Agenda item

(To receive a report from Keith Noyland, Head of Finance – Communities, which invites the Committee to consider and comment on the 2022/23 budget proposal implications for the Council's Highways and Transport Services activities)

Consideration was given to a report from Keith Noyland, Head of Finance – Communities, which invited the Committee to consider and comment on the 2022/23 budget proposal implications for the Council's Highways and Transport Services activities. Members were advised that no clarity had been forthcoming regarding Local Government funding reforms, therefore these budget proposals only covered one year. The Council proposed a three per cent increase in Council Tax, which was entirely allocated to adult social care.Members were given a breakdown of the proposed revenue budget for the Council's Highways and Transport services and were advised of a projected two per cent pay inflation subject to any pay award. Furthermore, provision for potential increases in utility costs, including the energy costs associated with signals and street lighting, was made within the Corporate Budgets. The Home to Schools and College Transport delivery and budget responsibility was proposed to be transferred to the Place Directorate from April 2022 and was the source of the most significant cost pressure at £6.546m. There were significant external factors currently impacting on the cost of passenger transport including national living wage rises, inflationary challenges, a national drivers’ shortage, a shortage of passenger assistants, rising fuel prices, and higher operational costs for larger suppliers including the requirements of the Public Service Vehicle Accessibility Regulations 2000 (PSVAR) legislation. A transformational programme was underway which focused on external factors, including developing new procurement tools and approaches, market engagement and management activity, improved contract management, an overhaul of routing and demand management activity. These activities aimed to better regulate the supply market, increase competition, and reduce the impact of external factors on costs. The forecast was to secure £1.239m of cost reductions in year one, resulting in a net budget increase of £5.307m in 2022/23. Provision for highways maintenance contract inflation, increased cost of plant, labour, and equipment, driven by the current materials and labour market issues, in addition to the growth of the highways network, results in a cost pressure of £0.760m. Members were given a breakdown of the proposed Capital Programme for 2021/22, the most significant changes coming in the form of material and supply risks in forecasts for the Major Highways schemes.The Highways Asset Protection budget would be set equivalent to the DfT grant once it is confirmed.The remaining risks of the major highway schemes currently in progress were to be reorganised to ensure the Capital Programme for 2022/23 was affordable.

The Committee considered the report, and during the discussion the following comments were noted:-

• Members were satisfied that the Major Schemes Programme remained affordable on the back of other schemes being deferred into the future. Members acknowledged impacts of the £12m gap in funding and were pleased to hear that there was ongoing work of Leading Officers and Executive portfolio holders towards a future funding strategy as part of the Highways Infrastructure Asset Management Plan. Members welcomed plans for the allocation of the remainder of £7m out of the £10m funds in 2022 – 2023 in line with the Highways Asset Management Strategy.
• Members expressed a view that the transfer of the transport to school services, that was now brought into the Highways budget, offered a potential for a thorough examination of that service and the cost pressures that were on the rise, to ensure that challenges were mapped, and funds were used in the most effective way. Members were assured that there was a structure and governance model around a fundamental review of educational travel and that home to school transport was one of the major transformation activities for the Council.

RESOLVED

1. That the Highways and Transport Scrutiny Committee unanimously supported the budget proposals for Highways for 2022/23.

2. That the Highways and Transport Scrutiny Committee agreed that the comments listed above be forwarded on to the Executive in relation to this item.