Agenda and minutes

1.1       RESOLVED

That the minutes of the meeting held on the 27^th May 2015 be agreed as an accurate record of proceedings and the Chair be authorised to sign them.

2.1       There were no declarations of interest.

3.1       Katie Wood, Scrutiny Manager introduced the report to the committee and outlined that it highlighted good practice from other councils around income generation strategies and different models of working.

3.2       Councillor Milne, Chair of the Public Accounts Select Committee, welcomed witnesses from the London Borough (LB) of Brent and IP & E (a company wholly owned by Shropshire County Council) to the meeting.

3.3       Aktar Choudhury, LB Brent, gave a presentation to the committee, highlighting the following key points:

·           The LB Brent had commissioned a thorough review of regulatory services looking at the full range of services, what was being done and why and how efficient they were. This was with the aim of creating a savings target to make the service self-funding and with the aspiration of becoming a net contributor to the general fund.

·           The focus was on generating more income, staff and the organisation becoming increasingly commercially aware, focussing on areas where there was most commercial potential.

·           The LB Brent was involved in a number of shared services where there was a clear cost-benefit.

·           Brent appointed consultants IP & E Ltd through a tendering process to help undertake the full review of regulatory services and the feedback was very frank looking at customer experiences and the strengths and weaknesses of service delivery.

·           The LB Brent was currently considering a trading arm for building control. Their team was very successful, and they were already working with contractors to provide guidance across London with the relevant permissions from those boroughs. If they were to achieve “approved inspector” status they would be able to compete with the private sector when bidding for work.

·           The LB Brent was looking to create articles and memorandum of associations which would be flexible enough to allow other service areas, for example pest control, to be added should the need arise.

·           Other methods of streamlining costs included reanalysing management structures and the level of skills needed across work areas. For example, in the planning department it was much more cost effective for administration staff and junior planners to be doing the low-level and routine work with the higher paid senior planners working on the larger and potentially more profitable projects. Management structures needed to be studied very closely with analysis based on role breakdowns rather than just the title and grade of a post. Highly qualified professionals were effectively doing mundane tasks and there needed to be process redesign to improve capacity and resilience.

3.4       Tim Smith, Finance and Commercial Director, IP & E Ltd, and Martin Key, Operations Manager, IP & E Ltd/Shropshire Council gave a presentation to the committee highlighting the following key points:

·         IP & E Ltd was a limited company wholly owned by Shropshire Council. It was set up as an alternative structure to outsourcing with all profit invested back into public services. They did not pay dividends to private individuals which was a key feature that appealed to public sector and third sector clients.

·         The company was set-up using statutory powers in the Localism  ...  view the full minutes text for item 3.

4.1       Following item 3, the Committee agreed to amend the Order of Business and the remaining agenda was taken in the following order: item 5, item 4, item 10, item 6, item 7, item 8, item 9 and item 11.

4.2       Selwyn Thompson, Head of Finance, presented the 2015/16 Financial Forecast to the committee, highlighting the following key points:

·         The current projections showed a predicted end of year overspend of £8.6 million against the directorates’ net general fund.

·         The current forecasts projected overspends in three of the four directorates with Resources and Regeneration predicting an underspend of £1.1 million.

·         £3.2 million was being held corporately to manage risk and would be used to reduce an end of year overspend.

·         The forecast delivery of savings in 2015/16 showed that progress was being made in reducing expenditure across directorates although there was some variance from agreed savings across all directorates.

4.3       In the discussion that followed, the following key points were raised:

·         The Council was participating in a pan-London scheme intended to restrict the ability of landlords to charge excessive rents to boroughs procuring accommodation. There was recognition that this was a London-wide issue and it was important to collaborate rather than compete to ensure better negotiation of rates.

·         There was no complacency regarding predicted overspends. All budgets continued to be monitored closely with a focus on volatile areas such as the “Looked After Children” and “Leaving Care” budgets to ensure efficient delivery of services. Budgets were monitored closely by Service Managers and Finance whilst working through savings, ensuring there was clarity and potential issues were flagged up promptly.

·         The underspend in the Resources and Regeneration Department was mostly due to vacancies being kept open. This amount was predicted to increase in 2016/17.

·         There was continued pressure within the schools budgets particularly in the secondary sector. Although the unit value per pupil was protected, the figure did not take into account inflationary pressures such as increasing salary costs. The Institute of Fiscal Studies predicted this as being an increase in costs of 7% to 2019/20.

4.4       RESOLVED:

That the report be noted.

5.1       Selwyn Thompson, Head of Finance, presented the report to committee and highlighted the following key points:

·         The 2014/15 results had been presented to Mayor & Cabinet on 3 June 2015 and the Audit Panel on the 18 June 2015.

·         The directorates’ net general fund revenue budget was overspent by £9.1 million at the end of the year. This was brought down to £5.2 million after £3.9 million was allocated from the “risks and other pressures” reserves.

·         It had been a challenging year and the Departmental Expenditure Panel had continued to run with the Corporate Expenditure Panel being introduced in October 2014.

·         The main pressures had been within Children’s Social Care Services, within which those with “No Recourse to Public Funds”, including bed & breakfast, temporary accommodation and section 17 payments, were the most significant cost pressures.

5.2       In the discussion that followed, the following key points were raised:

·         Changes in the National Policy on Housing Benefit created additional pressures on the Leaving Care Service budget.

·         The Corporate Expenditure Panel would be continued into the New Year. This was particularly important as an overspend in the net general fund budget was currently being predicted.

·         The cost of travel assistance, due to the increased use of taxis for the Partnerships and Targeted Services Budget had been high but this would be reducing due to an improved procurement deal regarding taxis. 

5.3       RESOLVED

            That the report be noted.

A link to the Management report can be found here

6.1       RESOLVED:

That the management report be noted.

7.1       Duncan Dewhurst, Head of Service Change and Technology, and Barry Quirk, Chief Executive introduced this report to the committee. During the discussion, the following key points were made:

·         Work was being carried out looking at a broad range of possibilities around shared services, including looking across different service areas such as adult social care.

·         There was regular discussion with neighbouring authorities and others across London. When considering options around shared services, it was important to assess a broad range of parameters that could help define the success of any potential partnership.

·         Members would be kept up to date on discussions and involved in analysing any proposals put forward.

·         Reforms of numbers of elected members being carried out by the Local Government Boundary Commission were not consistent in terms of population numbers to elected member ratios across all regions.

·         Standing orders were suspended at 9.25pm.

·         Currently, shared services in the borough included working with the London Borough of Brent on a shared IT support team and a shared support team for the One Oracle invoicing and payments package.

·         There was also a shared “Better Place” initiative with Southwark and Lambeth entitled “Pathways to Employment” which was a pilot project providing additional support to vulnerable groups on a path back to employment and better integration of local welfare provisions.

·         In addition to this, there was a partnership project with Southwark and Lambeth on a shared pilot of Universal Support Services to trial elements of, and learn more about, local support services ahead of the introduction of Universal Credit. This involved a partnership between the three Local Authorities and Jobcentre Plus and included a triage, to identify vulnerable claimants and those with complex needs. There would then be targeted additional support offered.

7.2       RESOLVED:

That the report be noted.

8.1       Martin O’Brien, Asset Management Planning Manager presented the report to the committee noting the following key points:

·         The report provided an update on the Council’s approach to asset management and details of the new Strategic Asset Management Plan 2015-2020.

8.2       In the subsequent discussion, the following key points were raised:

·         Community Services had been leading on consultations with relevant community groups on usage of properties.

·         The register was now complete apart from some valuations still pending.

·         The sub-areas approach to managing assets had been drawn up to align with schools planning areas and develop a vision for each sub-area. It did not however limit the scope of any suggestions at a ward level.

8.3       RESOLVED:

That the report be noted.

9.1       Katie Wood, Scrutiny Manager, presented this report to the committee highlighting the items for the next meeting and asking committee members to provide any additional details they wished to be covered in the reports.

9.2       RESOLVED:

That the report and work programme be noted.

10.1    David Austin, Head of Corporate Resources, introduced the report to the committee highlighting the following key points:

·         The strategy sets out the Council’s financial plans over the next four years to 2019/20.

·         The strategy forecasted a further reduction in resources of a minimum of £30 million in this time. This was set against indications that inflationary pressures including changes to national insurance, pay and price increases and changes in the borough’s demographics would require additional spending of around £53 million over the same period, giving an estimated savings requirement of £83 million.

·         In addition to this, the Chancellor of the Exchequer announced £2.6 billion in-year departmental savings and a total of £20 billion over the four year period. The details of exactly how these reductions in spending would impact local government would be set out in the Comprehensive Spending Review in the Autumn.

·         Further updates on the Medium Term Financial Strategy would be provided to the committee in the Autumn as part of the report on savings proposals.

·         Changes to the state pension provision will mean the Council will be liable to pay additional National Insurance contributions for staff who are in the Local Government Pension Scheme with an estimated cost to the general fund of £2 million per annum.

10.2    In the discussion that followed, the following point was raised:

·         The models used allowed predictions of the financial impact on the general fund of pension contributions to be reasonably accurate and not likely to be subject to wide variations or volatility.

10.3    RESOLVED:

That the report be noted.

11.1    There were no referrals to Mayor and Cabinet.