Meeting Details

RESOLVED that the minutes of the meeting held on 10 December 2024 be approved as a correct record.

Ms Carinna Cooper addressed the Panel, pursuant to the provisions of Meetings General Procedure Rule 5(1), to raise questions as to who was accountable for Council budget decisions, including the taxes incurred by the Colchester Commercial Holdings Ltd companies, and accused unnamed councillors of sharing extremist materials online. Ms Cooper voiced her dissatisfaction with the security arrangements for the Council’s public meetings, complaining that they were excessive, and that they were put in place as barriers to members of the public having their say. Ms Cooper accused the Leader of the Council of giving misleading answers to questions.

The Chairman shared concerns regarding the tax bill incurred by the Council, regarding its commercial companies, but voiced support for the Council’s use of bag searches and security, as disruption and problems had been seen elsewhere, when these had not been in place. The Chairman noted that there had been examples of elected members being brought to standards hearings, where accusations had been made about their online conduct. Councillor King, Leader of the Council, stated that the electorate held the Council accountable, and that the Council operated within the law. Councillor King stated that he was prepared to accept that the phrasing of some responses to questions could beave been better, but that the Council had tried its hardest to be open and responsive, recognising its duty to the public.

Ms Gerardine Murphy addressed the Panel, pursuant to the provisions of Meetings General Procedure Rule 5(1), to raise her concerns regarding safeguarding at the Mercury Theatre, accusations that the theatre was carrying out covert gender transitions of young people, and her views that it was not protecting women and girls. Ms Murphy stated that policies were in place, but were inadequate and not followed.

The Chairman stated that he would not want to deny people opportunities to see a diverse range of acts and events, and that safeguarding was a legitimate concern for cultural venues, including theatres and Council spaces such as museums. Any partnering arrangements had to include assurances that equalities, safeguarding and human rights law would be adhered to by the partners, and by any funding recipients.

Lucie Breadman, Strategic Director, explained that there was a funding review each year, for arts organisations receiving Council funding, which involved her and the Portfolio Holder. Funding Agreements were set, which included safeguarding requirements, such as having the necessary policies shown to be in place.

Councillor Sommers, Portfolio Holder for Communities, Heritage and Public Protection, explained that she had read Ms Murphy’s complaints, which had been investigated by the Mercury in line with its policy. Councillor Sommers asked Ms Murphy if she had followed her advice to raise her concerns with the Charity Commission, to which Ms Murphy replied that she had not, stating that it was not her responsibility to do so.

Councillor Natalie Sommers, Portfolio Holder for Communities, Heritage and Public Protection, gave an overview of her portfolio.

Examples were given of how Locality Budgets were used, with just over £21k remaining to be used for 2024-25. These had proven useful in leveraging additional funding. A Panel member raised concern that he had struggled to use the Locality Budget application, and that it was frustrating. The Portfolio Holder gave assurance that the Portfolio Holder for Economic Growth and Transformation was looking at all digital services, including those for councillors. A more user-friednlyfriendly user interface would be requested.

£8m funding had been achieved for work on Jumbo, whilst St Helena Hospice had been appointed as partner for the running of Holy Trinity Church. Roof work had been carried out on Hollytrees. A consultation was now proceeding as to how to make better use of that museum.

High visitor numbers had been recorded at the Castle, due to the exhibitions held. Conservation work on the building was due to start soon.

The Britannia Car Park/Priory Gardens improvement scheme was highlighted, as planned work to improve the link between the railway station at St Botolph’s, and the City Centre. The Portfolio Holder was asked if the Council was working with the owner of the Priory site, whether lighting would be improved and how the new walking route would work. The Panel was told that the plan was to continue to lock Priory Gardens at night, but options and new lighting possibilities were being explored. Improved safety lighting would be needed, and possible resident concerns about light pollution addressed. Approval would be needed from Heritage England, and further meetings were to be held on this.

Questions about the Lion Walk Mosaic led to an explanation that the Portfolio Holder was to meet with the manager of Lion Walk shopping centre to discuss this issue, and that this might be one project in which the Council could involve Dr Philip Crummy.

Questions were asked regarding a recent local paper article in which it was stated that there had been an increase of 20% in offences relating to possession of weapons, with an increase of 40% recorded across Essex. The Portfolio Holder referred to improved policing and detection, including Operation Grip and use of knife arches. Knife-carrying was most dangerous for those carrying the knives. Proactive enforcement and detection meant an increase in the number of offences recorded.

The Portfolio Holder was asked by one member if the Council was investing too much in work to promote equality, diversity and inclusion. The Portfolio Holder outlined the EDI Action Plan, with a policy having been introduced in 2024. The 2025-27 Action Plan would soon come into effect, and there were reviews and consultations on EDI actions and plans. These mainly applied to staff and their needs. The approach was shared with partners but was not being pushed onto the public.

The Portfolio Holder covered the work of the Communities Team and work to tackle antisocial behaviour [ASB]. Hotspots such as North Station Road were being monitored, with two new CCTV cameras sited on Middleborough. More funding was being sought from the Police, Fire and Crime Commissioner for further cameras. Regular action days were held with the Police, and hand-held terminals had been introduced for officers to issue on-the-spot fines. Street drinkers were no longer able to congregate at the April Centre; they now congregated in the City centre. The Council was seeking a safe space for them to meet. Most were not homeless. 

The Community Safety Partnership was getting good outcomes and gaining new partners, such as housing associations and providers of mental health services. The County Council was in phase two of procuring a new delivery organisation, seeking one organisation to provide infrastructure across the County. An all-councillor update would be provided imminently. The Portfolio Holder was asked if the Partnership could be modernised, including instilling a concern about electronic/online fraud and crime against businesses, such as shoplifting. An example was given of Essex Police refusing to investigate fraudulent use of a stolen credit card. The need to track data was highlighted. The Portfolio Holder gave the view that more education needed to be given regarding the avoidance of being victim to online fraud, which could include romance fraud and ‘long cons.’ The Portfolio Holder agreed to take the concerns raised to the Partnership, and to urge consideration.

Councillor Mark Cory, Portfolio Holder for Resources, gave a brief presentation of an overview of his portfolio. Local government finances remained under pressure. Some local authorities had issued Section 114 Notices. The Council was not close to that point, continuing to be resilient and make tough decisions. This included the ‘Fit for the Future’ Programme [FFF], a reduction in capital programme work, and changes to service provision. A fairer funding review was planned for the future.

It was found that it was harder to recruit new staff, with continued consideration of sharing options with other local authorities. A new Interim Section 151 Officer was being sought, whilst there were continuing problems in addressing the audit situation. Without having fully audited accounts, the Council was having to assume that its books were in order. A return to effective auditing was being sought, to provide assurances of this.

Comfort was gained from the Government pledge to protect councils from the increase in employers’ National Insurance contributions, but details were still awaited. A conservative assumption had been made that there would only be 50% relief on the increase in contributions. Heads of Service had worked to understand the direct and indirect costs of the NI contribution increase.

An extra £300k had been received from Government for work to tackle housing and homelessness. The Government was also seeking to address packaging with a tax on producers. The Council was to get contributions of funding, based on how much packaging was collected in refuse. An assumption was made as to how much this would be, but this had been set cautiously, as this might reduce as producers acted to minimise packaging.

Local Government Reorganisation necessitated a prudent approach prior to any changes. A prudent level of reserves had been maintained. A review had been carried out in the previous year, and another was scheduled for May/June. Unallocated general fund reserves and ring-fenced reserves had been shown.

Focus had been given to one-off capital spends, but a reduction in ongoing general fund spending had also been sought, along with the ensuring that the Capital Programme was tight and delivered for the Council. The Portfolio Holder noted that the Council was the accountable body for the Town Deal Fund projects, and the Levelling Up Funding [LUF] which had been allocated by Government. Delays from some project partners had been encountered, as well as some slippage in Council projects. Some positives had come from this, including an increase in interest earned on money allocated but not spent.

The Portfolio Holder covered the Council’s asset management and move to a corporate landlord model. Disposal of assets was considered where this would make financial sense. A cross-party Estate Members’ Steering Group had been set up to oversee this fundamental duty of the Council, overseeing officer actions and decisions. Long-term issues included the future of the Town Hall, and the work needing to be done on it. Opportunities for community groups or parish councils to take on the use or running of assets were being looked at, including where social value could be gained.

The raising of revenue and collection of funding was outlined. A new banded system had been introduced for Council Tax support, simplifying how this worked. The Council performed well in collecting Council Tax and Business Rates, hitting its targets. Business Rate relief had been reduced, by Government, for retail and leisure businesses. The Council was working to ensure that local employers were prepared for the effects of this.

When asked to explain the value he had personally added to decision making, the Portfolio Holder explained his experience, including as a previous Leader of the Council. This experience had helped him to manage finances to allow investment in the City, and to attract outside investments. Relationships had been good with officers, including an understanding as to how far the organisation and staff could be pressed. Better processes had been embedded, such as the corporate landlord model. A cross-party board had sought a new estate manager, but no suitable candidates had applied. An extension to the contract of Patricia Barry was therefore being sought, and any compromise in hiring would be avoided. A wide range of options was being considered for the portfolio of assets, with consultation being conducted widely.

The Portfolio Holder was asked to confirm what percentage of Council Tax was allocated to the City Council, and what control the Council had over business rates. It was confirmed that, whilst the Council collected Council Tax, it only kept 11% of tax collected, with the rest going to other organisations such as the County Council and emergency services. Government was responsible for setting almost all of the framework for Business Rates, and dictated the limits to rate relief that councils could give. The Council had benefited from participation in the pan-Essex arrangement to help keep business rate income in the area. The Deputy Section 151 Officer confirmed that there was little the Council could do on Business Rate margins, and that if the Council operated independently, it would be subject to an extra 50% levy. The arrangement with other Essex Councils meant that gains could be pooled, saving the Council a six-figure sum each year, at a level which fluctuated year on year.

Explaining how the corporate landlord model improved asset management, the Portfolio Holder explained that the Estate Groip had proven to be helpful and assisted in improving the understanding of the Council’s asset portfolio. Each asset was investigated as to their value to the taxpayer, the social return they could provide, and their potential disposal value. This helped provide consistency and to ensure that officers knew asset values and what they delivered for the Council. Facilities management could be improved, and issues had been identified with in-house management. Some external provision was sometimes beneficial.

A Panel member raised concern that Local Government Reorganisation [LGR] seemed to be causing chaos, with which the Administration was needing to deal. The Portfolio Holder was asked how the Administration planned to balance resources in the run up to reorganisation, and how the Council could ensure that Colchester did not lose out from LGR. The Portfolio Holder explained that LGR would likely see Colchester combined with Tendring, Braintree, and potentially one other council. Colchester and Braintree were comparable in terms of wealth, with Colchester larger in terms of Business Rates and Council Tax. Tendring was smaller and included significantly deprived areas. The local authorities had started working together, with partnership expected to lead to a shadow authority being set up. Assurances were being sought that none of the partner councils would seek to run down their reserves prior to LGR commencing.

The Panel was told that the Council did not want to create problems for the future local authority, so the MTFF would continue to be used to act prudently and manage reserves. The Leader of the Council underlined the need to engage with LGR, with the decision to be made in Whitehall. The Council had to ensure that it could feed into the process and details, prior to decisions being made. It was expected that the Council would be informed by the weekend as to whether Essex was to be included in the priority programme for LGR. Chief Executives and senior officers were starting to map future plans and transition management. A uniform approach to income raising across connected local authorities would be needed.

A Panel member asked for more detail on the challenges involved in managing the Council’s cultural and historic assets, and how the Council could get a return from them. The Portfolio Holder talked of the balance in investing in such assets, to increase growth and tourism, even whilst the Council did not directly benefit. With so many savings having had to be made, this had meant unavoidable reductions in spending on heritage and culture. Some work had proceeded, such as the lighting of sections of the Roman walls, and funding had been found for work on Jumbo, with £8m of Lottery funding. The spending of small amounts of funding often allowed the leveraging of larger funding grants. Heritage sites included the Castle, Hollytrees Museum and the Town Hall. There were often restrictions on what sites could be used for. Cost/benefit analysis was needed on the Town Hall. With LGR, the Council needed to think as to how necessary the Town Hall might be for future democratic purposes.

The Portfolio Holder informed the Panel that the Administration was looking at the possibility of some site disposals around the Northern Gateway site. The Sport Centre had been completed and the Southern part still scheduled for mixed development.

A suggestion was made that the Administration should explore possible cooperation with local authorities to the North, in Suffolk.

Andrew Small, Section 151 Officer and Head of Finance, apologised for not attending in person. This owed to a clash with a scrutiny meeting being held on the same night at Epping Forest District Council. The Head of Finance underlined the Council’s legal duty to set a balanced Budget, with the proposed Budget for 2025-26 being presented. Further years’ projections were also shown, within the Medium-Term Financial Forecast [MTFF], to help steer the Council’s financial planning. Each MTFF over the past four/five years had shown a deficit which needed to be addressed. It was the duty of the Administration and Finance Team to address these deficits. The current reserves position was compared to the MTFF, with reserves steadily increasing. This showed the Council’s success in balancing budgets and addressing challenges.

The Head of Finance described budgets as being a set of assumptions, and the Council recognised that assumptions would be constantly changing, so a set of assumptions had to be taken at one point in time. The key task was to assess whether the overall Budget proposed was reasonable and gave a fair picture. It was the duty of the Section 151 Officer to seek and give assurance that the Budget was balanced, and the Head of Finance confirmed that he gave that view, as Section 151 Officer of the Council.

A Panel member asked how the Council could have run deficits over the years, whilst balancing budgets and now adding to its reserves. The Head of Finance explained that the further ahead projections were made, the greater future deficits appeared, and by presenting balanced budgets each year, the Council used the time available to program in mitigations and solutions, allowing it to continue to balance its budgets.

A Panel member expressed the view that the report downplayed the reliance on a set of carefully chosen assumptions Whilst the Council’s statutory duty was to look only one year ahead, it was prudent for Councils to look further, given the effect that the Budget would have on future years. The Panel member stated that downplaying assumptions undermined the Budget process. The Head of Finance noted that the further into the future the Council’s assumptions were made, the more uncertain they became. Assurance was given that the assumptions for the coming year were as good as they could be, as there was knowledge of some things coming in the future. The MTFF was something that the Council had to produce, as a responsible local authority. The range of assumptions included some things that were known, and some that were known about, but not the extent of their size, such as the new Government grant system from 2026-27. The MTFF allowed the Council to plan and act to address what was expected.

A Panel member voiced disappointment that the Section 151 Officer had not been able to attend in person and given answers to questions from the Panel.

Councillor Sunnucks attended and, with permission of the Chairman, addressed the Panel to thank officers and the Leader for engaging with him, but to urge Scrutiny Panel to examine the numbers and plans closely. Councillor Sunnucks told the Panel that the Budget report and MTFF indicated a £7.9m structural deficit, with a £3.1m structural deficit for 2025-26, whilst the report stated that the 2025-26 Budget would add around £87k to reserves. Councillor Sunnucks urged serious consideration of the MTFF and stated that it was contrary to the CIPFA prudential code to run up capital spending without accounting for how this would be covered. Councillor Sunnucks ventured that this was also being done with the HRA [Housing Revenue Account]. Reserves of around £38m had been built up during the Pandemic, but these had reduced in each year since 2020-21. Councillor Sunnucks urged examination of how to increase income, what might be cut, what reserve usage might be appropriate, and from which reserves. Detail was requested relating to reserves earmarked for potential use on the Turnstone project. Councillor Sunnucks stated that he did not believe the calculations made regarding the HRA.

In response to questions regarding the CIPFA code, the Deputy Section 151 Officer explained that the prudential code dictated a prudent, affordable and sustainable approach towards capital investments. A deficit was acknowledged by the Administration and would be addressed going forward.

Councillor Cory, Portfolio Holder for Resources, acknowledged that the Council had been forecast to run up a deficit each year in recent years, but had met the need to balance its budget each time. It was noted that the Revenue Support Grant had been reduced from £13m per year down to zero by the previous Government.

The Deputy Section 151 Officer stated that Councillor Sunnucks had implied that the Council was living beyond its means, but the Council’s reserves had not materially declined in the previous year. The past ten years of balance sheets had been examined in the previous August. There had been £16-£17m in the General Fund reserves ten years ago. There was now around £20m in those reserves after that. Section 31 grants had been received during the Pandemic, to assist with Business Rate reliefs. The amount of these came down over time and only lasted for two years, with significant losses recorded in 2022-23. The grants awarded by Government helped to meet the deficit that this generated. Good performance eliminated the deficit by the end of 2022-23, and the reserve level of £30m was 50% higher than previous reserve levels, and it was wrong to say that the Council was running down its reserves.

The Deputy Section 151 Officer explained that the HRA was subject to complex and specific accounting arrangements, often statutory in nature or found in the Code of Practice. These were different to the arrangements and requirements in the private sector. The Council was not stretching depreciation figures and was following the required accounting process. Nothing had changed since the most recent audit. Interest rate figures given by Councillor Sunnucks were not accurate, and the borrowing rate was currently at a 0.6% discount, via the Public Works Loan Board [PWLB]. The expected borrowing rates in year five varied between forecasters, with no clear consensus, but there was strong consensus predicting a drop in interest rates in the medium term.

The Deputy Section 151 Officer was asked at what rate the Council borrowed, whether this was at a spot rate, or at any kind of discount. The Deputy Section 151 Officer explained the discounted rate for General Fund borrowing [0.2%] and for HRA borrowing [0.6%]. The draft Budget did not assume that these discounts would be maintained, with prudence regarding expected income also.

A Panel member asked if a written explanation could be provided to elected members, to explain how the projected interest rates had been settled upon, when these did not accord with the expectations of Councillor Sunnucks. The Deputy Section 151 Officer agreed to see if this could be done and would seek to understand how Councillor Sunnucks had generated his figures and predictions.

The Chairman invited Councillor Sunnucks to comment, who stated that officers had been told to use a lower rate than the PWLB rate [which was the gilt rate plus 1 percentage point], and that in his view the interest rate relating to the General Fund should be set at 4%, whilst the rate for the HRA should be 8%. Councillor Sunnucks requested an external audit of the interest rate expectations given, stating that both BDO and KPMG had refused to commit to this. The Deputy Section 151 Officer informed the Panel that Link was the treasury management adviser to the Council, including on the MTFF. Epping Forest District Council used different advisers, but they were in accord with the advice from Link. 

The Chairman asked if this advice had resulted in the Council’s companies generating a significant tax bill from HMRC, and a Panel member requested that the advice from Link be provide to the Scrutiny Panel. The Portfolio Holder confirmed that the tax bill mentioned had come from Colchester Commercial Holdings Ltd [CCHL] and had not arisen due to the company making any losses.

The Deputy Section 151 Officer noted that the Treasury Management Strategy was overseen by the Governance and Audit Committee, and would next go to that Committee on 25 February 2025, including an update on interest rates. The Deputy Section 151 Officer offered to share that report with members, ahead of Full Council on 26 February, where the Council would vote on the Budget. A Panel member stated that the report made it appear that there was a requirement for Link to look at the HRA. The Deputy Section 151 Officer was asked if this was the case, or whether Link only provided general advice, responding to say that Link kept the Council up to date on a range of issues, including interest rate forecasts. Specific advice could be commissioned, such as the advice on Colchester Amphora Energy Limited [CAEL]. The advice on interest rates was last given in November 2024, and was due for an update.

A Panel member stated concern that small divergencies in projected interest rates could have significant effect on the Council’s capital budget. The Panel needed to understand the numbers, and the detail behind them. Tackling questions on materiality, the Deputy Section 151 Officer explained the assumption of £21m borrowing for 2025-26, through the year and calculated as at the six-month point, e.g at around £10m. Gross expenditure of around £100m was assumed , but a surplus was expected on interest receivable.

The Portfolio Holder told the Panel that the HRA remained under review, as costs had to be driven down. The Council did not have any reason to underestimate borrowing rates, as this would cause problems in the future. The HRA programme had been delivered at a surplus in this current year. If the projections last year had been wrong, this surplus couldn’t have been generated. Borrowing cost were currently high, and there were restrictions on what could be done, but the Council was addressing issues.

The Leader of the Council gave assurance that external advice had been sought from a pool of experts, applying the best possible advice to Budget work. The Council had a record of savings, shown over a decade. Regarding questions on staffing levels, the FFF programme figures showed what had been delivered, and what actions were scheduled. The Portfolio Holder stated that the FFF programme would reduce revenue spending. More need to be done on the revenue budget, seeing a reduction in service provision and an increase in fees alongside a rise in Council Tax rates of 2.99%. Positives included investment in communities, including work with ECC on a new bus terminus in Colchester to improve transport links. Hopes were held for more Government support and strong performances by local businesses.

The Deputy Section 151 Officer outlined the General Fund Revenue Budget proposals in Appendix A. These were fully balanced, form an original deficit projected to have been £1.893m. This had been addressed, without drawing on reserves. The Council’s expected net expenditure was £29.974m, as shown at 2.41 of Appendix A. This assumes the confirmation of the Government settlement. National Insurance contribution increase was still a risk. An initial assumption had been that 100% of the cost would be covered by Government, but this had been reduced to 50%, based on intelligence received. FFF savings were outlined, with any additional need for future savings having to be covered on top of the current FFF actions scheduled.

The HRA Revenue Budget was shown in Appendix B, where no great changes were expected. A net income of £794k was projected, which was a reduced amount since November 2024. The management fee of Colchester Borough Homes [CBH] had been increased in order to meet the increase in employer contributions to National Insurance.

The Capital Programme shown in Appendix C involved £78.9m over five years. There had been a noticeable change since November 2024, due to a reprofiling of already-approved schemes. There would be little impact on capital financing costs, as this mostly involved external funding, such as the funding for Town Deal and Levelling Up Fund [LUF] projects. The HRA Capital Programme was projected to involve £157.6m of spending over five years.

Questions were raised regarding the figure of £0.23m projected spending on responsive repairs, and the same for cyclical repairs, with a Panel member noting that Patricia Barry, Interim Lead on Assets, had advised that the Council should spend £7m per year on estate maintenance and property servicing, and that this had not been incorporated into the Budget. The Portfolio Holder detailed the Lead on Assets’ work to identify assets needing repairs. There was one item for the general repair costs, and another for specific capital repairs required. A Panel member expected to see an increase in estate maintenance costs, to prevent greater costs in future years. The Portfolio Holder gave assurance that the premises maintenance budget was greater regarding the operational costs of the estate. Work cost for matters such as Middle Mill Weir were budgeted for elsewhere. The Asset Management Strategy showed an increase in spend of £1m per year on the repairing of assets and routine maintenance. This was a capital programme matter, rather than being in the revenue budget.

Returning to financing costs, a Panel member asked about MRPs [minimum revenue provisions] being reprofiled, with the report showing that most of the programme for 2025-26 not being funded from grants, which they said indicated that the Council would need to meet the full cost of borrowing for the projects, which included fleet replacement, car park works, a pumping station and wheelie bin roll-out. 

The Deputy Section 151 Officer stated that there was £6.2m in Town Deal schemes budgeted for 2025-26, funded by grants, and an £11.2m committed for LUF projects. The Northern Gateway enabling works were already included, from the November report. The Council was borrowing for that over 50 years, so this only entailed small amounts per year. The Council incurred full MRP in the year following that in which an expenditure was incurred, therefore MRP charges could be pushed back. The Portfolio Holder explained that the reprofiling of the significant costs, such as on Northern Gateway, reduced the carrying of costs. Borrowing projections had been reduced. The Deputy Section 151 Officer said that there was no known risk for 2025-26, and the HRA review could impact later years in the MTFF.

Regarding fees and charges, questions were asked to clarify why the income from garden waste collection had been estimated to be £0.359m less than expected, and whether this came from lower-than-expected demand, or a reduction in payments. The Deputy Section 151 Officer stated that this related to the original assumptions on subscription fees and showed a correction of these assumptions. The Leader gave assurance that this did not affect judgements on materiality, and that clarification could be provided on this in the future.

A Panel member noted that £4.77m of savings from Fit for the Future had been projected for integration into the MTFF, but a shortfall of £1.79m had been reported. The Portfolio Holder was asked how this was being dealt with and stated that whilst the FFF programme had been seen as a three-year programme, this would now be longer. In some cases savings had needed to be put back, and the Administration had accounted for this. The Leader confirmed that, where there were shortfalls, the Council had an obligation to pursue the difference. The future actions to address this would be reported back to members. The Portfolio Holder added that the FFF programme was embedded and would achieve or exceed the target for savings. A request was made by the Panel for information or a briefing as to this subject, to lay out an explanation.

A Panel member picked out Northern Gateway costs, spread across different budget lines. It was known that there was an issue with locating a cinema operator, and that the Council had ringfenced £4m of reserves, set aside to cover any potential issues. A confidential explanation was requested of the situation and related transactions, to explain the figures being fed into the Budget. This was widened to consideration as to whether to request a briefing covering Northern Gateway, and the Council’s other major commercial projects.

The Portfolio Holder agreed that it was difficult to see how the finances worked, and that the explanations could be circulated to the Scrutiny Panel and Governance and Audit Committee, with a confidential briefing note prior to Full Council on 26 February 2025. The Council had to pay Canada Life, paid out of rent collected. This would not be fully covered at this stage, and the Council would need to assess what calls were made on the £4m ringfenced reserves. The current assessment had to be included in the Budget report, and the Administration hoped to complete on a deal that covered the cost of payments to Canada Life and allowed the addition of £500k into the Council’s budget.

The Panel considered whether it wished to request sight of the CIPFA resilience index report prior to the Budget being put forward for approval. The Deputy Section 151 Officer explained that the index was retrospective, looking at data up to 2022-23, and lacked local interpretation. This sometimes led to mistaken conclusions regarding resilience levels. The Council had struggled to produce timely accounts in recent years. Information on this could be provided, after some work was done to prepare it.

The Portfolio Holder addressed queries about assurances given as to the Council’s record of remedying projected deficits. FFF could go deeper and further to increase efficiencies. The National Insurance assumptions were cautious, and a greater relief on increased NI contributions would reduce projected deficits. If income from taxing producers of packaging increased by 50%, this would mean an additional £500k income added to the Council’s base budget. Savings may also be made, if future elections did not go ahead [due to local government restructuring]. Asset disposals might also help ease Budget pressures.

The Chairman welcomed the inclusion and consultation of all party groups on the work that went into the Budget, and asked Councillor Sunnucks to explain how he had calculated that the expected base rate for interest would be 2.7%. The Deputy Section 151 Officer offered to circulate the calculations behind the Council’s interest rate expectations. The Deputy Section 151 Officer gave his view that the questions raised at this meeting did not raise any matters of material consequence to the Budget.

RECOMMENDED to CABINET that Cabinet makes available the following information to all elected members of the Council, prior to Full Council on 26 February 2025 and with the exception that any information deemed by Cabinet to be unsuitable for circulation to all members, due to commercial sensitivity, should only be provided to members of the Scrutiny Panel: -

a) A briefing note on the interest rate information and assumptions relating to, and underlying, the Housing Revenue Account

b) A copy of the advice received from Link, the Council’s advisors on treasury management

c) A briefing note explaining the reduction in expected income from garden waste collection, and why the projected income has reduced

d) A briefing note to explain how any shortfalls in the ‘Fit for the Future’ programme would be accounted and incorporated into the Budget estimates

e) A confidential briefing note on the finances of the Council’s major commercial projects, to help reconcile incomes and expenditures

f) A briefing note on the CIPFA Resilience Index results for Colchester, including the background context and what this means for the 2025/26 Budget proposals

RESOLVED that the SCRUTINY PANEL approves its work programme for 2024-25.