Agenda item

To consider the revenue budget financial forecast information for the West of England Combined Authority and the Mayoral budget for the financial year 2022/23 based on data from the period April 2022 to January 2023.

The West of England Combined Authority Committee RESOLVED to:

1.      Review and comment on the Mayoral Fund revenue budget and forecast as detailed in Appendix 1.

2.      Review and comment on the Combined Authority revenue budget and forecast as detailed in Appendix 2.

3.      Approve that the Combined Authority undertake a line-by-line budget review on all funding programmes with progress to be reported back to the Committee in June 2023.

Metro Mayor Dan Norris presented a paper setting out the financial revenue forecast information for the financial year 2022/23 based on data for the period April 2022 to January 2023, and which sought approval of a programme of efficiency reviews and risk-based financial reserve policy for the West of England Mayoral Combined Authority.

The recommendations were moved by Metro Mayor Dan Norris and seconded by Councillor Toby Savage.

Councillor Savage moved an additional recommendation (4) as follows:

“4. As the agreed 2-month bus extensions across the region are being put in place, costs are reported to be rising in excess of the funding requested and set aside by UA councils to support these services. Accordingly, the committee is recommended to reduce the planned £785k contribution to the Treasury Reserve (see Appendix 2) at year end to cover the cost increases on such routes (including to school services), with the view that this is replenished into the Treasury Reserve in due course by the efficiencies to come forward from the ongoing review”.

This additional recommendation was seconded by Councillor Richard Samuel. 

The Acting Interim Chief Executive stated that there were issues in that additional monies would further deplete the Authority’s reserves which were already at a low level compared with other Combined Authorities and were currently rated as inadequate on a number of measures.  He appreciated the financial pressures due to inflation and other demands that the Unitary Authorities were experiences and reiterated that supported bus services had been costed on price per passenger journey and funding was primarily provided by unitary authorities and had seen a significant price increase, in some cases three times higher.  Officers had also not had an opportunity to fully assess the proposals set out in the amendment. 

Councillor Savage responded by saying that the difficult situation could be resolved by providing a smoother transition to Demand Responsive Transport.  It was now too late for the Unitary Authorities to meet the increase in costs as their budgets had been set and the election period was beginning and decisions for extending contracts would need to be made today.  Therefore this was the only route available for a decision to be made to extend supported services.  He did not believe that reserves would be impacted in the medium term as the efficiencies review would be concluded later in the year but this was an opportunity to temporarily meet a shortfall.  He stated that the unitary authorities had already contributed additional funding for supported buses.

The Section 73 Officer urged caution due to the situation with the reserves and could not recommend support for drawing further on the reserves in this way.  Although there was work being carried out on efficiency savings the Combined Authority also had to be mindful of the overall risk factor that further depleting reserves would entail.

Councillor Richard Samuel stated that he agreed that the time had passed where for the Unitary Authorities to draw on additional monies.  He explained that the UAs had already added more resources to extending the transition period on some supported bus routes sometimes at the detriment of existing transport reserves.  He stated that all organisations were in the same situation with diminishing reserves and funds.  He stated that the DRT roll-out would be delayed so additional funds are needed as set out in this amendment.  He therefore supported this amendment.

The Acting Interim Chief Executive stated that there was a significant change in accounting practice due where changes in value in pooled funds would be taken through profit and loss accounts from 2025/26. Under these rules, at today’s fund values, it would mean that the treasury reserves would be wiped out and smaller reserves would have to be drawn on. The Authority will need to account for these changes under IFRS9.

Metro Mayor Dan Norris stated that he believed that the Unitary Authorities could still make necessary decisions during the pre-election period and stated that he would not be supporting the amendment.  Councillor Samuel stated that he did not believe it would be possible for the full Council meetings to make the necessary decisions to increase the budget spending in this way prior to the election.

Councillor Savage reiterated that this was the ‘drop-down’ date on which contracts could be extended therefore this meeting would be the last opportunity to make such an opportunity.  He also stated that the accounting practice change had already been postponed twice and could be extended again.  He confirmed that today’s meeting had been the first proper opportunity to address the matter.

On being put to a vote the amendment was supported by Councillor Savage and Councillor Samuel. Metro Mayor Dan Norris voted against.  Mayor Marvin Rees abstained.  Therefore the amendment was not approved.

The meeting then discussed the substantive

[Voting arrangements: Decision required majority agreement of Committee Members in attendance, or their substitutes (one vote representing each Authority) and including the West of England Combined Authority Mayor].

The West of England Combined Authority Committee RESOLVED to:

1.      Review and comment on the Mayoral Fund revenue budget and forecast as detailed in Appendix 1.

2.      Review and comment on the Combined Authority revenue budget and forecast as detailed in Appendix 2.

3.      Approve that the Combined Authority undertake a line-by-line budget review on all funding programmes with progress to be reported back to the Committee in June 2023.