To review and scrutinise the performance management and, where appropriate, to require response or action from the Executive Committee. 

39.1          The report of the Head of Corporate Services, circulated at Pages No. 48-107, attached the performance management information for quarter one of 2022/23.  The Overview and Scrutiny Committee was asked to review and scrutinise the information and, where appropriate, identify any issues to refer to the Executive Committee for clarification or further action to be taken.

39.2          Members were informed that this was the first quarterly monitoring report for 2022/23 and represented the latest information in terms of the status of the actions set out in the Council Plan which was refreshed and adopted by Council on 26 July 2022.  Progress against delivering the objectives and actions for each of the six Council Plan priorities was reported through the performance tracker, attached at Appendix 1 to the report, which was a combined document that also included a set of Key Performance Indicators (KPIs).  The remaining actions from the COVID-19 Corporate Recovery Plan had been incorporated into the Council Plan Performance Tracker so there would be one strategic document going forward.  Key financial information was also reported alongside the tracker documents with a revenue budget statement attached at Appendix 2 to the report, a capital monitoring statement attached at Appendix 3 to the report and a reserves position summary attached at Appendix 4 to the report. 

39.3           Key actions for the quarter were highlighted at Paragraph 2.3 of the report and included adoption of the Tewkesbury Borough Plan; approval of an interim Medium Term Financial Strategy; submission of the UK Shared Prosperity Fund Investment Plan; and completion of the solar canopy in the rear car park at the Public Services Centre.  Members were reminded that, due to the complex nature of the actions being delivered, it was inevitable that some would not progress as smoothly or as quickly as envisaged and the details of those actions were set out at Paragraph 2.4 of the report.  It was noted that not all actions started at the same time so any which were yet to commence had been ‘greyed out’ in the tracker with indicative dates for commencement stated.  In terms of KPIs, the status of each indicator was set out at Paragraph 3.2 of the report and KPIs where direction of travel was down and/or not on target, were set out at Paragraph 3.3. of the report.  Particular reference was made to KPI 18 – Percentage of minor applications determined within eight weeks or alternative period agreed with the applicant - as the quarter one outturn figure was a significant improvement on the 2021/22 full year outturn despite the target figure not being met for the quarter.  Similarly, performance in relation to KPI 22 – Investigate category C cases within 10 working days – had also improved when compared to the 2021/22 outturn figure albeit the target for quarter one had not been achieved

39.4           During the debate which ensued, the following queries and comments were made in relation to the Council Plan Performance Tracker:

39.5           Turning to the financial information, the Head of Finance and Asset Management advised that the financial budget summary for quarter one showed a projected surplus of £275,461 for the full year against the approved budget; however, a number of assumptions had been made for the report and there had already been an impact on the budget in the first three months of the year.  The cost of living impact was only just starting to be felt in terms of the Council’s expenditure so that would impact on services moving through the year.

39.6           The table at Paragraph 4.2 of the report highlighted the variances against budget.  In terms of employees, the Head of Finance and Asset Management explained that the figure in the table was not comparable to the wording at Paragraph 4.5 – the table did not include the gross cost of the Garden Town team which was funded externally and showed a full year variance of £393,676, but the wording at Paragraph 4.5 highlighted a potential gross surplus of £591,914 – although taking into account the corporate expenditure target to save £100,000 from employment costs across the Council, the net position was a surplus of £491,914.  Notwithstanding this, the pay award for April 2022 had not yet been determined; whilst the employment costs included an assumed 2% pay award which had been budgeted at the beginning of the year, it was likely to be in excess of that.  The employer’s side had responded in late July with an offer of £1,925 on every scale point plus an additional day of annual leave.  This was a significant pay offer which was being driven by the need to increase the lowest scale point by an estimated 10.5% to meet the expected National Living Wage.  If agreed, it was estimated it would cost the Council £500,000 - £300,000 above budget and there was potential for a higher award.  If funds were insufficient and there was no surplus to meet the cost, it would be necessary to use the £500,000 reserves which been established for that purpose at year end. Payments to third parties highlighted a projected overspend of £1.68m; however, £1.5m of that was in relation to the grant received and paid over to Gloucestershire County Council regarding the M5/A46 project so the real overspend was projected to be £183,000.  Of that, there was £240,000 deficit forecast against the Ubico budget with the rising cost of diesel accounting for £141,000 – since the forecast had been put together prices had dropped so it was hoped to see a reduction in quarter two.  Other areas of overspend related to agency staff and increased cost of vehicle hire.  It was noted that Ubico was also subject to the Council’s pay award.  Members were advised that, at the start of the financial year, after the budget had been set, Cheltenham Borough Council had advised of additional running costs in relation to Swindon Road depot; those costs had previously been borne by Cheltenham Borough Council and related to day-to-day running costs and maintenance requirements.  As such, Tewkesbury Borough Council was now required to pay a service charge of £150,000 per annum.  This would be off-set by a reduction in the gate fee for the Materials Recovery Facility (MRF) which was expected to be £150,000 lower than budget, largely due to the buoyant market for recycling collected which had resulted in the gate fee dropping from £67 per tonne to £26 per tonne.  Income was positive in many areas with Development Management predicting a 20% increase in planning fees due to a rise in the number of planning applications; however, a number of other income streams were not doing as well with income from the Leisure Centre expected to be lower than budget as it continued to recover from the pandemic and the commercial unit on the top floor of the Council Offices remaining vacant.

39.7           In terms of corporate expenditure, there was an estimated surplus of £51,867.  Treasury activities were expected to deliver savings in borrowing costs as, although rates had increased, the Council’s borrowing requirements had reduced.  The Council’s commercial property portfolio was currently predicting a deficit for the year as a result of the expected temporary void at one office unit in Hertford; that unit had now been let on a 10 year basis so would start to generate income following the inducement period.  The overall projected position on retained business rates was currently in line with budget expectations; however, this could be volatile and it would be interesting to see how the Government intended to support businesses through the winter.  Members were informed there was an overall budget surplus projection of £275,000 for the year, although that was likely to change moving through the year.  The Head of Finance and Asset Management indicated that no further funding was expected from the Government in the current year to support pressures on the budget.

39.8           The capital budget position as at quarter one was attached at Appendix 3 to the report and was currently showing an underspend of £525,000 against the profiled budget.  The capital programme estimated total expenditure for the year to be circa £5.17m with the main elements being Ashchurch Bridge, vehicle replacement, solar canopy and Disabled Facilities Grants (DFGs).  An overspend was shown on DFGs as more grants had been paid out but that had no impact on the Tewkesbury Borough Council’s financial position as it was funded by the County Council.  Appendix 4 to the report provided a summary of the current usage of available reserves; as expected at the end of quarter one, reserves expenditure was relatively modest but it was anticipated there would be further significant expenditure incurred through the remainder of the year.

39.9           A Member noted that it may be necessary to use reserves to fund the pay award and he raised concern as to how the ongoing cost of the increase - and other increases around energy costs etc. - would be met going forward.  Another Member drew attention to Page No. 54, Paragraph 4.2 of the report, and noted that the corporate expenditure included a corporate savings target which showed a deficit of £100,000 and he asked for an explanation on this.  The Head of Finance and Asset Management explained that the level of employee turnover was generally the same each year; however, this year there had been more than normal and there was often a delay in making new appointments.  The approach that had been taken was not to allocate savings targets to individual services.  There was an overall surplus of £591,914 which was more than the net £100,000 target – when looking to set a target for the current year, it was set at a level whereby it could be increased to support the overall budget.  With regard to the replacement of the Ubico fleet, the Member questioned whether the Council should be spending the money now rather than next year when vehicles were likely to be more expensive.  In response, the Head of Community Services advised that there was a balance between trying to extend the life of the current fleet as much as possible and the cost of repairs but it would not be prudent to get rid of the vehicles any earlier than necessary.  Currently the whole fleet was replaced at once so consideration was being given as to how that could be smoothed out.  The Head of Finance and Asset Management indicated that, in normal circumstances, approximately £4m was spend on the replacement of the vehicle fleet every seven years – this was compounded now by increased prices, uncertainty on Government policy and the commitment to carbon reduction.  How best to deliver the Council’s waste and recycling service was a complex piece of work but it was hoped there would be some outcomes over the coming months.  The Member asked whether Managers were generally being encouraged to spend their budgets to deliver projects within the current year given that costs were likely to increase next year.  The Head of Finance and Asset Management explained that, in general terms, if something was planned for the current year then it should be done within the original timeframe; however, there were particular instances where prices may reduce.

39.10         A Member asked what happened in terms of any overspend on the highway projects as he did not fully understand the mechanisms in place for funding.  In response, the Garden Town Programme Director explained that there had been unprecedented inflation which nobody could have predicted within general risk management in the budget, for instance, the Junction 10 M5 project now cost many millions more than when the original bid was calculated so there had been a lot of discussion with the Government as to how the funding gap would be covered.  The Member asked for clarification of the Borough Council’s position in terms of costs and was informed that the funding for each project was slightly different – the J10 project was via the incoming infrastructure fund which the County Council had been eligible to bid for and the work would be done in collaboration with the Department for Transport and National Highways; Ashchurch Bridge was via the Housing Infrastructure Fund which Tewkesbury Borough Council had been eligible to bid for so the money had come direct to the Council which procured or commissioned the work; J9/A46 was the next potential scheme and was currently not funded – it was intended to bid for Department for Transport funds which had slightly different parameters and may be picked up by National Highways.  He indicated that all funds were very different and the Council had to conform to criteria and bid accordingly.  The Member asked if there was any chance Tewkesbury Borough Council could end up having to pay for any overspend on any project and the Garden Town Programme Director confirmed that there was some risk but it was managed through the individual contract and he provided assurance that, in relation to the large scale projects, the risk was with the County Council not Tewkesbury Borough Council.

39.11         A Member drew attention to Page No. 56, Paragraph 4.16 of the report, which related to the additional running costs associated with the Swindon Road Depot and he asked why this had changed.  In response, the Head of Community Services advised that this had come as a surprise as Cheltenham Borough Council had previously covered the costs of running the depot; however, it was now intended to agree a work programme which would give Officers the ability to ask questions and push back if necessary.  A Member noted that the additional development expected within the borough would have implications for Ubico and the services it provided so he asked if that had been included within the budget going forward.  The Head of Community Services advised that, when the fleet had been designed seven years ago, some growth had been built in but that had now been used and the fleet was not far from capacity.  Another food waste round was being added next year and a further two recycling rounds were planned for the following year so consideration was being given as to how Section 106 and Community Infrastructure Levy (CIL) could be secured to provide the necessary infrastructure. 

39.12         In response to a query regarding the Council’s reserves, the Head of Finance and Asset Management advised that these were in a very good place having been built up over the last five to six years.  A lot of this was external funding to support specific project delivery but also from budget surplus and business rates in-year.  Given the current environment he would like to have more money within the reserves but he was comfortable with the level as it stood.  Forecasting was difficult; however, it was likely to be necessary to draw upon reserves more frequently in the future.

39.13         Having considered the information provided, it was

RESOLVED          That the performance management information for quarter one of 2022/23 be NOTED.