Agenda and minutes

To provide an opportunity for Members and Officers to declare any disclosable pecuniary and non-pecuniary interests in any item on the agenda.

Councillor M Gorman declared an interest as a member of the Cheshire Pension Fund Committee in relation to an item on the agenda about the Fund.

To approve as a correct record the minutes of the meeting held on 7^th September 2023.

RESOLVED

That the minutes of the meeting held on 7^th September 2023 be approved as a correct record.

In accordance with paragraph 2.24 of the Committee Procedure Rules and Appendix on Public Speaking, set out in the Constitution, a total period of 15 minutes is allocated for members of the public to put questions to the Sub-Committee on any matter relating to this agenda. Each member of the public will be allowed up to two minutes to speak; the Chair will have discretion to vary this where they consider it appropriate.

Members of the public wishing to speak are required to provide notice of this at least three clear working days in advance of the meeting.

There were no public speakers.

To consider a report on the second review of the Cheshire East Council forecast outturn for the financial year 2023/24.

The Sub-Committee considered a report on the second review of the Cheshire East Council forecast outturn for the financial year 2023/24.

Performance against the 2023/24 Budget within each service committee, and the Finance Sub-Committee was outlined in Table 1 of the report.

Members sought further information regarding the current revenue forecasts for Adults and Health and Children and Families which showed in-year forecast pressures of £4.7M and £10.8 respectively.

The Executive Director of Adults, Health and Integration outlined the factors driving increased costs in adult social care. These included price inflation in social care, with staffing costs in the care sector running ahead of headline inflation; the rate of growth of the aging population in Cheshire East which was higher than other parts of the country; more complex needs leading to higher unit costs; and the numbers of people being released from hospital into the community and requiring care.

The Executive Director outlined measures that were being taken to address budget pressures, including a reduction in the use of short-term residential and nursing placements, investment in domiciliary care, and capping price increases, with investment in a pricing tool to scrutinise provider costs.

The Executive Director of Children and Families advised that key factors underlying cost pressures in children’s services included increasing demand for, and the rising cost of, social care agency placements, with costs increasing above headline inflation and a significant number of asylum-seeking children in Cheshire East; the increased use and cost of agency staff; increasing home to school transport costs and the cost of school catering.

Measures being taken to address budget pressures included a recruitment drive to reduce the need for agency workers, a review of funding relating to school catering, seeking additional funding through grant applications, and increasing the number of safe walking routes to school to reduce transport costs. Further mitigations were being explored, including the possibility of early receipt of safety valve funding.

RESOLVED (unanimously)

That the Sub-Committee

1.    notes the factors leading to a forecast adverse Net Revenue financial pressure of £18.7m against a revised budget of £353.1m (5.3%);

2.    notes the forecast and further mitigations needing to be identified, aimed at bringing spending back in line with budget;

3.    notes the in-year forecast Capital Spending of £181.4m against an approved MTFS budget of £214.7m, due to slippage that has been re-profiled into future years;

4.    notes the contents of Annex 1 of the report and each of the appendices therein, and notes that any financial mitigation decisions requiring approval will be made in line with relevant delegations;

5.   approves capital virements up to and including £5,000,000 in accordance with Financial Procedure Rules as detailed in Appendix 7 Finance Sub-Committee, Section 5 Capital Strategy, Table 5; and

6.    notes that Council will be asked to approve fully-funded supplementary revenue estimates over £1,000,000 in accordance with Financial Procedure Rules as detailed in Appendix 1 Adults and Health Committee, Section 3 Corporate Grants Register, Table 2 and Appendix 4 Economy and Growth Committee, Section 3  ...  view the full minutes text for item 28.

To consider a report which seeks approval of indicative financial targets to support consultation on the development of the Cheshire East Medium-Term Financial Strategy 2024/25 to 2027/28.

The Sub-Committee considered a report on indicative financial targets to support consultation on the development of the Cheshire East Medium-Term Financial Strategy 2024/25 to 2027/28.

The Head of Finance advised that the focus was on producing a balanced budget for the 2024-25 financial year only. In the current committee cycle, committees would consider their budget envelopes. They would then consider budget feedback in the January cycle before final recommendations were made by the Corporate Policy Committee to Council.

The Head of Finance also confirmed that officers would if requested be able to assist political groups with alternative budget proposals, and that further budget proposals could be considered during the January committee cycle, before the budget Council meeting in February. The Chair added that groups could start the conversations now and did not need to wait until January.

RESOLVED (unanimously)

That the Sub-Committee

1.    approves the indicative budget envelope for all committees as a way of setting financial targets in support of achieving a balanced budget for 2024/25;

2.    notes that officers will develop further proposals in consultation with members to enable wider stakeholder consultation prior to approval by Council; and

3.    notes that Committees will be presented with the opportunity to further review financial proposals, designed to achieve a balanced budget, as part of their January cycle of meetings prior to recommendations being made to Council for approval.

To receive an update report on the Council’s progress in implementing the Chartered Institute of Public Finance & Accountancy (CIPFA) Financial Management (FM) Code.

The Sub-Committee considered an update report on the Council’s progress in implementing the Chartered Institute of Public Finance & Accountancy (CIPFA) Financial Management (FM) Code.

It was suggested that informal meetings be arranged for members of the Sub-Committee to receive briefings on the principles of the Financial Management Code.

RESOLVED (unanimously)

That the Sub-Committee

1.   notes the contents of the report and the requirement for a full self-assessment against the principles of the CIPFA FM Code;

2.   notes the plan to complete the current re-assessment by 31^st March 2024 and that there will be annual updates thereafter;

3.   notes the existing initial officer self-assessment at Appendix 2 of the report;

4.   approves Appendix 3 – Interim review of Cheshire East Council’s current level of compliance with the CIPFA Financial Management Code Framework – Principle 1 – Leadership; and

5.   agrees that informal meetings be arranged for members of the Sub-Committee to receive briefings on the latest officer review in respect of all principles in the Financial Management Code and to provide an opportunity for members to engage in the re-assessment.

To consider a report which provides feedback from the Business Rates Working Group and which seeks a decision in relation to the Discretionary Relief Policy.

The Sub-Committee considered a report which provided feedback from the Business Rates Working Group on the business rates discretionary relief review, and which sought a decision in relation to the Discretionary Relief Policy.

Councillor M Gorman, who attending the Working Group meeting, thanked the officers for their work.

RESOLVED

That the Sub-Committee

1.   approves the amendment of the Business Rates Discretionary Relief Policy to include leisure centres at page 17 where sports and social clubs are referenced; and

2.   delegates authority to the Head of Revenues and Benefits to amend page 11 section 5.9 of the Policy, to allow backdating of relief in certain circumstances, once the Non-Domestic Rating Billreceives Royal Assent.

To receive a briefing report on matters considered at the Cheshire Pension Fund Committee.

The Sub-Committee considered a briefing report on matters considered by the Cheshire Pension Fund Committee.

The Vice-Chair, Councillor Gorman, who was also a member of the Cheshire Pension Fund Committee, commented that at present the Fund was not invested in businesses and enterprises in Cheshire or the North-West. He advocated the setting up of an investment vehicle that would enable the Fund to invest in local businesses whilst satisfying the regulations. Other members expressed sympathy with the principle of the proposal, provided it did not place the pensions of public servants at risk and that returns on investment were maximised.

RESOLVED

That the Sub-Committee

1.    notes the briefing paper, summarising the key points in the items presented to the Cheshire Pension Fund Committee on 8th September 2023; and

2.    asks officers to facilitate a conversation with the Cheshire Pension Fund and officers at Cheshire West and Chester and Warrington Borough Councils on the possibility of Cheshire Pension Fund investments being made in Cheshire and the North-West, and report back to the Sub-Committee at a future meeting.

To consider the key findings from Internal Audit's review of arrangements for the management and monitoring of Section 106 funds.

The report to the Audit and Governance Committee on 28^th September 2023 is attached.

The Sub-Committee considered the report to the Audit and Governance Committee on 28^th September 2023 setting out the key findings from Internal Audit's review of arrangements for the management and monitoring of Section 106 funds.

Internal Audit had completed an extensive review of the Council’s arrangements for the management and monitoring of Section 106 agreements. The key findings of the review were set out in Appendix 1 to the Audit and Governance Committee report. The overall assurance opinion for the review was “No Assurance”. This reflected the view that there were currently significant areas of risk which were not being managed effectively in relation to the use of S106 agreements and contributions. The audit report findings also referred to a lack of strategic oversight in place for senior officers and service committees.

The Audit and Governance Committee at its meeting on 28^th September 2023, having considered the findings of the internal audit review, asked for an initial progress report in March 2024, and a further update on the implementation of actions in 12 months’ time.

The matter had been referred to the Finance Sub-Committeewith a view to understanding the financial implications of the review, and how the planned changes should drive more effective recording, use, and timely spend of S106 contributions.

The Head of Planning assured members that no monies had been returned to developers as part of the process.

Members noted that the Environment and Communities Committee as the committee responsible for this area of work was to set up a member/officer working group to oversee the implementation of the actions arising from the review and to consider how information could be more pro-actively shared with members regarding section 106 contributions.

Members made the following comments in relation to the report and its findings:

• Members should be consulted on all stages of the S106 process and should be provided with information, including a process diagram, to assist their understanding of the process.
• The Finance Sub-Committee should receive regular reports in relation to the financial aspects of S106, which should be added to the work programme for future meetings.
• Assurances were needed regarding staffing, training and the effective use of software in relation to the management of S106 obligations and contributions.
• Members should receive lists of all S106 agreements affecting their wards.

The Head of Audit and Risk undertook to take these comments forward.

With regard to staffing, the Head of Planning advised that the recruitment process would commence next week.

RESOLVED

That the Sub-Committee notes the report.

To consider the work programme and determine any required amendments.

The Sub-Committee considered its work programme for 2023-24.

Officers confirmed that, as requested earlier in the meeting, items would be included on the work programme for future meetings relating to Section 106 and the Cheshire Pension Fund.

RESOLVED

That the work programme be noted.

The report relating to the remaining item on the agenda has been withheld from public circulation and deposit pursuant to Section 100(B)(2) of the Local Government Act 1972 on the grounds that the matter may be determined with the press and public excluded.

The Committee may decide that the press and public be excluded from the meeting during consideration of the following item pursuant to Section 100(A)4 of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 and the public interest would not be served in publishing the information.

PART 2 – MATTERS TO BE CONSIDERED WITHOUT THE PUBLIC AND PRESS PRESENT

RESOLVED

That the press and public be excluded from the meeting during consideration of the final item on the agenda pursuant to Section 100(A)4 of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 and the public interest would not be served in publishing the information.

The meeting was adjourned at 12.51 pm.

During the adjournment, members of the Sub-Committee received an informal briefing on the strategic options review of the Council’s wholly-owned companies.

The meeting reconvened at 2.25 pm.

To consider a report on a strategic options review of the Council’s wholly-owned companies.

The Sub-Committee considered a report on a strategic options review of the Council’s wholly-owned companies.

Councillor M Warren remained present for this item as Chair of the Environment and Communities Committee.

Members asked that the review include the option of testing the private market.

RESOLVED (unanimously)

That the recommendations in the report be approved.