Agenda item

To consider the report.

Following consideration of the officer report, appendices and discussion, the Executive agreed:??

a.        That Somerset Council faces a financial emergency and acknowledges that urgent actions need to be taken to address the position including the setting up of the Financial Focus Group and the introduction of further financial controls to limit spending.  

b.        To approve that the Council should continue its discussions with the Department for Levelling Up, Housing and Communities (DLUHC) following the letter from the Section 151 officer to them concerning the councils’ financial challenges and the initial meeting.

c.        That there should be a special meeting of the Audit Committee in December to consider the council’s financial sustainability and the issues raised in the letter from Grant Thornton.

d.        To approve the disposal of the commercial investment portfolio, delegated the appointment of external agents to the Director of Strategic Asset Management in conjunction with the Lead Member for Economic Development, Planning and Assets, and uses the Property & Investment Executive sub-committee to oversee the disposal programme.

e.        To receive an update report on the actions being taken and progress in closing the budget gap for the 2024/25 Budget at the 6 December Executive 2023 meeting.

f.         To receive a report on the review of Earmarked Reserves at the 6 December Executive meeting. 

g.        To task the Asset Management Group with bringing forward asset disposals including council office rationalisation proposals, with an update to the Executive on 6 December 2023. 

h.        Agreed to receive a report on the vision for a sustainable Somerset Council at the 6 December 2023 Executive meeting.

ALTERNATIVE OPTIONS CONSIDERED: As set out in the officer report

REASON FOR DECISION: As set out in the officer report

The Leader of the Council and Lead Member for Governance and Communications, Cllr Bill Revans, invited the Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, to introduce the report.

The Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, introduced the report, highlighting: the critically important report outlining the scale of challenge and complexities faced by Somerset Council financially and as a new organisation; that all Councils are facing the same challenges but with varied financial starting points; summarised and outlined the direct and challenging recommendations in the report, including declaring a financial emergency, that at their meeting 26 October 2023, the Audit Committee considered the section 151 officer’s letter to DLUHC on Somerset Councils Financial Challenges and the letter from Grant Thornton on the Financial Sustainability of the Council but was not assured that arrangements were in place to address the current years forecast overspend or to close the 2024/25 budget gap, as a result, they have called a special Audit Committee in December 2023; the essential review and work on Council reserves with the Amalgamated Report to be considered by Executive on 6 December 2023; the vision for a sustainable Somerset Council at 6 December 2023 Executive meeting; and the changing, developing and emerging emergency situation and programme of work required at pace to avoid the requirement for the S151 Officer to issue a Section 114 Notice.

The Director of Resources and Corporate Services, Jason Vaughan, added to the above points, highlighting: that the new Council faces a very stark and challenging financial position; summarised the complexities of Local Government finance, including revenue, taxation, investments reserves and grants; that the increase in costs at the same time as income has been restricted has resulted in a fundamental imbalance and a very considerable budget gap between the costs of providing services and the income the Council receives; summarised the range of actions being taken to close the £100m forecast budget gap, including: the Service Director challenge sessions, deep dive sessions for Adult and Childrens Social Care, the review of the existing capital programme, staffing review, reviewing the inherited commercial investment portfolio and developing a disposal programme; the rationalisation of the council offices and other asset disposals to generate capital receipts and reduce running costs; the development of a transformation programme to reshape the Council’s services; the upcoming Autumn Statement and financial settlement; and the updated position and progress on these actions to be reported to the 6 December 2023 Executive.

The Lead Member for Children, Families and Education, Cllr Tessa Munt, further added to the above points, highlighting: the challenges faced in Children's Social Care, the statutory requirements; the increase and complexity of demand; the school transport challenge session outcomes, focus and ongoing work; The County Council Network and the Society of County Treasurers report of financial pressures; and the continuing work to reduce the overspend.

The Leader of the Council and Lead Member for Governance and Communications, Cllr Bill Revans, invited comments from other Members present, questions and points raised included: the external input, budgetary and financial impact of a Section 114 notice; the need for a  communication message regarding Council spending to be sent to residents of the County; the circumstances affecting the One Somerset business case, the complex transformation from five Councils to one Council, including the changed financial landscape; the work of the Council to mitigate financial situation; and the comparison of local Unitary Councils Council tax charges.

Having been duly proposed and seconded, the Executive unanimously agreed to amend recommendation d, to include ‘in conjunction with the Lead Member for Economic Development, Planning and Assets’:

d. To approve the disposal of the commercial investment portfolio, delegated the appointment of external agents to the Director of Strategic Asset Management in conjunction with the Lead Member for Economic Development, Planning and Assets, and uses the Property & Investment Executive sub-committee to oversee the disposal programme.

The Executive proceeded to vote on the recommendations, which were agreed unanimously.?

Following consideration of the officer report, appendices and discussion, the Executive agreed:??

a. That Somerset Council faces a financial emergency and acknowledges that urgent actions need to be taken to address the position including the setting up of the Financial Focus Group and the introduction of further financial controls to limit spending. 

b. To approve that the Council should continue its discussions with the Department for Levelling Up, Housing and Communities (DLUHC) following the letter from the Section 151 officer to them concerning the councils’ financial challenges and the initial meeting.

c. That there should be a special meeting of the Audit Committee in December to consider the council’s financial sustainability and the issues raised in the letter from Grant Thornton.

d. To approve the disposal of the commercial investment portfolio, delegated the appointment of external agents to the Director of Strategic Asset Management in conjunction with the Lead Member for Economic Development, Planning and Assets, and uses the Property & Investment Executive sub-committee to oversee the disposal programme.

e. To receive an update report on the actions being taken and progress in closing the budget gap for the 2024/25 Budget at the 6 December Executive 2023 meeting.

f. To receive a report on the review of Earmarked Reserves at the 6 December Executive meeting.

g. To task the Asset Management Group with bringing forward asset disposals including council office rationalisation proposals, with an update to the Executive on 6 December 2023.

h. Agreed to receive a report on the vision for a sustainable Somerset Council at the 6 December 2023 Executive meeting.

ALTERNATIVE OPTIONS CONSIDERED: As set out in the officer report

REASON FOR DECISION: As set out in the officer report