Apologies had been received from Councillors Clarke-Taylor and Nembhard.

There were no disclosures of interest.

The minutes of the meeting held on 27 June 2023 to be submitted and signed.

The minutes of the meeting of Finance Scrutiny Committee held on 27 June 2023 were signed.

The Chair highlighted the recommendations contained within the report at paragraph 3.1 and then invited the Head of Finance to present her report to the committee.

The Head of Finance warned the committee that the report set out a very challenging picture, because of persistent high inflation, high interest rates and the cost-of-living crisis and warned of a variance to the revenue budget of £3 million.  However, there were allocated reserves for some of the variances, and there were virement requests in appendix 7 which would enable the creation of budgets to reflect the planned use of these reserves. 

But there was still a forecast overspend of £1.4 million, which would have to be met from the unallocated reserves, the Economic Impact Reserve, and the General Fund.  As a result, the General Fund would fall below the risk assessment level for balances. 

There were also mitigation measures available, such as holding open vacancies to deliver savings and the impact of these should be seen in the next monitoring report to the Committee in November.

The Head of Finance also highlighted the cost pressures that were coming from external factors such as temporary accommodation and inflationary pressures, a good deal of which was the forecast staff pay award. 

The Head of Finance highlighted the unprecedented level of uncertainty, particularly in relation to the staff pay award and Veolia contract pressures, but pointed out that the reserves were there for the purpose of dealing with such pressures. 

The Head of Finance informed the committee that there was a forecast £11 million reduction in spending on the Capital Budget in year.  This reduction would help with borrowing costs. 

The report summary concluded on a positive note with the delivery of savings being in a strong position in year. 

The Chair thanked the Head of Finance and invited questions.  The following issues were raised. 

·        The pressures relating to the Veolia contract had been an issue for some time, the committee asked how this situation could be better managed.  The Head of Finance explained that the contract had a fixed and a variable element.  Whilst the team were working hard to control the variable element, the underlying costs were linked to indexation that was controlled by the original contract.  But conversations were had with all partners on how to reduce costs within the contract. 

·        There was a discussion around the various cost increases that were responsible for the variance in the budget, especially the sustainable transport budget.  This was a budget where earmarked reserves had been set aside to manage the variance, so was not really an overspend. 

·        The proposal to rephase the Town Hall Quarter and Colosseum into next year’s budget was explained as being due to the speed of delivery of these projects.  The main contract work was still to be completed and clearly this would occur next year. 

·        There was a discussion around the reserves, noting they were falling to below risk levels, the Economic Impact Reserve was all used and the  ...  view the full minutes text for item 11.

The committee received the report of the Head of Finance, who explained that this report was brought every year to set out the timetable for setting the budget.  The committee were given the basic highlights of the report, including certain assumptions that had been made to complete the report.

In response to a question about how much effort was put in to raise income, the Head of Finance pointed out that councils were not allowed to invest purely for income.  But Watford Business Park and other schemes raised income, plus the fees and charges also contributed.  Following on from that, the committee were advised that external consultants and the Property investment Board met regularly to ensure continued income generation from investment property.  The council had also looked at what other councils were doing to see if there were learning points or ideas to generate income.  Shared services were also mentioned as another saving measure.

RESOLVED –

that the Finance Scrutiny Committee notes the 2023/24 Budget Planning Framework, outline timetable at Appendix 1 and Budget Principles at Appendix 2.

The committee received a presentation by the Head of Finance.  The reasoning behind raising some fees and charges from 1 January 2024 was explained as being necessary to meet increased costs.  Several exceptions were detailed such as:

·        Garden waste collection – annual subscription runs from September to August.

·        Leisure – SLM set these charges and there were contracts in place, so these would change later in the year.

·        Hackney and Private Hire – fell under the remit of Licensing.

·        Market Traders – outside of this.

·        Planning fees – fell under central government legislation but would be reviewed in the autumn.

In response to a question about the issue of two increases in the same twelve-month period, the Head of Finance explained that these proposed changes would be fully debated at Council in October.  It was also pointed out that many of these charges were purchased as a one-off, so a customer would not see two price increases.  Members of the public were also used to seeing prices change regularly, so this would not be seen as unusual.   

The Head of Finance also explained that whether future years would see fees and charges being reviewed in January, had yet to be determined.

There followed a discussion about the rephasing of the charges where some of the committee members were unhappy with the changes and others saw the reasoning and agreed with it.  There was clear concern that the estimated additional income of £30,000 for 2023/24 as a result of raising charges on 1 January rather than 1 April was only small compared with the £1.4 million gap in the budget.   

In response to a question about bulky waste charging, the contract fee was approximately half of the cost to make the collection.  This was subsidised.  There could be a risk that charging the full cost of collection would increase fly tipping. 

The point was made that every subsidised service was every member of the community paying for a small number to benefit from the service. 

The Chair expressed his disquiet at the earlier increase in January 2024, citing parking increases and burial cost increases as being of particular concern and asked that this was minuted.

RESOLVED –

1.      that the Finance Scrutiny Committee has considered the draft Charging Policy for 2024/25 at Appendix 1 and provided comments to Cabinet and Council.

2.      that the Finance Scrutiny Committee has considered the proposed Fees and Charges for introduction from 1 January 2024 and 1 September 2024 and provided comments to Cabinet and Council.