To consider the report.

Andrew Vallance said that this was the first look at the budget process for next year. The strategy and the plan would be considered by Cabinet in July, before it came back to the Panel at its next meeting a few days later. The report would then go to Full Council in September for approval. The strategy was a high level look at long term savings, with the main aim this year being to align the strategy with the areas set out in the Corporate Plan. Health and wellbeing and the climate were not included as they were difficult areas to achieve savings, but all other areas were included. The Medium Term Financial Plan would look to identify any gaps and there was a starting point of £4.8 million deficit which was identified as part of the budget process from February. Officers would be testing all of the assumptions that had been made as part of the plan, with particular emphasis on inflation, interest rates, pay and government funding. The report would feed into the budget process and would help to identify the savings gap. This savings gap would then be filled as part of the draft budget at the end of the year.

There was one registered public speaker on this item, Mr Andrew Hill. He had noted in the report that ‘RBWM had moved up the financial risk curve’, the council was not a commercial company and he asked what officers had meant by this. Considering the current financial position of RBWM, Mr Hill questioned whether this was the time for the council to be ‘moving up the financial risk curve’. He felt that there should be policies in place to ensure that the council moved down the curve to avoid bankruptcy. On the Property Company, Mr Hill said that the business plan had been discussed entirely in Part II which meant that members of the public were unable to view the report or see what had been discussed. Officers had been unable to answer his earlier question on the train station forecourt loss of £500,000, he felt that officers and the Cabinet Member should be aware of this sum. Mr Hill continued by asking what the inflation assumptions were for the report, he asked if the £15 million over five years saving figure took into account inflation at or above 10%, or would the council need to make in excess of £15 million of savings. Mr Hill concluded by asking if officers were planning for that eventuality.

Andrew Vallance said that the comments on the financial risk curve was an acknowledgement that the council was undertaking more commercial activities and was therefore more reliant on income generation, this was the same for most other councils. On the train station forecourt, there was one capital accountant at the council, she had been on leave and therefore an answer could not be provided at the meeting. The budget for this year had been made on an assumed inflation figure of 4.5%, assumptions would be tested over the coming weeks and it was almost certain that this inflation assumption would be increased. Services had put forward budget bids which outlined their anticipated growth, therefore the budget should reflect the demand of the council.

The Chairman said that the council would look at all opportunities from a commercial viewpoint to drive value for money.

Councillor Davies considered the report in relation to the Corporate Plan objectives, the council had an aim to reduce carbon output by 50% by 2025. She asked if the council would therefore not be in a position by 2027/28 to make some decisions on savings that were good for the environment.

Andrew Vallance said it was a good idea and he would add a section on climate change related savings to the Medium Term Financial Strategy.

Councillor Hill noted that there were a number of savings outlined in the report that would be achieved by 2026/27. He asked how officers planned to achieve these savings, given that council tax increases were capped at 3% and inflation was forecast at 11%. Councillor Hill was worried about staff retention and he felt that some of the savings were extremely ambitious and that there was a heavy reliance on the Maidenhead Golf Club scheme going ahead.

Andrew Vallance said that it was challenging, there would be a line-by-line review and there were various reserves that could be used. Work was being done to identify the correct cost of social care, this could then be used to lobby government to gain the correct level of funding.

The Chairman felt that it was premature to be negative but it was right to be aware of the risks, the council needed to flexible with its projections going forward.

Councillor Hilton referred to the table at 5.1 in the report, the total was around £12 million. Of that, £7 million was a result of the loss of business rates as a consequence of the regeneration of Maidenhead. The council received around 16% of business rates but received all of the contributions from council tax. The finance team had tackled issues very well and the transformation team had saved £5 million.

Councillor Price asked if the strategy was achievable with all the cuts, financial uncertainty and the inability to raise the council tax cap above the current level.

In response, Andrew Vallance reminded the Panel that the council had a legal duty to set a balanced budget, so the strategy needed to be achievable. Councils nationally would be lobbying government on the council tax cap.

Councillor Price said that an increase in the number of residents in the borough meant more council tax but this also meant a greater demand on services. This could be more significant than the amount gained through council tax. On the risk factors, she asked if these could be explained and evidenced further.

Andrew Vallance confirmed that this would be done in the report which would come back to the Panel in July.

Councillor Price asked if a savings tracker would be included to show how savings were being achieved and the progress that had been made.

Andrew Vallance explained that the financial update reports that were considered by Cabinet included a savings tracker. There would also be a growth tracker, ensuring that the service had been delivered.

Councillor Price said that the council would not get things right first time. It was better to take longer and test things multiple times, this would release resource from things that needed to be corrected.

Councillor Werner reiterated the concerns raised by Councillor Hill, the developer at the golf club could decide that it did not want to develop the land at the current moment in time, until the market picked up. He asked what the consequence was of this project not going ahead. Councillor Werner commented on long term borrowing, he asked if there was going to be a strategy to consider borrowing more long term than short term. Councillor Werner said that he believed that the Leader of the Council, Councillor Johnson, had written to the government asking for the cap on council tax to be raised. He asked if this was correct and if a copy of the letter could be shared with the Panel. Things set out in the strategy relied upon the transformation programme, Councillor Werner underlined that transformation should lead the savings rather than savings leading the transformation programme.

Andrew Vallance said that there were no significant capital receipts on the golf club in the next two to three years so there would not be a short term impact. Long term there would be higher borrowing costs, this would be in the capital programme. The assumption on borrowing was 0.6% in the current budget, not all borrowing would increase as the council had hedged in a number of cases. A significant amount of borrowing for next year had been secured at a lower rate. Risks were reduced by having a mix of borrowing lengths which ensured that not everything was short term. Andrew Vallance was not aware of the letter the Leader of the Council had written, he would take this away from the meeting. On transformation, estimations needed to be made on when the savings would be factored into the budget.

ACTION – Andrew Vallance to investigate if the Leader of the Council had written to the government about the council tax cap being raised and if the letter could be shared with the Panel.

Councillor Story asked if officers were aware of what the impact might be from the new health and social care proposals, which were due to come into effect from April 2023.

Andrew Vallance said he would be briefing the Cabinet Member for Finance and the Leader of the Council at the end of the week, the team were beginning to calculate what the costs to the council could be.

Councillor Bond added that he had seen a presentation on the proposals at the People Overview & Scrutiny Panel, he said that the proposals were planned to be coming in October 2023 rather than April 2023.

The Chairman said that this was potentially exciting as it could lead to a better delivery of services in a joined up approach, if it could work it would lead to a fairer system.

Councillor Price said that she had a general understanding of the difference between statutory and non-statutory services, she understood that the non-statutory services were at risk of being cut and asked if this was a fair assumption to make.

Andrew Vallance said that while some services were statutory, the level of the service could vary.

Councillor Hilton clarified that the council had not made cuts, over three years £10 million more had been added to children’s services.

Councillor Werner suggested that the comment raised by Councillor Davies, that the Medium Term Financial Strategy should include reference to the other two Corporate Plan objectives, should be put forward as a recommendation by the Panel.

This recommendation was proposed by Councillor Davies and seconded by Councillor Werner.

RESOLVED UNANIMOUSLY: That the Panel noted and commented to Cabinet on:

i)             The proposed key themes of the Medium Term Financial Strategy set out in the report.

ii)            It was recommended by the Panel that the Strategy contained reference to the Corporate Plan objectives on the climate and health & wellbeing.