Agenda item

This item includes a supplementary report at page 85.

The Committee considered the Revenue and Capital Budget and Strategies - Medium Term Financial Strategy (MTFS) 2023/24 to 2027/28; Flexible Use of Capital Receipts Strategy; draft Capital Strategy; draft Treasury Management Strategy; and draft Investment Strategy.

The results of the budget consultation would be reported to Cabinet on 7 February 2023.

A report was submitted by the Labour Group outlining five concerns and proposals.  These were outlined on pages 85 to 88 of the agenda pack. The concerns related to:

(1)         The level of borrowing proposed to meet capital expenditure.

(2)         Volatility in UK financial markets.

(3)         Value of assets proposed for disposal.

(4)         Costs associated with proposed new multi-storey car park in Newcastle town centre.

(5)         Removal of the financial allocation to support legal action regarding regulation of the abatement notice at Walleys Quarry.

The following queries and issues were raised:

·         What impact would the Labour groups’ proposal to use the 3x multiplier have on the Capital Programme?   The next year would probably be alright but no forecast could be given for the following year.  As it was for a ten year period it had to be looked at as a whole and any unspent money would have to be returned to the Government.   

·         The level of borrowing was predicated on the asset disposal of capital receipts and land sales but there was no indication of what those were.  Clarity was requested on what the sites were.  A confidential report was requested setting out the information.

·         Regarding the figure of £20.9m assumed from capital asset sales, it was requested that this figure be broken down and reported to Members.

·         How much had the Council raised from the sale of capital assets over the last five years?  This was approximately £8.5m.

·         Regarding curbs on funding and how a loan would be structured, how would that be achieved?  The report mentioned the Public Works Board (PWB).  This Council wanted to move away from the PWB and work with Local Authorities.  How could the Council be assured that the same rigorous rules were in place when borrowing from the County Council or from the PWB?  Borrowing now had to have more of a regenerative purpose and was enforced by the Public Works Loan Board.

·         An explanation was requested for the assumption for estimating future spending and income within the budget.

·         Details were requested on how the budget had taken the results of any public consultation into account.  The Consultation was now finished and the results showed that the priority areas were Street Scene, Town Centre and general cleanliness of the Borough. The results of the consultation could be discussed at the next meeting of this Committee or at the end of the Full Council meeting in February.  It was asked if the consultation included the building of a car park?  The consultation was regarding residents’ concerns and the car park was not a particular item on it.

·         What were the recommendations of the Finance Efficiency Board?

·         Regarding the £400,000 recouped from Walleys Quarry and put back into the budget.  How much of that had been repaid to date?  There was a repayment plan in place for this and all payments were up to date.

·         The cost of demolition of the Midway car park was requested and whether any problems were envisaged regarding infrastructure of buildings surrounding the facility. There were 1268 paying, private and Council car parking spaces around the Town Centre.  Could assurance be given that a full cost benefits analysis of works involving the car park would be available for scrutiny and to the public and also if a lower rise car park might be considered

·         Under Good Housekeeping and More Efficient Processes, reference was made to savings of £215,000 and it was asked where those had been made.  The savings had come from: ICT; Leisure and Cultural; Recycling and Fleet and Corporate outlined on page 20, Appendix 1 – points G1-G4.

·         If there was a significant upturn in the economy with developers wishing to return to the town centre, the proposed new car park would be taking up a significant piece of land.  The car park was part of a business case that was already government approved for the regeneration of the Ryecroft site.  In addition the Midway car park had a considerable amount of money spent on it in the past and was deteriorating year on year.  The new car park would generate income.  There would be charging points for electric vehicles and would be more sustainable.  In terms of the return of retail to the town centre, there would need to be a reversal in the current trade, moving back from people shopping at out of town centres and online.

·         Where was the income strategy or regeneration strategy linked to the car park?  The car park was part of the regeneration of the Ryecroft site and as well as providing a modern parking facility for the town centre, parking spaces would be needed by people staying at the hotel, and visiting Aspire or occupants of the residential units.

·         Could assurance be given that none of the spaces on the new car park be given away to partners as part of a deal?  The current parking offer had parking permit schemes available to different organisations and that could be offered on the new car park.

·         Regarding the £376,000 saving from the One Council initiative, £265,000 would come from a restructure of internal support services and review of vacant posts.  Would there be any redundancies or restructuring costs around that?  There would be no redundancies.  The restructure had allowed for those wishing to take up the Mutually Agreed Resignation Scheme (MARS) so some of those payments were included in the figures, covered by the One Council Programme funding.

·         Regarding the Capital Assets and Review Group, who attended this and would there be any value in a member of this Committee attending it or having output of the meetings to keep members up to date as to how capital output was progressing?  Members of this were the Head of Finance/S151 Officer, Portfolio Holder for Finance, Town Centres and Growth, Head of Legal and Governance/Monitoring Officer; Executive Director of Development and Growth; Head of Commercial Delivery, Housing and Regeneration and a member of the Property Team. 

·         On the Capital Programme, under external contributions, it accounted for the Future High Streets Fund and Town Deals Fund.  There was also a presumed from 2026/27 of £1.5m per annum in external contributions.  What were the assumptions and external contributions?  Town Deal Funding, Future High Street Funding.  The £1.5m was in respect of Disabled Facilities Grants received by the Council.

Resolved: That:

(i)        The progress on the completion of the Revenue (Appendix 1) and Capital Budgets (Appendix 4) be noted.

(ii)       The updated Medium Term Financial Strategy 2023/24 to 2027/28 (Appendix 2) be noted.

(iii)      The strategy for ensuring a balanced revenue outturn position for 2022/23 be noted.

(iv)     The calculation of the Council Tax base and the Council Tax increase to be proposed for 2023/24 of 1.99% per Band D equivalent property be noted.

(v)      The risk assessment at Appendix 3 and S151 Officer’s recommendation on the level of reserves and contingencies provisionally required to be maintained in 2023/24 be noted.

(vi)     The draft Flexible Use of Capital Receipts Strategy (Appendix 5) for 2023/24 be noted.

(vii)    The draft Capital Strategy (Appendix 6) for 2023/33 be noted.

(viii)   The draft Treasury Management Strategy (Appendix 7) for 2023/24 be noted.

(ix)     The draft Investment Strategy (Appendix 8) for 2023/24 be noted.

(x)      That the concerns raised by the Labour group (numbered 1 – 5 above) be noted.

Watch the debate here