Agenda item

Members of the Committee are requested to bring their copy of the agenda for the Executive meeting on 29 June 2022.

The Committee considered the following reports on the Part 1 agenda for the meeting of the Executive on 29 June 2022.

(5)  PROVISIONAL FINAL ACCOUNTS

  Report FSD22052

This report presented the provisional final outturn for the Local Authority at both Portfolio and Council-wide level for the 2021/22 financial year, including a £290k increase in General Fund balances, subject to the recommendations in the report being agreed.  The report also set out the potential implications of the Council’s financial position for the 2022/23 financial year.

The Director of Finance introduced the report and advised that the inflated balances in earmarked reserves was due to the early receipt of Section 31 grant from government of £45,125k for business rate relief which would be fully utilised to fund costs accounted for in the 2022/23 financial year.  The cost of children’s social care, particularly at the higher end of need, was a current and growing pressure to the Local Authority culminating in an increase of circa £2M in costs in the last six months.  There was a deficit of -£7,142k in Dedicated Schools Grant reserve which reflected the shortfall in funding Special Educational Needs and Disabilities education provision.  The Local Authority was not permitted to meet any such shortfall via its General Fund and the Children, Education and Families PDS Committee would continue to closely monitor the deficit.

A Member queried an underspend in the public health budget during the 2021/22 financial year.  The Director of Finance explained that to maximise its resources, the Local Authority had prioritised expenditure of COVID-19 funding over ringfenced public health funding and that this approach would be scrutinised by the Adult, Care and Health PDS Committee in considering the final outturn report 2021/22 at its meeting on 28 June 2022.  Another Member noted a sizeable variation of £600k within the Legal Service and was advised that this was due to the high number and complexity of children and young people cases for which external counsel had to be retained in addition to the in-house work undertaken by the Legal Service.  There were also cost implications flagged for the Planning, Litigation and Licensing Team which related to a number of planning inquiries held during the 2021/22 financial year.  An underspend in the Democratic Services staffing budget for 2021/22 was due to vacant posts but the service was now fully staffed.

RESOLVED: That the Executive be recommended to:

• Consider the provisional revenue and capital outturns for the 2021/22 financial year and the earmarked balances on the General Fund as at 31st March 2022;

• Consider the variations in 2021/22 impacting on the Council’s 2022/23 financial position;

• Consider the comments from Chief Officers as detailed in Appendix 2 to Report FSD22052;

• Approve the requests for carry forwards totalling £465k (net) as detailed in Appendix 6 to Report FSD22052, subject to the funding being allocated to the Central Contingency in 2022/23 to be drawn down on the approval of the relevant Portfolio Holder;

• Agree the changes to the central contingency sum as detailed in Paragraph 3.5 of Report FSD22052; and,

• Agree that a sum of £814k be set aside as a contribution to the CSC/CCG earmarked reserve as detailed in Paragraph 3.8 of Report FSD22052.

(6)   CAPITAL PROGRAMME OUTTURN 2021/22

  Report FSD22057

This report set out the final outturn on capital expenditure and receipts for the 2021/22 financial year.  Capital expenditure during the year had been £19.3M compared to the final approved budget of £73.6M, resulting in a total net variation of Cr £54.3M. For funding purposes, £40.0M slippage had been assumed in the Quarter 3 2021/22 Capital Monitoring report, so there was an overall variation of Cr £14.3M in the use of capital receipts and external and revenue contributions.

In response to a question from a Member, the Director of Finance advised that there had been slippage of £9.5M on the Civic Centre Development Scheme but that it was anticipated the Scheme would be presented to Members for consideration during the 2022/23 municipal year.

RESOLVED: That the Executive be recommended to note Report FSD22057 detailing the capital outturn position for the 2021/22 financial year.

(7)   AUTHORISATION TO PROCEED TO CONTRACT: ENERGY CONTRACTS

Report HPR2022/031

This report presented a review of the Local Authority’s existing gas and electricity contracts and sought authorisation to award further contracts via a flexible energy purchasing route for an additional period of three years using the United Learning Trust Framework following a mini-competition.  The report also highlighted that, subject to Members’ consideration, the budget for green-sourced gas and electricity supplies would need to increase to £5.12M due to increases in supply costs.

In response to a question from a Member, the Senior Energy and Sustainability Manager advised that the Local Authority would still benefit from any fall in energy prices should the proposed three-year contracts be awarded via the United Learning Trust Procurement Services framework.  The Member was concerned at the uncertainty around energy usage and cost in the short to medium-term but this would be monitored by the Renewal, Recreation and Housing PDS Committee and also by the Executive, Resources and Contracts PDS Committee where it related to contracts.  Another Member queried whether it was planned for the Local Authority to apply for funding from the Public Sector Decarbonisation Scheme and the Senior Energy and Sustainability Manager confirmed that an application had been made to fund a full review of the Local Authority’s energy stock.

RESOLVED: That the Executive be recommended to:

• Approve the award of further contracts for the supply of electricity and gas via the United Learning Trust Procurement Services framework via a mini-competition for a contract duration of three years commencing October 2022;

• Approve an annual budget from October 2022 of £4,026k for the purchase of Renewable Energy Guarantees of Origin (REGO) backed electricity, an increased requirement of £1,888k on the existing budget. Members should note that the cost would be £3,965k for brown electricity, which would be a required budget increase of £1,827k.

• Approve an annual budget from October 2022 of £1,095k for the purchase of Renewable Gas Guarantees of Origin (RGGOs) backed gas, an increased requirement of £736k on the existing budget. Members should note that the cost would be £979k for brown gas, which would be a required budget increase of £620k;

• To agree a drawdown from the unallocated inflation provision in the 2022/23 Central Contingency of £1,312k for renewable energy, or £1,224k for brown energy, for the part-year increased cost in 2022/23, and to reflect the full year annual budget impact in the financial forecast;

• Note that the sums above are the indicative cost for the first year of the three-year contract.  Energy market volatility is hard to predict and cost may go up in Years 2 and 3 or may fall;

• Purchase REGO electricity and RGGO gas which will cost more than brown energy;

• Opt for flexible procurement energy contracts to purchase energy in tranches during the period of the contracts;

• Delegate authority to the Chief Officer to select suppliers based on quality and cost (management and delivery) criteria following the mini-competition. The cost criteria are the supplier management fees for servicing the account and delivering the flexible product mechanism. These elements are charged and added by the supplier to the cost of wholesale energy prices. The actual cost of energy shall be determined by the wholesale energy prices at the point of purchase plus the supplier’s management and delivery fees and any other and any ‘industry set’ pass through network charges; and,

• Delegate authority to the Chief Officer to finalise the energy prices based on the quote at the point of the procurement.

(8)  HOMES FOR UKRAINE

  Report HPR2022/032

This report presented an update on the Homes for Ukraine response by the Local Authority and outlined the approach going forward.  This report was the first of a series of quarterly updates to monitor progress in this area.

In discussion, Members welcomed the report which demonstrated the excellent work of the Local Authority in supporting Ukrainian refugees and their sponsors, including the recent opening of the Ukrainian Hub.  In response to a question from a Member, the Head of Compliance and Strategy explained that as additional funding had not yet been announced, the Local Authority was taking a cautious approach in using the initial 12-months of funding.  Assessments were being undertaken in 160 Bromley households to ensure sufficient sponsors were in place to meet the level of need from incoming families, and modelling was also underway to identify the impact of these additional residents on local services.  The Member highlighted the need to work with other local authorities to lobby for further Government funding.  The Director of Finance advised that the Government was issuing national monitoring reports and these would form the basis of the case for additional funding.  A separate Government grant was being provided to the Local Authority to fund additional education costs, and this would be allocated to Bromley schools and academies on the basis of need. 

RESOLVED: That the Executive be recommended to:

• Review and note the contents of this report in relation to the current activities under the Homes for Ukraine scheme;

• Approve the use of £1,171k funds to manage staffing and associated expenses with the ability to step up or reduce the number of staff according to the level of casework required; and,

• Agree that any other future changes in allocation or expenditure of funding are delegated to the Director of Housing, Planning & Regeneration and the Director of Finance in consultation with the Portfolio Holder for Resources, Commissioning and Contract Management.