SCRUTINY MANAGEMENT BOARD – 25TH MARCH 2015

Report of the Strategic Director of Corporate Services

Part A ITEM 7 SCRUTINY OF THE COUNCIL’S BUDGET Purpose of the Report At the Scrutiny Management Board (SMB) meeting held on 28th January 2015 the Board received a report of the Budget Scrutiny Panel. After receiving that report the Board resolved that a further report be requested to consider if, and how, the budget scrutiny process should be modified for the 2016/17 budget. Action requested That the Board notes the contents of this report and considers if, and how, the budget scrutiny process should be modified for the 2016/17 budget. Background Setting the Council’s annual budget is a statutory requirement and a key corporate activity leading to the publication of corporately significant Cabinet and Council reports. This report is designed to inform the Board in its role of facilitating effective scrutiny of the budget by councillors. Budget scrutiny process for the 2015/16 budget At its meeting held on 23rd April 2014 SMB approved the following process for the scrutiny of the 2015/16 budget, to be undertaken by the Budget Scrutiny Panel. Informal Panel Meeting #1 June 2014 – To allow Loughborough councillors to discuss the proposed Loughborough Special Expenses for 2015/16. Invitees to the meeting:

The Leader of the Council, relevant Cabinet Lead Members, the Chief Executive and relevant Strategic Directors and Heads of Service to be invited to attend.

Formal Panel Meeting #1 Early October 2014, following publication of the draft Medium Term Financial Strategy (MTFS), to discuss:

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How the MTFS was constructed for 2015/16

Key assumptions and sensitivities within the MTFS

Projected financing shortfall projected within the MTFS

The proposed approach being adopted in constructing the draft 2015/16 budget (to be presented to Cabinet in December 2014)

Possible outcomes of Panel discussion:

Recommendations to Cabinet regarding changes to the MTFS to be considered when the final version of the MTFS is submitted in December 2014, following consultation

Recommendations to Cabinet regarding preparation of the draft 2015/16 budget

Informal Panel Meeting #2 December 2014, following publication of the Cabinet report setting out the draft budget for 2015/16. Discussion topics:

Potential areas where the Panel may wish to focus its scrutiny of the draft budget

Invitees for the next formal meeting of the Panel (to ensure appropriate Directors and Heads of Service of impacted areas are in attendance)

Invitees to the meeting:

The original proposals were amended by SMB; as a result, Loughborough ward members were to be invited to this meeting to offer views on the potential scrutiny of the Loughborough Special Expenses element of the draft budget papers

Formal Panel Meeting #2 January 2015 Discussion topics:

General Fund service areas identified as being significantly impacted by draft budget proposals (with relevant Heads of Service and Directors in attendance)

Housing Revenue Account – overview of budget

Any proposed uses of reserves (balances)

Proposed changes to the Borough Council Tax rates

Proposed changes to the constituent components of the Loughborough Special Expenses (LSX)

LSX – overview of budget

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Other matters identified in the course of the informal meeting with the Chair / Vice-Chair of the Panel in December 2014

Possible outcomes of Panel discussion:

Recommendations to Cabinet regarding changes to the budget to be considered when the final version of the 2015/16 budget is submitted in February 2015, following consultation

Recommendations to Cabinet regarding changes to the process for developing the budget in future years

In addition, it was also agreed that the processes detailed above be reviewed by the Board at its meeting to be held on 18th March 2015.

Officer to Contact: Simon Jackson Strategic Director of Corporate Services

01509 634699 simon.jackson@charnwood.gov.uk

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Part B

Outcome of the Budget Scrutiny Process for the 2015/16 Budget 1. The Budget Scrutiny Panel process ran in line with the proposals agreed

by SMB, with the addition of a further informal meeting with Loughborough councillors in September 2014 to enable them to consider officer responses to issues raised at the informal meeting held in June 2014.

2. The main difference between this year’s process and that of previous

years was the addition of the informal meetings held in June and September to allow Loughborough councillors to discuss the proposed Loughborough Special Expenses for 2015/16, with the Leader of the Council, relevant Cabinet Lead Members, the Chief Executive and relevant Strategic Directors and Heads of Service. This was to afford councillors of Loughborough wards the opportunity to be consulted on the proposed Loughborough Special Expenses for the forthcoming year and to create clear separation between the Budget Scrutiny Panel process and ward member consideration of Loughborough Special Expenses

3. At its meeting held on 28th January 2015 the Board considered a report

of the Budget Scrutiny Panel presenting its findings and recommendations. It also received a supplementary report providing additional information with regard to the Panel’s recommendation to part fund a PhD student from Loughborough University to undertake data collection on Houses in Multiple Occupation (HMOs). In considering those reports the Board resolved the following:

‘1. that in respect of grants to the voluntary sector, the creation of the

post of Voluntary and Community Sector Development Officer for 12 months be supported and that it be recommended to the Cabinet that the role’s effectiveness be reviewed, allowing for a settling-in period, by the Scrutiny process and a report be submitted to the Cabinet at a time specified by the Cabinet;

2. that in respect of funding for additional data collection regarding

HMOs, it be recommended to the Cabinet that the funding up to £7,500 per year from the Loughborough Special Expenses for the PhD student for three years be supported in principle with additional information being provided concerning what the role would be and understanding the benefits to the Council over and above what officers were doing and could do themselves. Also to consider identifying the work for the later years of the PhD student if licensing was implemented in 2016;

3. in respect of resolution 2. above, the Scrutiny Management Board

noted the additional information in the supplementary report of the Budget Scrutiny Panel;

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4. in respect of resolution 1. above, an item to review the effectiveness

of the role of the Voluntary and Community Sector Development Officer be added to the Scrutiny Management Board’s Work Programme to be scheduled for consideration at an appropriate time after the post had been filled.

Reasons

1. The Board agreed that the creation of this post would be seen as a

valuable opportunity to empower voluntary organisations to be more sustainable and to develop appropriate skills to benefit their organisation and that appropriate monitoring of this post should be undertaken to evaluate its success.

2. To support the work of the Council in collecting data about the

location of HMOs and their impact in a cost-effective manner. 3. The Board was satisfied with the information provided. 4. To ensure effective scrutiny of the issue.’

4. At its meeting held on 12th February 2015 the Cabinet considered the

findings and recommendations of the Budget Scrutiny Panel, along with the additional information detailed in the resolutions of the Scrutiny Management Board, above.

5. The Cabinet, in considering the 2015/16 General Fund and HRA

Revenue Budget report later on in the meeting resolved to support the recommendations of scrutiny by providing the following through the Loughborough Special Levy:

The partial costs of a post graduate student to carry out work on HMOs for up to three years.

75% of the costs of a new Voluntary & Community Sector Development Officer for one year.

The costs of opening Biggin Street, Loughborough, toilets on a Friday for one year;

Officer Comments on the Budget Scrutiny Panel Process 6. In previous years it was clear that the expectations of Loughborough

councillors were not met with regard to their ability to influence the Loughborough Special Expenses Budget. For this reason, an additional informal meeting was added to the process to allow Loughborough councillors to discuss the proposed Loughborough Special Expenses for 2015/16.

7. The initial informal meeting referred to above was held in June 2014 with

follow up in September, when Loughborough councillors were invited to

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a second informal informal meeting to consider officer responses to the issues raised at the informal meeting held in June. The perception of officers is that Loughborough councillors did feel more engaged in the budget scrutiny than in previous years, and were happier with the overall outcome of the process.

8. Generally, officers believe that members of the Panel were given

adequate information and explanations, and an appropriate amount of time, to enable them to scrutinise the budget proposals effectively.

9. Overall, officers consider that the Budget Scrutiny Panel process worked

well in respect of the 2015/16 budget.

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