussion with the Committee:-

1. What are the total costs involved for the next two years in recycling and waste management,( both the large capital expenditure for the new scheme and operational costs) AND correspondingly if the new scheme were postponed, what would be the costs involved if the current system were maintained (operational costs and any likely capital expenditure) ?

2. Given the risk assessment shows a very large number of high risks with no actions that can be taken and given the statements on page 48 that the capital programme "will require a significant amount of borrowing" together with "an annual contribution of £50K from revenue account to the ICT Development Fund" with scarce reserves, how can the council justify the capital budget as proposed?

3. What income is estimated to be received in the next two years from sale of land to support the proposed budget?

In response the Executive Director of Operational Services submitted the following response to Question !

1a.       What are the total costs involved for the next two years in recycling and waste (both the Capital Expenditure for the new scheme and Operational Costs)?

1b.       What would the costs be if the current system were maintained (Operational Costs and likely Capital Expenditure)?

*Excluding recharges and subject to detailed service modelling and costing to confirm number of rounds and staffing resources required.

Mr Jones considered that the answer was more troubling in terms of the cost of the proposed new system.  Mr Jones added that the increase in costs had been confirmed by a recent Cabinet report. The Deputy Leader pointed out that a decision had not been taken to purchase of new vehicles.  He added that the proposed new system was not designed to save money but to deliver an improved method of collecting recycling at no extra cost.

Q2. Given the risk assessment shows a very large number of high risks with no actions that can be taken and given the statements on page 48 that the capital programme “will require a significant amount of borrowing” together with “an annual contribution of £50k from revenue account to the ICT Development Fund” with scarce reserves, how can the council justify the capital budget as proposed?

The overall risk profile of the council in relation to the objective of setting a balanced, affordable and achievable budget has reduced compared to 2018-19. The highest risk score is now 9, at the bottom end of the high risk category, and a number of risks that were previously rated as high or moderate have reduced to moderate or low. This is due in part to actions taken to mitigate risks in year – for example, undertaking a detailed stock condition survey and completing the pay spine review. both of which have provided greater certainty about future funding requirements. The draft revenue and capital budgets also include a number of measures designed to reduce those risks further or to provide greater financial resilience – for example:

·         adjusting the base budget for significant shortfalls in income in waste and revenues

·         building in a £1m contingency into the capital programme

·         establishing a £300k growing borough fund which will provide pump priming for initiatives that generate additional revenue streams or enable efficiency savings

·         increasing the General Fund reserve from £1.2m to £1.448m

One of the key prudential ratios we are required to calculate under the CIPFA Prudential Code is the actual and estimated ratio of financing costs to net revenue stream which is a broad measure of the affordability of capital investment. On the basis of the draft 3 year capital programme this ratio is expected to rise from 1.11% in the current financial year to 1.17% in 2021/22. Comparative statistics for other local authorities are not readily available. However, on the basis that the council is currently debt-free and does not have plans for large scale borrowing over the next 3 years our ratio will compare very favourably with most other councils. In the longer term, the affordability of the council’s capital programme will hinge on our ability to grow our net revenue stream – for example, by growing our tax base (both council tax and business rates) and generating additional income from investments, fee and charges and other revenue streams. The more successful we are in doing this, the greater the level of capital investment we will be able to afford.

Mr Jones felt that the answer to Q2 showed the risk of using Reserves with the uncertainty of the level of interest rates.  Mr Jones questioned that as the population grew the authority may be required to spend more.  The Deputy Leader confirmed that this risk was recorded at the bottom of the risk register.

Q3

What income is estimated to be received in the next two years from sales of land to support the proposed budget?

Estimates of capital receipts from asset disposals are shown in Appendix 3 to the revenue and capital budget report (p19 of the Cabinet agenda). These total £7.4m in the next 2 years.

Mr Jones concluded by stating that members of the public would need to see good justification for the increase in Council Tax.

Mr Jones was thanked for his attendance and the interest he had demonstrated.