Inside Crowthorpe

Dear Colleagues,

In accordance with Section 25 of the Local Government Act 2003, I am writing to provide my statutory opinion on the robustness of the budget estimates and the adequacy of the proposed reserves for the financial year 2027/28.

Robustness of estimates

I have reviewed the budget assumptions set out at Appendix 1, in particular the proposed in-year savings of £8.6M, the assumed council tax base growth of 1.2%, and the borrowing capacity calculations underpinning the second phase of the Town Centre Regeneration Programme.

In respect of the proposed savings, I note that £4.1M is dependent on a delivery profile that has not been achieved in the preceding three financial years. I draw Members' attention to this in the strongest terms.

In respect of the Town Centre Regeneration borrowing, the Prudential Code calculation assumes anchor tenant occupancy at 92%. Current occupancy is 71%. I note that the report before Members materially overstates the affordability of the proposed borrowing.

Adequacy of reserves

The proposed General Fund balance of £14M represents approximately 4.3 months of net revenue expenditure. This is below the level I would consider prudent for a council with the dossier exposures identified at Appendix 2 (including the Equal Pay liability, currently estimated at £42M).

I am required to make this report in writing. It will be made available to Members at the budget-setting meeting and will be a public document thereafter.

Yours sincerely,

Dear Ms Whitlock,

Thank you for your request of 18 July 2027 made under the Freedom of Information Act 2000, in which you asked the following:

"Please provide all correspondence between the Leader of the Council and the Chief Executive of [redacted private consultancy] in the period 1 January 2027 to 31 July 2027, including any draft contracts, scope-of-work documents, and meeting notes."

The Council has located the requested information. We are pleased to provide the documents set out at Annex A, with the following redactions:

1. Personal data of junior officers (Section 40(2)).
2. Commercially sensitive pricing schedules (Section 43(2)).

The redactions are limited in scope. The remainder of the requested information is released to you. We note that you may seek an Internal Review of these redactions, and subsequently appeal to the Information Commissioner's Office.

I would also note that the public interest test in respect of Section 43(2) has been considered carefully. The Council has determined that, on balance, the harm to commercial relations from full disclosure outweighs the public interest in transparency. The redactions are therefore upheld.

Yours sincerely,

Item 11.4 — Motion of No Confidence in the Leader (Submitted by Dr H. Voss-Mitchell, Green Group)

The Chairman invited Dr Voss-Mitchell to move the motion. Dr Voss-Mitchell rose and spoke for the permitted nine minutes, citing concerns regarding (i) the Section 25 statement on the 2027/28 Budget, (ii) the Equal Pay liability provision, and (iii) the recent departure of two Directors. The Chairman noted thirty-one Members had indicated they wished to speak. The Chairman ruled, with the agreement of the Monitoring Officer, that speaking time would be capped at three minutes per Member.

The Leader, Cllr [Leader's Name], spoke in response for the permitted ten minutes. The Leader defended the administration's record on financial stewardship and noted the inheritance of the dossiers in question from the previous administration. The Leader concluded by inviting the Group Whips to confirm their groups' positions.

Cllr W. Garrity, Chief Whip of the Reform UK Group, confirmed the Reform Group would vote against the motion. Cllr D. Khatri, Leader of the Labour Group, confirmed his single vote would be in favour. Cllr R. Halloway, Liberal Democrat Group Leader, confirmed his Group would vote in favour. Cllr J. Beaumont, Conservative Group Leader, confirmed her Group would abstain. The three Independent Members confirmed they would vote in favour.

The motion was put to a recorded vote. The motion fell, 21 votes in favour, 35 against, 4 abstentions.

Item 11.5 — Adjournment

The Leader of the Opposition (acting), Dr Voss-Mitchell, requested a five-minute adjournment. The Chairman agreed. The Council reconvened at 9.47pm.

Dear Members of the Audit Committee,

This is my Annual Report on the audit of Crowthorpe Metropolitan Borough Council for the year ended 31 March 2027.

I have issued an unqualified opinion on the Council's financial statements. I am, however, required to draw Members' attention to three matters arising from this audit, in respect of which I have considered whether to make a statutory recommendation under Section 24 of the Local Audit and Accountability Act 2014. I have decided to make one such recommendation, set out at paragraph (c) below.

1. Town Centre Regeneration Programme. The Programme remains a significant strategic risk. The carrying value of the Council's investment in the Programme is dependent on assumptions about future rental income that have not been met for three consecutive years. I have considered whether an impairment review is required and concluded that the Council's accounting treatment is on the boundary of acceptability.
2. Equal Pay Provision. The Council has provided £42M for potential equal pay liabilities. The range estimated by the Council's external counsel is £28M to £62M. I am satisfied the central estimate is reasonable. I draw Members' attention to the sensitivity of the General Fund balance to movements in this estimate.
3. Reserves Adequacy. STATUTORY RECOMMENDATION. The Council's General Fund balance at 31 March 2027 represents 4.3 months of net revenue expenditure. CIPFA guidance and comparator authorities suggest a level of 6 months would be more appropriate given the Council's dossier exposures. I recommend that the Council develops, within six months, a written plan to rebuild reserves to at least 6 months of net revenue expenditure within three years.

This report will be considered at the public meeting of the Audit Committee scheduled for 24 March 2028.