Agenda item

This annual report provides an account of the role of the Leader of the Council. It details their ambitions for their areas of responsibility, how they have and will undertake political challenge and leadership and what their priorities and ambitions are for the year ahead.

Discussion:

The Leader of the Council introduced the report, he highlighted that the government had made announcements in relation to Local Government Reform (LGR) that week which proposed the structure and boundaries in a number of areas. In Essex there would be five authorities, in Hampshire and the Isle of Wight there would be five authorities, and in Norfolk and Suffolk areas there were three authorities proposed for each area. The government had sought additional consultation in East and West Sussex. Whilst the government had stressed that no precedent was set by the decision in these instances, the Leader was confident that this indicated that the option chosen by the Council, known as 4D, was viable.

The Leader thanked officers and the Committee for its hard work during the year and scrutiny it provided, both pre decision scrutiny and holding Members to account. He also thanked the Head of Revenue Accounts Dave Reynolds who was leaving Medway, for all of his hard work.

The following issues were discussed:

Meningitis outbreak – a Member thanked the Leader for the leadership he had shown, and the work undertaken by officers during the recent meningitis outbreak. The Leader stated that whilst the outbreak was not finished, the evidence was that the hard work undertaken by officers was working, he added that his thoughts were with the families of those affected and the University of Canterbury. When the outbreak had been resolved, lessons would be learned but Public Health teams in Medway and Kent had done excellent collaborative work, as had the Communications team in ensuring the messages were delivered effectively.

Pride In Place – Members welcomed the Pride in Place funding which provided additional investment for deprived areas in Medway. A Member asked if the Council would be responsible for decision making in relation to allocation of funds. The Leader stated that he was proud to have worked closely with local MPs to receive additional grant funds, decisions would be managed by three Independent Boards which would deliver funding directly and include local resident representation.

Exceptional Financial Support (EFS) – it was asked how the Leader could consider the multi-year settlement positive when the Council was one of 30 authorities which required EFS to balance the budget and this had been used on multiple occasions. The Leader stated that he was confident that the Council would not require further EFS for 2027/28.  The multi-year settlement meant that the budget gap for the 2027/28 year was £8m, which was a lower figure than previous years and was achievable. In addition, the Council had a Financial Improvement and Transformation (FIT) Plan to improve financial sustainability with 81% of actions complete through the first three quarters of the year.

Borrowing Costs – the Committee discussed borrowing costs, it was commented that the finance and interest budget was overspent by £500,000 because Public Works Loans Board (PWLB) rates had not fallen as expected, it was asked whether the Council was at risk because the PWLB had no requirement to follow base rates in its lending. The Leader stated that he had worked with the Chief Operating Officer and had written to the PWLB to request a more consistent approach in their lending policies.

It was asked if there was a risk to frontline services including the weekly bin collection and the Council declaring bankruptcy if the Council lost control of finances. The Leader stated that the Council had clear plans which were transparent and he was confident that the Council would balance the budget in 2027/28.

it was asked what stress testing the administration had undertaken when considering the current policy. The Leader stated that potential risks of increased costs and increased finances had been considered during wider consideration of proposed projects. The impact of borrowing and interest costs on the revenue account and potential risks was considered as part of spending and budget priorities. For example, the Kennel Service scheme had been brought forward, which had incurred a capital cost, that would be offset by increased revenue generation.

A Member commented that the Council was scheduled to spend £25m on debt repayment next year and was scheduled to borrow £487m over the next three years, with interest rates likely to rise, he asked if further EFS would be required to cover the additional costs. The Leader stated that the Council considered the cost of borrowing, it also took into account the cost reductions which resulted from investment, such as lower temporary housing accommodation costs.

In response to a question whether the lack of cash reserves had required the Council to borrow to ensure liquidity, the Leader stated that over the lifetime of Medway Council there had been a number of occasions when the Council had borrowed on a very short-term basis to ensure liquidity. The Chief Operating Officer added that an element of the Council debt included working capital, but he did not envisage a situation or have any risk where the Council was not able to borrow to fulfil its responsibilities.

Capital Programme - it was asked whether the Council should consider the viability of the Capital Programme given the likely increase in borrowing costs and its impact on the revenue budget. The Leader stated that the programme was always under review, and the administration was prepared to make difficult choices. Where possible the administration prioritised income generation over cutting services. The Leader stated that he was confident that the budget for 2027/28 would be balanced without the need for further EFS.

It was asked if the Council was charged a higher rate for borrowing due to its financial difficulties, the Chief Operating Officer stated that the Council was not charged a higher rate by the  PWLB because of its financial position. The Council would borrow from other local authorities if it could achieve a lower rate and some local authorities had been less willing to lend to the Council than previously, however, he did not foresee any circumstances in which the Council could not borrow form the PWLB.

Crisis Resilience Fund – a Member commented that the Crisis Resilience Fund succeeding the Household Support Fund had meant that that free school meals during the holidays would be discontinued and he had been contacted by a number of worried families. He asked whether ending free school meals during the school holidays had been a Cabinet decision. The Leader stated that guidance provided by the Department of Work and Pensions (DWP) had been against a blanket policy of free school meals during the holidays. There was a recognition that help and support was required but that it needed to be focused on those in the most need and the government wanted to move away from vouchers and help families build resilience. The Leader added that vouchers would be available to those in need for the upcoming Easter holidays. The Council was in the process of setting up a community supermarket, and the locations would be announced shortly. If this worked well there was scope to add further locations. The Leader thanked the Finance Welfare team for the work they did in relation to the Household Support Fund.

Online Council Tax – a Member expressed disappointment that only 25% of people received their council tax bills online. The Leader stated that the Council continued to promote the scheme at various Medway events. The Chief Information Officer added that the target for the year was 25%, the number of residents which now received Council tax online had risen to 27%, and previous experience had shown that there was an uplift during annual billing which was about to be undertaken.

Medway 2.0 – an update was requested on progress in relation to completion of forms as part of Medway 2.0, the Chief Information Officer stated that four forms were due to be completed, and this would be done by the 1 April target.

External Audit – the Leader was asked whether he was confident that the work required for external audit would be completed within the required timeframe. The Leader acknowledged there were national difficulties in the sector, however, it remained a key objective for the Council to regain assurance. A Member added that the external auditor Grant Thornton had reported that the Council had made progress and the objective remained to regain assurance prior to LGR.

Electoral Services – a Member raised concern that 25% of postal voters had chosen not to reapply for a postal vote and asked whether this represented a disenfranchisement of voters, particularly vulnerable or elderly voters. The Leader stated that the process was a new national requirement that every postal voter reaffirmed they wanted to continue voting by post every three years. He was not surprised the figure was 25% as this was a new requirement. He added that he did not accept that postal votes were less legitimate than other votes and noted that electoral vote fraud was very rare. A Member requested that the Committee receive a report from Electoral Services to consider the issue of disenfranchisement related to postal votes, on being put to the vote the recommendation was lost.

Town and Parish Councils – the Leader was asked for his thoughts regarding the possibility of Town and Parish Councils being developed in response to LGR to ensure local decision making and representation. The Leader stated that the Council had a good track record of developing neighbourhood plans with residents and engaging with the public. Rochester had relatively recently, rejected the opportunity to establish a Town Council. The Leader wanted to empower residents to work for the local community, however, development of further Town and Parish Councils was not a priority for the administration prior to LGR and thus it would be a decision for the successor authority. In his view LGR included the potential for area committees as part of the successor authorities.

LGR - a Member asked whether the recent government decisions which included changes to boundaries aligned with the Medway proposal, option 4D. The Leader stated that the recent government decision outlining the structure of local government in a number of areas including Essex and Norfolk included changes to boundaries in some areas which was part of Medway’s proposal. The government had stated that no precedent had been set, however, those decisions did suggest that Medway’s proposal remined a viable and strong option. The Leader added that if the decision was a different option than the one put forward by Medway, he would not legally challenge that decision.

Devolution – the Leader was asked for an update on the progress of the devolution deal which would provide opportunity for the region to obtain more powers from central government. The Leader stated that 13 of the 14 councils in the region had signed an agreement for a Foundation Strategic Authority, he understood why Kent County Council had not signed at this time, but the Councils continued to work together collaboratively.

Risk – it was asked what risks had been identified and added to the risk register in relation to LGR and what mitigations were in place. The Leader stated that LGR had a number of risks attached, and Portfolio Holders were dealing with those risks on an ongoing basis and on an issue-by-issue basis. He explained that in relation to procurement, the Council was ensuring that contracts did not end on 31 March 2028, to ensure continuity of service but also included break clauses to allow for flexibility for the successor authority to make decisions as required.

Whoever would be running the new authority, scrutiny would have an important role in ensuring that the creation of the new authority was both safe and legal and positive for residents.

The Leader stated that in relation to Finance, disaggregation was a significant issue, and he highlighted the experience of Cumbria which had taken around five years to complete disaggregation. He remained confident that the senior management team managed those risks and highlighted that residents principal concern was that frontline services continued to run effectively.

Armed Forces – a Member thanked Councillor Stamp for her work as Armed Forces Champion, and all that she and the Leader had done for armed forces families in Medway. The Leader agreed, and added that he was proud that Medway had created its own Armed Forces Partnership Board and continued to be a part of the Kent and Medway Armed Forces Partnership Board

Decision:

The Committee noted the report.