Agenda item

Report of the Head of Finance.

The Head of Finance presented the report.

In response to questions from a couple of Members about why increasing payroll costs had not been adequately considered, the Head of Finance advised that 4% was in fact budgeted for, but the final cost could end up being somewhat higher. A new forecasted rise of 6.75% had now been budgeted for, though the final figure might be lower than that.

A Member suggested that rising energy costs should have been more accurately foreseen, and asked whether the leisure centre contract incentivised Everyone Active to reduce energy use or were the Council simply obliged to pay.

The Strategic Director of Communities advised that the contract did not simply pass on all costs; he would be happy to supply Members with a briefing note.

In response to a question from a Member about whether an energy subsidy scheme between a council and leisure centre provider was commonplace, the Strategic Director of Communities advised that the scheme they had agreed primarily covered extraordinary costs over a given base; more details would be provided to Members.

In response to a question from the Chair about how projected decreases in energy costs would impact the agreement, the Strategic Director of Communities advised that it was not based on hypotheticals, and there was a clear and transparent formula to arrive at the figure.

In response to a question about whether any money had been paid to Everyone Active, the Legal Team Manager advised on procedure, noted that no money had been so far paid, but some details could not be shared because of commercial sensitivity.

Several Members expressed concerns about the practice of using unutilised staffing budgets – from unfilled vacancies – to cover budgetary shortfalls. The Strategic Director of Communities advised that staffing roles weren’t being unfilled to cover short falls, but if they simply couldn’t be filled then the money was used elsewhere.

A Member asked if the money was utilised elsewhere, what became of the post at that point. If the roles were then lost this would impact service provision. The Strategic Director advised that no posts had been lost in this way.

The Chair asked how this practice affected the commitment to improving housing service delivery, the Strategic Director of Communities advised that this was an ongoing priority of the Corporate Management Team. Plans for the development of the service would be brought to the meeting of the Corporate Scrutiny Committee on 23 November and there was a planned timetable.

The Chair expressed concern about hiring temporary staff for planning, there had been a shortage for years, and agency staff were an expensive way to fill posts. The Strategic Director of Resources advised that this was an ongoing organisational priority but had to be balanced with HR considerations. The Head of Human Resources and Organisational Development added that additional supplements to the staffing budget for planning had been agreed and had been useful for recruiting and retraining permanent staff.

A Member requested the details of how many people had worked on a temporary contract or agency basis for more than six months, with the premium this entailed, and which might be better spent on long term recruitment. The Head of Human Resources and Organisational Development advised that this information could be provided; a permanent post is always preferred but not always possible.

A Member expressed concerns that it appeared that the administration had abandoned the net zero by 2030 target. He also added that the £3.1 million budget set out at in the report appeared in actuality to be a reduction from a previous projected budget of £4.5 million.

The Strategic Director of Resources advised that £3.1 million referred to the current financial year’s budget approved by Council. The Strategic Director agreed to come back to Members with the precise details of the five-year position.

A Member asked why the earmarked reserve not been moved into the general reserve if it was no longer needed? The Head of Finance said that she would clarify this.

A Member expressed concern that, as set out at paragraph 2.6.3 of the report, it appeared that to cover the overspend which was required to renovate Stenson House the organisation seemed to be taking £150,000 out of the Electric Charging point budget and was concerned. The Head of Finance said it was still being used for electrical charging point but on paper it was now set out in a different budget. This would be clarified in the Cabinet report.  The Chair requested a full breakdown of what had happened to the £150,000. He felt that the amount for electric charging points at Whitwick Business Centre sounded a rather large amount, and he doubted that was where all the money had gone.

A Member asked about the affordable housing sections of the report and how the £2.27 million budget was to be spent. The Head of Finance said a briefing would be provided.  The Member inquired how this tallied with numbers in the Housing Revenue Account section. The Head of Finance advised that it was a separate budget.

Questions were asked about the £1 million budget for recreation, play areas and leisure. The Strategic Director of Resources advised that they were now attempting to present the totality of the budget in finance updates. This first report was a starting point and Member comments had been useful in aiding this moving forwards.

The Chair felt that inadequate attention was being given to inflation in the report and more clarity was needed. The forecasted inflation figures in the medium term also were wrong and should be recalculated accordingly. The Strategic Director of Resources advised that the comments of the committee would be taken onboard, and future budgets were already being planned and the impact of inflation would extend over the medium terms. He added that a draft budget would come to the Corporate Scrutiny on 4 January 2023.

The Chair thanked Members for their comments which would be presented to the Cabinet on 19 September 2023.