Agenda item

Local Government Reorganisation - Finance Theme Update

To consider Report No: DoR79/22 of the Interim Director of Resources, which updates the Committee on the current position and proposals for the finance theme of Local Government Reorganisation. 

 

Recommendation:

It is recommended that the Committee note the report.                 

Minutes:

Members considered the report no: DoR 79/22 of the Interim Director of Resources, which sought to update the Committee on the current position and proposals for the finance theme of Local Government Reorganisation.

 

The Interim Director of Resources advised that the shadow authority was in the process of producing a budget report which would establish the starting position for the budget process. Further, that the Medium Term Financial statement would also set the horizon scanning in respect of funding, expenditure, inflation, as well as interest rates. It was noted that this was a complex process due to the aggregated budgets of the three district councils and the one disaggregated country council budget.

 

A budget gap of £32 000 000 was highlighted in the 2023/2024 Medium Term Financial Plan (MTFP) for the two authorities. The MTFP would need to be split, with an estimated funding gap of £ 14 000 000 for Westmorland and Furness.

 

The Interim Director of resources advised that with regards to staffing, all the Chief Executives, the statutory officers, bar the Monitoring Officer for Westmorland and Furness, were in post. Tiers 2 and 3 were likely to be done by vesting day. One of the issues created by having Tier 3 appointed before vesting day, is the potential for unnecessary redundancies, which could be mitigated by redeployment and the management of change policy needs a redeployment provision. It was highlighted that this was concerning staff. Further, from the district council’s perspective, it was important that services continued from vesting day, with the appropriate officers equipped to continue. Directors will need to establish what capacity they need to run the service do this in line with the budget and Westmorland and Furness corporate and service plans .The Interim Director of Resources emphasised that the council’s training and development programme has been focused through appraisals to equip officers with the tools for the roles and jobs they were looking for.

 

Members asked the following questions of the Interim Director of Resources:

 

·       Who are you working with?

 

Response: There is a governance structure for finance. Westmorland Finance will approve the budget in February. I am the interim officer s151 officer for the new authority and working with the permanently appointed s151 officer, Pam Duke. We work to a theme board, this finance theme board have constructed the budget. The County Council have aggregated the district budgets into their disaggregated budgets.

 

·       You mention a budget deficit of £ 32 000 000, from where does this arise? From what I understand the district budgets are technically balanced? In terms of the overall financial position for Westmorland and Furness, where does it stand?

 

Response: Yes, all the budgets for 22/23 are balanced. The £ 32 000 000 is taken from the 23/24 year of the medium term financial forecasts. The biggest chunk of the projected deficit is the county as the biggest authority. The only authority projecting a balanced budget for 23/24 was Eden District Council. However, there are many changes and this isn’t strictly speaking the case. Some authorities have a adopted a very pessimistic view of their finances and for instance haven’t included council tax increases. All of the component authorities are in the same boat with rising costs.

 

·       With the aggregation of district services, is it correct, that a lot of the savings for LGR will be on staff?

 

Response: Yes, a lot of the staff will be transferring so savings on staffing costs will only happen later.

 

·       Is the Pension fund protected?

 

Response: Yes, it is protected and ring-fenced in its own authority. It makes its own decisions rather than the county council.

 

·       Based on what you’ve said, there’s going to be an increase in council tax and we have this shortfall. I’m interested, as Eden has the highest council tax per band of the component authorities. Will this mean an increase for Eden?

 

Response: Firstly, no decision has been taken on whether there will be an increase on council tax and no decision will be taken until we know that the referendum principles are. The harmonisation of the banded council tax of the three authorities is extremely close. There are various options that can be considered, but no decision has been taken yet. Any increase on council tax would be consulted upon, but as said no decision will be made until referendum principles are received.

 

·       What will happen with the costs for social care services and council tax?

 

Response: The adult social care precepts are likely to remain.

 

Proposed by Councillor Ryland

Seconded by Councillor McCall

 

andRESOLVED that the Finance Scrutiny Committee note the report.

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