Transcript

Q. Are we ok to make a start? Ok, thank you everybody. I think there's still one person. Right, there's not been an accident on the motorway has there again? As far as we're aware, no? Ok, the recording's started, so welcome to today's meeting of Cheshire East Council's Finance Sub-Committee, being held at Westfields and Sandbacks. I'm Councillor Nick Manning and I'll be chairing this afternoon's meeting today. The meeting's been audio webcast and recorded and the recording will be uploaded onto the Council's website as soon as Patrick will after the meeting. I kind of remind everybody to use their microphone when speaking and to speak clearly into the microphone. So the audio is picked up in the broadcast. But I also ask for people to put their phones and their laptops on silent because when there's an all-member email sent out during a meeting it's like musical pings around the room. So yeah, I'll put them on silent for the duration of the meeting. And before we start the formal business, I'd like to welcome Adele Taylor, stand next to me, who's the Interim Director of Finance and Customer Services here at Cheshire East and it's your first meeting of the Finance Sub-Committee. Would you like to introduce yourself? Thank you, Chair. So as the Chair has said, I'm the Interim Section 151 for the Council and I've been here for not quite two months yet. I hope to be here to help you with your business. Thank you very much. Okay, so start the formal business of today's meeting. Do we have any apologies for absence? Yes, Chair. We have apologies from Councillor Reg Kane and Councillor Chris O'Leary and we have two substitute members present, Councillor Rod Fletcher and Councillor Stuart Gardiner. Thank you. Welcome to both of you and hope you find this afternoon's meeting informative and enjoyable. So Item 2, declarations of interest. Are there any disposable pecuniary interest or other registrable interest and non-registrable interest on any item of today's agenda that a member wishes to declare? Stuart. In the interest of openness, references made throughout the papers to the Cheshire Pension Fund and I am hopeful we'll have a recipient. I am also 30 years with the contributions into the Cheshire Pension Fund and hopefully women, not too much longer, able to draw upon them. I also, in the interest of openness, in my capacity as Chair of this subcommittee, I act as the council shareholder in relation to the wholly owned companies and we've got an item, item 7 on the part 1 of today's agenda where that is relevant. Thank you very much. No other declarations of interest? Oh, sorry, got over there. I was looking the other way. Janet. Yes, it's just really, it's that time of year where I suspect that Brown will have to just give us the generic extension of caring and interest as we spoke about the council tax and assumptions about the council tax. Okay, okay. Rob. Well, I'm a member of the county council. I'm a member of the county council of 24. Okay, thank you very much. And minutes of our previous meeting which took place on the 22nd of March and those minutes are on pages 5 to 12 of this afternoon's agenda pack. Does any member who was present at that meeting have any issues of accuracy? No, I'm not seeing any hands go up. Therefore, I'm happy to propose those minutes be approved as a correct record. Do I have a seconder? All those in favour who were present? One, two, three, four. Any against? Any abstentions? One, two, three, four. Thank you very much. Thank you. Speeding on to item 4, public speaking open session. We don't have any registered public speakers and as far as I'm aware, we've got no visiting members this afternoon. So we can quickly move on to the next item which is the first substantive item of our agenda item 5. It's the final out turn for 23/24 which starts on page 13 and runs to page 190 of this afternoon's agenda pack. There's a slight correction to the recommendations 3 and 4 where there's no change to the recommendations but the wording has been tidied up, I think that's the best way of describing it. They have been circulated before the meeting to all members and for any member of the public listening in who's got the original agenda pack in front of them on their computer, I will read out what the recommendations 3 and 4 now read. Recommendation 3, it's recommended to council that approval of the Children and Families Committee supplementary capital estimate over £1 million and capital environment of over £5 million in accordance with the financial procedures rules as detailed in Annex 1, Appendix 2, Section 4, Table 4. And the recommendation 4 is to recommend to council the approval of the Highways and Transport Committee supplementary capital estimate over £1 million as detailed in Annex 1, Appendix 6, Section 4, Table 4. And again I'm reading that out for anybody who's listening in this afternoon or listens to the recording and only has access to the original printed agenda. Okay, moving on to the item itself. Adele, would you like to introduce and pick out the salient points? Thank you, Chair. As stated, this is the report on the out term for financial year 23/24 and just to advise that this is a summary of performance for the whole council. All service committees, apart from one which is happening slightly later, have been through their individual areas of responsibility, but this gives a summary position for the full council. It includes information on our revenue spending, our reserves position and also our capital funding, financing and capital expenditure. So previously this committee has seen the financial forecast at financial reporting period 3 when it was anticipated that we would have an overspend of £13 million during the financial year. Due to a number of actions, the position has improved slightly so that now there's an overspend position of £8.5 million. That means that £8.5 million will be drawn down from the general fund reserve to fund that overspend in the year. As I say, an improvement on what was previously recorded. During 23/24, a net total of £29.3 million has been drawn down from our earmarked reserves and that has been applied to fund service expenditure. Just as a reminder, earmarked reserves are those reserves, they are one-off monies that are applied to specific tasks and areas that have been set aside for that purpose. So each of the service outlets won't atone forecast, take into account expenditure and funding, so you'll see that it is a net of any application of reserves. As I have already stated, this report also reports on capital expenditure and the capital expenditure is £136.9 million against a budget of £171 million. So that is an underspend of £34 million that will be slipped into 24, 25 and future years. Budgets will be re-profiled as part of the out-term reporting, but this is a level of slippage of 18% just by the committee. The report provides a significant amount of detailed information about each of the service committees and the expenditure, both on a revenue and a capital position. At this point, I will answer any more detailed questions on the report. Thank you very much Adele. So before we move to the recommendations and the discussion, have any members got any questions for Adele on matters of accuracy and information in detail on the report? Janet, then Rob. Is it just questions first? On page 43, I think it would be useful to know how much longer do we have to pay the CO5 payments? Did I know they are something we inherited before we came to the council? Probably it's 35 years or whether it's actually longer than that for us. In terms of... Kate, do you want to put that one up first? I will actually have to find that out because I'm not sure on the year that the CO5 payment is, but I'll try and find that out for you. Okay. So you're going to provide a written response. Could you copy the rest of the committee into that response? Thank you. Rob? Yes, thank you, Chair. Please correct me if I'm asking the wrong question at the wrong time because I'm a late son to this committee. What concerns me is that the 31st of March, the reserves, December 5.6 million, they are coming to the end of June, but as she goes into January, it doesn't give you any information of how well we're doing between the 31st of March and what will be the 30th of June. And there's a lot of comments in the media today about an independent company that said all political parties are not going to provide much money for the council in future years. So I do worry if... Is it possible to give someone a estimate of what our reserves do stand at this moment in time? We'll say nearly three months has elapsed since we were down to 5.6 million. I think that may have been better asked under the next item, but if it does, the quarter only ends at the end of this week, doesn't it? So our reserves position will be after all of our expenditure and our income during the financial year. So we wouldn't be using up our reserves during this first quarter. So the reserves are the position after we take into account our forecasted income and expenditure over the year. So we wouldn't just look at it at the end of the year. So it's the difference between something being a cash flow item and something being, so in other words, how does our cash work as opposed to the reserves, which is the position at the end of the year after you take into account, we work on the course position and not on cash basis. In terms of the forecasting, in terms of forecasting for this year, the chair was correct. We are still in the first reporting period that we were the first in account, which is the first quarter. And we will be bringing that to September committee. Stuart? So throughout this report, we see the reference to this is a new grant against a number of items. It doesn't tell us whether or not that is a one off payment or whether it will be applied then. And also, their prison appeared to be, and I've read the report throughout, didn't appear to be any single figure that shows how much additional income we received in the accounting period by way of a new ongoing grant. So you are the individual ones are there. And I'm sure that I could go and count them or add them all up in the calculator. I would expect it in an annual review because we're talking about substantial amounts of money. I would expect that to say that in addition to our hand expenditure, we were receiving a single piece of this amount in terms of. So you want to know how many fixed one off that occurred and ended in twenty three, twenty four. And how much are ongoing or recurring beyond the first day. There's that. But there's also the element of what was the total we received from government in terms of new grants. I think to say that we would have new grants and our grants. And it's also you've mentioned new grants that could be both capital and revenue grants. I wouldn't expect I personally have never seen that level of detail in a report like this. It's something that members are interested in. We can look at how we can explain that in future. But our funding, we will budget at the beginning of the year with the grants that we know about. If it's a new grant, a brand new grant during the year, then we would always bring a supplementary budget estimate because we have to do that. However, I can look at how we can describe that in future. I understand. I understand the process, although I'm visiting. But what I don't what I'm not seeing is the fact that if it's a new grant, one assumes it's not something that we are anticipating. And so therefore, it would be in terms of how much money are we spending as a council, which we are using our own money for? How much money are we spending? For instance, there has been money for a number of items. And it says in the detailed explanation, this is a new grant. Therefore, we are receiving additional monies above that, which we have anticipated in the beginning. This is a retrospective. We would be we are aware of those facts at the time the retrospective is prepared. We are not prepared or aware of it at the time the budget is set. And that's what I'm looking for is where. So we know, for instance, that there's a loan to spend in certain departments. Stuart, this is a look back on twenty three, twenty four. So we know what we don't know, what whichever government is in power going forward, what grants and how much and what, whether they're capital and what restrictions are they're going to they're going to make to various council. This is a look back on the picture that I understand. Yeah. So what? So let's be clear what what we can ask Adele to provide. Are you asking us to provide a breakdown of what grants we received during the last year from central government? Because we don't get anything anywhere else now. And of those grants, an indicator of whether they're likely to be recurring or whether it was one. Yeah. Is that feasible? We can try to do that. But what I do need to advise the committee is we do get hundreds of grants, some very small and very large. But also, just as a reminder, often if it is a new grant, it is a new burden as well. So although we it's very likely we're having responsibilities with those as well, I can take that away. And I'll provide a written response to check that away. Maybe some of it may not be done right to the grant. A broader picture will be acceptable. I mean, obviously there isn't a new responsibility. A, is it a new responsibility if it's only going to happen for 12 months or is it something ongoing which you can put a budget for it? And if it's not, also the second question is, if it costs £10 and we're only giving £2.50, quite clearly there is an implication for the council in terms of having to pick up resources. OK, thank you. Janet? Yeah, I'm just thinking clarity because actually I had something which I think is a lot similar to what's in the next bit. And that was looking for, if you look at the tables that you've given each of those indices within the documentary document, it is very clear that under each of those, each of our departments have received quite a number of government grants. And I was looking at particular economic growth, for example. So lots of things coming in which I would see as more or less. So different phases of the harmonisation grants and in terms of those kinds of elements. All I was looking for, but I'm quite happy to have the details as well, is an annual summary of all those grants received from government that we have not anticipated in the preceding MPFS. Because for me that's where the differentiation needs to be made between government grants, or do you get any other form of income that was unexpected, versus the Cheshire East revenue capital spend that we have anticipated. You are a submachine. And we must be aware, you referred to economy and growth, which Janet and myself sit upon. We received energy efficiency grants, they come straight in and go straight back out again. Because they are paid to registered social landlord, housing association, registered providers I think the current label they have is, to improve the energy efficiency of their most inefficient properties. So some grants will come in and they will go straight out through one door and out the other. I'm just conscious of the fact that it's, and I'll make no apology, we are about to embark on a transformation programme, well actually we have embarked, and I know there's a considerable amount of additional workload in that, ensuring we maximise value for money. So I want to make sure, A, we respond to the spirit of your question, but I don't want it to get in the way of other more urgent work. So we'll take that away and we'll hopefully provide some information that will provide you with some reassurance. Okay. Any more questions before we move to the resolutions? Lada? Under the adults and half. Put your mic on Lada. Under the adults and half, on page 31, it's got on the second paragraph, late unanticipated charges have also affected buying position, including recharging for agents and staff, and then white-off of uncollected income. Do we know how much that is? And I think there's the same wording for children and families as well. I would hope so. Adele, do you want to pick that up? So in terms of adults and health, there was a write-off of some old uncollectable direct payment. We claimed it was circa $200,000, but that would be after they have gone through every single part of the debt recovery process. It's usually linked to perhaps where a client has passed away or the estate not having sufficient funds to enable us to claim against. The level of debt, as I say, we only write it off of the stage. It becomes uncollectable. And obviously what we do do is, like all businesses, we set aside a bad debt provision, because we recognise that whenever you raise income, you're not going to receive 100% of it. And in terms of children and families, I haven't got a number in the family, but I do have numbers for adults. Okay. Jenna? Can I just clarify, because in terms of adult social care debt, we actually account also for those monies that we are accruing, but we'll be able to then claim back on these things. So I've got the exact term for it, but it is money sort of waiting to be claimed, but we just can't claim it. Just as though it's called deferred payments. Okay. If there's no more questions, we'll move to the recommendations. There, that's set out on page 14 and 15. I'm happy to propose those to the committee. Do I have a seconder? Lonta, thank you very much. Does anybody wish to speak on those specific recommendations? Again, it is a look back. I know a lot of it's for information, but it's key information, and it's pulling together all of the budget holding services committees of the council into a single report in place. So it is an important, and it's part of our council, because after today, this, I think if I read the report right, it will go to Audit and Governance for their meeting at the end of September. Thank you, Chair. I think Audit and Governance may have had a sneak preview due to the timing of the, or the deferred timing of this committee. It was simply due to the cycle. So they've already had sight of it. Thanks for that clarification. Okay, does anybody wish to speak on the recommendations? Janet. I'll just look you down the room. Yeah, thank you. So, first of all, it's a difficult read, but we have come through in a balanced position, in all real terms. But it's important to recognise that underspends, say, for example, 4.5 million in corporate policy committee, economy growth of 3.6, economy, sorry, environmental communities of 3.6. Whilst we are always grateful for savings, that has to be set against what has been lost, as it were. And there is an awful lot of that, and it's related to capacity, the holding of vacancies, as well as other things that we would normally do, as part of our business as usual, but have not. So whilst it has helped the budget position, it's not something that's sustainable in the long term. So we just need to keep an eye on that. And in terms of the DSG, it's encouraging to see that it's less than it was expected to be, but it is still a very large number, it's still 58.6 million, and there is still a lot more work to be done about that. So it's just really, this is the retrospective look that sets the scene for the next agenda item. So I'm just sort of making it very clear that we take this in the spirit as intended, we learn from it in order to sort out our planning going forward. So those are the main things, underspends are not necessarily a good thing. Thank you. Yeah, points that were also made at other services at the economy and gold committee. Any other questions? Just do it. So being a sub committee, I obviously was leaving a paste to get through, but I did read the committee, and I found that there are two things. Firstly, it is a long bleed, and there are lots of questions I could ask, but I'm conscious that we haven't got all night, as it were. And so I will keep those for another day. But I do feel that as a committee, some of the problems that we were experiencing the last year, which has become to like earlier in the process, and perhaps that is something that we can learn. If all we're doing is looking at this and thinking, yeah, that was last year, close the book, then actually we're not doing our job properly, because what we should be doing is learning from mistakes. Or sometimes they're not mistakes, they're just learning that circumstances happen, and we need to be able to respond to them, and actually work the best we can, or the council, or the leadership that we work in, by council and the membership of the council. But I also feel that there was a reference on a number of occasions to things that clearly we as a subcommittee need to be mindful of, that we may not actually have a complete understanding or recognition of them. And particularly with regards to the situation around the council's assets, and how we manage those. And even a reference saying that the council should be training people well. I asked my colleague, my left, and she tells me that she doesn't recall having any training about asset management and associates. So if we're being asked to make a decision about the council's assets and how we, and our investment, we should have some understanding about what we are doing. I would urge that amongst the work programme that we'll do later, there is some capacity put into that to facilitate learning for the standing members, but also open to any potential understander of the substitute, so that they can learn about it. But I'm also not convinced that my decision to vote against the NTFS at the budget council in England was a wrong one. So thank you very much for the report. Right. I'll only respond to your first point as chair, in the fact that all organisations the size of Caesarese, we provide 400, 500 services, we have a revenue budget of somewhere around this year, 370 million pound plus. Yet you're always learning, and there are always going to be external factors and shocks to the system that haven't been foreseen, or the severity of which haven't been foreseen. What I can assure you is that, and again, I think this committee has played a role in that, and you've echoed comments that have been made on previous afternoons in this subcommittee, that a far more robust reporting mechanism is in place. And what I'm pleased to say is, as well as receiving information of how much variance to a budget there is, and the reasons why there is a variance, the most key question that this committee always wants to know the answer is, what's been done about it to put it back on track? And that's, we'll see as we progress through the year, that's in place and it's already, we've got the RAV rating that's gone through the various service committees. So there has been a learning experience over the last year. But the situation is very difficult, and again, I know we're in Purde, and I won't make any political point, but it is clear that whoever holds the key to number 10 Downing Street on Friday the 5th of July, if it's all settled overnight, has a major issue regarding the funding of things such as adult social care, SEND, the DFG, and indeed the whole way that local government is funded. Now I don't think they'll be all resolved in the first week of any new government, but I would have thought that hopefully enough members will be elected to Parliament who've had experience in local government to inform that discussion going forward in that other place. But yes, you're right, and I know Adele's worked very hard on, and again, it's a 360 degree process. It's not just up and down, it's all around, and a lot of budgets, different teams, different departments are involved. Again, that's especially the case with external partners as well. What do we pay for and what does the NHS pay for regarding adult social care, is a perennial thorn issue over continuing healthcare funding. But we are where we are. The recommendations are before us, they've been moved and seconded. Stuart, you've got another question? This was a point of clarification that I should have asked first. We're using the phraseology of 'consider a prune and a note'. I don't understand what the prune and note means. It raises before Mr Brown, recognizing that I'm not quite sure what to consider means. You've already done that by reading it hopefully. I just think it's a little bit loose and that it could be misconstrued as I may have. I've considered it and therefore I agree with everything in it, and that's what worries me. From my mind in the context of this report, consider is to consider and review if there are any clarifications that you wish to have at this committee. It's your opportunity to scrutinise, consider and ask questions. That is all that is meant by consideration. It's really important as a committee you have the opportunity to review, ask questions. As ever, and it doesn't matter where I work, I would say the same thing, if at any point even after this committee meeting you can find something you need. If you wanted to ask a personal question, that's all we as officers are here for as well. That's what's meant by considering this and in this context. Thank you for the clarification. OK, so we've got the recommendations set out on pages 14 and 15 as corrected with the supplementary information. All those in favour, please raise your hand. One, two, three, four, five. Any against? One against. Any abstentions? Two. Two. Thank you, that's clearly carried. Thank you very much. We now move on to item six, which is the medium term financial strategy assumptions and reporting cycle for 2024/25 to 28/29. This starts on page 191 on the agenda pack and runs through to page 242. Again, I'd ask Adele Taylor to introduce the item. Thank you, Chair. So the report in front of you is a really important starting point for consideration of our medium term financial strategy for this year and the development of that strategy in terms of our financial sustainability as the Council. What this report does is it confirms the baseline assumptions for the net revenue expenditure and our core funding. So this confirms those that were agreed at full Council and approved at full Council in February 2024. As happens, there are some minor amendments to those that are proposed in the tables and also indications of some scenarios of potential other changes in terms of the medium term financial strategy. But as I say, this is the starting point for the work that we need to do, really important work for the Council over the coming months. If you see the recommendations, it's about ensuring that you as members of this committee are part of the development of what we need to do to ensure that we have a balanced budget and including in there is a setting up of a finance subcommittee assumptions working group, which I believe that you've had before. That's an opportunity to review the current assumptions, test them, challenge them, ask any questions with an aim to feeding back to September committee meeting. What I would also want to use that as is an opportunity to discuss with that working group how we can present information in a better, more understandable way so that we can ensure that all Councillors and all residents are able to understand the field reports. So it's a really important opportunity to do so. We've provided indicative savings targets and budget envelopes for each committee and that's shown in Table 7 and also in Appendix B. I'm really clear that these are indicative budget envelopes, in other words, cash limits, because that's on the basis of what we know right now. But as you can see from the combined budget setting and transformation timeline that is set out in Appendix C, this ensures that what we're doing is we are running together the processes we are doing at the moment, which is around transforming the organisation and ensuring that mix really closely and together with the budget setting process. So in other words, if transformation came out with savings that were perhaps at a slightly different proportion and that we deliver more in one area but still transform and to make the council more efficient and deliver all the priorities that you have, that's why they're indicative cash envelopes at this point in time rather than hard and fast targets. Included in this report as well, really importantly, the starting point for the NTFS is understanding what's going on in 24/25 in terms of the budget change items that were agreed as part of your budget setting in February and that's been set out in Appendix D. That has been shared with all the service committees. It's brag rated, so blue, red, amber and green. So for those not used to the blue, that's actually completed and items that are done and are dealt with. And those we have already agreed that we would present those at each of the service committees each time so that members have the opportunity to test and challenge those out. We have also indicated that given that the first financial reporting period is very close to the end of quarter two, that we would also give a direction of travel at that point in time as well because it's really important that we get information to you in a timely way to do something about. There are, as I say, a number of scenarios that have been presented, so tables four. Table four is the known items. There are some small changes in here. One of them is around the pay pressure on 24/25 from the pay award. This was agreed nationally, so actually it just causes a pressure throughout the life of the NTSB. What we also have is the second home's additional 100% council tax that have not been included and those two that should cancel each other out. I've also included for the future, given the risks that this council is facing and given the low level of reserves, we currently don't have a contingency budget and that is something I'm very used to ensuring that we have in other authorities. The reason for that is sometimes there will be things that come along during the year that are completely unexpected. If you don't have strong reserves, then actually it doesn't allow you the ability to deal with those. There would be that contingency budget as part of our medium term financial strategy, clear guidelines about how that could be allocated so it isn't just something that you can just spend with meeting the clear rules and engagement around that. I've also built in, in terms of medium term financial strategy, there had been some confusion over the numbers. We talk about 100 million over four years, but that was because it included the replenishment of general reserves. What I've now done in table four is actually just shown that over the life of the medium term financial strategy so that actually the numbers add up and we are talking about one single number. We've also added in the risk of unachievable budget savings. Given the size of budget savings that we have to deliver, it is prudent to add in the potential around non-delivery. Okay, I've said this is at the start of the MTFS process, so as we refine the medium term financial strategy and we refine the options, those numbers may be able to be reduced because if the risks are lower because there are things that can definitely happen, then you may not need or require those. But at this stage, it's really important to have that included in our summary. Then we just have the other two scenarios. So scenario B is a slightly pre-funding case. That just takes some of the intelligence that we're gathering at the moment that may be, that there may be some small additional funding that we could expect, but again, being prudent at the moment, we wouldn't include it until there was more certainty given the period we're in at the moment and there will be a new government. Again, that will be refined during the process. And then the scenario C, which is just around the pay inflation request that's currently out nationally. Again, these scenarios will be developed through the process. And on a final note, the other area that I want to make sure that we consider as a committee is actually being really clear what our medium term financial strategy is. So in other words, how do we prioritise our resources? It's included in your current NTFS, but what I'd like to do through that working group is ensure that the assumptions that you're looking at, we can set out a number of principles at the start, almost like an executive summary. And again, I would like to use that committee as an opportunity to test that out with that working committee. So when we bring these papers back, there is more clarity over that. Okay, there's quite a lot to digest there. Any questions? Right, sir? What's so much a question, but anyone that's seen this diagram, that's in the pack. What page in the pack is it on? It is on appendix C, I believe. What's the page? Page 213. 213? Oh yeah, the most coloured. It's really useful and I would advise sharing that with the rest of your group as well. I know I'm sharing this with the independent group, but it helps anyone to see what needs to be done there. Thanks. Thank you for doing that. Okay, thanks for that. Yes, it's quite a useful document. Any questions for now? I'll change that at first then Stuart. I'm not quite sure if it's a question or not or an observation. I'm not quite sure how we're going to handle, or how you're going to handle the data articles. But it seems to me that it sort of sits in two areas. 2425, how we manage the immediate financial elements for this coming financial year. And obviously get that process in motion. But also there's the longer term elements that we're going to have to deal with. We also have to deal with the fact that we've got something to transfer the motion around to do with 528 forwards. I'm not quite sure which is which, but very close together. And in that context, the other element around this is that we're going to concentrate on 2425 first of all. I am a little bit concerned about the RAG rating. So first of all, I'll say it again, delighted to see the RAG rating is a really important tool. There are no reds other than something around the Social Work Bank in Children's. And there are elements there when I sat at Children's Committee which were raising red flags to me. So I just wanted to ask, what... Can you crystallise any questions? Yeah, what constraints, what safeguards are we putting on these assessments? So these will become a constraint for the directorates. Who is going to be double checking that for robustness? Because there seems to be a mismatch between what we're debating at Children's Committee and then to see only that one red flag rating on that particular element in these papers as raising red flags. Right, well there's two questions there I think. Firstly is the here and now for 2425, then there's the longer term. And I think Adele started to explore that towards the end of the presentation about the strategy going forward. And then there's a second question about what you see is a difference between the RAG rating you've seen at a Service Committee and what you've seen here this afternoon. Right, okay Adele do you want to pick those up? Thank you, I'm going to take them in reverse order if that's okay because it's probably easier to answer them that way. So in terms of the checking that we do on the RAG ratings, so we do... So these are only on the budget changes so obviously it is only part of the picture. So it may well be that there are other pressures within the rest of the service. So that's the slight, because you're only seeing the budget changes in this paper. As a first off I think it will start to make more sense once they come with the whole of the financial reporting period as well. Because that will show the businesses usually if I can put it that way. However, on top of that in terms of the ratings you are correct, these are the ratings that are applied by the Directorates themselves but they are challenged. So these are challenged through our meeting that is called CBERT, which is basically Emergency Budget Response Meetings. What we are checking is there's a whole series of information that sits behind this, which is around the original high level business case. And the steps that people said they had to go through to deliver the savings that were in front of us. So something is only able to be green if those steps are on track, if it's delivering as expected, it's sticking to time. Red is where something is either completely off track or a decision that should be taken hasn't been taken yet. Or if in doing the due diligence in the work we've been doing we find often some of these savings are about changing behaviours or changing things to happen. And if we're not seeing the outcome that we expect. I suppose in one way I usually focus on the ambers as much as anybody else because they can either go green or red. The reds, we've set out a clear expectation as an officer group that if it is red that alternative savings need to be found within the Directorates to cover those. And in fact we went through a number of those, we in fact had that meeting this morning. And so we went through a number of those alternatives this morning at that meeting, we do that on a weekly basis. And we are asking Directorates to do that but the ambers are the ones where we will focus efforts on what are the steps and why are things not happening in the order that they should do. So the challenge, the Directorates come up with this but the challenge is around as much as anything else. It's not the numbers themselves but actually the activity that sits behind it. So that is done corporate wide. So that's the answer to that question. In terms of 24/25 that is very much part of our budget management and I'm really clear we don't monitor budgets, we manage budgets. And it's a piece of language I think everybody is getting used to after eight weeks of me here. I don't ever talk about monitoring things, we have to manage things. One of the first exercises that we are undertaking is in fact a line by line review of what happened in 23/24 and in fact the year before. So we've got detailed information at account and cost centre level for every single budget across the Council that we are going through at a Directorate level. Which is understanding and picking up the point from the previous report is if we can identify early anything that happened last year are we seeing the same trends this year and therefore what does that mean for 24/25. So that's really key and really crucial and that activity is happening again as we speak and will form part of the first financial reporting period will be again what can we identify early so that we shouldn't end up with a big overs and unders. Or if we do we recognise them very early in the year. That will also focus on any activity that we need to do to bring back our budgets on track, I'm really clear we have a cash limited budget therefore how do we learn to live within our means. So that budget management process is crucial in that. The focus has got to be on delivery because if we don't there isn't an alternative. You know we've got to find those alternatives, we've got to manage within our cash limited budget. And that longer term piece we also, I'm looking at the way in which we're managing our financial response in terms of making sure that when we make financial judgements when we take action on our budget that we understand both the short term implications and the longer term implications. So for example, vacancies, if we've got a vacancy and I mentioned this at the policy committee you might get a short term cash saving from not recruiting to a post but what does that mean in terms of activity, what does it mean for the longer term. So trying to actually think about the longer term financial implications and not just the short term. Ok, right and then let me turn you back on Brian. Following on from Janet's observations, so against the RAG status would it be useful to have a risk analysis against each one of the RAG statuses because for me there's an awful lot of numbers against each committee and I don't know if that's going from amber merging onto green or amber merging onto green. And the risk analysis against it would help to say it's an amber but it's ok, it will probably go to green at some stage, if it's an amber it's red or it's at a five risk, you know it is going to go into red and we need to do something about it. So for me it would be useful to have a risk analysis against each one. So the direction of travel isn't it, like an arrow going up and going towards green or going downwards, it's sliding towards the RAG. Ok Adele. I'm happy to pick that up absolutely, direction of travel but also we can also look at the wording on some of these as well. The other thing, you're absolutely correct, what we haven't done is we haven't provided a key for what red and green means so I'll make sure that's added in as well so happy to dig up. That's useful suggestion. Stuart then... Firstly, in regards to what Brian just said, we used to have that in one of the little bit of RAG rating elsewhere and in the several headons we've had... Can you speak up on this Stuart or bring the microphone... Sorry sorry, we used to have an up or a down arrow next to the RAG rating so we needed to know which way we were going. I have two concerns. First one is I'm a bit concerned that we might be, I know we've got to make these savings but given that I was at an adult committee last night that said that we had a situation whereby we've got increasing demand, increasing number of complex needs, increasing pressures in terms of the charge-out from RAG commission services that the reductions being proposed appear to me to be very extreme and I'm not convinced that they are achievable and I hope that they are. I'm quietly confident in what you just said that things are in place to ensure that we know whether or not those are achievable. But my other concern is one of democracy and that is that we're all elected here to buy people out there and if things go wrong it's us that takes the can. I have no problem with taking the can for decisions I've made. I have a problem with taking the can for decisions other people have made. And therefore I'm a former local government officer and many years ago I was involved in a process where the council I worked for did dire financial restraints and the councilors there listed every service that was delivered in the council. And they put at the top of the list all those statutory things that they could determine that they had to do and then everything that was discretionary then went into a new list and they had to, from one to however many who were on the list, determine what were their priorities as councilors. And that those were the services that we delivered. So I will use an example, it's a very extreme example and it is only for the purpose of identifying. We fill potholes and it costs a lot of money and we cut the grass and I know from a couple of them, now they're both in the same directory or they're both in place. Who decides whether we cut the grass or we fill the potholes? I believe that decision should be taken by the councilors and not by officers. And so I'd like clarification of the process that we do to ensure that there is a democratic input into the decision making. First of all, there was one phrase you didn't mention at all, so in the country, value for money. Just because a service is a statutory service doesn't mean it should be subjected to vigorous value for money assessment. Also, and I speak as well as a former 30 year local government officer, a lot of statutory services are delivered intertwined, I think is the best way, with services that go above and beyond. We go above and beyond our statutory duty, for instance, to homeless people who do not have a need under the homeless legislation. We go above and beyond that, especially during hard weather. To un-pay that would probably cost more than not to. So it's not a linear process, but you're right, but one thing you didn't mention is just because it's a statutory service doesn't mean we shouldn't be seeking to optimise value for money where the council tax pay it. And that is also our duty. I don't disagree with you. I know you don't disagree with me, but you didn't mention it, so of course I would. Adele, do you want to come back? Absolutely. The way we allocate resources is through the corporate priorities. So, in other words, the MTFS, the medium term, sorry, apologies for using that please, the medium term financial strategy and the medium term financial plan are all about delivering the corporate priorities of the council. And so our funding should follow those lines. So in terms of, but again I come back to the value for money I was going to pick up as well, but sometimes it's about how we do it. So in terms of, you know, as members you're setting out the policy of what you're expecting to happen, but we also have to live within our means because that's your other fiscal responsibility is not to run out of money. So it's about ensuring that we fit our, the resources you've got to the priorities that you have and that you do make those choices. And what we need to do in the presentation over the short, medium and long term is present to you the cost of your wants and your priorities. Absolutely though it has to be fundamental to all this is your best value duty. It's basic and your best value duty is as members and as a council we have a best value duty. So it is ensuring that we are delivering things in a best value way. So again, there may be, you know, you could have mentioned adult social care, it's actually never run over very well because it's where I first started my financial career. There are ways and ways of delivering, and we need to ensure that we are delivering the requirements of the service but in a month money way. So what are the tools that we can use as a council to ensure that we deliver in the most efficient way possible, that we, whatever the service is, that we secure the funding that we need to, that we manage all the processes and that we should do everything from collecting the income that we should do. We talked earlier about the write off of debt, we should do everything we possibly can for example to cut that debt before we make that decision. So sometimes it's about the way we do things and the cost of the way we do things, it really matters but absolutely the NTFS is your delivery of your corporate hierarchy. Thank you chair, yes, 20 says that my understanding is that by March 2028 we have a potential forecast funding gap of £100 million. Now also looking at table 4, a new contingency budget, we hope to have £10 million in that by March 2028 and also a replaced general reserves from £5 million back up to £20 million. Well it was recommended £20 million some years ago, we've not been there for a very long time. So basically that's £25 million, is that £25 million included in the £100 million or is that extra? It's included, so that's why I've shown this table, so it shows that replenishment and the reserves, so they will be at the level that we need them to be at. Thank you. Okay, any more questions? I'll just say a bit of clarity on number 2 on the recommendations. The Finance Subcommittee, Subs and Working Group is an advisory body, therefore it's not subject to political proportionality, is that the right phrase, thank you. So if we do adopt that, we're looking for 4 volunteers, at least 4, there's not a cut off from the subcommittee to take part in that process, which I did last year for the first time and I felt it was quite a useful and good learning process as well. So I'm happy to propose the recommendations as set out on page 193. Do I have a seconder for that? Councillor Drake, thank you. Does anybody wish to comment or make any contribution regarding the specific recommendations? Oh, sorry Janet. I would like it limited please, I don't think it necessarily needs an amendment, but make it very clear that at this stage, when we approve the budget assumptions, they are the initial interim, not end of day assumptions and that they are subject to change throughout this process. I think both the chair and the girl are nodding vigorously about that, they are assumptions as at this point in time. And it is those that the working group will work with and obviously bring any changes to those assumptions to this corporate as well. And then again, you already put in 3 approved indicative savings, so it's just making sure that this is the very start of a technical process. Anybody else wish to comment before I ask for the vote? Sorry, are we entering into the debate here? Yes, sorry, I thought that you were making a, I said, it's been moved and set indeed and I'm asking for contribution to the debate and you spoke. Do you want to speak again? Sorry, yeah, I just was really talking because we haven't actually taken the vote. So in terms of the wider debate on this, in terms of how we take this forward, I hear exactly what was said about the value for money directly, that's always really, really important. One of the things that I think the public and the members always have difficulty with is that, particularly things like adult social care, children's care, and none of the services that we offer that have a statutory element. It is based on need and unfortunately there is always going to be that difference of perspective as to what people need in a statutory provision term and what they feel they absolutely need. And it's, what they want is not the same as what they need and it's stripping that down in ways that people will understand. And certainly in terms of the document that you have provided here, which is, sorry, closes. The indicative allocation of the budget envelope, so that's kind of the theme. Bear in mind, these are indicative and bear in mind that we went to adult social care last night, excuse me. There are some very, very big asks here and I think we need to be absolutely honest when we are doing this and we need to be honest with the public. This is a public meeting. There are going to be decisions here that are very painful and they will be ongoing. And I want to be sure that when we look at that chart that Councillor Anderson showed us, the timeline, that we are making it very clear to the public at regular intervals where we are going and why we are going in that direction. It is so important that we don't just present decisions to the public without them having been part of that journey as well. Fair points, good points. Anybody else want to speak regarding the specific recommendations? Okay, I'll ask us to move to the vote if there's no further contributions. All those in favour of the recommendations, please show. Any against? Any abstention? Thank you very much. Just on recommendation two, at least four members of the subcommittee. What I will say is we'll send an invite out to members of the subcommittee and it will come from your team, will it David? You can do it, yes. And it would be very helpful if you could give a date of the initial meeting when you send the invite out because it's no good for somebody volunteering if they are away on their holidays. So I was thinking if you could set a date and then invite invitations and we need a minimum of four, is that correct? It is, I didn't know if there was any possibility of volunteers today. Excellent. It's easy to take the names of those not volunteering. I think it's the two sorts actually. But again, we've volunteered and hopefully four of us... Well that's a fair point, if members are not here today, they can put their hands up. Fiona? Yes, I have to check. When we did this process last year, and I think it was useful because of the former section 1.1 because it talked through items, what might assist people by the amount of time of year is if we actually met on Teams. So I think it would be worthwhile to see if you can do something to discuss this holiday. That's allowable isn't it because it's needed guys? It's informal so it can be via Teams and then you can move it to an in-person later on year if that's more appropriate. That sounds good. So again, those two members who can't be present today, that's Councillor Kane and Councillor O'Leary isn't it? If they can be made aware as well. Thank you very much. Okay, thank you. Moving on to item 7. This starts on page 243 of the agenda pack. This is the draft pre-audited financial statement for my wholly owned companies for 2023/24 and an out-to-date update for 2023/24. Again, you're going to introduce this. Thank you, Chair. So in front of you, this report gives you the summarised position of the wholly owned companies' financial statements for the period up until the 31st of March 2024 and also gives you an indication of dates in relation to the approval process for those financial statements. And it also contains an overall financial performance picture for the company as well, showing for ASTB reserves increasing up to 2 million and for the wholly owned companies' net core contract spending around 45, just over 45 million. So as a reminder, these statements are presented to you, but obviously it's the responsibility of the boards to actually manage the financial statements. But the financial statements provide information about the financial performance that is useful to a wide range of interested parties, of which we clearly as shareholder are one of them. So what it gives you is it gives you an idea about what the services cost, where the money comes from and what significant events are during the year and what the company net worth is. You are not required to approve the pre-audit, so you're not pre-audit company statements. However, what this is, is it gives you an early indication of the key messages from those financial statements as part of the overall financial reporting for the group as shareholder. So I'm happy to take questions at this point. And the final outcome comes later in the year to us, doesn't it, each September? I think it's tensed into September, isn't it? The dates that have to be, that have to be finally published is orderable for the 31st of December. Right, so we're muted then. Okay, thank you very much. Any questions for Adele on this matter? No questions? Okay. Right, the recommendations are set out on page 244. It's an important piece of financial architecture, so even though we're noting it, it's an important part of our role as the shareholder to do so. I'm happy to propose that. Do we have a seconder? Councillor Brown. Does anybody wish to speak on the recommendations? Okay, I know we've got a member out of the room. Should I wait for that member to return or am I okay? Are we happy to receive the recommendation? All those in favour? Any against? And Councillor Wilson didn't vote. Okay, alright. So moving on to item 8, the appointments to working groups and polio companies. Moving on to item 8, appointments to working groups and the wholly owned companies. These have been circulated ahead of the meeting to us, so effectively they're populating the recommendations which are on page 255 and 256. Unless there's any errors on that or last minute changes, I as your chair am happy to propose those. You've all got them in front of you. We need one member for the extra care housing management board. I've been that nominee in the past. For the record, it's not the most onerous job. He hasn't met in the last three years. But I believe it may have some duties in the future regarding the replacement for the Beechmere. But we don't know yet. That may not be. Any speakers on this? All those in favour of those nominations? Any against? And thank you for everybody volunteering to carry on and take the role. Okay, moving on to the work programme. We've got the work programme in front of us. David or Adele, do you want to lead on this? David, do you want to break the run that Adele's had up to now? Well, just to introduce a bit of variety and to allow our new chief finance officer the opportunity to get to grips because there are a few matters that will need a little bit of timing up. As you're aware, the last meeting on the 22nd of March was the last meeting of both that chief financial officer and indeed the clock of the meeting of many years. So your forward plan does have a number of matters that I do need to pick up from the minutes of the last meeting. So if I could direct members attention to page six of the minutes for page six of this pack, which is in the minutes, you'll see that on page six there is reference in the minutes to an issue there relating to the final bullet point. Of the first thing a report in the first paragraph of council tax and business rates for June committee. And similarly, on page seven, there is on the resolution there at recommendation three, a suggestion of informal sessions for May and June resulting to a self-assessment and an action plan for CIPFA. There is also on page eight, and recommendation seven, a unanimous agreement with this committee to seek further information and briefing on all of the assets of the local authority by way of share holdings and companies. Now, I appreciate that a small matter of a general election has got in the way, members have been extremely busy and indeed officers as well and picking up the fact there is a new chief finance officer. Of course, we have not managed to comply with all of those. So if you look at page eight of those minutes and the work programme, you'll see there are five bullet points which captures into a degree the issues we've just been through. So the first point for your work programme is to decide out of those five bullet points which ones will need to move forward to your September committee. You have on that, so the first one is the CIPFA financial management code self-assessment. Now, again, your new CFO mad review on that. So I don't know if you want, and then for wholly owned companies is on this one, the finance subcommittee oversights of all the holdings, that should be put on the September work programme. There is something that is bullet pointed as budget oversight report, and then the final one which is council tax and business rates collection. So those are the matters that are extant from the previous minutes, so those are the first ones. Otherwise, on your work programme for September, which you will find it is page 267, your code update is on there, planning assumptions is back. Your first financial review, pension scheme, enterprise Cheshire and Warrington review, that is one of the companies which we retain an interest in. Your financial code, which I presume relates possibly to the CIPFA matter, but that is on for November, so if you're content for that. So it is just in relation to sort of, the only other issue is briefings from members, which was on the recommendation 7 of page 8. So that needs to be on your forward plan. OK, and where do you think it is appropriate to slot that maybe? Well, given that it's, I think there is a number of briefings that will be coming. Sorry, does anybody know how to adjust the air conditioning in here? I would have thought possibly for your September meeting, I appreciate the members of the business need, we now have the election and there's a number of people I understand canvassing at the moment. So we have the summer holiday period, so I think realistically it's probably not until September for the next series of briefings, if that's alright. Yeah, starting at the beginning of September. Is everybody comfortable with that? I think we'll all need a holiday. OK, anything else on the work programme? OK, I'll take a sense of the meeting, we're happy to note that, and sorry Stuart, as a visitor, don't give us lots of work and disappear. I just suggested earlier on, when we looked at item 5, that there might be some benefit in some briefing being given to members regarding the management of assets of the council when they are being asked. I think assets actually comes within the remit of the economy and growth committee, so I think we need to perhaps have a conversation whether it comes here or to economy and growth. It might be worth, in that case, the amendments of both committees being appropriately trained, because it was clear in the report that it says that the council had an obligation to ensure that when you were making decisions about what to do with your assets, particularly at the moment, it's not just your estate, it's also other assets, like investments, there was some training. Oh I see, sorry, I was thinking of tangible assets. Adele? So on your work programme we'll see that there is actually an item that picks up, so I was trying to find out if you've seen it, but it's around in January which is the MTFS strategy, so investment strategy, treasury management strategy, capital strategy and reserve strategy, so that should pick up all of those pieces before them or make sure that there is training. Yeah because I just think if you go to the meeting in January and you don't understand what you're being talked about. So what we'll make sure is that there is adequate training for members on all of that before the report's coming. Could it be open to all members please, because it's something I'd quite like to do. Mr Members can attend a briefing, go ahead. Okay, I think that's it, point well made to it and again assets are not just tangible, they're also financial instruments as well. Okay that's the work programme, no other quiz on that. Is it getting slightly less frozen in this room? I'm getting some thumbs up, it was very cold when we walked in. Right, an urgent decision, an urgent decision was required between meetings and it's set out on page 275. The decision's been taken and again I'd like to put on record thanks to Councillor Wilson for picking up the observer role at Obitas as well as answer at short notice. I think we're just asked to note this, so unless anybody specifically wants to speak on the matter or take a sense of the meeting and we're content to receive it. Thank you very much. Right, I've noted we've been going for an hour and a half, do you want a break after we go into part two or do you want to carry on straight through? Do you mind if we have a break after the exclusive? Yes, after we go into part two. Yes, after we go into part two, that's why I said that. Let's go outside and have a quick warm. Okay, well item 11 is exclusion of the press in public. I have to read this out of the baton. The remaining item on the agenda today contains exempt information and needs to be considered in private. I as chair therefore move that the press and public be excluded from the meeting during consideration of the following items, pursuant to section 100A4 of the Local Government Act 1972, on the grounds that they involve 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. I move that. Do I have a seconder? Councillor Wilson, all those in favour? Any against? Any abstentions? No, that is unanimously carried and we're now moving to part two. So it's just before four o'clock, can we all be back in our seats at five past four? Because I know people have other appointments and concerns.