Agenda item

Reporting Person – Eugene Walker

The Leader of the Council, Councillor Barker, drew attention to the positive and constructive discussion on the Medium Term Financial Strategy (MTFS) which had taken place at the Overview and Scrutiny Committee on Monday, 11 September 2023.  Following points raised at the Committee, it was reiterated that Impact Assessments would take place on the proposals being put forward.

The Leader provided an update on the Council’s companies.  Due to the Council’s critical financial position, the Leader explained that the Council would not be able to support or subsidise the companies moving forward and the Council and the companies would need to take advice on how to deal with the challenges presented.  The Leader advised that the Council was in positive and supportive discussions with Government in respect of proposals that required borrowing support in order to get the best outcomes for the public purse and delivered the best value for money returns from the historic investments the Council had made.  It was noted that the Council would only proceed with additional investment and borrowing where it had Government support and funding.

The Leader reported that Business Cases were being prepared for Government in order to secure Government support in relation to completing, or partially completing, specific schemes that were already in delivery by companies owned by the Council when the Section 114 Notice was issued, primarily ThamesWey and Victoria Square Woking Limited.  It was noted that the Council had agreed to the deferral of loan repayments due from companies to the Council until 31 December 2023.  This decision had been taken following legal advice and was supported by Commissioners.

The Executive heard that significant progress had been made in confirming this approach with Government and was being progressed for the Victoria Square and the Sheerwater Redevelopments.  The Leader proposed an addendum to the MTFS that would be incorporated into the report when it was considered by Council at its meeting on 28 September 2023. The addendum would note that the Council’s Investment Programme accommodated investment where full Government funding and support existed to facilitate the completion of assets that were partially complete and to deliver best value for the public purse.  Attention was drawn to the capital planning principles contained in the July MTFS report, namely Principle C, which referred to items where following support from Government and Commissioners, resources were provided for specific schemes that were already in delivery when the Section 114 Notice was issued.  Therefore, investment in Victoria Square and ThamesWey would continue where it was in accordance with Principle C.  A further report would be brought back to the Executive to set out the actions being taken by Officers to implement those decisions.

Councillor Forster, Portfolio Holder for Key Projects, provided an update on the Sheerwater Regeneration Scheme and advised that the Council and ThamesWey were in negotiations with Government around drawing down previously approved money to complete the Red, Yellow and Copper phases.  Once negotiations had been completed and agreed, the Council would have a timescale on when those phases would be implemented.

Councillor Roberts, Portfolio Holder for Finance, introduced the report which set out the strategic financial approach that the Council needed to take to deliver the Improvement and Recovery Plan (IRP) and respond to the Section 114 Notice, whilst continuing to meet the Council’s statutory duties.  The Executive noted that the report included feedback from the recent resident engagement exercise, alongside next steps for public consultation on proposed changes to Council services.

The Portfolio Holder tabled a proposed amendment to recommendation (iv) to read “the Chief Executive, as Head of Paid Service, has the delegated authority to now proceed with the full implementation of changes to Council staffing structures following consultation on those structures.  These changes are contained in the MTFS Fit For The Future savings 3(A) Table of Annex 6 to the report”.  The Executive agreed the amended recommendation (iv) which would enable the Chief Executive, as Head of Paid Service, to complete the staffing restructures required.

Executive Members highlighted the proposed savings in their individual Portfolio areas, including the phased closure of Pool in the Park, removal of community grant funding, closure of public conveniences, and removal of funding to arts, cultural and sports development.  The Executive expressed much regret at the proposed savings contained in the MTFS whilst acknowledging that difficult decisions needed to be taken in order to put forward a balanced budget, which was a legal requirement.  The Council would need to demonstrate it had ‘its own house in order’ before making a case to Government for financial support to deal with the estimated Deficit of £1.2bn due to the Council’s historic investment strategy.  Subject to the agreement of Council on 28 September 2023, formal public and stakeholder/service user consultation would commence on 2 October 2023 for six weeks to understand the implications of the savings proposals.

RECOMMENDED to Council

That  (i)    the MTFS and embedded MTFP are an estimate of the Council’s current financial position at Q2, noting that the figures will change as further updating takes place;

          (ii)   it be noted that the Section 114 Deficit continues to be reviewed but is able to be used for conversations with Government to attain financial support and for other sundry purposes as referred in the report;

          (iii)  the Council consults on a number of the proposed savings contained within the MTFS, as set out in Annex 6 to the report; and

          (iv)  the Chief Executive, as Head of Paid Service, has the delegated authority to now proceed with the full implementation of changes to Council staffing structures following consultation on those structures.  These changes are contained in the MTFS Fit For The Future savings 3(A) Table of Annex 6 to the report.

Reason:   The decision is sought to ensure open and transparent governance in the financial affairs of the Council in balancing the 2024/25 Budget.