To receive apologies for absence.

Apologies had been received from: Councillor Jenny Bartlett (Scrutiny Management Board Member), Councillor Graham Biggs (Cabinet Member Economy and Growth), Councillor Harry Bramer (Cabinet Member Community Services and Assets), Councillor Pauline Crockett (Scrutiny Management Board Member), Hilary Hall (Corporate Director Community Wellbeing), Councillor Jonathon Lester (Cabinet Member Corporate Strategy and Budget) and Tina Russell (Corporate Director Children and Young People.

To receive details of members nominated to attend the meeting in place of a member of the board.

The named substitutes were:

-        Councillor David Hitchiner for Councillor Pauline Crockett

-        Rachel Gillott (Service Director, Safeguarding and Family Support), for Tina Russell (Corporate Director Children and Young People).

-        Hayley Doyle (Service Director All Age Commissioning) for Hilary Hall (Corporate Director Directo Community Wellbeing).

To receive declarations of interests from members of the board in respect of items on the agenda.

No declarations of interest were made.

To receive the minutes of the meeting held on 16 December 2024.

The minutes of the previous meeting were received.

Resolved: That the minutes of the meeting held on 16 December 2024 be confirmed as a correct record and be signed by the Chairperson.

To receive any written questions from members of the public.

One supplementary question had been received by the committee and is published, along with a response, at Appendix 1 of the minutes

To receive any written questions from councillors.

No questions had been received from members of the council.

To seek the views of the Scrutiny Management Board on the draft revenue budget proposals for 2025/26.

The Cabinet Member Finance and Corporate Services provided an overview of the report, the key points are detailed below:

The budget had initially been set at £223.4 million with a £2 million funding gap, assuming a 3.99% council tax increase.

On November 28, 2024, the central government announced that rural support grants (previously allocated to Herefordshire) were being discontinued and replaced with:

·       The Recovery Fund

·       The Social Care Grant

·       The Children's Services Prevention Grant

On December 18, 2024, the provisional settlement had resulted in a net loss of £7.1 million in government grants, leaving a £6.76 million final deficit.

To balance the budget outside of the central core funding available, the council:

·       Used Extended Producer Responsibility (EPR) funding (a £1.1 billion government fund).

·       Scaled back growth programmes within directorates by £1.4 million.

·       Allocated £1.2 million from the Hereford Enterprise Zone business rates.

The Cabinet Member Finance and Corporate Services explained that by taking the actions described the council had been able to achieve a balanced budget for 2024/25.

The discussion was opened up to the committee and the key points of the debate are detailed below:

1. The committee looked at income sources and questioned whether fees and charges were optimised to generate maximum revenue.

o   The Cabinet Member Finance and Corporate Services detailed how the council’s income was derived from multiple streams. Council tax brought in £146 million, business rates £40 million, government grants £29 million and various service fees and charges made up the remainder.

o   It was explained that quarterly monitoring reports tracked all income sources and highlighted variances over £250,000.

o   An internal audit on planning fees had found that past income targets were overestimated leading to unrealistic budget expectations

2. The committee requested clarity on whether other income streams faced similar overestimations.

o   The Cabinet Member Finance and Corporate Services stated that the council’s external auditors confirmed that the budget that had been set in the current financial year 2024/25 was achievable, measurable and appropriate.

3. The committee moved on to the Community Well-being budget where it noted there had been a 15.27% (£6.86 million) increase driven by: rising demand for adult social care services, a 50% increase in residential care placements, 23% increase in domiciliary care requests and rising care provider costs due to wage increases and inflation.

4. The committee noted key funding allocations of £448,000 to cover National Insurance increases, £7.36 million for inflationary cost pressures and an £11 million contingency fund for unexpected demand spikes.

5. The committee raised concerns that there appeared to be no clear long-term savings plan, unlike children's services, which had a multi-year savings target.

6. The committee asked how sustainable the increased funding was and whether there should be a dedicated strategy to reduce costs in adult social care?

o   The Cabinet Member Adults, health and Wellbeing explained that the council was investing in preventative care such as home adaptations, technology and voluntary services. It was also reviewing care provider contracts for cost efficiency. Stricter spending controls had been introduced and any  ...  view the full minutes text for item 113.

To seek the views of the Scrutiny Management Board on the draft capital investment budget and capital strategy proposals for 2025/26.

The Cabinet Member Finance and Corporate Services provided an overview of the capital investment report. The key points are detailed below:

The council's capital programme aligned with the council plan, covering infrastructure, public services, and strategic development projects. Details of the key projects and budget allocations were provided:

·       Western Bypass 1^st Phase (Southern Link Road) – £30 million allocated.

·       Children’s Play Area – £1 million to enhance child-friendly infrastructure.

·       IT Upgrades – Ensuring digital systems were updated.

·       Public Realm Contract Renewal – Funds set aside to make contracts more accessible to local contractors.

·       Care Homes and Building Improvements – Investment to upgrade facilities.

·       Flood Mitigation – Over £2 million to address long-standing flooding issues.

·       Road Resurfacing and Safety – £5 million allocated for resurfacing and another £5 million for infrastructure upgrades, including addressing three accident-prone “black spots.

·       School Transport Fleet and Planning Software – £50,000 for school route planning software and investments in new school transport.

·       Infrastructure Investment for Growth – Projects intended to support housing and business expansion.

It was explained that the council aimed to increase capital spending from around £80 million in the current year to £134 million next year.

The discussion was opened up to the committee, with key points of debate being listed below:

1. The committee raised concerns about the feasibility of such a rapid increase and highlighted historical delays in capital project execution.

2. Concerns were raised about the risk of overburdening project managers and external factors such as material costs and contractor availability.

o   The Cabinet Member Finance and Corporate Services stated that the administration was confident that the new leadership and staffing structures would be able to drive efficiency.

o   It was explained that previous increases in capital programme delivery had shown improvement, with the current year already surpassing the previous year’s total.

o   The programme had ambitious targets to drive economic growth and to address long-standing infrastructure deficits.

3. The committee noted that phase one of the Western Bypass had been allocated £40 million (£30 million in new funding + £10 million already spent) and asked whether phase one provided value on its own, or whether it was only justifiable as part of the full bypass.

4. The committee pointed out that the project would add £1.5 million per year in repayments over 40 years to the council’s revenue budget and was concerned about how this might impact the council’s financial flexibility and what would happen if the full bypass was never completed.

o   The Cabinet Member Finance and Corporate Services stated that the administration considered it a necessary first step in delivering long-term transport infrastructure. It was suggested that the bypass would be essential in diverting traffic away from Hereford’s city centre, supporting economic growth and new housing, and reducing congestion and pollution.

5. The committee acknowledged these points but countered that the cost of the project might become unsustainable and that there were question marks around secure funding for the full bypass.

6. Certain committee members suggested that alternative infrastructure solutions should be  ...  view the full minutes text for item 114.

To consider the work programme for the board.

(Papers to follow).

The committee was reminded that a work programme planning session had been scheduled for 23 January 2025, 10am.

Tuesday 11 March 2025, 2pm

Tuesday 11 March 2025, 2pm

Question from member of the public – Scrutiny Management Board, 14 January 2025