To consider any decisions made by the Cabinet at its last meeting that have been called-in.
The Chairman informed the Committee that Cllrs: Mrs J Roach, Cllr D J Knowles, Cllr F W Letch, Cllr R M Deed and Cllr R Wright had called in two decisions made by the Cabinet at its meeting on 25th October 2018 (with regard to the Medium Term Financial Plan and the Modernisation of Council Homes 2018-2023) for consideration by the Scrutiny Committee in accordance with the Council’s Constitution.
a) Medium Term Financial Plan
· This report is listed as having been 'noted’, the proposals in paragraph 8.2 of the report be endorsed'. Paragraph 8.2 in the report contains possible actions the Council could take to remain solvent. There is little evidence to demonstrate how and why these might or could be adopted. Without clear objectives and an overall plan a satisfactory outcome is doubtful.
· An allocation of 11 million pounds for 75 affordable homes is an SPV project which appears to be funded by MDDC.
· On page 89, there is a further allocation of funds to the SPV for the Tiverton Roundhill site. Is MDDC funding the SPV or not?
The Chairman asked the lead member who had called in the decision for the reasons why she felt that a call in was appropriate.
The lead member explained that she had missed the member briefing and the Cabinet meeting and did not feel that the Medium Term Financial Plan or the allocation of funds to SPV had been sufficiently discussed.
The Deputy Chief Executive (S151) explained that two reports had been sent to Cabinet and a member briefing had been arranged which had detailed the funding arrangements for 3 Rivers Developments Ltd. He further explained that Full Council had been fully informed of the arrangements and that this had been approved. He reiterated that Council could borrow money at a low rate and this had been lent to 3 Rivers at the market rate which would see the Council realise a profit on the monies lent. The Council was not funding 3 Rivers Developments Ltd out of the General Fund. He explained he was happy to provide the member with further information if she required.
In answer to a question about the Deputy Chief Executive’s (S151) role as both Finance Director for the Council and a Director of 3 Rivers Developments Ltd he explained that Members had approved the Memorandum of Association which had confirmed the governance arrangements between the two entities.
Members present who had attended the briefing about 3 Rivers Developments Ltd stated that they were clear of the governance arrangements and that they had full confidence in the Council and the Deputy Chief Executive (S151).
The Chairman recommended and the Committee agreed that the discussion about the funding for 3 Rivers Developments Ltd was closed at that point and no recommendation or proposal was made to the Cabinet.
With regard to the Medium Term Financial Plan the lead member of the call in stated that she had concerns that she could not see a ... view the full minutes text for item 92
To receive a report of the Deputy Chief Executive (S151) providing an updated Medium Term Financial Plan (MTFP) which takes account of the Council’s key strategies (i.e. The Corporate Plan, Business Plans, Treasury Management Plan, Asset Management Plan, Work Force Plan and Capital Strategy) and demonstrates it has the financial resources to deliver the Corporate Plan. This models potential changes in funding levels, new initiatives, unavoidable costs and proposed service savings
The Cabinet had before it a *report of the Deputy Chief Executive (S151) providing an updated Medium Term Financial Plan (MTFP) which took into account the Council’s key strategies (i.e. the Corporate Plan, Business Plans, Treasury Management Plan, Asset Management Plan, Work Force Plan and Capital Strategy) and demonstrated that it had the financial resources to deliver the Corporate Plan. The report modelled potential changes in funding levels, new initiatives, unavoidable costs and proposed service savings.
The Cabinet Member for Finance outlined the contents of the report stating that the MTFP was based on best assumptions and estimates for further year on year reductions in Government funding.
The budget gap forecast for 2019/20 to 2022/23 as depicted below:
It was forecasted that the budget gap would be £1.4m if no remedial action was undertaken. Key assumptions had been made with regard to the Revenue Support Grant, Business Rates, any capping on a Council Tax rise, income from the New Homes Bonus and any possible amendment to the split between county and district authorities.
Consideration was given to whether the assumptions were realistic and that there was no guarantee on Government funding.
RESOLVED that the Medium Term Financial Plan be NOTED and that the proposals outlined in paragraph 8.2 of the report be fully endorsed.
(Proposed by Cllr P H D Hare-Scott and seconded by Cllr C R Slade)
Note: * Report previously circulated, copy attached to minutes.