Agenda item

5.1

Alistair Tice raised questions, and responses were provided as follows:-

(1)      The 2022-23 budget proposals refer to £52.7 million savings schemes which is a huge number but does not specify in its key messages or commentary what these cuts are.  What are they?  How can £50 million more be cut without a massive cut in already reduced services?

In response, Councillor Cate McDonald (Executive Member for Finance and Resources) stated that a full list of all £52.7m of savings schemes is shown in Appendix 2 to the Budget Book.   Whilst the Council was having to reduce the amount it would like to spend to meet the pressures on its services, this does not mean that expenditure was being cut.  In fact, Table 7 shows that the Council’s spending actually rises from £420.4m to £440.3m.  However, given upwards pressures on spending of £81.7m (as shown in Appendix 1), the Council has had to reduce its budgets by £51.3m to limit the spending increase to what it can afford (i.e. £440.3m).  Additionally, in a number of places, including Appendix 2, there is a link to the Council’s Budget Implementation Plans (BIPs).  These BIPs set out the savings proposals in more detail.  The BIPs numbers are quoted in Appendix 2 to make them easier to find in the linked excel document.

(2)      The budget refers to proposals to use £70 million reserves (£30m for 21-22, and £40m for 22-23) and later says if the £52.7 million cuts and the cuts required from the strategic reviews do not happen, the Council "will have to use remaining reserves in a risky and unsustainable manner" in 2023-24.  So how much reserves have been identified as available altogether?  Where have these reserves come from as they were not referred to on the Council website or by Eugene Walker in correspondence about levels of reserves, only the £12.9 million unearmarked reserves were referred to?  And how can such big numbers of reserves be used now when campaigners against cuts have repeatedly been told by Council leaders and officers that reserves couldn't be used to set a No Cuts budget which we were told would be illegal ?

Councillor McDonald stated that the Council has identified that £70m of reserves were available altogether.  The Council had a number of reserves, which were generally amounts set aside to meet known future commitments.  Of these reserves, only £12.9m was not set aside for specific items (i.e. these reserves are “unearmarked”).  However, every year the Council reviewed all its reserves to see if they were all still needed (or indeed if they required increasing as new commitments emerged), and then could use any it does not need.  This year, improvements in items such as the financial position of the South Yorkshire Pension Fund (into which the Council pays towards its employees’ pensions, as all employers have to) means the Council can reduce some of its reserves.  Obviously, if the Council had used these reserves in earlier years (in a more risky manner since we did not then know, for example, that pension fund values would experience a sustained rise), then we could not use them now, and consequently would have to make bigger savings this year.  The Council can use its available reserves to smooth spending between years to give it time to deliver savings, but it is legally required (by Central Government) to set a balanced revenue budget each year. Reserves once spent, are gone forever.

(3)      In view of the lack of information on the Council website about the proposed £52.7 million cuts, and the existence of at least £70 million reserves available, wasn't the Council's public consultation a purely tick box exercise about which the public could not make an informed comment due to a lack of transparency about the real state of the Councils finances?

Councillor McDonald stated that the Council had published the state of the Council’s finances in both the draft financial statements and the Medium Term Financial Analysis that were considered by the Co-operative Executive in October 2021.  A link to the Medium Term Financial Strategy had also been included in the public consultation to make sure that people had simple route to it.  The Council’s budget monitoring information had also made both local and national trade and non-trade press.

Eugene Walker (Executive Director, Resources) added that the questions raised highlighted the serious problems facing the Council.  The improved performance of the South Yorkshire Pension Fund over the last few years had enabled the Council to use more of its reserves, and if such reserves had been used in previous years, the Council would now be in a much more difficult position.  In terms of going forward, it was important that officers continued to be prudent, and work closely with Members to set a balanced budget.  If a balanced budget was not set, the Government could appoint a Commissioner to set a budget, which could result in severe cuts being made, with no regard to any political or community concern.