Agenda and minutes

Apologies for absence were received from Reverend Philip Johnson (Church Representative) and Miss Alexandra Sayer (Parent Governor Representative).

There were no declarations of interest.

RESOLVED:

That minutes of the meeting held on 29 October 2020 be approved as a correct record and signed by the Chairman. 

The Chairman reported that he had attended the meeting of the Executive on the 3^rdNovember and presented the comments from the Board on the Transformation Programme and Smarter Working Programme. In relation to the Transformation Programme, he had highlighted the Board's comments about the involvement of overview and scrutiny committees and the use of individual councillors as sources of intelligence. The Executive agreed that there should be more emphasis on the role of councillors as part of the programme, encompassing the One Council approach, and officers confirmed this would be reflected in future reports.

He reported that with Councillor R Wootten he had met with officers on 23^rd November to discuss the future reporting arrangements for the Transformation Programme to the Board. It had been agreed that an overview report would be provided to the January meeting and a progress report would be provided to the March meeting.

Democratic Services was currently looking into an alternative date for the March meeting to enable the Board to conduct its usual business before the pre-election period which was expected to start around 22^nd March.

Councillor M Whittington, Executive Support Councillor for Resources and Communications, reported that following the recent Government Spending Review announcement on 25^th November, he had met with the Leader of the Council and finance officers to commence a review. The Executive Director -  Resources, reported that the review was underway on how the details of the announcement would impact the County Council. He reported on the key themes of the announcement which included a public sector pay freeze and further financial support in the light of the Covid pandemic. He reported that the annual financial settlement from the Government was expected mid December.

The Chief Executive reported on the expected Government announcement due on 26^th November on which tier of Covid lockdown restrictions Lincolnshire would be in following the end of the national lockdown from 2^nd December. All members would be notified as soon as the information became available.

None had been received.

None had been received.

(To consider a report from Michelle Grady, Assistant Director – Finance, which invites the Board to consider the Revenue Budget Monitoring Report 2020/21 – Quarter 2 which is being presented to the Executive on 1 December 2020. The views of the Board will be reported to the Executive as part of its consideration of this item)

Consideration was given to a report by theAssistant Director – Strategic Finance, on Revenue Budget Monitoring 2020/21 Quarter 2, which was due to be presented to the Executive on 1 December 2020.  The views of the Board would be reported to the Executive as part of its consideration of this item.

The report compared the Council's projected expenditure with the approved budget for 2020/21, and provided explanations for any significant over or under spending.

The overall revenue position was a forecasted underspend this year of  £1.973m (excluding schools and Covid-19). There was also a forecast underspend on capital financing charges of £7.868m, this was excluded from this forecast position at this stage. It was planned that the capital financing underspend would be used to manage future fluctuations in the annual capital financing budget by transferring it to the capital financing earmarked reserve. It was assumed that the forecasted Covid-19 position would be contained within the government emergency grant forecasting a surplus of £7.673m. Included in this forecast was an estimated additional grant of around £4.200m which could be claimed to cover losses of income. It was forecast that general reserves at the end of the year would remain within the target range of 2.5% to 3.5%. The impact of the revenue budget forecast on the Council's resilience had been assessed and the conclusion was that financial resilience remained strong due to the current forecast of an underspend. There were healthy reserve balances and financial resilience would continue to be strengthened.

Members discussed the report, and during the discussion the following points were noted:

·         The impact of Covid-19 – the current forecast surplus of £7.673m would be used to cover the additional costs arising due to a rapidly changing situation. The Government had announced additional support going into the new year for Covid-19, and the Council was expecting some additional costs to filter into the new year, particularly in relation to adult social care but also in relation to Children's Services and home to school transport. The Government had so far provided funding when pressures were known and had committed to supporting councils in the new year with any shortfalls such as around council tax and tax base losses. There was no immediate concern for the finances of the Council, however it was expected that some businesses and members of the public were likely to struggle to pay rates and council tax in the future. Concerns were highlighted about the longer term impact on funding in future years.

·         Cost pressures in Children's Services social care budget – the high cost pressures related to Higher Needs, an increase in requests for Education, Health and Care Plans due to children being off school for a significant amount of time, and Looked After Children requiring specialist placements and the lack of market provision for children with complex needs in the independent sector. To address these two cost pressures, the Transformation Programme contained two projects to look at how best to support  ...  view the full minutes text for item 57.

(To consider a report from Michelle Grady, Assistant Director – Finance, which invites the Board to consider the Capital Budget Monitoring Report 2020/21 – Quarter 2 which is being presented to the Executive on 1 December 2020. The views of the Board will be reported to the Executive as part of its consideration of this item)

Consideration was given to a report from the Assistant Director – Strategic Finance, which invited the Board to consider the Capital Budget Monitoring Report 2020/21 – Quarter 2 which was being presented to the Executive on 1 December 2020. The views of the Board would be reported to the Executive as part of its consideration of this item.

The report compared the Council's projected expenditure with the approved budget for 2020/21 and provided explanations for any significant over or under spending. It also compared total projected expenditure for capital projects spanning more than one year with the total approved budget. The current forecasted position was an underspend of £5.424m(Block schemes £0.763m, Project schemes £4.661m). For the project schemes, the whole life budget was forecast to be overspent by £22.542m.The whole life position would be considered as part of the forthcoming budget setting process to ensure that the overall capital programme remained affordable.

The current year's forecast underspend of £5.424m would not increase the need to borrow. The forecast underspend in the current year on Capital Projects would not adversely impact on the Council's financial resilience. However, the forecast whole life overspend was a significant amount and was currently being considered as part of the budget setting process. The Capital Strategy 2020/21 required the capital programme to be affordable over the longer term and this assessment of affordability would need to be made. If necessary the capital programme would need to be modified to ensure this affordability, thereby maintaining financial resilience.

Members discussed the report, and during the discussion the following points were noted:

·              Overspend of £8.755m on the Lincoln Eastern Bypass – the forecast overspend on the Lincoln Eastern Bypass was due to a number of issues which could not be foreseen. This included the public inquiry, the bankruptcy of the original contractor Carillion, flooding, redesigns and Covid-19. There were always a number of unknowns, such as bad weather, which were factored in as risks. The project should be physically completed this calendar year, but would not be financially completed for some time due to outstanding claims such as for bad weather.

·              Overspend of £8.833m on Grantham Southern Relief Road – Delays and costs were increasing, mainly due to Covid-19 and waiting for third parties, namely Network Rail, Highways England and utility companies, to divert power and water supplies. 

·              Overspend trends – the Board suggested that it would be useful to have a breakdown of overspends in previous quarters included in the report going forward so that quarters could be compared and any trends could be identified.

·              Review and analysis of major projects on completion – there was no formal process to review and consider lessons learnt at the end of a major project. An officer led Capital Review Group was in place to strengthen reporting to scrutiny committees and the Executive. Lessons learnt from major projects could be considered by the Capital Review Group going forward.

·              Managing overspends from within the existing capital programme – it was  ...  view the full minutes text for item 58.

(To consider an update report from Dan Quinn, Assistant Director – Corporate Recovery, on Covid-19 and its economic impact)

Consideration was given to an update report from the Assistant Director – Corporate Recovery and the Assistant Director – Growth, on Covid-19 and its economic impact. The report provided an overview of the work by the Local Resilience Forum (LRF), partners and Lincolnshire County Council (LCC) to manage Lincolnshire's response to the Covid-19 pandemic. The significant disruption created by Covid-19 had forced authorities and communities to change their behaviours and routine working practices, which  had demonstrated what was achievable through collaborative working. The  Council and its strategic partners aimed to ensure that positive outcomes  were maintained to help inform future service delivery to improve services. As well as serious implications for people’s health and public services, Covid-19 was having a significant impact on the economy and the response / recovery approach would need to be considered against an uncertain economic backdrop. This issue was compounded by increased demand in areas of service activity such as social care teams, wellbeing services, infection control etc.

Since the meeting in October, there had been a significant resurgence of the disease nationally and this had been reflected locally with a significant increase of infection within the communities in Lincolnshire. On the 5^th November 2020, the UK began a second period of lockdown. The new measures would apply nationally for four weeks up to and including Wednesday 2^nd December. At the end of that period, the UK may return to a regional approach, based on the latest data.

The report highlighted the recent data which included the number of cases and number of deaths. The report also made reference to activities on homelessness, vaccination roll-out plans, communities and volunteer coordination, mortality planning, education, business and exit strategy post lockdown.  The Assistant Director, Corporate Recovery, updated the Board on the latest figures relating to Lincolnshire for Covid cases and made comparisons to neighbouring areas. He suggested that the curve of infection rates was flat lining and that some areas of the County had shown signs of decreases, although Boston. Lincoln and East Lindsey were slightly above national average rates. He reported on the positive discovery of a number of vaccines and plans underway for roll out, possibly later in the year.

Consideration was given to a report from the Assistant Director – Growth, which described:- the economic impact of Covid-19 as currently known; set out the actions that had already been carried out by Lincolnshire County Council (LCC), the Greater Lincolnshire Local Enterprise Partnership (LEP), and other partners to reduce the impact; and explained the priorities of the midterm economic recovery strategy which the LEP had co-ordinated and would communicate to Government. The report outlined the main economic impacts of Covid-19 as: rising unemployment, tightening labour market, reduced business investment, rapid digitisation, and localised impacts particularly on the tourism and hospitality sectors which provided a high proportion of jobs/business activity. Also outlined was the detail of the mid-term strategy which was structured around three headings: protect, progress, and prosper.

The report also outlined  ...  view the full minutes text for item 59.

(To receive a report from Karen Tonge, Treasury Manager, on the Treasury Management Performance Quarter 2 (1 July to 30 September 2020))

Consideration was given to a report from the Treasury Manager, on the treasury management activities and performance for Quarter 2 of 2020/21 to 30^th September 2020, comparing this to the Treasury Management Strategy and Annual Investment Strategy 2020/21 that was approved by the Executive Councillor for Resources and Communications on 20^th March 2020. The report made reference to activity and performance in relation to interest rates, investments and borrowing. It was reported that the Government announced its response to the PWLB Consultation as part of Spending Review and one result was to lower interest rates for borrowing for eligible Councils by 1% across the board. The Council, who was eligible for this new rate cut and who had not borrowed yet in 2020/21, welcomed this announcement.

It was reported for information that LCC had lent £5M this year to the London Borough of Croydon. This was over a one year period and part of the Council's Investment lending strategy. It had been reported that the London Borough of Croydon had been in some financial difficulties and would be reviewing their budget as part of a S114 Notice strategy. It was confirmed, however, they were not seen as a credit risk and there was no concern that the money would not be repaid. The Council had a total of £170m investments with other Councils at present and another £30M committed future lending. The amount lent by the Council was driven by cash flow and Local authorities were seen as low Government risk and hence had a maximum limit of £20M over a two year period per local authority. It was reported that lending amongst local authorities had significantly increased over the last year to over £11bn, due to the impact of the Covid-19 pandemic measures on the money market. Councillor M Whittington, Executive Support Councillor for Resources and Communications, reported that the Council's lending exposure to other local authorities was being reviewed.

(Councillor B Adams gave his apologies for the remainder of the meeting)

RESOLVED:  That the report be noted and the comments outlined above be passed onto the Executive Councillor for Resources and Communications.

(To receive a report which enables the Board to note the content of its work programme for the coming year)

Members were advised that this item was for information only.

RESOLVED:

That the work programme be noted.