Agenda item

To consider the Medium Term Financial Strategy and the report approved by Cabinet on 17 October 2012. 

The Committee considered a report regarding the Medium Term Financial Strategy which had been approved by Cabinet on 17 October 2012. The report had been brought to the Committee for their comment and feedback. Officers were thanked for the excellent format and use of language in the report and strategy, which made it accessible to Members and members of the public.

The Medium Term Financial Strategy was updated every year and aimed to predict the likely budget totals. A Budget Review Group (BRG) had been set up, chaired by the Portfolio Holder for Finance and Budget Management, and made up by three Cabinet members and two senior Officers. The biggest uncertainty facing the Council’s finances was central government funding. The details of the funding settlement would not be available until the third week of December. 

Members questioned which efficiencies were being investigated in order to create savings. Nothing was off the table and the BRG had been given a clean slate to work with. Fees and charges, terms and conditions, procurement, expenses, staffing, and changing the way we work were examples of areas that were being looked at. Members questioned which particular areas were being looked at in relation to staffing and terms and conditions. The Portfolio Holder for Finance and Budget Management advised that there were around twenty different options regarding staffing, but that there would be no redundancies. With regard to expenses, best practice would be looked at in order to be consistent with other local authorities across the country, as some current practices at the Council did not match what was happening elsewhere. These efficiencies were currently in draft form and there was no solid selection at the moment; the selection would be made available at the next meeting of the Committee. The settlement for central government funding was the key issue to the selection of efficiencies, and it was preferable to not commit to any efficiencies at this stage.

Members highlighted the 5% reduction in Central Government funding that had been assumed, and questioned that if the reduction was greater than 5% with no efficiencies in place and no increase in fees and charges, where would staffing become relevant. If the settlement was worse than anticipated then it would be covered by an additional sum which did not include staffing cuts. Members further questioned service reviews that were being undertaken. The reviews would give more power to section heads and allow them more freedom to run their directorates in the way they considered best. Every Head of Service had been given the option to participate and there had been a peer challenge. There would be possible savings and the potential to invest to save. It was considered by Members that the cost of labour was the greatest form of expenditure for the Council. Full time equivalent staff had not been reviewed and vacant posts may have been offered by the Executive Management Team as possible savings. Members questioned whether new vacant posts were being looked at, and if so, which ones. There were a number of different posts, but Officers did not have the details to hand. The posts would have been vacated at different times over the last twelve months. The information would be provided to the Chair after the meeting.

The General Fund Balance of £1.4 million was questioned by Members. The reserves had been reviewed as part of the budget process and all indications were that they would appear to be sufficient. It was questioned whether the money factored in for Council Priorities had been factored in to continue, which was confirmed to be the case. It was further questioned what would happen if the £10,000 sum allocated to home security support for vulnerable residents was not enough. The best use was being made of the £10,000 and the Portfolio Holder was happy with the situation moving forward. The current spend on the priority was within the allocated sum and was being monitored with feedback being received. The Portfolio Holder would hold discussions with the Executive Director Resources and Support Services if demand outstripped the budget, and budgets needed to be looked at.

The Town Centre Partnership and the £30,000 that had been allocated to it were questioned by Members. It was considered that this did not seem a large figure and Members questioned whether the recruitment process was now underway for the Town Centre Manager. The advert for the Town Centre Manager position would be out that week and there would be a robust recruitment exercise for the role. Funding was being sought from other sources, and the £30,000 figure was the Council’s contribution. It was requested that the Committee receive the figures regarding this, the funding position and a copy of the advert for the Town Centre Manager.

Members questioned what the potential additional areas of income generation were. Advertising was considered a potential for income generation as there were areas within the borough that were ideal for advertising. Initiatives such as selling space on the back of parking tickets were an option; the majority of councils did this and Newcastle Borough did not. It was hoped that advertising would be implemented in time to affect next year’s budget and there were other discussions taking place too. It was noted by Members that Jubilee 2 had done well with generating income. It was noted in the minutes of the previous meeting however that expenditure was eating into the income being generated. This was due to additional cleaning of the facility.. There would be a six month report at the next Committee meeting which would show that income was significantly up.

Members questioned what was meant by good housekeeping. This could be a number of things including energy usage, use of I.T. equipment and printing in black and white rather than colour. It was questioned by Members what was meant by the better use of assets. Shared use of the Civic Offices with partners was an example, as was using the best routes with regard to vehicles to save petrol; the best value should be made of any physical assets. It was questioned whether this would mean fixed capital assets and it was confirmed that this would be the case. The Asset Management Strategy was a current review of all Borough Council owned assets with disposal or shared use being considered, and the strategy was expected to be received by the Committee in December. The former St. Giles and St. George’s school building and the former Sainsburys site were examples of properties included in the review. Members questioned whether the Asset Management Strategy would name sites and it was confirmed that definitive sites would be named and the business list would be received with the Asset Management Strategy in December. There was no new information to be shared with the Committee; the Council was always looking at partnership working.

The Committee concurred they were satisfied that the questions asked had been sufficient and they were positive with the report and strategy, subject to the additional information that had been requested.

RESOLVED:                        (a) That the information be received.

(b) That the Committee be provided with the funding position and a copy of the advert for the Town Centre Manager position.