To approve the 2022/23 Budget and Reserve Strategy.
Lead: Martin Tugwell
5.1 Members received the reports on the Budget Reserve Strategy at Item 5 together with Item 6 the Business Planning report and Item 11 the Corporate Risk Register report. The Chief Executive and the Interim Finance Director then outlined the key aspects of each of the reports.
The Chief Executive provided background as to why the Budget and Business Plan had not been set earlier and highlighted three key areas for the Board to consider. These were the preparation of the new Strategic Transport Plan (including work on the Independent Economic Review, the regional Decarbonisation Strategy and Transport Related Social Exclusion plus Health and Wellbeing), TfN’s work on strategic policy areas, and its role in supporting partners.
He then reminded Board that where appropriate the executive would look to prepare cases that build on existing capabilities for the Department to consider in the Autumn. He informed Board that provision had been made within the business plan to allow for the preparation of such cases.
5.2 The Interim Finance Director provided Board with an overview of the budget. He then went on to highlight the key points within the corporate risk register.
5.3 Mayor Brabin expressed her disappointment at the closure of the Leeds office and extended an offer for Transport for the North staff to make use of the West Yorkshire Combined Authority’s offices. She highlighted the importance of retaining the analytical skills that Transport for the North has.
5.4 The Chair extended his congratulations to Bradford on being successful in securing the City of Culture designation for 2025 and stated that he wishes to look at early work which can be done on transport issues in the area.
5.5 Cllr Robinson emphasised the importance of the Communications and Engagement strategy and requested that this be circulated to Members as soon as possible. He stressed the importance of this when dealing with difficult issues with the Government.
As to reserves, he questioned whether the Executive was comfortable that the medium term financial strategy allowed for a robust financial future.
The Finance Director stated that TfN is comfortable in the medium term. He added that there will be challenges going forward in year 2-4 and these would be part of discussions with the Department in coming months.
5.6 Cllr Gittins raised the issue of in year inflationary pressures and whether these have been considered when setting the budget.
5.7 Cllr Little expressed concerns about funding for Local Authorities in the future. He explained that when the Local Transport Authorities (LTAs) have limited funding for local transport projects, LTAs will need to rely more on support from TfN when developing projects.
5.8 On the risk register, Members were keen that this should be looked at in more detail. Mr. Mark Roberts commented that it is helpful for the risk register to be linked to the Business Plan.
5.9 Mr. Mark Rawstron highlighted the importance of the Business Plan as a tool for discussing future funding settlements with Government. He stated that a plan with clear messages and a focus on the golden thread of improved economic performance will assist the conversation with Government on future funding.
Mr. Peter Kennan suggested that there should be an input from the LEPs to the business plan forward. He also requested the inclusion of actions that TfN can make with regards to buses.
5.10 In response to concerns on inflationary pressures the Interim Finance Director explained that the majority of costs going forward relate to staffing which includes spinal point increases and pay awards. In relation to the future pay awards he explained that a 3% assumption had been made and should this be different then this will be looked at in year or by using reserves.
5.11 The Chief Executive addressed some of the other issues raised by Members. He explained that through the budget and business planning process the activities for the year have already been prioritised by the Board.
He further explained that provision has been made within the resourcing of the organisation to work on propositions such as freight and logistics, appraisal frameworks and analytical capability.
On the issue of the Communication and Engagement Strategy the Chief Executive informed the Board that he was meeting with the Head of Communications and the Chair next week to map out the strategy and will update Board at the end of July.
The Chief Executive was supportive of the LEPs providing a foreword to the business plan.
1) That the Board approves the 2022/23 Business Plan, subject to delegating to the Chief Executive responsibility for the finalisation of the document as required;
2) That the Board approves the Budget as presented in the report;
3) That Board approves the transfer of the earmarked devolution reserve of £0.5m to general reserve. This activity would be considered alongside normal business planning;
4) That Board approves the reserve strategy as presented in the report; including the use of reserves in 2022/23 of £1.7m;
5) That Board notes the Outturn reserves as detailed in section 7.10 of the report;
6) That Board notes that the staffing numbers included within the report are projected and subject to on-going UNISON and employee consultation;
7) That the Board approve the content of the Corporate Risk Register as a reflection of the current position.