Meeting documents
Finance and Best Value Overview and Scrutiny Committee
Wednesday, 6th December 2006
Present
Chair
DM Elderton
Councillors
FM Doyle, AER Jones, ED Prout, WW Smith, CM Teggin, Mrs K Wood
Index to Minutes
- Minute 43 - DECLARATIONS OF INTEREST/PARTY WHIP
- Minute 44 - MINUTES
- Minute 45 - PRESENTATION - BUDGETARY CONTROL
- Minute 46 - FINANCIAL MONITORING STATEMENT
- Minute 47 - FINANCIAL MONITORING SUMMARY 2006/2007
- Minute 48 - MONITORING REPORTS
- Minute 49 - CAPITAL MONITORING SUMMARY 2006/2007
- Minute 50 - SERVICE RE-ENGINEERING SUMMARY 2006/2007
- Minute 51 - PROJECTED BUDGET 2007/2008
- Minute 52 - SERVICE RE-ENGINEERING - CORPORATE ICT UNIT
- Minute 53 - PROGRESS ON FAIRTRADE
Minute 43 - DECLARATIONS OF INTEREST/PARTY WHIP
Minute Text :
Members were asked to consider whether they had personal or prejudicial interests in connection with any item(s) on this agenda and, if so, to declare them and state what they were. No such declarations were made.
Minute 44 - MINUTES
Minute Text :
Minute Decision :
Resolved - That the minutes of the meeting held on 26 September 2006, having been confirmed by the Council, be received.
Minute 45 - PRESENTATION - BUDGETARY CONTROL
Minute Text :
The Chairman advised the Committee that he had agreed with the Director of Finance that this item would be deferred to the next meeting of the Committee.
Minute 46 - FINANCIAL MONITORING STATEMENT
Minute Text :
The Director of Finance provided a summary of the current position of the Authority's revenue accounts and General Fund balances. The Monitoring Statement included the composition of the 2006/2007 budget by department, including agreed Service Re-Engineering (SRE) savings, other savings and policy options; monitoring against the 2006/2007 budget; anticipated variance against the original budget; and an explanation of variances and areas identified as requiring further attention. It was based upon the information provided within the departmental financial monitoring reports presented to each Overview and Scrutiny Committee, and he commented that further details were included within the financial monitoring summary report (see minute 47 post) and service re-engineering summary report (see minute 50 post). The Chairman referred to anticipated variances that had been identified, and invited appropriate Chief Officers to comment upon what actions they proposed to address the overspend.
The Director of Children's Services reported upon the budgets that were controlled by the Children and Young Peoples Department. He commented upon various factors that affected those budgets, and indicated that the key feature was in relation to children being looked after outside the Borough, and the use of non-local authority foster carers. He reported upon measures being taken to address the variance identified of £850,000, which he anticipated would be reduced over the remainder of the financial year. However, the financial affairs of the Department had always to be offset against the potential risk to children of action proposed to be taken. Furthermore, children were placed outside the Borough, as a result of Court Orders, and the courts would have to be satisfied with regard to any proposal to bring them back to Wirral. In response to a request from a member, the Director agreed to present a detailed budget report to the next meeting of the Committee.
The Director of Technical Services reported that he had now identified the total SRE savings of £570,000, and he indicated that the anticipated variance of £2,456,000 related solely to the additional cost of awarding the new Waste Services contract to Biffa Waste Services.
The Director of Regeneration reported that he proposed to present a report to the Cabinet on 14 December 2006, seeking that the anticipated Cultural Services revenue budget deficit of £1.9m be funded from balances this year, and that the same amount of growth be approved for next year. He commented that the main overspends were in relation to reduced income, increased energy costs, grounds maintenance and landscaping, and the Pacific Road Theatre. In addition SRE savings had not been achievable, and had been included within his report to the Cabinet. In response to a comment by the Chairman, the Director indicated that there was no realistic prospect of a reduction in the budget deficit by the year end, and that £1.9m remained the most optimistic projection.
The Director of Adult Social Services reported that the latest figures available were up to the end of October, and he indicated that the half year spend was presently 49% of budget. He referred to increased energy costs, and commented that the anticipated variance of £269,000 included SRE savings of £106,000, which currently remained outstanding. He drew attention to pressures in a number of areas, and commented that activity had now increased with individuals retained in services longer than planned, which had resulted in projected additional spending on community care of £2m. Action had been taken to shift the emphasis of activity into reviewing cases and the rigorous application of eligibility. This, together with a continued drive to reduce costs through renegotiation and maximising block contracts should all evidence in the December accounts and redress projections in the second half of the year.
In response to comments from members, the Director indicated that there was no particular difficulty in relation to Wirral PCT debt, and he was confident of achieving income of £4.1m health liability by the year end. He referred also to debts of £1.9m from 5 PCT's outside of Wirral, and commented that although accounting practice was to write-off debt over three years old, he proposed to seek the support of the Department of Health, and to take legal action for recovery. The debts were legitimate health costs, and consequently, they could not be met by the local authority.
In response to a question related to the Invest-to-Save capital scheme, the Director now proposed to report to the Cabinet in January 2007 upon proposals for the reconfiguration of Girtrell Court, and additional local capacity for specialist residential care, in order to achieve the savings for 2007/2008.
Minute Decision :
Resolved -
(1) That the contents of the financial monitoring statement be noted.
(2) That a further update be submitted to the next meeting of the Committee.
(3) That the Director of Children's Services be requested to present a detailed budgetary report to the next meeting of the Committee.
(4) That Chief Officers be requested to do all that is possible to reduce the budget deficits identified.
(5) That the Director of Adult Social Services be instructed to take action as necessary to recover outstanding debt from PCTs outside Wirral.
Footnote :
The Committee considered this item in conjunction with the Financial Monitoring Summary 2006/2007 (see minute 47 post)
Minute 47 - FINANCIAL MONITORING SUMMARY 2006/2007
Minute Text :
The Director of Finance reported that a financial monitoring report for each Department had been presented to the relevant Overview and Scrutiny Committee during the current cycle, and he provided a summary of the implications for the General Fund. He set out progress with regard to policy options, savings, savings from service re-engineering, and savings funded by bridging finance. He reported upon the budgetary effect of decisions taken by the Cabinet and Executive Board, and commented with regard to variations, that the areas traditionally regarded as being a financial risk continued to be closely monitored, and had been or were to be reported to relevant Overview and Scrutiny Committees.
On a motion by Councillor Elderton and seconded by Councillor Mrs Wood, it was -
Minute Decision :
Resolved -
(1) That this Committee continues to be concerned in relation to the inability of some departmental heads to operate within the financial budget constraints for 2006/2007, for a variety of reasons.
(2) That this Committee recommends that the Cabinet takes due account of the background surrounding these issues, and the proposals put forward by department heads to alleviate some of these continuing problems, before deciding upon executive action to be taken.
Footnote :
The Committee considered this item in conjunction with the Financial Monitoring Statement (see minute 46 ante)
Minute 48 - MONITORING REPORTS
Minute Text :
In accordance with the timetable agreed by the Executive Board (minute 36 (6 April 2006) refers), the Director of Finance presented a series of financial monitoring reports. With regard to General Financial Matters (Appendix A), he provided information on the money market key indicators, current interest rates, the Council cash position, the position regarding Council Tax, National Non Domestic Rate, general debt and cash income collection and the payment of Benefits. He reported on the financial performance of the Finance Department (Appendix B), and the Treasury Management budget (Appendix C)during 2006/2007, and provided information on progress made in Corporate Risk and Insurance Management (Appendix D) against the objectives for those services and the anticipated developments in the coming months. The Director presented also the Finance Department Performance Monitoring Report (Appendix E) for the period August - October 2006, which set out progress in respect of the Council's corporate plan and improvement agenda, and provided a summary of the next quarters activities.
In response to a question from the Chairman regarding the new Accounts Receivable system referred to in the General Financial Matters report, the Director commented that considerable time had been spent in negotiations with Fujitsu regarding the improvement of the system, and he was confident that it would ultimately meet the requirements of the Council. With regard to Fees and Charges, the Chairman referred to sources of cash income generated by the Council, and expressed his concern that some of the budgets may have been overly optimistic. He referred also to the importance for members of training sessions in Risk Management that had been arranged on the evenings of 11 and 19 December 2006.
Minute Decision :
Resolved - That the report be noted.
Minute 49 - CAPITAL MONITORING SUMMARY 2006/2007
Minute Text :
The Director of Finance reported that a capital monitoring report for each department had been presented to the relevant Overview and Scrutiny Committee during the current cycle, and he provided a summary of the progress on the overall programme. The latest forecast position indicated a total programme at November 2006 of £74,804,000. He commented that the resources similarly compared the developing programme, and reflected the changes to the base programme approved in December 2005. The generation of capital receipts through the sale of assets was used to fund the programme, and at this stage £7m was included for use in 2006/2007. This income, whilst uncertain in the exact timing of receipt, offered flexibility in the timing of its use and could be used to either balance the 2006/2007 programme or to address future budgetary issues.
Minute Decision :
Resolved - That the report be noted.
Minute 50 - SERVICE RE-ENGINEERING SUMMARY 2006/2007
Minute Text :
The Director of Finance reported that the current position regarding the delivery of service re-engineering (SRE) savings had been incorporated within the departmental financial monitoring reports presented to the current cycle of Overview and Scrutiny Committees, and he provided a summary report on the progress being made in achieving the total SRE savings of £3.7m, contained within the budget for 2006/2007. He reported also that of the total SRE savings, an allocation of £1.2m had been included for reinvestment into services, and of that sum, a total of £0.5m was presently unallocated.
Minute Decision :
Resolved - That the report be noted.
Minute 51 - PROJECTED BUDGET 2007/2008
Minute Text :
The Director of Finance presented the projected budget for 2007/2008, which would be updated regularly throughout the year. He commented that on 31 January 2006, the Office of the Deputy Prime Minister (ODPM) issued the Local Government Finance Settlement for 2006/2007, which included indicative figures for 2007/2008, as part of the move to three year budgets. The first three year settlement only covered two years to allow the local government settlement to be brought into line with the Comprehensive Spending Review due in 2007 and covering the period from 2008 to 2011. The settlement was only indicative which meant that the actual figures for 2007/2008 could change for any of a number of reasons.
He set out variations that had been identified for 2007/2008, and indicated that the projected balances were presently £5.6m. In response to a question from a member, he confirmed that a recommendation to the Cabinet on 14 December 2006, by the Director of Regeneration (see minute 46 ante) would result in the balances being reduced to £3.7m. In accordance with an undertaking given to the District Auditor, they would then need to be built back up to £4.5m for 2007/2008 and £5m for 2008/2009.
The projected expenditure was £260.1m, with anticipated resources of £249.4m, and he commented that the budget gap at present, of £10.7m would need to be bridged by a combination of savings and/or increased Council Tax. He indicated that every 1% increase in Council Tax represented approximately £1m. However, the Department for Communities and Local Government had indicated that any local authority increasing its Council Tax by over 5% would be liable for capping, and the Cabinet on 25 May 2006 (minute 13 refers) had agreed that the Council would not exceed the indicative Council Tax cap for 2007/2008.
Minute Decision :
Resolved - That savings be identified and reported to the Cabinet.
Minute 52 - SERVICE RE-ENGINEERING - CORPORATE ICT UNIT
Minute Text :
The Director of Finance reported that at its meeting on 7 September 2006, the Executive Board (minute 134 refers) agreed to a restructuring of the Corporate ICT unit to save £100,000. He outlined changes to the structure, which envisaged the creation of a team to concentrate on school issues while other staff were amalgamated into existing teams, and he commented that further changes to the structure would be made as integration developed and areas of duplication and overlap were eliminated.
Minute Decision :
Resolved - That the service re-engineering saving of £100,000 be noted.
Minute 53 - PROGRESS ON FAIRTRADE
Minute Text :
The Director of Finance provided an update on the activities that had taken place in and around the Council to support the "Fairtrade Borough Status", which had been conferred on the Borough at a ceremony on 26 April 2006.
Minute Decision :
Resolved - That the Committee supports the action to promote Fairtrade products.
(Minutes Published: 13 December 2006)