Agenda and minutes

Corporate Scrutiny Committee
Wednesday, 29th January, 2025 9.30 am

Venue: Ground Floor Committee Room - Loxley House, Station Street, Nottingham, NG2 3NG. View directions

Contact: Damon Stanton 

Items
No. Item

29.

Apologies for Absence

Minutes:

Councillor Andrew Rule  -  work commitments

Councillor Naim Salim  -  personal reasons

30.

Declarations of Interests

Minutes:

None

31.

Minutes pdf icon PDF 390 KB

To confirm the Minutes of the meeting held on 27 November 2024

Minutes:

The Committee confirmed the Minutes of the meeting held on 27 November 2024 as a correct record and they were signed by the Chair.

32.

Scrutiny of the Budget pdf icon PDF 116 KB

Report of the Statutory Scrutiny Officer

Additional documents:

Minutes:

Councillor Neghat Khan, Leader of the Council and Executive Member for Strategic Regeneration, Transport and Communications; Councillor Linda Woodings  , Executive Member for Finance and Resources; Sajeeda Rose, Chief Executive; Stuart Fair, Interim Corporate Director for Finance and Resources; and Lee Mann, Strategic Director of Human Resources and Equality, Diversity and Inclusion presented a report on the development of the Council’s proposed Budget for 2025/26. The following points were raised:

 

a)  The Council’s budget development is extremely complex, so review work will be carried out to seek learning around how next year’s budget setting and consultation processes could be improved. The current proposals that have been to public consultation are cross-cutting, while operational savings, efficiencies and income proposals have also been put forward by individual directorates. Unfortunately, the wider economic environment is unstable, with inflation and borrowing rates remaining high – contributing to escalating costs (particularly in relation to fuel and energy) within the context of a trend of increasing demand for services.

 

b)  A number of core assumptions have been used to develop a sustainable 2025/26 budget – staring with managing the cost pressures within the 2024/25 budget successfully and sustaining this for the medium-term. A maximum Council tax increase of 4.99% is anticipated, primarily to fund the rising service demands within social care, and it is anticipated that the overall Council Tax base will also grow. Pay inflation has been assumed at 4%, though employers’ new National Insurance liabilities will not be fully funded by the Government – particularly in the context of contracted providers within the wider care sector. Individual directorates are expected to manage inflation in contracted services costs. A great deal of risk management is being carried out, with any ultimately undeliverable savings proposals being identified and removed. A corporate contingency of £15 million has been set for 2025/26 and then £10 million in all future years to mitigate against in-year pressures, as borrowing costs are currently very high.

 

c)  The 2025/26 budget gap has been reduced to £23.4 million, with a cumulative £56.8 million gap within the current Medium-Term Financial Plan. New savings of £18.4 million have been set for 2025/26, affecting all areas of the Council – with each directorate tasked with bringing down their net costs. An application for Exceptional Financial Support (EFS) has been made to the Government for up to £25 million in 2025/26 and up to £10 million in 2026/27. The current recovery plan aims to end the need for EFS by 2027/28. Currently, £31.6 million of extra resources from the national Recovery Grant have been received, on the basis of deprivation factors within the city. A public consultation was carried out on six cross-cutting savings proposals between December 2024 and January 2025, and the responses received will be used to inform the final proposals.

 

d)  There is a savings target of £1.96 million within the Finance and Resources directorate itself, designed to achieve efficiencies across a number of corporate services, with £168,000 in savings being made within the Chief Executive’s department. However, the majority of these proposals represent management-related efficiency savings that would be made as part of normal processes and have no direct impact on service users.

 

The Committee raised the following points in discussion:

 

e)  The Committee sought assurance that the current proposals would deliver a balanced budget. It was reported that there is confidence in delivering the £38 million in savings that have been planned (which have been fully risk-assessed), and in the Council being able to ultimately close its budget gap by 2027/28. However, it is extremely difficult to assess the level of cost pressures that could arise in-year, particularly in the context of social care, so appropriate continency sums have been established within the budget. A comprehensive structure of oversight is in place, including external expertise, and a great deal of benchmarking has been done with other similar Local Authorities to ensure that proposals are proportionate and deliverable. A substantial level of work has been carried out to ensure that the budgeting process is transparent and that there are clear lines of oversight and accountability.

 

f)  The Committee sought assurance that the corporate contingency within the proposed budget had been set at the appropriate level. It was set out that the proposed 2025/26 budget takes a very different approach to the previous 2024/25 budget, with a substantial focus on the delivery of cross-cutting efficiencies and transformation. However, transformation is more difficult to deliver than cuts, so an appropriate contingency sum is in place to ensure that this process is supported. As a result, a Director of Transformation post has been created to drive the delivery of cross-cutting transformation and the needed cultural shift within the Council to support the process.

 

g)  The Committee asked what the primary risks and challenges were to achieving the proposed budget, and whether there were any associated risks to the ongoing delivery of the Council Improvement Plan. It was reported that all of the potential risks have been assessed, graded and valued, as part of informing the establishment of the £15 million contingency. The current 2024/25 budget is being managed closely to ensure that any ultimate overspend is kept to a minimum, particularly in the context of social care costs. Mitigations are in place against arising in-year pressures, with the right monitoring implemented so that pressures can be responded to rapidly at the appropriate level. A great deal of work is being done on how the cross-cutting savings will be realised in the 2025/26 budget, and many of the needed savings will be realised on a rolling basis throughout the year. The budget proposals as they stand do not compromise the ongoing delivery of the Council Improvement Plan.

 

h)  The Committee asked what was being done to protect the most vulnerable people from being negatively impacted as a result of the current savings proposals. It was explained that a number of consultation responses focused on the cross-cutting proposal for growing digital delivery and the potential impact of this on the accessibility of services. As a result, in growing its digital services the Council will nevertheless ensure that there are always other, viable routes into services. A substantial piece of work is being planned on how to actively support people in accessing the Council services that they need in an efficient way.

 

i)  The Committee expressed concern that the overall response level to the public consultation on the budget savings proposals had been very low (particularly as the consultation had taken place within a four-week period across Christmas and the New Year), and asked what had been done to engage effectively with Nottingham people as part of the process – particularly vulnerable people and those living in the highest areas of deprivation. It was set out that a number of engagement events had been held at a range of venues in the city, and the consultation documents had been available in a range of languages. However, although the consultation carried out was compliant with the Gunning Principles, it taking place across the Christmas period could have made it less accessible, so consideration is being given to how public consultation on the proposed budget could be carried out more widely and at an earlier stage for next year. Work will also be done on how consultation could be taken out into communities more effectively, in the context of the resources available, to seek a wider range of responses – and engagement will be carried out with Ward Councillors on the development and delivery of this.

 

j)  The Committee noted that, in addition to taking into account how to engage effectively with people whose first language was not English, consideration should also be given on how to engage with people who could not read or write in any language. The Committee also considered that the cross-cutting issues set out in the 2025/26 consultation seemed particularly hard for people to engage with due to their abstract nature so, going forward, careful consideration should be given to how any future consultation on strategic and transformational proposals could be conducted to achieve a larger response.

 

k)  The Committee queried why relatively little information around the detail of the 2025/26 budget proposals and their potential service impacts had been provided to the Council’s Scrutiny Committees to date, given their role in scrutinising the budget development and delivery process. It was explained that, following the public consultation process, more work was needed to set out how the savings established in the six transformational, cross-cutting issues would be delivered across the Council’s directorates, as they are currently conceptual in form. The timelines for the budget development process have been extremely challenging for a sustained period, and savings need to be delivered in a very difficult context – meaning that a great deal of time is required to develop them. There have also been a number of changes in personnel at the senior officer level, so the new people in post need time to review and verify the proposals.

 

l)  The Committee sought assurance that the savings against the six cross-cutting areas would be achieved, if these were still conceptual in nature. It was set out that a substantial level of benchmarking has been carried out against other Local Authorities to ensure that the Council’s delivery of services is proportionate and in line with wider best practice. The transformation process will be carried out in consultation with other Local Authorities to make strong use of their related expertise, with cross-cutting savings developed on the basis of principles underpinned by evidence. A suitable contingency has been budgeted for to support the delivery of the transformation programme.

 

m)  The Committee asked what Transformation Plans were being produced for the delivery of the cross-cutting proposals within individual directorates. It was reported that training was underway with managers on planning for the delivery of the needed savings and efficiencies, to ensure that there was full understanding of and accountability for the delivery of the Council’s budget in a sustainable way. Management tiers and spans are being reviewed for efficiency, using a tool provided by the Local Government Association. Benchmarks are in place as part of taking a holistic approach to ensuring an efficient and streamlined management structure, in consultation with Heads of Service and above, so that decisions can be taken quickly and effectively. Corporate services across directorates are being reviewed to ensure that they are provided centrally whereover possible, to reduce duplication.

 

n)  The Committee requested that engagement should be carried out with Scrutiny on the ongoing development of the cross-cutting savings and their potential implications for Council services (with information shared on the current implementation and delivery schedule), and sought assurance that there would be a much closer level of engagement with the Scrutiny Committees as part of the development process for the next 2026/27 Council budget proposals. It was explained that a great deal of learning had been taken from the 2025/26 budget development process, particularly in relation to the timetable – so more work will be done for the 2026/27 budget to enable better engagement with Scrutiny at an earlier stage. It will be possible to bring further details on the development of the cross-cutting savings proposals to Scrutiny from March, with the associated implementation delivery planning information. Equality Impact Assessments in relation to delivery, and the associated delivery consultations, should start to take place from April.

 

o)  The Committee noted that, in addition to the cross-cutting savings taken to public consultation, proposed new savings and efficiencies had been put forward by each directorate – though these had been identified as not requiring public consultation. The Committee considered that a number of these new savings proposals within directorates would have an impact on current service users and their future experience of services, and that these impacts should be brought to Scrutiny for consideration.

 

The Chair thanked the Leader of the Council, the Executive Member for Finance and Resources, the Chief Executive, the Interim Corporate Director for Finance and Resources, and the Strategic Director of Human Resources and Equality, Diversity and Inclusion for attending the meeting to present the report and answer the Committee’s questions.

 

Resolved:

 

1)  That the Committee notes the assurance provided by the Leader of the Council that the budget setting process will be reviewed and that the 2026/27 budget will commence earlier in the municipal year. 

 

2)  That the Committee recommends that as part of the review of the budget setting process, consideration is given as to how Scrutiny can be involved in a meaningful way in accordance with best practice; that the process commences earlier in the municipal year; and that the public consultation is longer, commences earlier, and avoids the Christmas and new year period to maximise engagement. 

 

3)  That the Committee recommends future consultations are more specific on what the proposals mean for residents, and that more proactive work is done to reach out to communities. 

 

4)  That a timetable for budget implementation is provided to the Committee which outlines aspects such as staff consultation, completion of Equality Impact Assessments, updates made to the risk register, and RAG ratings for the proposals, for example.

33.

Work Programme pdf icon PDF 118 KB

Report of the Statutory Scrutiny Officer

Additional documents:

Minutes:

The Chair presented the Committee’s current Work Programme for the 2024/25 municipal year. There was one amendment proposed, with the Committee requesting an item on the Transformation Delivery Plans for its March meeting.

 

The Committee noted the Work Programme.