Agenda and minutes

It was advised that Councillors W Breare-Hall and H Kane were substituting for Councillors C Whitbread and G Mohindra respectively.

Councillor Stavrou chaired the meeting on behalf of the Finance Portfolio Holder.

(Director of Governance) To declare interests in any item on this agenda.

There were no declarations of interest pursuant to the Council’s Code of Member Conduct.

To confirm the minutes of the last meeting of the Committee held on 15 September 2016.

Resolved:

(1)        That the minutes of the meeting held on 15 September 2016 be taken as read and signed by the Chairman as a correct record.

(Senior Performance Improvement Officer) To consider the attached report (FPM-013-2016/17).

The Director of Resources presented a report on the Quarter 2, Key Performance Indicators 2016/17.

The Director of Resources reported that the Council was required to make arrangements to secure continuous improvement in the way in which its functions and services were exercised, whilst having regard to a combination of economy, efficiency and effectiveness. As part of the duty to secure continuous improvement, a range of Key Performance Indicators (KPI) relevant to the Council’s service priorities and key objectives were adopted each year and performance against all of the KPIs were reviewed on a quarterly basis.

A set of thirty-seven KPIs had been adopted for 2016/17 in March 2016, which had been increased by one with regards to the waste recycled and waste composted KPI being split into two separate indicators to better monitor the performance.

The KPIs were important to the improvement of the Council’s services and comprise a combination of former statutory indicators and locally determined performance measures. The aim of the KPIs were to direct improvement effort towards services and the national priorities and local challenges arising from the social, economic and environmental context of the district.

Progress in respect to all of the KPIs was reviewed by Management Board and Overview and Scrutiny at the conclusion of each quarter, along with service directors reviewing the KPI performance with the relevant portfolio holder(s) on an on-going basis throughout the year. Furthermore, the four Select Committees were each responsible for the review of quarterly performance against specific KPIs within their areas of responsibility as well.

The position with regard to the achievement of target performance for the KPIs at the end of quarter 2 (30 September 2016), was as follows:

(a)                       28 (76%) indicators had achieved target;

(b)                       9 (24%) indicators had not achieve target, although 2 (22%) of these indicators had performed within the agreed tolerance for the indicator; and

(c)                       31 (84%) of indicators were currently anticipated to achieve year-end target with a further 4 (11%) that were uncertain whether they would achieve year-end target.

The Director of Resources advised that he was confident the 3 KPIs within Resources that were amber and red would achieve their year-end target. The Committee was asked to note the second quarter in relation to the KPIs for 2016/17.

Councillor W Breare-Hall advised that there had been a real effort within the Neighbourhoods Directorate to improve and achieve the targets. He advised that KPI - NEI001 (Non-recycled waste) and KPI- NEI013 (Waste recycled) were not likely to achieve their year-end target and these KPI were being revised to better reflect the results.

Councillor A Lion stated that it appeared fly tipping within the District had recently increased and that it could be possible the closure of DYI and construction waste to residents at the Recycle Centres within the District was already having an impact. Councillor W Breare-Hall advised that Essex County Council’s decision was being monitored by both the Council and themselves with the decision being reviewed in 3  ...  view the full minutes text for item 27.

(Director of Resources) To consider the attached report (FPM-014-2016/17).

The Director of Resources presented a report on the External Auditor’s Annual Audit Letter, which would be presented to the Audit & Governance Committee on 28 November 2016. The report had been placed on the agenda to ensure that Members were aware of the key issues raised.

The Director of Resources advised that the Annual Audit Letter (AAL) confirmed that the Financial Statements gave a true and fair view of the Council’s financial affairs. It also confirmed that the Annual Governance Statement contained in the Financial Statements was not misleading or inconsistent with other information.The external auditors were able to satisfy themselves that the Council had proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources and this enabled them to issue an unqualified value for money conclusion. The AAL confirmed that the auditors had not needed to exercise their statutory powers and that they had no matters to report. The audit certificate to close the audit for the year ended 31 March 2016 was issued on 30 September 2016.

Resolved:

(1)        That the External Auditor’s Annual Audit Letter be noted.

Reasons for Decisions:

To ensure that Members were informed of any significant issues arising from the annual audit.

Other Considered and Rejected:

The report was for noting, no specific actions were proposed.

(Director of Resources) To consider the attached report (FPM-015-2016/17).

The Assistant Director (Accountancy) presented the Quarterly Financial monitoring report for the period 1 April to September 2016, which provided a comparison between the original and profiled budgets for the period ending 30 September 2016 and the actual expenditure or income. The report provided details of the revenue budgets for both the Continuing Services Budget and the District Development Fund and the capital budgets including details of major capital schemes. The reports were presented based on the directorate that was responsible for delivering the services to which the budgets related and the budgets themselves were the Original Estimate.  The Assistant Director (Accountancy) advised that investment interest was lower than the budget due to lower interest rates but this wasn’t entirely unexpected.

The Cabinet Committee noted that the salaries budget showed an underspend of £338,000 or 3%. Resources showed the largest underspend of £121,000, which related to Revenues and Housing Benefits, Neighbourhoods showed an underspend of £117,000 relating mainly to Forward Planning and Grounds Maintenance and Communities showed an underspend of £83,000 which related to the Housing Works Unit. Variances on Governance and the Office of the Chief Executive were less significant.

Within the Governance Directorate the Development Control income was £151,000 higher than the budget to date and pre-application charges were £15,000 higher. Building Control income was £56,000 higher than the budgeted figure and the ring-fenced account was expected to show an improved position. Furthermore there was a lot of scanning work required for Building Control files and it was proposed to use some of the accumulated surplus to finance this work over the next few years. Local Land Charge income was £3,000 below expectations and there had been fewer searches undertaken in recent months, so the position would need to be monitored.

Within the Neighbourhoods Directorate Public Hire licence income and other licensing was above expectations, although the Public Hire figures included £25,000 which related to future years, so in reality income relating to 2016/17 was £4,000 down. Income from MOT’s carried out by Fleet Operations was £27,000 below expectations, although the account itself was budgeted to be deficit by £4,000, due to salary savings. Car Parking income was £3,000 above the estimate, although there were still some delays being experienced with income receipts. The actual for Recycling income was low when compared to the expectations; however the outstanding income for waste service enhancement and recycling credit income were all received in the first half of October. An overspend was showing on Recycling expenditure, due in part to collections from additional properties and payments made to the contractor to compensate for the fall in income from the sale of recyclable materials, which was being reported to Cabinet in December.

Within the Communities Expenditure the Bed and Breakfast placements were on the increase and a growth of £36,000 had been allowed for within the 2016/17 budget with a further increase of £58,000 estimated to be needed. The Housing Repairs Fund showed an underspend of £420,000. There were underspends showing on  ...  view the full minutes text for item 29.

(Director of Resources) To consider the attached report (FPM-016-2016/17).

The Director of Resources presented an update on the various schemes funded through Invest to Save.

In setting the budget for 2015/16 the Council had decided that as the balance on the General Fund Reserve exceeded the minimum requirement and further savings were required, £0.5 million would be transferred from the General Fund Reserve into an Invest to Save earmarked reserve. This was subsequently topped up with an additional £154,000 during the current year and it was intended that this earmarked reserve would be used to finance schemes that would reduce the Continuing Services Budget (CSB) in future years. There was still £219,000 available in the fund, with a proposal to use £40,000 to create three new car parks that were approved by Cabinet on 3 November 2016.

The Director of Resources advised that following a presentation by Pricewaterhouse Coopers (PwC) to the joint Cabinet/Management Board meeting regarding their initial work on the Accommodation Review, it had been agreed to seek a price and timescale for an additional option. The additional fee had been advised as £18,500 (excluding VAT but inclusive of expenses/disbursements) and would undertake the following additional activities;

(a)          To determine the capacity of the Civic Building to accommodate civic/customer facing functions and staff;

(b)          To consider the extension potential of the Civic Building and any additional capacity this might create, giving regard to the structural survey that had been commissioned by the Council separately;

(c)          To determine the capacity of the proposed new Housing Hub at North Weald to accommodate residual staff numbers;

(d)          To determine the agile working ratios at the Civic Building and Housing Hub required to accommodate future staff numbers within the overall footprint;

(e)           To produce a high level development massing for the areas of the Civic Offices site surplus to Council office requirements, setting out the optimum development mix/unit numbers;

(f)           To prepare a high level development appraisal for the Civic Offices identifying both the potential rental income and residual land value for the proposed development to input into the financial appraisal;

(g)          To financially appraise the new option in line with the options considered to date; and

(h)          To revise and update the draft PwC and Bisset Adams reports to reflect the additional option and revised conclusions.

The development appraisal of Option 4 would have regard to the recent planning and ecological advice provided by the Council and the other options would not be re-visited on the basis of the latest advice.

The Director of Resources advised that the Portfolio Holders for Asset and Economic Development and Safer, Greener, Transport had confirmed their support for the proposal by email and he asked other Members to comment.

Councillor W Breare-Hall enquired whether any of the additional work could be undertaken by officers and what type of discussions had taken place with PwC. The Director of Resources advised that there was not the officer capacity and that the fees were always negotiated.

Resolved:

(1)        That the updates on the various schemes funded through  ...  view the full minutes text for item 30.

(Director of Resources) To consider the attached report (FPM-017-2016/17).

The Assistant Director (Accountancy) presented a report on the fees and charges to be levied by the Council in 2017/18 and what, if any scope there was to increase particular charges.

The Assistant Director (Accountancy) advised that the Medium Term Financial Strategy identified the need to find savings of £500,000 over the four year period with £250,000 falling in 2017/18. The Revenue Support funding which had been included in the strategy was subject to the DCLG accepting the Council’s request for a multi-year settlement and the Council’s application had been submitted before the deadline of 14October but no response had yet been received. The scope for increased income as a result of increasing fees and charges was relatively limited for the General Fund and less so with the Housing Revenue Account (HRA). The labour rate inflation latest figure was 2.1% and the figure of 2.0% had been proposed.

Within the Communities Directorate the Limes Centre had proposed a 5% increase to bring it inline with other similar facilities. Furthermore, a proposed review of the charging structure would commence in October 2017 because of the issues to do with people from outside the district booking the facilities under the name of EFDC tenants and taking advantage of the 50% tenant discount on hall hire fees. The Council’s Museum, Heritage and Culture (MHC) service would be implementing a 2% increase across all events and activities in 2017/18, including after school and holiday classes, Education Outreach work, Evening and Daytime Talks and general hire of facilities. The Schedule of proposed Housing-Related Fees and Charges for 2017/18, generally recommended that the majority of fees and charges be increased by 2% - rounded up or down as appropriate.  The only exceptions to this approach were; Sheltered Housing Charges and Area Housing Charges Telecare packages (alarms and up to 4 sensors) and monitoring of alarms for other organisations which Essex County Council provided the support funding for with an inflationary increase; Bed and Breakfast Accommodation which had been fixed for a three-year period; Requirement for smoke and carbon monoxide alarms in private rented properties incorporating the Council’s duty to enforce; Inspection of properties for immigration applications, which would be based on officer time; Charges for Housing Act 2004 - Enforcement Notice Fees; and Sewerage charges for individual sewerage systems.

Within the Governance Directorate the Legal Services proposed to increase the fees by 2% with the exception of shop and industrial leases which had been proposed to increase both to £750.00. The Land Charges would require a cost analysis for the new CON 29 search enquiry form and would be undertaken before the 2017/18 charges were set. There were no planned increases for Development Control, although the ‘other cases’ fee had been increased to £80.00 and £120.00 for Listed buildings on pre-application fees, because of the introduction of pre-application fees from County Council and the Environment Agency and Building Control Fees were proposed to be rounded to the nearest £1 due to the complicated fee  ...  view the full minutes text for item 31.

(Director of Resources) To consider the attached report (FPM-018-2016/17).

The Director of Resources presented a report on the mid-year Treasury Management and Prudential Indicators 2016/17.

The Director of Resources advised that the mid-year treasury report was a requirement of the CIPFA Code of Practice on Treasury Management and that it covered the treasury activity for the first half of the financial year in 2016/17. The Council had continued to finance all capital expenditure from within internal resources and the average net investment position had been approximately £61.9 million with no breaches on any of the prudential indicators.

Actual capital expenditure in the first six months of 2016/17 was £9.229 million, compared to the full year estimate of £47.597 million. The original Capital Programme for the three years to 2018/19 totalled £102 million and was partly funded by £12.6 million borrowing.  It had been predicted that at the end of 2018/19 there would still be £2.99 million available in Capital Receipts and nothing in the Major Repairs Reserve.

The Director of Resources confirmed that there had been no breaches of the Authorised Limit (£240 million), the Operational Boundary (£230 million) and the Maturity Structure of Fixed Rate Borrowing during the period to 30 September 2016. It was anticipated that all borrowing would be repaid on maturity and that the capital programme could no longer be financed through internal resources and so the Council intended to borrow later in 2016-17 or 2017-18 in order to finance the approved capital projects e.g. Langston Road Retail Development.

The treasury position as of 30 September 2016 was that the short term investments of £33 million were in fixed rates, £19.9 million were in variable rates and there were no long term investments.

The Council had received no further dividends from the administrators of the Heritable Bank and the total figure remained at 98% of the value of deposits. A recent letter from the administrators stated that they were seeking to extend the administration for another year to 6 October 2017. This was necessary as the claim on the administration from one of the development sites was still to be settled.   

Resolved:

(1)        That the management of the risks associated with the Council’s Treasury Management for the first half of 2016/17 be noted.

Reasons for Decision:

The report was presented for noting as scrutiny was provided by the Audit and Governance Committee who make recommendations to this Committee when necessary.

Other Considered and Rejected:

Members could ask for additional information about the CIPFA Codes or the Prudential Indicators.

Section 100B(4)(b) of the Local Government Act 1972, requires that the permission of the Chairman be obtained, after prior notice to the Chief Executive, before urgent business not specified in the agenda (including a supplementary agenda of which the statutory period of notice has been given) may be transacted.

Resolved:

(1)        That, in accordance with Section 100B(4)(b) of the Local Government Act 1972, together with paragraphs (6) and (24) of the Council Procedure Rules, the Chairman had permitted the following item of urgent business to be considered following the publication of the agenda:

(a)        Draft General Fund CSB, DDF and ITS lists and Savings Update; and

(b)        Triennial Valuation of Pension Scheme.

(Director of Resources) To consider the attached report (FPM-019-2016/17).

The Director of Resources presented a report on draft of the Continuing Services Budget (CSB), District Development Fund (DDF) and Invest to Save (ITS) Schedules for 2017/18.

The Director of Resources stated that the Financial Issues Paper had been  considered by the Cabinet Committee on 14 July 2016 and it had highlighted a number of financial uncertainties and risks facing the Authority, which included the reductions in Central Government funding, Retention of Business Rates, Welfare Reform and the Leisure Management Contract Renewal.

The Medium Term Financial Strategy (MTFS), which formed part of the Financial Issues Paper identified savings of around £500,000, which were required over the forecast period. The savings required in 2017/18 were identified at £250,000 after savings of £464,000 and had already been identified and taken into account. It was noted though that there was more uncertainty than usual and little has changed since then.

Since July the Council had accepted the Governments 4 year funding agreement, a more detailed consultation was outstanding regarding Business Rates Retention and the Leisure Management Contract process was progressing. The lists currently showed net CSB savings of £730,000 in 2017/18, which assumed a saving of £250,000 from the new leisure management contract and were somewhat prudent as the final savings were expected to be rather higher. However the Local Plan and the Waste Management Contract were expected to require additional resources from a mixture of DDF and CSB. The total CSB expenditure in 2015/16 was £2.9 million higher than the Original budget, but this was entirely down to the decision to fund Capital Expenditure of £3 million from the General Fund balance because of the significant General Fund balance held by the Council and the comments made by Central Government around ‘excessive’ balances held by local authorities.

The figures generally need to be viewed in the context of this being quite early in the budget preparation process and would be revisited over the next two months or so as the budget came together.

The Director of Resources advised that following the discussion for the fourth option on the Accommodation Review discussed under item 7 - Invest to Save Update of the agenda, the Invest to Save schedule would require updating.

Resolved:

(1)          That the draft of the Continuing Services Budget (CSB), District Development Fund (DDF) and Invest to Save (ITS) schedules for 2017/18 be noted;

(2)          That the savings achieved to date as part of the 2017/18 budget process be noted; and

(3)          That £18,500 from the Invest to Save scheme be allocated for a fourth option for the Accommodation Review.

Reasons for Decision:

Members were asked to note the first draft of these schedules and make comments as appropriate.

Other options Considered and Rejected:

No other options applicable.

(Director of Resources) To consider the attached report (FPM-020-2016/17).

The Director of Resources presented a report on the different options for paying the Council’s pension contributions for the next three years to Essex County Council. The ongoing contributions were the same under each scenario but the deficit contributions varied. The option of 19 years was recommended as the reduction in CSB growth was felt to offer good value relative to the small extension in timescale for repaying the deficit. It was also noted that this deficit recovery period was still ahead of the schedule set at the previous valuation.

The Director of Resources advised that the payment options allowed for the deficit payment for the whole period to be paid at the start of the period, at the start of each year or on a monthly basis. Option B was recommended as it allowed for the increase in deficit payments to be phased over the three years and took advantage of the discount allowed for earlier payment without compromising the Council’s cashflow position. The ongoing payments had also increased and the contribution rate was expressed as a percentage of pensionable pay and was increasing from 15.9% to 18% (£322,434).

Recommended:

1.            That the option to fund the deficit over 19 years be recommended to Cabinet; and

2.            That Option B as set out in the Essex County Council consultation be recommended to Cabinet.

Reasons for Decision:

Essex County Council has set a deadline of mid-January for responses to their consultation and so it was necessary to evaluate and decide on one of the options.

Other Options Considered and Rejected:

The shorter deficit recovery period could be adopted or Members could choose to either take full advantage of the front loaded payment option or not to front load at all.

Shortening the recovery period would increase CSB growth at a time when there were already budget pressures. Fully front loading the payments could create difficulties in the management of the Council’s cashflows and would limit the ability to fund other demands at short notice without additional borrowing.