Minutes:
The Interim Director of Finance introduced the
report and stated that it had been written before the intervention
had begun, which was why the intervention was only briefly
mentioned. He explained that the situation was moving quickly, but
the Quarter 2 2022/23 finance report would include more detail on
the situation, and would outline any capital loss and wider
impacts, for example the Minimum Revenue Position. He stated that
the financial position was fluctuating, which meant that there was
currently a limited level of certainty, but regular reports would
be brought forward to ensure regular monitoring.
The Interim Director of Finance felt that some service pressures
within the Council were significant, but the Council and
commissioners were working through a variety of solutions to these
pressures that could be implemented next year. He stated that in
the short-term, there was a pressure to balance the 2022/23 budget,
but explained that this had been a challenge before the
commissioners had started working with Thurrock. He explained that
some of these pressures were being seen at a national level, for
example pressures within Adults Social Care and Children’s
Social Care, although stated that this pressure was at a lower
level compared to previous years. He added that there were also
service pressures in areas such as home to school transport and
employee cost pressures. He summarised and stated that the
commissioners were working with the Council to assess the financial
position and the Minimum Revenue Position (MRP).
Councillor Muldowney felt that refinancing debt at a higher
interest rate might have implications on services already
experiencing budgetary pressures. She asked if other pressures,
such as an increase in inflation which was currently at
approximately 10%, would affect the Council. She also asked how the
Council would cover the cost of rising inflation, as central
government had not committed to covering this rise. The Interim
Director of Finance explained that central government would be
providing a funding indication at the end of October, which would
be finalised in December. The Interim Director of Finance added
that a service review had started at the beginning of the year,
which had identified service pressures and was working to reduce
these. He stated that at the beginning of the financial year, there
had been a budget gap of £13million, and explained that
£9million of funding to bridge this gap had been agreed, and
£3million was in the process of being agreed. He explained
that the Council were in the process of setting the budget for
2023/24 with the commissioners, although DHLUC needed to fully
understand the scale of the problem before they could act. He
explained that any savings made needed to be sustainable and
deliverable to ensure that statutory services were maintained. He
added that the commissioners would be working with Thurrock for
three years. Councillor Muldowney questioned how long the issues
would take to resolve, as the approximate figure appeared to be 20
years. The Interim Director of Finance explained that the Council,
commissioners and DHLUC were working to find a sustainable
solution, but 20 years was the usual first approximation. He
explained that this was a historic methodology and could therefore
be longer or shorter.
Councillor Kent highlighted the budget presented to Council in
February 2022, which outlined that £3million of reserves
would be used to bridge the gap. He queried if this figure was
still correct. The Interim Director of Finance stated the reserves
outlined in February 2022 still needed to be used, but additional
service specific reserves would also need to be used, for example
the Adult Social Care reserves, to support the service as there was
significant demand. Councillor Kent queried how the home to school
transport service would be affected, as he felt that some young
people were no longer able to access this service, particularly
those young people with special educational needs and disabilities.
The Interim Director of Finance explained that home to school
transport was experiencing pressures due to an increased caseload
as there were now more SEND facilities in Thurrock. He stated that
the rules and regulations regarding home to school transport were
specific, and Thurrock had to meet their statutory duty, which
meant Thurrock had limited control over who to offer the service.
He explained that this budget was funded through the general fund,
rather than the Dedicated Schools Grant. The Interim Director of
Finance stated that although it was a statutory duty, the Council
periodically reviewed the service. Councillor Kent felt that asset
sales were not a sustainable way of increasing income, and asked if
the £3.3million of asset sales in the budget had been
achieved. The Interim Director of Finance confirmed that the asset
sale figure of £3.3million had been achieved.
Councillor Kent highlighted that this was the first public meeting
that had discussed the intervention, and sought clarity on how the
Council had reached this position. He felt that Members had little
understanding of the finance and investment strategy, but felt that
an apology should be issued to residents and Members. Councillor
Muldowney echoed Councillor Kent and felt that the investment
strategy and Council finances needed to be thoroughly scrutinised,
and questions asked. The Portfolio Holder for Finance stated that
the Council would now be trying to bring forward as much
information as possible to Committee’s and Members to ensure
increased transparency. He stated that the Council were still
trying to find out how the financial situation had occurred, and
this would not be reported on until the BV report in January 2023.
He commented that reports or briefing notes would be brought
forward regularly so all Councillors could see the process and make
decisions.
RESOLVED: That the Committee:
1. Noted the Department of Levelling Up, Housing and Communities
have put an intervention package in place and nominated Essex
County Council as the Commissioners as set out in Section 2.
2. Commented on the forecast revenue and capital outturn positions
for 2022/23.
3. Noted that additional action will be required to identify
further savings to manage the reported General Fund budget
pressures.
Supporting documents: