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Note: Due to the COVID-19 Pandemic, this meeting will be held remotely. Joining details are included on the agenda cover sheet
Register of attendance, membership and apologies for absence
It was noted that Councillor Ian Stokes substituted for Councillor Linda Wootten. Apologies were received from Councillor Charmaine Morgan. All other Members of the committee were present.
Disclosure of interests
Members are asked to disclose any interests in matters for consideration at the meeting
No interests were disclosed.
Action notes of the meeting held on 30 June 2020 PDF 229 KB
Members confirmed that all were in receipt of the action notes from the meeting held on 30 June 2020.
One Member expressed disappointment over the late arrival of the action notes of the meeting held on 30 June 2020, which were issued as a supplementary report two business days prior to the meeting. A Member indicated that they had been assured that action notes from the meeting held on 13 June 2020 would arrive in ‘good time’. The Vice-Chairman explained that he had received the action notes for verification but had been on holiday at the time of receipt. He processed these on his return from holiday which accounted for the delay to other Members.
Reference was made to section 74 of the action notes of the previous meeting, which related to the Outturn Report 2019/20. One Member suggested the paragraph “The committee questioned if there was a simplified way of presenting this information to laypeople and members of the public which could be more helpful going forward” should have been an action point to see whether this was feasible. The Chairman, in response to the Member, informed the Committee that he had raised his comment as an example of one way the accounts could be made more accessible. The Chair was satisfied that this did not need to be recorded as an action point, with which the Member expressed satisfaction. The Cabinet Member for Finance and Resources confirmed that the request was being undertaken.
A Member suggested that a further comment, which had been made at the previous meeting, should also be captured as an action point: “more could be achieved from financial reports if they also contained lessons learned for the future”. It was reported by the Cabinet Member for Finance and Resources that this suggestion would be reflected within the report on the amended budget, which would be presented to the Joint Budget Overview and Scrutiny Committee in August. The report would include lessons learned regarding savings.
Reference was made to discussions during the last meeting of the Committee where a lack of pre-decision scrutiny on the Future High Streets Fund was raised as a matter of concern. The Member did not feel the action notes [bottom of page 13 of the action notes of the previous meeting] reflected the conclusions of the Committee, which was that the view of the Committee was generally positive, other than the fact that it had not been consulted earlier and concerns over the governance of the Town Team. As these areas were not reflected in the recommendation, there was concern they had not been brought to the attention of the Cabinet, particularly as the timing of the meeting meant that the Committee’s recommendation was not captured in the report to Cabinet.
Action notes to be amended from “Governance arrangements for the Town Team to be shared when available” to “Governance arrangements to the Town Team to be reported back to ... view the full minutes text for item 82.
Updates from previous meeting
Asset revaluation adjustment
Details on the asset revaluation had been circulated to Committee Members. It was noted that the document was ‘restricted’. While recognising there were commercial values within this document, Members questioned why the list of assets was restricted. It was confirmed that some information within the document could be shared in the public domain.
The Head of Finance to confirm which information relating to asset revaluation adjustments could be made publicly available.
District Council-owned recreation assets
One Member indicated that he had additional questions, about which he would liaise directly with the Democratic Services Team.
Leisure Centre working group
Members felt that the response provided by the Deputy Leader in respect of the Leisure Centre Working Group did not address why the working group, which consisted of Members of the Committee, had been set up but never met. The response provided by the Deputy Leader referred to the involvement of local Members, but it was noted that not all Ward Members had been involved in respect of the Deepings leisure centre.
To seek clarification from the Deputy Leader as to why no meetings of the working group have been called.
New build Council housing
A breakdown of council housing had been requested by a Member which had been provided but without context. Information had not included targets.
The target for new build council housing to be provided to Committee Members by the Interim Assistant Director of Housing, together with confirmation as to whether any more could be expected during the year.
Provision of information
Members noted that responses to all the actions had been collated before circulation. They stated a preference for information to be provided on receipt. A question was raised about the timing of information being provided and the resourcing of Democratic Services.
Request response from the Chief Executive regarding resourcing within the Democratic Services Department.
Welland Procurement Annual Report PDF 302 KB
Report summarising procurement activity for 2019/20 and detailing the annual report from Welland Procurement
The Cabinet Member for Finance and Resources introduced the report, which was the first annual report to be provided by Welland Procurement for review by this Committee.
The Head of Finance explained that a decision had been taken to withdraw from Procurement Lincolnshire in March 2019 of which the Council had been a member since 2008. Appendix A to the report was the Welland Procurement Annual Report 2019/20, while Appendix B was its activity report. The Annual Report document showed a saving of £75,891 for the 2019/20 financial year. Additional benefits provided by the service included ensuring legal compliance of procurements and best value. This supported the improvement of the procurement practice across the Council.
The Chairman introduced Amy Myers, the Head of Procurement for Welland Procurement, who made a presentation to the Committee, which covered:
· The services provided by Welland Procurement
· The Councils that were supported by Welland Procurement
· How Welland Procurement supported the Council
· How Welland Procurement provided updates to the Council
· The benefits of being a member of Welland Procurement
· The support provided to the Council by Welland Procurement in 2019/20
· Training that had been delivered to officers of South Kesteven District Council
· Customer satisfaction and performance
· Plans for 2020/21
· Resources provided by Welland Procurement
Members were advised that the satisfaction survey would be amended for next year as it did not identify which council was responding.
Committee Members were provided an opportunity to ask questions. Key points raised included:
· The relationship between the resource provided by Welland Procurement and the Council’s Procurement Lead
· Whether inhouse resources represented better value than the use of the shared service
· The value of current procurement arrangements in comparison to the previous arrangements
· Whether the feedback survey presented by Welland Procurement constituted a representative sample of customers’ views
· Clarity around the calculation of initial and whole life savings
Members were told that temporary staffing resource was to fulfil compliance obligations and was not provided by Welland Procurement. It was acknowledged that feedback from the satisfaction survey was too narrow with methodology changes planned and with project completion figures impacted by project cancellation. It was acknowledged that the presentation of the projected savings was confusing particularly when projects straddled beyond a year.
It was noted that it was not unusual for procurements to fall across more than one financial year. The proportion of completed procurements (4 out of 14) was consistent with other partners.
The Head of Finance to provide the cost of membership of Procurement Lincolnshire
Members were advised that the role of the Council’s Procurement Officer was designed to complement the work of Welland Procurement by identifying contracts from which significant savings could be achieved whilst driving forward good procurement practice.
Concerns were raised over whether contract arrangements were in place for disabled adaptations, and whether extensions to contracts were used. The Head of Finance confirmed that contracts would often go out to tender for a defined period with opportunities to extend included.
The Head of Finance to ... view the full minutes text for item 84.
Housing Revenue Account 30 Year Business Plan PDF 397 KB
Report summarising the Housing Revenue Account 30-year financial business plan, a requirement of the HRA self-financing system introduced in April 2012
The Cabinet Member for Finance and Resources introduced his report on the Housing Revenue Account (HRA) financial business plan. The business plan was a requirement of the self-financing system. The 30-year forecast was detailed in Appendix A.
An explanation of the financial structure of the HRA was provided by the Head of Finance. The HRA subsidiary system was replaced in 2012 with a self-financing system. Under the system the Council was required to produce a 30-year plan, which showed income and expenditure expected to be incurred by the HRA to ensure it was financially sustainable. The Council was required to make a £122 million payment to Government, which was associated with the debt related to the Council’s housing stock. Currently there was £93 million outstanding. Under the self-financing arrangements, the Council could keep housing income for reinvestment into council houses.
Members heard that the business plan ensured a robust long-term plan. Certain assumptions needed to be captured within the plan, including annual modelling, and updated estimates of income and expenditure to ensure affordability of future plans. Assumptions made when producing the plans included using historic information to anticipate right-to-buy sales which would impact on rental income. It was noted that the number of new builds had not kept pace with the number of properties lost through the right to buy. Other assumptions related to major expenditure such as bathroom and kitchen replacement, the rate of voids and inflationary increases on rental income.
The Head of Finance explained the data that was presented in Appendix A to the report, highlighting the main changes within the 30-year Business Plan. It was noted that the reduction in reserves and the reduced level of interest needed to be reviewed in the context of Covid-19. Rental payment presented the highest consequential risk from Covid-19 though this was reported as having no inverse impact at that time. This would continue to be monitored with the Business Plan being adjusted accordingly.
A Member noted that figures showed an estimated 50 properties being lost each year under the right-to-buy scheme and questioned how many have been lost over the past year and how many new build properties the Council anticipated being built in the coming years. The Member additionally asked whether there were plans to improve how voids were prepared prior to reletting.
The Interim Assistant Director of Housing to provide an indication on the total net loss of property year-on year from April 2012 and the number of replacements
The Interim Assistant Director of Housing to provide details of void repair and improvement prior to re-letting.
It was noted that figures within the tables on pages 35 and 36 (Housing Revenue Account 30-year Business Plan and Housing Revenue Account Reserve Balances) would include brackets to demonstrate clearer methodology in future reports.
The Chairman questioned whether the terms of the Equal Instalments of Principal (EIP) loan had a fixed interest rate, which the Head of Finance confirmed.
It was suggested that the Council, if it chose, ... view the full minutes text for item 85.
Financial Update Report PDF 505 KB
Report summarising the latest position on the 2020/21 Budget framework as a result of the financial impact of the Covid-19 crisis and financial information up to and including 30 June 2020
The Cabinet Member for Finance and Resources introduced the report to Members explaining that this was the third report that provided the latest financial position for 2020/2021 with regard to the Budget framework and the financial impact from Covid-19.
The report presented an updated deficit forecast of £2.2 million, representing a reduction from the previously reported figure. The forecast included Government grants, which reduced the forecast overspend for the net cost of services from £3.9 million.
The Council had also received additional income, which reduced the forecast overspend. This included a letting opportunity at St Peter’s Hill, £700,000 savings related to supplies and services, income received for employees who had been furloughed, a £100,000 saving from the Gravity Fields Festival and business rate savings in respect of leisure centres. The salary vacancy was below target by £140,000.
Income had been impacted by Covid-19 with a £915,000 shortfall that resulted in a reduction in budgets and these were being continuously reviewed.
Capital programme schemes were under review to identify any that could be deferred or postponed to ease pressure on financing. There was an improved surplus position on the HRA due to delay in repairs because of Covid-19.
The Council had received £194,000 as part of a Government support package. There was also an indication that the Council would receive additional funding for unrecoverable costs. This figure was not yet known as further information was awaited. The Government had also made provision for the phased repayment of the collection fund deficit, which enabled payment over three years.
Cash flow modelling was reviewed daily and showed a positive position when benchmarked against other authorities. The collection rate for council tax and business rates was slightly lower compared to the same time last year. Rent collection rates were slightly improved on the same point in 2019/20, however it was noted that the number of rent weeks in a year had an impact.
The Cabinet Member for Finance and Resources notified Members that the amended budget would be presented to the Budget Overview and Scrutiny Committee on 26 August 2020, Cabinet on 8 September 2020 and Council on 17 September 2020.
Whilst praising the presentation and the report provided, a Member questioned whether there was any indication as to when funds and details of the Government’s funding scheme for local authorities would be known. The Head of Finance stated that there was no indication when the information would be made available, however the Council was able to model on anticipated funding as well as what was expected to be included. This was subject to sensitivity analysis. Estimates needed to be cautious, because the long-term recover was unknown.
A Member warned of the impact on council tax collection and increased unemployment in the context of economic recovery and the Bank of England warning of a severe recession.
Members noted that previous iterations of the report had included a risk register, and requested it be reintroduced for future versions of the report. The Cabinet Member for ... view the full minutes text for item 86.
To confirm the Work Programme and add items as necessary
The Chairman reported to Members that there were several issues on the work programme and that he had discussed with the Vice-Chairman what additions should be made. Discussion was deferred on this item with the Chairman requesting Members to send their suggestions to both himself and the Vice-Chairman for inclusion.
The Chairman requested a review of the work programme as some items should be changed. He expressed gratitude at the inclusion of the Committees work programme.
Close of meeting
The meeting was closed at 12:39.