Agenda and minutes

There were no disclosable pecuniary interests.

(a)  To agree the minutes from the meeting of Cabinet on 16^th November 2021

(b)  Matters arising

The minutes of the meeting held on 16^th November 2021 were agreed and signed as a true record. There were no matters arising.

Report of the Director of Business, Investment and Culture

The Cabinet considered a report of the Director of Business, Investment and Culture that indicated that Coventry City Council (CCC) had been successful in its application to the West Midlands Combined Authority for £751,306 to be allocated through the Community Renewal Fund (CRF) to enable the delivery of a pilot project (expected to be 7 months duration) up to 30th June 2022, which would support the continued growth and competitiveness of cultural sectors in Coventry, not least through realising the unique opportunities presented by UK City of Culture 2021, the 2022 Commonwealth Games and associated Legacies.

Through the CRF Pilot, CCC would lead a partnership to deliver an integrated business, skills and employment support package to Coventry’s cultural sectors, which included creative industries, tourism and hospitality, events, and businesses/freelancers supplying these sectors. 

The CRF was announced at the March 2021 Budget. It was principally revenue funding and had four themes: Investment in Skills; Investment for Local Businesses; Investment in Communities and Place; and Supporting People into Employment. A key purpose of CRF was to deliver pilot initiatives (including new innovative concepts) that could act as the forerunner for activities that could be potentially delivered through the UK Shared Prosperity Fund (UKSPF - the Government’s successor to European Regional Development Fund - ERDF and European Social Fund - ESF), which was expected to be launched in either 2022 or 2023.

Through the successful application, CCC (working with Delivery Partners) would be able to build on its extensive track record of delivering successful economic and social development programmes through ERDF and ESF, and also pilot new ways of delivering business, skills and employment support services which could then be taken forward through UKSPF – this was expected to be an important funder of many of CCC’s economic and social development activities after ERDF and ESF funding in the UK ended in 2023.

CCC would engage in a contracting process with the West Midlands Combined Authority (WMCA) who were the Lead Authority for the overall funding received from Government.  Following the signing of this Funding Agreement, it would also need to develop Grant Aid Agreements with its Delivery Partners before project activities could formally start.

The report provided information on the bid and sought approval for the Council to accept the grant allocation in order to deliver the pilot project.

RESOLVED that the Cabinet:

1)  Approves the acceptance and drawdown of the grant funding totalling £751,306 for the Community Renewal Fund to be utilised in delivering the City’s priorities, as set out in the report.

2)  Delegates authority to the Director of Business, Investment and Culture, following consultation with the Director of Finance, the Director of Law and Governance and the Cabinet Member for Jobs and Regeneration, to negotiate the final terms and approve entry into:

a)  the funding agreement with West Midlands Combined Authority for Community Renewal Fund funding allocation; and

b)  back-to-back agreement with such delivery partners as is deemed necessary to deliver the City’s priorities, as set out in the  ...  view the full minutes text for item 50.

Report of the Director of Finance

The Cabinet considered a report of the Director of Finance that would also be considered by Audit and Procurement Committee at their meeting on 31^st January 2022, advised of the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of September 2021. Appendices to the report provided details of: Revenue Position -  Detailed Directorate breakdown of forecast outturn position; Capital Programme - Analysis of Budget/Technical Changes; Capital Programme - Estimated Outturn 2021/22; Capital Programme - Analysis of Rescheduling; and Prudential Indicators.

The headline revenue forecast for 2021/22 was for net expenditure to be £14.4m over budget before the application of COVID-19 emergency funding for local government. After the use of this grant, the net forecast over-spend was £3.1m. At the same point in 2020/21 there was a projected overspend of £3.5m.

The position included an underlying overspend of £6.8m within Children’s Services although £3.3m of this had been attributed to the pandemic and funded from one-off Covid funding accordingly leaving a net overspend of £3.4m (2.7m at Quarter 2). Work had been undertaken to understand the likelihood and extent of these pressures continuing into next year and this would be reflected in the 2022/23 Pre-Budget Report. Management focus would continue to identify the causes and manage as far as possible the budget pressures within Children’s Services as a fundamental element of balancing the 2022/23 Budget position. It was clear though that a combination of societal and demographic trends and market pressures were creating a very difficult environment for the service, part of the effect of which was the challenging financial position reflected here.

Elsewhere, lower-level budget pressures had continued or emerged within Streetscene and Regulatory Services, Finance, Legal and Governance Services and Transportation and Highways. In overall terms the corporate position was within acceptable tolerances at this stage of the financial cycle and could be reasonably expected to continue improving towards year-end.

The Council and the city continued to receive Government support linked to Covid within the 2021/22 financial year. This amounted to c£24m announced to date to support Council services directly and a further c£41m channelled through the Council to support Coventry businesses and external suppliers. Although further allocations could be ruled out, the pace of funding announcements had slowed markedly reflecting the wider easing of lockdown measures. The scale of any residual Covid related grants was therefore likely to be modest.

The Council’s capital spending was projected to be £253.4m and includes major scheme expenditure which ranged from investment in to the A46 Link Road, Coventry Station Masterplan, construction of a second office building and a hotel within the Friargate development, Air Quality highways works and Secondary Schools expansion. The size of the programme and the nature of the projects within it continued to be fundamental to the Council’s role within the city.

The Council’s services and its financial position were moving gradually towards a business as usual position as the year progressed with activity and impacts arising  ...  view the full minutes text for item 51.

Report of the Director of Finance

The Cabinet considered a report of the Director of Finance that had been considered by the Finance and Corporate Services Scrutiny Board (1) at their meeting on 1^st December 2021 (their minute 22/21 referred) and would also be considered by Council at their meeting on 18^th January 2022, that presented a Medium-Term Financial Strategy (MTFS) for adoption by the City Council. A briefing note setting out a recommendation from Finance and Corporate Services Scrutiny Board (1) consideration of the report was circulated.

The previous strategy was approved as part of the 2021/22 Budget Report in February 2021. The Strategy set out the financial planning foundations that supported the Council’s vision and priorities and the financial and policy context for the Council’s current Budget process. Cabinet would consider proposals within the Pre-Budget Report in December and the final Budget Setting Report would be brought to Cabinet and Council in February 2022.

The national funding background to the MTFS was that the local government would be subject to a new settlement from Government within the financial parameters of the Autumn Budget and Spending Review 2021 (SR2021) announced in October. Although a major upheaval in the funding arrangements for all councils had been signalled at regular intervals this was once again postponed in SR2021 and there would be no structural changes to the system until 2023/24 at the earliest. In addition, SR2021 provided only indicative control totals for the sector and it would not be until the provisional local government settlement was released in December 2021 that firmer indications would be provided of the Council’s outline financial settlement for the next three years. The Pre-Budget report that would be considered by Cabinet alongside this one set out the best estimate of the Council’s three-year settlement financial position. Current medium-term estimates were still based on assumptions of local authorities continuing to face significant financial pressures.

The national political and financial environment had continued to be subject to fluidity and uncertainty resulting from the impact of Covid and the economic transition as restrictions had been lifted. Despite the large increase in Government borrowing incurred during the pandemic SR2021 indicated that real terms growth would be allowed across Government departments over the medium term. How this affected the financial position for local government would not be known with any certainty until the forthcoming local government settlement, although it was anticipated that demographic, societal and inflationary pressures would absorb much if not all of the indicated growth in the sector. The shorter-term impact of this was likely to be some additional funding for local government to help deal with known and growing financial pressures. The extent that the position could be forecast beyond 2022/23 would depend greatly on the detail set out in the settlement. There was every expectation that the pressure on public finances would not ease in a sustained way and that any increase in available revenue resources would be at least matched by equivalent need to meet pressures within the sector, in  ...  view the full minutes text for item 52.

Report of the Director of Finance

The Cabinet considered a report of the Director of Finance that outlined, as a basis for consultation, a set of new revenue budget proposals for 2022/23 to 2024/25 which represented changes to the Council’s existing Budget. Consultation views were also sought on the potential level of Council Tax and Adult Social Care Precept increases for 2022/23. The final Budget proposals and the Council Tax and Adult Social Care Precept increases would be subject to Council approval in February 2022. An appendix to the report provided details of the Pre-Budget Financial Position.

The Council’s overall future strategy was set out in the “One Coventry Council Plan” which described the Council’s key priorities including: improving the quality of life for Coventry people, especially the most vulnerable; promoting the growth of a sustainable Coventry economy and ensuring that residents shared in the benefits; and making the most of assets and working closer with partners and residents to enable people to do more for themselves. Implicit within the plan was the Council’s commitment to delivering a range of core services to everyone in the city. The Plan was currently being revised and it was intended that it would be brought for approval during the first part of 2022. Much of the policy content would remain similar to the current version although it was expected that there would be some significant changes.

The expected developments in relation to the system of local government finance continued to be delayed. The Secretary of State for Levelling Up, Housing and Communities had announced that a future move to 75% Business rates retention would not now proceed although the current assumption was that wider 50% retention and existing arrangements for Business Rates pools and pilots would continue for the foreseeable future. In the Council’s case this would mean continued membership of the Coventry and Warwickshire Business Rates Pool and the West Midlands Combined Authority Business Rates Pilot, both of which continued to offer potential positive financial benefits. At present though, neither further reform to the fundamental nature of the Busines Rates and Council Tax arrangements within local government nor the fair funding review of local government appeared imminent.

The Chancellor of the Exchequer did announce the Autumn Budget and Spending Review 2021 (SR2021) on 27th October 2021. This presented a three-year horizon for Government spending in the form of Departmental Spending Limits (including local government). This indicated some further financial support for local government although at the time of writing the Council was still awaiting the 2022/23 Provisional Local Government Finance Settlement which would include details on a number of key funding announcements which would dictate the funding envelope within which the Council would need to operate next year. As a result, the financial Pre-Budget position set out in this report was assumption sensitive and was likely to be subject to significant changes in some important areas prior to the setting of the final Budget in February 2022. A note of caution was urged both due to the pressures  ...  view the full minutes text for item 53.

There are no outstanding issues

There were no outstanding issues.

There were no other items of public business.