Agenda item

To receive the Draft Budget and Medium-Term Financial Strategy for scrutiny in relation to areas within the select committee’s remit.

WITNESSES

• David Lewis, Cabinet Member for Finance and Resources
• Matt Furniss, Cabinet Member for Highways, Transport and Economic Growth
• Denise Turner Stewart, Cabinet Member for Customer and Communities
• Natalie Bramhall, Cabinet Member for Property, Waste and Infrastructure
• Marisa Heath, Cabinet Member for Environment
• Kevin Deanus, Cabinet Member for Fire and Rescue, and Resilience
• Mark Nuti, Cabinet Member for Health and Wellbeing, and Public Health
• Claire Edgar, Executive Director for Adults, Wellbeing and Health Partnerships
• Dan Quin, Executive Director of Community Protection and Emergencies (Chief Fire Officer)
• Owen Jenkins, Executive Director for Highways. Infrastructure and Planning
• Simon Crowther, Executive Director for Environment, Property and Growth
• Carolyn McKenzie, Director for Environment
• Lucy Monie, Director for Highways and Transport
• Rachel Wigley, Director for Finance, Insights and Performance
• Sarah Bogunovic, Assistant Director for Registrations, Coroner's Service and Customer Strategy
• Jane Last, Head of Community Investment and Engagement
• Jean Pierre Moore, Head of Community Partnerships & Prevention
• Clare Matthews, Principal Strategy and Policy Lead
• Nicola O’Connor, Strategic Finance Partner for Corporate
• Tony Orzieri, Strategic Finance Partner for Environment, Infrastructure and Growth
• Louise Lawson, Strategic Finance Business Partner Resources and Customers, Digital and Transformation

KEY LINES OF DISCUSSION

ENVIRONMENT, INFRASTRUCTURE & GROWTH

1. The Chair asked whether more could be done to reduce the cost of large multi-year EIG (Environment, Infrastructure and Growth) contracts. The Director for Highways, Infrastructure and Transport said that costs in large multi-year EIG contracts are managed through competitive tendering, ongoing reviews, and integrating social value and environmental goals. She emphasised the need to reassess policies and specifications and highlighted savings achieved through innovations like LED lighting and targeted road lining.
2. A Member asked about the risk of the identified pressures of £14.5 million for 2025/26 being higher than expected and inquired about the specific risk areas. The Executive Director for Environment, Property and Growth explained that the pressures for 2025/26 were anticipated to arise from scope changes, inflation in contracts, and staffing costs, particularly as many costs were tied to contractual terms. The Director for Highways and Transport said that a key risk was related to concessionary fare reimbursements, which could increase with higher bus usage. She mentioned that while the risk was considered low, it would still be monitored due to its dependence on external factors.
3. The Chair asked about the status of the bus fare cap. The Director for Highways and Transport said that the cap was increasing from £2 to £3 in 2025. More details were expected to come in the early part of 2025 regarding the implications of the change for both users and operators.
4. A Member asked for clarification on whether the levels of reimbursement would decrease if the bus cap went up. The Cabinet Member for Highways, Transport and Economic Growth explained that the bus cap was a national policy requiring operators to join the scheme for government reimbursement. He also mentioned efforts to encourage more operators to participate and noted that any cost increases would be managed within the budget.
5. A Member asked if the £2.6 million in efficiencies in the draft budget had meant doing the same work better or stopping some activities. The Director for Highways and Transport explained that efficiencies in highways and transport focused on increasing surplus and recovering costs. Some savings, like the fixed transfer of £5.3 million, were already secure, while others required detailed planning. The Executive Director for Environment, Property and Growth added that efficiencies could be achieved through innovation in contracts, but some activities might be paused, slowed, or stopped.
6. A Member asked about the impact of reducing the capital budget for solar investment to zero on the Council's ability to meet its 2030 and 2050 net zero goals, given the £500,000 in efficiencies in the Greener Futures spending. The Cabinet Member for Environment said that £500,000 in efficiencies had reduced staffing by 30%, with work expected to continue through partnerships like the Southeast Net Zero Hub. She acknowledged risks and emphasised leveraging private investment and partnerships, with the Greener Futures Board playing a key role. A Member expressed concern that cutting the solar investment budget undermined the 2030 net zero target, noting the importance of solar and the team’s reduced capacity. The Director for Environment clarified that changes affected technical roles focused on the 2050 agenda, with expertise now sourced through collaborations. Ground-mounted solar projects faced feasibility issues, but rooftop solar remained funded. The 2030 net zero team was unaffected.
7. A Member asked about the consultation with local members on changes to capital funding affecting their divisions and whether discussions on proposed efficiencies, such as recycling support payments, had been held with districts and boroughs or were still to be arranged. the Cabinet Member for Environment confirmed that discussions about changes, including recycling support payments, had been held in the Surrey Environment Partnership with all districts and boroughs involved. The Executive Director for Environment, Property and Growth added that the team had successfully raised grant money and should continue to pursue funding for projects and recognised that there may have been lapses in consulting all Members on capital allocations but emphasised efforts to keep them informed about specific projects. The Cabinet Member for Finance and Resources stated that the consultation on the capital budget is still ongoing, with opportunities for feedback before the final budget approval in February 2025.
8. A Member asked whether the work towards the 2030 target had been paused or slowed down due to staff cuts in the Greener Futures team. The Director for Environment said that the programme had not been paused, and that they had still been delivering on their net zero and public sector decarbonisation fund projects, though the programme had not progressed as quickly as they had liked.
9. The Member asked a supplementary question about whether the proposed changes in the draft budget might cause the 2030 team's activities for 2025 to be paused or slowed down due to reduced staffing. The Director for Environment said that this had not happened.
10. A Member asked a supplementary question about whether the proposed changes in the draft budget might cause the 2050 team's activities to be paused or slowed down due to reduced staffing. The Director for Environment said that they would need to prioritise smarter ways of working and partner with organisations focused on green finance to share expertise.
11. A Member asked whether there was more value in supporting the Greener Futures team with £500,000 than in allocating that money to immediate needs like weed control and grass maintenance. The Cabinet Member for Environment said that achieving net zero goals required government funding and legislative changes. She emphasised the importance of focusing on lobbying for resources while balancing residents' needs and environmental priorities. She also highlighted the need to update the 2021 plan and discuss resource after its revision.
12. A Member asked whether funding would be budgeted to avoid another backlog of recommended safety improvements outside schools in Surrey. The Cabinet Member for Fire and Rescue, and Resilience said that yes, funding would be budgeted.
13. A Member asked how the reduction in the highway capital budget from £120.6 million in 2025/26 to £60 million in 2027/28 had affected the long-term maintenance and quality of the highways. The Cabinet Member for Highways, Transport and Economic Growth said that the increased funding had been used to improve roads, and the proposed budget after 2027/28 would have maintained the roads at a steady state. He acknowledged that inflation had not been included in the modelling but believed the budget be sufficient for the next 15 years.

COMMUNITY PROTECTION AND EMERGENCIES

14. The Chair asked whether inflationary pressures after 2025/26 would lead to increased staffing and running costs for the Joint Fire Control Centre, and if this could pose a bigger challenge in future years. The Chief Fire Officer said that staffing costs, which accounted for about 90% of the gross budget, were expected to rise due to inflationary pressures and the national pay settlement after 2025/26, presenting a larger challenge in future years. However, efforts had been made to manage these costs effectively while maintaining the service's efficiency, with a 3% pay inflation applied for 2025/26, and a 2% increase planned for subsequent years.

CUSTOMER, DIGITAL AND CHANGE

15. A Member asked if the coroner's service's specialised nature meant no safe cost efficiencies were possible. The Assistant Director for Registrations, Coroner's Service and Customer Strategy had said that the coroner's service had continually identified safe cost efficiencies through robust contract management, market understanding, and digitisation. She had highlighted examples and ongoing efforts to streamline processes and maintain reserves.
16. A Member asked whether there was anything the Council could do to reduce costs related to property and the coroner's services, given that they were often their own landlord. The Cabinet Member for Customer and Communities outlined the £31 million capital programme for Customers, Digital, and Change, with allocations of £2 million for the registration service, £1.2 million for coroners, and the remainder for the Libraries and Hubs programme. She highlighted that value engineering on projects in Weybridge, Staines, Epsom, Walton, and Woking had reduced the overall cost from £32 million to £26 million.

COMMUNITY FUNCTIONS, SPECIFICALLY ADULT WELLBEING AND HEALTH PARTNERSHIPS

17. A Member asked for clarification on where the main impact of the proposed changes and efficiencies would fall, particularly in relation to empowering and creating thriving communities. The Cabinet Member for Health and Wellbeing, and Public Health explained that, due to reductions in some roles, they would increase flexibility in community engagement, including creating officers to cover larger areas. He emphasised that Councillors should take responsibility, advocate for their communities, and provide feedback.