Peterborough City Council budget debate: Opposition ask key questions

Members of the Joint Scrutiny Committees raised several questions about Phase One of the council’s budget at their meeting (17 November), before it was approved.

With the majority of councillors in the chamber at Sand Martin House listening to the presentation of Phase One of the budget from Cllr Andy Coles, Cabinet Member for Finance, they took the opportunity to scrutiny the proposed savings.

Members wanted to know specifically in which areas savings could be made, and in specifically targeted areas within Phase One of the budget, how those savings would or could be made.

Cllr Graham Casey asked: “Do we have any plans to reduce the £31m Capital repayment costs on things that we have bought in the past, and are there any items among those purchases that we could off-load to help cut-down the repayment costs which simply don’t seem to be going down, year on year?”

Peter Carpenter, Corporate Director of Resources replied: “The £31m is made up of two segments: half of it is minimum revenue provision which is repayment of Capital, half is interest.

“The number has stayed the same for the last few years because we have been repaying the debt, but we don’t generally repay debt before it is due to be paid because its mostly public loans work, and the penalty for early repayment is quite high.

“We do look to refinance or look at debt all the time, and obviously with the potential for rising interest rates in the next year or so, there are schemes where as long as the Capital programme is agreed, can forward-borrow for up to two years.”

Cllr Nicola Day asked: “The council has put in place a series of controls to closely manage and scrutinise expenditure and one of these controls is enhanced member governance structures with the introduction of a Financial Sustainability Working Group to ensure involvement and engagement from all political parties.

“Could we not also look at reforming and re-shaping the current governance structures that we have, so that when we face budget challenges in the future, we are more robust?”

Leader of the Council, Cllr Wayne Fitzgerald responded: “The Constitution and Ethics Committee will look at any proposals brought forward by any member about the governance structures that currently exist in the council.”

Parish Cllr June Bull asked: “Where are we with the N-Power loan status which Deloitte calculated at £20.4m at the end of the last fiscal year; has that loan call-in been factored into this budget?”

Mr Carpenter replied: “We actually took over the asset portfolio from N-Power on Friday of last week (12 November), so we have an asset manager now managing that on our behalf.

“We’re reviewing the whole asset portfolio the valuation of which is £20.3m and that is now a long-term loan for the council, converted from a short-term loan.

“As we have all the data from the full portfolio, we were only an investor before, but we’re now going through to see that everything is as it should be and where we can now make improvements.”

Cllr Nick Sandford said: “I was pleased to hear in his presentation Cllr Coles announce that we are having an extraordinary Full Council meeting in December as we all want to work together to try and find a way out, but we need to know how we got here in order for that to be effective.

“I’d like to repeat the question that I put to this council twelve months ago, which is, given the fact that we’ve been criticised for not focusing on our strategic objectives, what is there in this budget that is going to help us achieve our objective of getting to net zero carbon by 2030?”

Cllr Coles responded: “I think it is very important that the councillor bear in mind that the strategy is under review and that it will be coming back.

“It is also important to mention that the Financial Sustainability Working Group has that role of looking at what we come up with.

“You are absolutely right that we are following net zero and to introduce that; but you will also know that our primary aim is going to be to make sure we reach financial sustainability.

“Therefore, reaching net zero will be subsidiary to achieving financial sustainability.”

Cllr Oliver Sainsbury asked: “Social Care is obviously a big part of spending for the council and it brings huge pressures and demands.

“Do we know the full impact yet of the Prime Minister’s pledges on social care for clients and will there be a funding review?”

Peter Carpenter replied: “I was at a meeting on Friday where the Director of Finance for the Department of Levelling Up, Housing and Communities said of social care that there would be consultation starting in the summer on a new set of funding.

“However, if you’ve read what the Minister has said it’s unlikely to be as radical in terms of business rates as was mooted by the previous incumbent where councils would get up to 75%.

“In terms of social care, we haven’t seen very much detail yet.”

Cllr Nicola Day asked: “Core funding assumptions state that there is likely to be an increase to council tax based on 2.99%.

“We were waiting to hear from the spending review in October; do we know what the outcomes of that spending review have been?”

Mr Carpenter responded: “Yes, it is 2.99%. That was 1.99% originally for the general fund, and 1% for adults, so it is 2.99%”

Cllr Ed Murphy said: “I would like to know more about the selling off of assets, particularly the £50k from the hydrotherapy pool?

“Will you ensure that the user’s group and other disabled people are fully consulted and involved before any recommendation is brought to council to change that service?”

Mr Carpenter replied: “A lot of work has gone on with the hydrotherapy pool, and the £50k is our ongoing revenue costs.

“We have new people to take it over and so there will be continued community usage of that facility.

“There would be a minimum of 20 hours per week of community use of the pool, but we expect that to be far higher because many of the physiotherapists’ clients use the facility in the afternoon and in the evenings.

“I can absolutely assure you that the very committed and very effective friends’ group of St George’s have been engaged throughout the process and are watching anxiously to make sure we guarantee that community provision.”

Cllr Aasiyah Joseph asked: “Can I ask how close we are to getting full rental from Sand Martin House as I know at one point, we had a whole floor empty, and we have some of the lowest unit cost currently so what else can we cut?”

Mr Carpenter responded: “We have a contract now with the CITB until August of next year and they are looking to reduce their space at Sand Martin House, so we are talking with a number of other people about that space upstairs.

“We are also looking at rationalisation of all of our other buildings – one of the by-products of COVID is the fact that the way we work as an organisation is completely different now.

“So, we’re looking at what space we actually require going forward in this building, and how we interact with the public.

“From that, we will have a revised space requirement for all of our corporate buildings, and then look at who the best people and partners are who might want to come into these buildings.

“One of the limiting factors in that, of course, I think that everybody else is looking to downsize at the moment, so looking for partners is far more difficult than it was maybe a year ago.”

Cllr Chris Wiggin asked: “Has it been considered whether it would be better to have a one-phase budget, rather than a two-phase budget?

“The reason I ask this is because every year I’ve been on the council, we’ve got to Phase One of the budget, and there’ve been so many uncertainties from central government how are we supposed to set a budget?

“We don’t know at this point in the year what we’re getting from government, we don’t know what they’re going to change, what we’re allowed to do in terms of raising revenue.

“So, how can we be reasonably expected to scrutinise a lot of this information and data when we don’t have any of the answers and you don’t have any of the answers as Cabinet and Officers?”

Mr Carpenter responded: “I think that it’s important we retain a two-phase budget for a number of reasons.

“We know we’ve got a significant budget gap at the moment and we need to start to close that gap earlier so that we can implement them.

“I agree with what you are saying about lateness, we won’t have the local government settlement until probably 16 December and an assumption we’re making at the moment with that is actually it’s going to cover the increases that we’re going to need to do.

“However, if we did everything at the last stage it only gives us three weeks to go out and consult on everything – what a two-phase process gives us is time to implement what we can do as early as possible, but cuts down what remains to do in a very short space of time after Christmas, delivering a budget by 11 March 2022.”

Members voted to approve the various sections of Phase One of the budget, and the matter will now go forward to an additional Extraordinary Meeting of the Full Council which has been added to the calendar for 16 December 2021.