The Prime Minister for Gender Equality and Equalization of Society, Kemi Badenoch MP wrote the letter to the head of the city council, cllr Wayne Fitzgerald, following an external review of the Peterborough City Council’s financial position and the strength of its broader governance arrangements.
In the letter, Mrs. Badenoch said; “However, I am concerned that the scale of the economic challenge facing the Council is not yet fully understood and that the Council may take further steps to remedy the situation. I trust that the results will help you to focus your advice on activities that will lead to sustainable change. “
In the letter, she adds: “I need assurance that the Council accepts the results of the study and is motivated to improve the Council’s financial status. This includes the main recommendations for agreeing on a revised medium-term financial strategy, drawing up an improvement plan and appointing I would also expect to see the Council’s plans for the recommendation of a four-year “all out” election cycle in due course.
“As such, I would ask you, within the next month, to outline in writing the steps you are taking in the short and long term to respond to my review. Any hesitation in this area will give rise to considerable concern and could lead to to reconsider whether another approach might be appropriate to ensure the necessary improvements. “
Following the review, a report has been published. The report says: “The most worrying is the inclusion of amounts for an increase in the municipal tax above the statutory level, which is not agreed. The Council also has limited reserves to support them during the period of medium-term financial strategy (MTFS) and had at the end of 2019/20, the lowest ratio between reserves and service expenditure of any of the Council’s close neighbors.In summary, there is a significant risk that the Council will not be able to balance its budget during the MTFS period . “
The report adds: “The financial challenges facing the Council are significant and urgent. The financial difficulties that led to these requests have been apparent for some time, but although the Council has made savings, these have not been at the level to meet the scale of the challenge, and the Council continues to increase its net expenditure on services and capital expenditure.
The report states that “Although the Council has taken steps to reduce the capital program to reduce the revenue implications, we believe that the current borrowing requirement is unsustainable and that the program is still containing unaffordable growth.” We also believe that the Council has assets that can be realized to help balance the budget before exceptional financial support is provided. “
In response, cllr Wayne Fitzgerald said; “This is a serious report with some important recommendations for us to consider. We have already worked actively in many of the areas covered by the recommendations – and therefore we are now able to confirm that we will not seek further exceptional financial support. in the year (2021/22)
“I am committed to the locally led approach, which is supported by the two reports and in the Minister’s statement, and I will continue to work with CIPFA, DLUHC and the new improvement council to get the council in a position of financial sustainability as soon as possible.
“The report acknowledges the very significant challenges we have faced in the past, but also acknowledges that Peterborough’s services perform well and are low cost. However, it is clear that I, as a leader, including all other members regardless of political party, must take seriously take note of these reports and start implementing some of the recommendations that will mean that there are very difficult choices ahead. Going forward, I will invest more in services to the residents and see the city continue to flourish and grow, but we will need the finances for that. ”
The Council has already taken a number of actions following the review:
a Financial Sustainability Working Group has been set up and there are now recommendations going to the Cabinet and then the full council, amounting to around € 10 million. GBP in savings in the first phase of the budget;
– increased staff resources for the development of phase two of the budget are in place, to work up transformation and budget opportunities to deliver savings.
– a program of ongoing challenge and support from CIPFA has been launched, which will examine all major headings throughout the Council;
– preparations for the establishment of an improvement committee have begun, which means that the Board of Directors can take office immediately after the publication of these reports;
a review of the Council’s audit function has now begun, which is likely to lead to the appointment of an external independent chairman.
– the appointment of a new CEO to provide the council with dedicated and additional management capacity is underway;
– The Council is now working on a single improvement plan covering all revenue and capital budgets; new pressures and risks. This will detail and review all of the Council’s assets, capital program and contracts.