Meeting documents

Joint Scrutiny Committee (Budget Monitoring)
Thursday, 2nd February, 2017 10.00 am

Date: Thursday 2nd February 2017 Time: 10.00 a.m. Place: Council Chamber, Civic Centre, Ebbw Vale

Please note: all Minutes are subject to approval at the next Meeting

PresentAndReport toReport of
COUNCILLOR M. CROSS (CHAIR)
Item
No
Item/Resolution Status Action
PUBLIC
1. APOLOGIES

Apologies for absence were received from: -

Councillors K. Brown, M. Holland, L. Winnett, Mr. T. Baxter and the Corporate Director of Education

Noted
2. DECLARATIONS OF INTEREST AND DISPENSATIONS

There were no declarations of interest or dispensations reported.

Noted
3. JOINT SCRUTINY COMMITTEE
Minutes (186K/bytes)

Consideration was given to the Minutes of the Joint Scrutiny Committee (Budget Monitoring) held on 31st October, 2016.

A Member referred to the two sets of minutes included on the agenda and expressed concern regarding the format. He said they were more like a 'question and answer' session and did not give any context of what the Chief Finance Officer reported. Minutes were published for members of the public etc. to gain an understanding of Council issues and a flavour of the debate that was undertaken in making decisions.

He understood there were staffing issues within the Democratic Services Section, but asked whether this format was a 'one-off' occurrence or whether this was the intended format moving forward. He said if this style of minutes was intended, it was against a Council decision made in May 2016 rejecting proposals to reduce the length of the minutes.

A brief discussion ensued when the Chair undertook to discuss this matter with the relevant Officers.

RESOLVED, subject to the foregoing, that the Minutes be accepted as a true record of proceedings.

Agreed
4. ACTION SHEET
Action Sheet (40K/bytes)

The Action Sheet arising from the Joint Scrutiny Committee meeting held on 31st October, 2016 was submitted.

RESOLVED that the Action Sheet be noted.

Agreed
5. SPECIAL JOINT SCRUTINY COMMITTEE
Minutes (204K/bytes)

The Minutes of the Special Joint Scrutiny Committee held on 9th January, 2017.

RESOVLED that the Minutes be accepted as a true record of proceedings.

Agreed
6. ACTION SHEET
Action Sheet (41K/bytes)

The Action Sheet arising from the Special Joint Scrutiny Committee held on 9th January, 2017 was submitted.

RESOVLED that the Action Sheet be noted.

Agreed
7. REVENUE BUDGET MONITORING 2016/2017, FORECAST TO 31 MARCH 2017 (AS AT 31 DECEMBER 2016)
Report (114K/bytes)
Appendix 1 (349K/bytes)
Appendix 2 (50K/bytes)
Appendix 3 (95K/bytes)
Appendix 4 (83K/bytes)
Appendix 5 (712K/bytes)
Appendix 6 (47K/bytes)

Consideration was given to report of the Chief Finance Officer which provided a forecast of the end of year financial position across all portfolios for the financial year 2016/17 (as at 31st December, 2016), and reviewed the actions taken to move towards a balanced outturn position.

The Chief Finance Officer said the three reports on the agenda related to the quarter 3 forecast budget position. Overall the current statement demonstrated an improved revenue position, albeit an over-spend at the end of the year. The capital position was relatively stable, and a number of reserves had been utilised across a range of revenue and capital areas.

The Officer then went through the report and highlighted points contained therein.

The table at section 2.2 of the report indicated that the forecast year end spend position was higher than the budget by 0.45m across all services, and this was after the application of 3m from reserves to address 'one-off' in-year planned and unplanned expenditure.

He said Children's Services remained the most significant cost pressure with an adverse variance of 2.5m. However, he confirmed that the Head of Children's Services continued to closely monitor the budget and provided updates to CMT and the Social Services Scrutiny Committee.

There were number of other significant cost pressures across all Portfolios and these were detailed at Appendix 3 of the report.

A Member sought further clarification in relation to section 2.6 of the report, namely the increase in forecast income for the surplus on Council Tax collection, and a forecast reduction in costs relating to the Council Tax Reduction Scheme.

The Officer said Members would be aware of press reports indicating that Blaenau Gwent had the lowest Council Tax collection rates in Wales in a singular year. However, he confirmed that Officers continued to collect debts, and overall were successful in recovering Council Tax even if it took a number of years.

In terms of the Council Tax Reduction Scheme, the overall cost to the Authority was over 8m. This money was used for people who were supported to pay their Council Tax in full, and there was an approximate 50/50 split in Blaenau Gwent of people who paid full and those who received various levels of support. The overall forecast position was that the Council will spend approximately 7.7m on Council Tax Support, thus generating a forecast underspend of 300k. The reasons for the underspend could be more people in work, or working longer hours therefore reducing their benefits.

He also said that Universal Credit had changed the way people accessed benefits, particularly those families previously in receipt of Working Tax Credits. Also those eligible for free school meals now received this money directly, and the Council could not guarantee that this money was being passed on for the purposes intended. We would need to consider the eligibility implications and how this will impact on families. This meant a significant decrease in funding which would impact on various elements of the Revenue Support Grant received from Welsh Government.

A Member requested a breakdown of the number of people paying Council Tax, i.e. those paying full and those in receipt of support, and the current level of outstanding Council Tax owed to the Authority. The Chief Finance Officer would seek to find this information and report the findings to a future meeting of the Committee.

A Member queried the loss of income regarding non-Council Tax payers and if we received any reimbursement from Welsh Government. The Officer responded that we do not receive any financial support for a loss of income.

He also confirmed that Welsh Government put 244m into the RSG to provide a level of Council Tax support to all Councils, but this figure had not increased year on year.

A 300k savings proposal had been put forward in relation to the Council Tax Support Scheme for 2017/18.

A brief discussion ensued when a Member referred to the impact of changes to the benefits system, and it was agreed that a Members' briefing session be convened in the new cycle in order to get a better understanding of the situation.

A Member requested the percentage of people who claimed single person discount on Council Tax and asked how often checks were undertaken of those people. The Officer confirmed that this would be built into the comprehensive report that had been requested. However, he urged Members to report any suspicions of fraudulent claims to Officers for investigation.

RESOLVED to recommend that the report be accepted and the Joint Scrutiny Committee:-

i. Acknowledge the forecast financial outcomes in the report and the cost pressures identified in Appendix 3;

ii. Support budget holders to operate within approved budgetary control procedures for the 2016/17 financial year; and

iii. Acknowledge the action plans attached at Appendix 5 to address forecast adverse variances, when considering the financial forecast, produced as at the end of December 2016.

Agreed
8. 2016/17 FORECAST CAPITAL EXPENDITURE (AS AT 31 DECEMBER 2016)
Report (132K/bytes)
Appendix 1 - 3 (492K/bytes)

Consideration was given to report of the Chief Finance Officer which provided an overview of each Portfolio's forecast capital expenditure against funding approvals for the 2016/17 financial year.

The Chief Finance Officer spoke to the report and highlighted points contained therein. The total forecast underspend against approved budgets for 2016/17 was 9,934, and Appendix 2 provided an explanation for the significant variances contributing to this figure. He said it was important that all forecast overspends and underspends were managed in order that secured funding approvals were not lost and to mitigate any potential adverse impact upon the future capital programme.

The Officer also referred Members to section 2.3 of the report which referred to the demolition of Abertillery Leisure Centre. The project was currently forecast to spend on budget for 2016/17, however, work had been suspended due to the presence of asbestos which was not identified in the specialist consultant's pre-demolition survey. The impact of this was currently being assessed, however, it was likely that the increase in costs would be significant and would impact upon expenditure and the delivery of a number of projects during 2017/2018.

A Member asked whether any additional costs incurred could be 'clawed back' from the specialist contractor, and the Corporate Director confirmed that this was being pursued.

In response to a question raised by a Member regarding the variation in demolition costs of Abertillery Leisure Centre and Nantyglo Leisure Centre, the Head of Technical Services explained that Abertillery was a much larger building.

The Chief Finance Officer also pointed out that this was the proposed spend for the current financial year, however, some of the schemes ran over a number of years, thus the variation in costs reported.

A Member referred to Appendix 1 and requested more detail to be provided against each budget line.

A brief discussion ensued when the Head of Technical Services said as part of demolition schemes materials were recycled, where possible, in order to reduce costs.

RESOLVED to recommend that the report be accepted and the Joint Scrutiny Committee:-

i. Continue to support appropriate financial control procedures agreed by the Council; and

ii. Acknowledge the budgetary control and monitoring procedures in place within the Capital Team, to safeguard Authority funding.

Councillor G. Thomas left the meeting at this juncture.

Agreed
9. USE OF GENERAL AND EARMARKED RESERVES
Report (145K/bytes)
Appendix 2 (113K/bytes)
Appendix 3 (72K/bytes)
Appendix 4 (91K/bytes)

Consideration was given to report of the Chief Finance Officer which updated Members on the forecast reserves position for 2016/17 as at Quarter 3 (31st December, 2016).

The Chief Finance Officer presented the report and highlighted points contained therein. He said the revenue budget forecast year-end position for 2016/17 at the end of Quarter 3 indicated an overspend of 0.450m after the application of 3m from general and earmarked reserves.

He said if the worst case scenario was assumed, the Quarter 3 forecast outturn position for the General Reserve at year-end 2016/17 was 4.826m, which was a reduction of 1.246m during the year.

In response to a question raised by a Member the Chief Finance Officer explained that Appendix 3 reported adjustments to earmarked reserves during Quarter 3.

The Member then referred to Appendix 2 which listed the forecast movements to earmarked reserves in Quarter 3, and expressed concern that the 147k decrease in individual school budgets, had not been highlighted at Appendix 3, and the Chief Finance Officer undertook to investigate.

He also expressed concern regarding a number of the earmarked reserves listed at Appendix 4, particularly the Budget Contingency Fund, ICT, Insurance Liability and Payroll, and asked whether this was a one-off or an ongoing arrangement. He said in the previous quarter the budget contingency fund showed spend of almost 76k, however, the figure for quarter 3 was 246k and he sought clarification on the additional spend.

The Chief Accountant Revenue Services explained that these were one-off spends. The actual expenditure from Quarter 3 up to Quarter 4 would increase by costs incurred during that period, and she gave an explanation of the spend on the Budget Contingency Fund, in relation to the external legal support and running costs of various buildings.

In relation to education staff costs, the Head of School Improvement & Inclusion undertook to report back on this matter.

The Member expressed concern that a more informative breakdown of the costs should have been provided in order to fully scrutinise the figures.

The Officer suggested that forecasts be included in future reports, particularly for some areas where the Council were funding the costs in full.

Appendix 2 - Individual School Budgets

The Member expressed concern that 147k had been taken out of individual schools budgets, and that 465k had been taken out of the Education reserve for the 3-16 implementation costs, including closing school deficits. He asked for clarification on these school deficits, as he understood that a number of the closing schools were in a surplus position, and that there seemed to be no validation for the 465k taken out of the Education reserve for the 3-16 school implementation cost.

In response the Chief Finance Officer agreed to circulate more detailed appendices, including a breakdown of the specific items amounting to that figure.

The Member said there was 149k left in the individual school budgets earmarked for use in Quarter 4, and then this budget would be 'wiped out'. He expressed concern that 1.5m had been taken out of earmarked reserves in Quarter 3 and Members had not seen any benefit in the community in terms of highway improvements or additional street cleansing etc. He asked whether any of these decisions were agreed by the Leadership and Executive Member.

The Chief Finance Officer said he had delegated authority to make adjustments to Council Reserves, but assured that these were considered by CMT.

The Member commented that final approval should be made by the Leadership.

Appendix 4 - Downsizing, Redundancy & Transitional Costs

A Member sought clarification on the redundancy costs for staff from the Leisure Trust, and the Officer said this information would be included in the more detailed appendix to be circulated to Members.

Another Member referred to the cost of the roadworks at St. Illtyd's, and the Head of Technical Services reported that the scheme was currently out to tender and a report would be brought back to a future Committee.

RESOLVED to recommend that the report be accepted and the forecast use of general reserves and earmarked reserves for 2016/17 be acknowledged.

Agreed