Agenda and minutes
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Contact: Email: Democracy@southkesteven.gov.uk
Note: Due to the COVID-19 Pandemic, this meeting will be held remotely. Joining details are included on the agenda cover sheet
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Comments from members of the public
To receive comments or views from members of the public at the Committee’s discretion Minutes: No comments from members of the public were received. |
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Register of attendance, membership and apologies for absence
Minutes: The membership of the Committee had changed following the Annual meeting of full Council on 17 September 2020. Councillor Linda Wootten no longer served as a Committee member and Councillor Ian Stokes had joined as a full Committee member.
Apologies for absence were received from Councillor David Bellamy.
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Disclosure of interests
Minutes: No interests were disclosed. |
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Action notes of the meeting held on 28 July 2020
Minutes: The action notes of the meeting held on 28 July 2020 were considered by the Committee.
Members had requested at a previous meeting for information relating to the location and value of Council owned properties, that was still yet to be received. The Interim Director for Finance informed members that some of the information relating to the request was of a commercially sensitive nature and would only be able to be circulated to members at that time.
ACTION
1. Details of the location and value of South Kesteven District Council properties be circulated to all Members. Members were to note that the information would be restricted at that time and not for publication.
Councillor Morgan requested for her apologies to be reflected in the notes, rather than being listed as present, she had submitted her apologies prior to the meeting
ACTION
2. That Democratic Services amend the attendance at the meeting to reflect Councillor Morgan’s apologies.
A Member queried minute number 83, New Build Council Housing. The Member noted that no definitive answer had been provided in relation to the number of Council Houses that had been built so far and how many were anticipated to be built that year. It was agreed that the information was available and that it would be provided to Members via the Cabinet Member for Housing and Planning.
ACTION
3. That the Cabinet Member for Housing and Planning advise all Members how many Council Houses had been built and how many would be completed during the current year.
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Updates from previous meeting
Minutes: The Chairman noted that updates from the previous meeting had been discussed during consideration of agenda item 4. |
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Quarter 1 Financials
Report to inform Finance, Economic Development and Corporate Services Overview and Scrutiny Committee of the Council’s forecast 2020/21 financial position as at the end of July 2020 Additional documents: Minutes: The Cabinet Member for Finance and Resources introduced the Finance update report, for the period of 1 April – 31 July 2020.
The Committee had during the current financial year, received regular reports that monitored and assessed the financial impact of the Covid-19 pandemic. The report presented to members at the meeting reverted to the style of budget monitoring received in the previous financial year. The report included the amendments to the budget that were presented to Council on 17 September 2020.
The Revenue Budget – General Fund 2020/21 that was set at £19.175m by full Council on 2 March 2020, had been increased at the meeting of Annual Council on 17 September 2020 to £24.914m. Table 1 of the report detailed Budget Amendments to the General Fund, which included 2019/20 Grants received and use of the Maintenance Reserve. The deficit forecast as at 31 July 2020 for the General Fund £1.315m. Officers provided a detailed breakdown of the General Fund Summary and the Forecast Outturn. Additionally, the significant changes were also highlighted to members.
The General Fund Capital Programme 2020/21 was amended to £3.522m by Council on 17 September 2020. Details of individual Capital Schemes were detailed at Appendix C of the report. General Fund Reserves 2020/21 showed that there was a balance of £2.843m in the budget stabilisation reserve which may be required to fund the forecast deficit of £1.315m.
The Revenue Budget 2020/21 Housing Revenue Account (HRA) had a budgeted surplus of £5.373m which was required to fund future investment in stock growth and property maintenance. HRA Forecast Outturn Position showed a number of variances, including a £50,000 reduction in income due to the re-phasing of rent on new builds and an increase in £100,000 in write-offs due to non-collection of debt. Write-offs were however in line the current bad debt provision which was set out in the Business Plan. Covid-19 has meant that there was a delay in repairs and maintenance at Council properties, which had resulted in a forecasted under-spend of £380,000. Those repairs were due to be re-scheduled later in the financial year subject to any property access constraints.
The HRA Capital Programme 2020/21 budget was currently £17.616m, which was approved at Council on 17 September 2020. Capital Schemes were detailed at Appendix E to the report. The forecast movements on the HRA Reserves 2020/21 had been amended to reflect the reduced financing which was required to fund the Capital Budget.
Cashflow management remained an important area of focus given the unpredictability of the Council’s income streams, particularly in relation to Council Tax and Business Rates and its legal obligations to pay precepts and contractual payments. The Government had provided some assistance with the deferral of the repayment of specific grants for three months (although this period had now expired). Despite the climate, cashflow remained positive and collection rates were performing well. Collection rates were benchmarked on a monthly basis with Lincolnshire partners and the profile remained consistent.
Members of the Committee considered the ... view the full minutes text for item 6. |
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Quarter 1 Performance
Report detailing South Kesteven’s performance now the council has moved into the ‘Re-start’ phase of the Covid-19 pandemic recovery plan and setting out performance reporting for quarter one of 2020/21 Additional documents: Minutes: The Leader of the Council presented to Members the Quarter 1 Performance Report which detailed performance now the Council had moved into the ‘Re-start’ phase of the Covid-19 pandemic recovery plan.
Throughout the pandemic the Council had worked hard to ensure an essential service had remained. The waste collection service remained uninterrupted with staff redeployment to help with the increased volumes of collection.
Some council services had resumed such as Environmental Health Food hygiene inspections. They had been working with nursing homes and schools to ensure the safety of communities within the district.
An autumn arts schedule had been put in place and the arts centres had been re-opened in a limited way for regular users to meet in a Covid-19 safe way. Socially distanced films would be starting soon at the Stamford Arts Centre.
Despite the restrictions and challenges brought on by the pandemic and the subsequent lockdown, overall the Council had performed well. The performance was a testament to officers throughout the authority. At the start of the lockdown there were only around 40 agile workers, with that having increased considerably, to almost all the office-based workforce.
The Director of Finance was invited by the Leader to highlight the key points featured in the report.
The Cabinet had agreed a framework on 16 June 2020, to set out a recovery plan from the effects of Covid-19. Key activities of the ‘Re-start’ phase were:
· Deliver growth of the economy; · Housing that met the needs of residents; · Strong communities with high quality facilities; · A clean and sustainable environment; and · A high performing council.
The report highlighted each area of the plan and what that Council had committed to achieve.
An overview of performance for Quarter 1 2020/21 against agreed indictors was set out in the report, with details provided within the appendices, these were as follows:
· Rents performance; · Council Tax Performance; · Non-domestic rates Performance; · Planning process performance; · House build performance; · Complaints and Compliments performance; and · Waste Performance.
Covid-19 had a detrimental impact to collection activity to date and this was primarily due to the suspension of all recovery activity due to the lockdown. The focus of the revenue teams during that time was on providing support and advice to residents and businesses. The team would ordinarily have issued approximately 11,000 council tax reminders and 1,300 business rates reminders.
The annual council tax bills were issued 10 days before lockdown commenced, collection was down by 1.06% which was £905,383 and the net liability had increased by £2,802.726. Deferral requests for council tax collection in April and May to later in the year totalled £242,000. Direct Debit cancellations totalled £141,000 for April to July, which represented a 0.5% rejection rate.
A balance remained of £436,305 from the Government allocated Council Tax Support hardship which, when awarded, would assist with reducing collectable liability. South Kesteven had seen an increase in the number of residents in receipt of Council Tax Support of 661 since 1 April 2020. The cost of the scheme ... view the full minutes text for item 7. |
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Report providing an overview of the loan arrangements that are in place between the Council and its wholly owned companies Minutes: The Committee considered a report on an overview of loan arrangements in place between the Council and its wholly owned companies.
The Committee at its meeting on 28 July 2020 requested that a report be provided which set out the loan arrangements which were currently in place. To date there had only been two loans agreed, these were for Gravitas Housing Ltd and EnvironmentSK Ltd.
Loans were awarded as part of the Treasury Management Strategy and considered each year by Council as part of the Annual Budget. The criteria of any loan being made with a Local Authority Controlled Company (LACC) was based on the receipt of a clear business plan.
Gravitas Housing Ltd had a combination of a loan and an equity investment, which was approved by the Council. The arrangement of £2.8m, 60:40 split, loan and equity were allocated in the Capital Programme in order to fund new housing development using land owned by the Council. The funding was approved by Council on 2 March 2017 and released following a meeting of the (then) Shareholder Committee on 3 April 2017.
The loan was structured on a commercial basis and was set at 2% above prevailing Public Works Loan Board (PWLB) rates. The loan was set at 4.03%, based on the principal being repayable from retained profits upon sale of developed properties or maturity on 31 March 2025, whichever was the soonest.
EnvironmentSK Ltd began trading on 1 March 2019, to enable the grounds maintenance service to be delivered where there was a requirement for a loan to purchase vehicles and equipment. The sale of equipment to EnvironmentSK Ltd was set at £571,000 plus VAT, which was the original cost to the Council. Loan affordability was assessed and a loan structure of £571,000, plus interest of 4% was put in place with a repayment period of 8 years. The loan was due to mature on 1 July 2027 and was paid in quarterly instalments.
A councillor asked about ‘state aid’ rules and satisfaction of those regulations and what impact Brexit would have on that. The Chairman noted that the position of Brexit was not known at that time, but the potential for change to regulations would be noted by Members.
The Committee were interested in commercial loans and the pricing of risk, how was it priced when loaning to those companies. Both loan arrangements were subject to audit and had been reviewed. External advice had been to price loans between the Council and its wholly owned company at 2% above PWLB rates, as a methodology for loans on a commercial basis. Gravitas was building properties which in the event of any financial difficulty would transfer back to the Council. EnvironmentSK Ltd provided an annual management fee, which could be withheld or deferred if there were any concerns.
The Chairman asked about the security of risk, if there was a charge over the assets of EnvironmentSK Ltd. Officers advised that there was not any charge, however the Council provided an ... view the full minutes text for item 8. |
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Growth Directorate Outturn 2019/20
Report to review the financial and performance outturn of the Growth Directorate following the presentation of the Council’s outturn position for 2019/20 Minutes: The Committee received a report on the financial and performance outturn of the Growth Directorate, following the presentation of the Council’s outturn position for 2019/20.
The Council’s financial outturn was presented to the Committee on 30 June 2020, during the review it was requested that further information be presented to analyse the operational and performance of the Growth Directorate. It was noted to that meeting of the Committee there was a reported variance of 44.4%.
Accounting adjustments required in line with regulations had a significant impact upon the reported growth variance for the Directorate. Table 1 showed the reported variance, table 2 showed the relevant accounting adjustments and table 3 showed the outturn position re-presented with the accounting adjustments removed. It was seen that the re-stated outturn for Growth reduced the overall variance from 44.4% to 1%. Table 4 showed a significant variance analysis for the Growth Directorate, details were provided which gave explanation of those significant variances.
The Committee noted the contents of the report and thanked officers for the further detail which had been provided.
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Additional documents: Minutes: The Committee received the Work Programme and the Cabinet’s Forward Plan. The Chairman advised that he had been working with officers to consider items for the Work Programme and welcomed members’ suggestions.
It was requested that consideration of the Special Expense areas be reviewed at the earliest opportunity so that it could be included in the 2021 budget. The Cabinet Member advised if it were to be considered in January that would be too late in the process for 2021/22 budget setting. The Chairman agreed to discuss with officers if there was potential for the item to be considered at the Committee meeting in November.
ACTION
1. That the Chairman and Officer discuss the potential for the Special Expense Areas to be considered at the November meeting of the Committee.
One member asked if it was possible look at Grantham’s High Street Fund Bid at the November meeting, rather than in January.
ACTION
2. To discuss with officers Grantham’s High Street Fund Bid and if possible, receive an update at the November meeting.
The Chairman advised that he had been working with officers to consider items for the Work Programme and welcomed suggestions from the Committee.
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Any other business, which the Chairman, by reason of special circumstance decides is urgent
Minutes: A member queried if the Finance, Economic Development and Corporate Services Committee could consider Spittlegate Heath Development and the archaeological finds. There had been considerable archaeological discovery, those artefacts were to be sent to Lincoln for archiving. The Member felt very strongly that they should remain within Grantham as part of the area’s heritage, with the potential for a boost in visitors to the area boosting the local economy.
Officers advised that this was an area for the Culture Committee and as part of planning processes. The Chairman agreed to discuss the matter directly with the member who had raised concerns.
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Exclusion of the Press and Public
To exclude the press and public from the meeting during the discussion of the following items of business due to the likelihood that information that is exempt under paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended) because it contains information relating to the financial or business affairs of any particular person (including the authority holding that information) Minutes: It was agreed to exclude the press and public from the meeting during the discussion of the following item of business due to the likelihood that information that was exempt under paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended) because it contained information relating to the financial or business affairs of any particular person (including the authority holding that information).
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St Martin's Park, Stamford Project Update on Financial Submissions
Additional documents: Minutes: The Committee received a report on St Martin’s Park, Stamford Project Update, on the financial submissions.
The report detailed work that had been undertaken since a report was received by the Companies Committee on 30 June 2020. Members noted the robust processes that were in place and provided detailed feedback to Cabinet on the report.
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Close of meeting
Minutes: The Chairman closed the meeting at 12.49.
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