Meeting documents

Finance and Best Value Overview and Scrutiny Committee
Wednesday, 21st June 2006

Present

Chair

DM Elderton

Councillors

FM Doyle, AER Jones, ED Prout, WW Smith, CM Teggin, Mrs K Wood

Index to Minutes

Minute 1 - CHAIRMAN'S OPENING REMARKS

Minute Text :

The Chairman welcomed members to the first meeting of the Finance and Best Value Overview and Scrutiny Committee, and set out what he considered the Committee should seek to achieve : -

- To continually monitor the financial performance of the Council departments, seeking to ensure that actual expenditure does not exceed the budget, and that any problems identified are immediately dealt with as they arise.

- To scrutinise decisions made by the Cabinet to ensure they take fully into account the consequences and financial impact of decisions made.

- To scrutinise Council departments' financial performance to ensure that departmental savings targets, and separate savings arising from service re-engineering, are monitored and achieved progressively over the current financial year.

- In an 'overview' role, to make recommendations to the Cabinet (as may be deemed appropriate from time to time) concerning innovative or alternative ways of providing 'Best Value' for Council Tax payers, and improving service delivery.

He commented also on the need to reduce the amount of paperwork, and looked to the officers to develop strategies to improve the performance of the Committee, by concentrating on 'exception reporting', whilst at the same time ensuring that issues requiring attention were not hidden from view. In order to add structure to the Committee's responsibilities, the Chairman circulated a single draft spreadsheet to provide an immediate summary of how the Council was performing financially, the most important feature being the end of year forecast against budget. He proposed that the document would be developed by the Director of Finance and be placed as the first item on future agenda to stimulate constructive debate and decision making, concerning recommendations to the Cabinet.

Minute Decision :

Resolved -

(1) That subject to the presentation of a number of monitoring reports that are required to be reported by the Director of Finance, and in addition to reports on matters identified by the Committee in the development of its Scrutiny agenda, the officers be requested to develop strategies to improve the performance of the Committee, by submitting 'exception reports' as necessary.

(2) That the Director of Finance be requested to develop the draft spreadsheet introduced by the Chairman, for submission to all future meetings of the Committee.

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Minute 2 - DECLARATIONS OF INTEREST/PARTY WHIP

Minute Text :

The Head of Legal and Member Services requested members 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.

Councillor C Teggin declared his interest in agenda item 17 Housing/Council Tax Benefit - Annual Report (see minute 18 post).

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Minute 3 - APPOINTMENT OF VICE CHAIR

Minute Text :

The Head of Legal and Member Services requested the Committee to consider whether it wished to appoint a Vice-Chair for the ensuing municipal year. The Chairman commented that he did not propose to miss a meeting of the Committee, and suggested that the Committee should appoint a Vice-Chair as and when the need arose.

Minute Decision :

Resolved - That for the ensuing municipal year, a Vice-Chair be appointed on an ad hoc basis as and when the need arises.

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Minute 4 - FINANCIAL AND PERFORMANCE MONITORING - GENERAL FINANCIAL MATTERS

Minute Text :

The Director of Finance reported on the money market key indicators, current interest rates, the Council cash position, the position regarding Council Tax, National Domestic Rate, general debt and cash income collection and the payment of Benefits. He commented also that future reports would contain more detail, with regard to fees and charges comparisons with previous years.

In response to concerns expressed by members with regard to sundry debtors arrears, particularly those owed by the Primary Care Trusts (PCTs), the Director commented that of the £10.2m arrears figure, £8.3m related to invoices sourced from the Director of Social Services. He reported that PCT invoices were gradually being paid, and that most of those outstanding were now over two years old. In addition to their financial concern, Members also expressed their apprehension with regard to the wider, knock-on impact on Council services of the ongoing difficulties faced by the PCTs, and their failure to meet their financial obligations.

Minute Decision :

Resolved -

(1) That a further detailed report be presented to the next meeting of the Committee, upon the situation regarding PCT sundry debtor arrears.

(2) That the Adult Health and Social Care Overview and Scrutiny Committee be advised of this Committee's concerns with regard to the PCTs, and be requested to consider the wider impact on Council services of the PCTs ongoing financial situation.

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Minute 5 - FINANCIAL AND PERFORMANCE MONITORING - FINANCIAL AND PERFORMANCE PLANNING AND MONITORING 2006/2007

Minute Text :

Further to minute 36 (Executive Board - 6 April 2006), the Director of Finance reported upon the timing and content of the financial and performance monitoring reports to be submitted to the Cabinet and Overview and Scrutiny Committees during 2006/2007, and the proposed process and timetable for the production of service and financial plans for 2007/2008.

Minute Decision :

Resolved -

(1) That the dates for the planning and monitoring reports be noted.

(2) That the process for financial and performance planning and monitoring be noted.

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Minute 6 - FINANCIAL AND PERFORMANCE MONITORING - FINANCE DEPARTMENT - FINANCIAL MONITORING

Minute Text :

The Director of Finance reported that further to the reporting of the Estimates 2006/2007 to the Cabinet on 20 February 2006 and to the Council on 1 March 2006, changes from the original Budget Estimates had resulted in an approved budget of £15,272,300, and he submitted an analysis over service areas. The Finance Department share of the overall service re-engineering savings target was £767,000, and he set out how it would be achieved. He reported also that during 2005/2006, notification was received from the Department for Work and Pensions regarding settlement of the 1999/2000 subsidy claim for Housing Benefit and Council Tax Benefit. Decisions were still awaited for the subsequent financial years 2000/2001 to 2004/2005 and, as with 1999/2000, those repayments would be met from the Housing Benefit Reserve.

Minute Decision :

Resolved - That the report be noted, and a further report be submitted to the next meeting.

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Minute 7 - FINANCIAL AND PERFORMANCE MONITORING - CORPORATE SERVICES DEPARTMENT - FINANCIAL MONITORING

Minute Text :

The Deputy Chief Executive/Director of Corporate Services reported upon the financial performance of the Corporate Services Department during 2006/2007. Changes from the original Budget Estimates had resulted in a budget approved by the Council on 1 March 2006 of £6,865,700, and he submitted an analysis by service areas. He set out progress on policy options and commented that the Corporate Services Department share of the overall service re-engineering savings target for 2006/2007 was £241,000, which would be achieved through savings arising from 1Business and from vacancy control. In response to a comment from a member, he indicated that the only way for service re-engineering savings to be achieved for the current year was, in the main, through vacancy control measures. However, issues of recruitment and retention of staff remained in certain areas, and would continue to be addressed.

The Director reported also that the current report had been presented to six Overview and Scrutiny Committees, and he sought guidance from the Committee as to what information it wished to receive in the future and how that information should be presented.

Minute Decision :

Resolved - That the report be noted, and further 'exception' reports be submitted as required.

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Minute 8 - FINANCIAL AND PERFORMANCE MONITORING - FINANCIAL MONITORING SUMMARY 2006/2007

Minute Text :

The Director of Finance reported that a financial monitoring report for each Department would be presented to the relevant Overview and Scrutiny Committee during the current cycle, and would compare spend against the approved budget, references to growth items, savings, and any other variations from the approved budget. Although there were no significant variations at this stage of the financial year, the Director highlighted the areas that were traditionally regarded as being a financial risk, and which continued to be closely monitored. In response to comments from members regarding refuse collection, the Director indicated that the estimated additional expenditure resulting from the award of the Environmental Streetscene contract with effect from August 2006, was £2.4m in 2006/2007, with a total of £3.6m for 2007/2008. Whilst this would have to be met from balances in the current year, both the replenishment of the balances and the additional costs represented an additional requirement of £6m for the 2007/2008 budget. The Deputy Chief Executive commented that the Cabinet had considered the results of a detailed procurement process that had been undertaken with regard to refuse collection, and he commented that all of the bids received for the contract were in excess of the allocated budget.

Minute Decision :

Resolved - That the report be noted, and a further report be presented to the next meeting.

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Minute 9 - FINANCIAL AND PERFORMANCE MONITORING - 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.

Minute Decision :

Resolved - That the report be noted, and an updated report be presented to the next meeting.

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Minute 10 - FINANCIAL AND PERFORMANCE MONITORING - ANNUAL PERFORMANCE MONITORING REPORT 2005/2006

Minute Text :

The Director of Finance reported upon the performance of the Finance Department during 2005/2006. Performance was compared to the objectives and targets identified in the Departmental Plan, some of which were included within the Best Value Performance Plan.

Minute Decision :

Resolved - That the performance of the Finance Department during 2005/2006 be noted.

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Minute 11 - FINANCIAL AND PERFORMANCE MONITORING - PERFORMANCE MONITORING JANUARY - MAY 2006

Minute Text :

The Deputy Chief Executive/Director of Corporate Services reported upon the performance of the Corporate Services Department during the period January – May 2006. Performance was based on the objectives and targets identified in the Departmental Plan, which was presented to the Finance and Corporate Management Select Committee in January 2006 and agreed by the Cabinet on 20 February 2006. He commented that his report had been presented to six Overview and Scrutiny Committees, and contained information in relation to each of those Committees. He proposed that future reports would be structured in such a way so as to ensure that each Committee received the information it wished, presented in accordance with the Committees scrutiny agenda.

Minute Decision :

Resolved - That the performance of the Department during the period January – May 2006, and the future performance issues anticipated in the coming period, be noted.

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Minute 12 - FINANCIAL AND PERFORMANCE MONITORING - TREASURY MANAGEMENT - FINANCIAL MONITORING

Minute Text :

The Director of Finance submitted one of a series of reports, the purpose of which was to highlight the financial performance of the Treasury Management budget during 2006/2007. Following changes from the original Budget Estimates, the budget approved by the Council on 1 March 2006 was £14,414,700CR, and he presented an analysis over service areas. He commented that the Asset Management budget had income of over £39m and expenditure of around £15m per annum, and he indicated that due to its size and complexity the budget could vary significantly as a result of the impact of variations in interest rates and market conditions. All budgets continued to be monitored and at this stage no significant variations had arisen.

Minute Decision :

Resolved - That the report be noted and a further report be submitted to the next meeting.

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Minute 13 - FINANCIAL AND PERFORMANCE MONITORING - CORPORATE RISK AND INSURANCE MANAGEMENT

Minute Text :

The Director of Finance presented information on progress made in the last quarter against the objectives for Corporate Risk and Insurance Management, and set out anticipated developments in the coming months.

Minute Decision :

Resolved - That the report be noted and a further report be presented to the next meeting.

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Minute 14 - BUDGET DEVELOPMENT - PROJECTED BUDGET 2007/2008

Minute Text :

The Director of Finance presented the projected budget for 2007/2008. It was compiled from the base budget for 2006/2007 of £249.4m, agreed by the Council on 1 March 2006, and the Medium Term Financial Plan 2006/2009, agreed by the Cabinet on 3 August 2005, and it would be updated regularly throughout the year. He outlined the variations that had been identified for 2007/2008, and commented that an undertaking had been given to the District Auditor to increase balances to £4.5m for 2007/2008 and £5m for 2008/2009. The waste collection tender accepted by the Cabinet on 8 May 2006 would require an additional £2.4m in 2006/2007 to be funded from General Fund Balances, which would need to be reinstated for 2007/2008 (see minute 8 ante).

The Director reported that the indicative Formula Grant for 2007/2008 was £133.8m, which could be amended by the DCLG as a result of changes in population, other data, service responsibility, changes between Formula Grant and specific grants or changes to the allocation of specific grants. He reported also that the DCLG had indicated that any increase in Council Tax by over 5% would be liable for capping, and the Cabinet had agreed that the Council would not exceed the indicative Council Tax cap for 2007/2008.

As a result of the issues set out in his report, the Director indicated that the projected budget for 2007/2008 was £270.1m, against resources of £249m. In response to comments made by members, the Deputy Chief Executive indicated that Chief Officers had been instructed to manage the budget gap, and identify savings as necessary.

Minute Decision :

Resolved - That the Cabinet be informed of the concerns of this Committee in relation to the projected budget gap of £21.1m, and be requested to identify adequate control measures.

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Minute 15 - BUDGET DEVELOPMENT - SERVICE RE-ENGINEERING MONITORING SUMMARY 2006/2007

Minute Text :

The Director of Finance presented an update on the progress being made in achieving the service re-engineering savings contained within the budget for 2006/2007, agreed by the Council on 1 March 2006. The agreed Council budget for 2006/2007 identified gross savings of £3.7m, and of this sum £1.2m represented a service re-engineering investment budget. He set out the apportionment of savings, and commented that progress on service re-engineering savings would be reported to each cycle of Overview and Scrutiny Committees as part of the financial and performance monitoring reporting process throughout 2006/2007, and a summary report on the current position presented to this Committee and to the Cabinet.

In response to concern expressed by a member with regard to the use of vacancy control measures to deliver savings when the Council was experiencing problems of recruitment and retention of staff, the Deputy Chief Executive indicated that assessments on staff turnover would inform decisions with regard to the use of vacancy control measures. In response to a further comment with regard to benefits payments, the Director reported that the Council was presently in dispute with the Department for Work and Pensions (DWP) over elements of grant that had been paid, that the DWP was attempting to claw back. He envisaged that agreement would be reached with regard to the amount to be repaid, but until the matter was resolved, it would continue to be shown as a 'fundamental uncertainty' in the District Auditors report.

Minute Decision :

Resolved - That the report be noted, and a further report be presented to the next meeting.

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Minute 16 - POLICY DEVELOPMENT - PRESENTATIONS

Minute Text :

The Director of Finance reported that the former Finance and Corporate Management Select Committee included on each agenda a presentation of one area of its responsibilities. The Chairman had indicated that he wished the practice to continue, and the Director requested members to identify suitable topics.

Minute Decision :

Resolved -

(1) That a schedule of presentations be agreed for future meetings of the Committee, to focus initially on the following issues -

(a) Wider Service Re-engineering
(b) General Budgetary Control
(c) Changes in the Benefits System

(2) That presentations on other areas of Finance and Best Value scrutiny be brought to the attention of the Chairman and the Director of Finance.

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Minute 17 - POLICY DEVELOPMENT - MEMBERS TRAINING

Minute Text :

The Director of Finance reported that the finances of local government were very complex, and Wirral was a large local authority facing significant financial pressure. Consequently, he indicated that it would be advantageous for members of the Finance and Best Value Overview and Scrutiny Committee and the Cabinet to have a good understanding of the finances of the Council, and he proposed a training course for members to be conducted over two sessions to achieve that aim, in addition to the training that was being offered in the role of scrutiny.

He set out the elements that would be included in the course, and commented that training for members involved in Finance would ultimately improve the authority's score both for the revised Use of Resources (UOR) Assessment, and the Comprehensive Performance Assessment (CPA).

Minute Decision :

Resolved - That the Finance training be provided on dates to be agreed with the Chairman and party spokespersons, and be offered to all members of the Council.

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Minute 18 - POLICY DEVELOPMENT - HOUSING/COUNCIL TAX BENEFIT - ANNUAL REPORT

Minute Text :

The Director of Finance reported upon the progress of the Benefits Service over the last year. He commented that considerable effort had been put into the establishment of a regime of monitoring and checking performance on a daily/weekly basis to ensure that key Benefits Performance Indicator targets were maintained. The Service had performed well against the national Performance Measures, in addition to Best Value Performance Indicators, and he outlined the challanges to be faced in 2006/2007, particularly in relation to the implementation of the Integrated Revenues and Benefits System, which would cause an unavoidable disruption to the service. In response to a comment by the Chairman that close monitoring was essential in order to identify and address any downward trends in performance, the Director agreed to present progress reports as necessary.

Minute Decision :

Resolved -

(1) That the report be noted.

(2) That update reports be presented to future meetings as necessary, with regard to any disruptions to the Benefits Service as a result of the implementation of the Integrated Revenues and Benefits System.

Footnote :

Councillor C Teggin declared his prejudicial interest in this matter and left the room during its consideration.

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Minute 19 - CORPORATE GOVERNANCE - COMPREHENSIVE PERFORMANCE ASSESSMENT (CPA) - USE OF RESOURCES

Minute Text :

The Director of Finance reported that under the 2005 Use of Resources Assessment by the Audit Commission, Wirral had retained a score of 2, and the Director gave a breakdown across the key areas. He commented that the Audit Commission had made it clear that in addition to impacting directly on Financial Standing and Internal Control, which both scored 1, the Public Interest Report and the Social Services budget overspend in 2004/2005 also affected other scores in the five Key Lines of Enquiry. He submitted an Action Plan, agreed by the Cabinet on 8 May 2006 (minute 595 refers) that had been prepared in response to the issues raised both by the Assessment, and by the consultation paper issued by the Audit Commission in February on the proposals for 2006, and he set out the actions to be taken in terms of the specific issues that affected the CPA score.

Minute Decision :

Resolved -

(1) That the proposals in, and responses to, the consultation paper on Use of Resources be noted.

(2) That the action plan responding to the issues raised by the Use of Resources assessment be noted.

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Minute 20 - CORPORATE GOVERNANCE - ANNUAL AUDIT AND INSPECTION LETTER 2004/2005

Minute Text :

The Director of Finance reported that following its submission the to the Cabinet on 16 March 2006, the Annual Audit and Inspection letter from the Audit Commission was referred to the appropriate Select, now Overview and Scrutiny, Committees for consideration, and he provided a summary of the issues identified and, for those that fell under the broad heading of financial matters, the actions taken/planned to address those issues. He set out the key messages from each area of the audit, and commented that the Audit Commission had concluded that whilst democratic arrangements needed to be developed, the Council had a strong focus on reducing costs and was improving the way it worked. The financial position of the Council was affected by events in 2004/2005 and, at the time, the financial pressures for 2006/2007 were also to be addressed. The Director outlined the responses to the financial issues raised in terms of Council Performance, and the Accounts and financial aspects of Corporate Governance.

Minute Decision :

Resolved - That the report, and the actions being taken, be noted.

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Minute 21 - EXEMPT INFORMATION - EXCLUSION OF MEMBERS OF THE PUBLIC

Minute Text :

Minute Decision :

Resolved - That in accordance with section 100A (4) of the Local Government Act 1972, the public be excluded from the meeting during consideration of the following items of business, on the grounds that they involve the likely disclosure of exempt information as defined by the relevant paragraphs of Part 1 of Schedule 12A (as amended) to that Act.

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Minute 22 - CORPORATE GOVERNANCE - COMPREHENSIVE PERFORMANCE ASSESSMENT (CPA) - BENEFIT 2006

Exempt :

NOT FOR PUBLICATION - Exempt by virtue of paragraphs 3 and 5 of Part 1 of Schedule 12A (as amended) to the Local Government Act 1972

Minute Text :

The Director of Finance outlined the Comprehensive Performance Assessment (CPA) review process for the Benefits Service, and reported upon how changes to the Housing and Council Tax Benefits (HB/CTB) Performance Standards were likely to impact upon performance for 2006. He commented that without exception, since the first annual review to date, the Benefits Service had secured the top CPA score, despite significant changes to the Performance Measures, each essentially applying a 'harder test'. For 2006, the Performance Measures had again been reviewed, and the Director reported upon the results of a sample assessment that he had undertaken against the Standards, in anticipation of the 2006 review. The outcome of the exercise was that the service achieved a top score of 4 in all areas except the 'User Focus Theme', which had only met minimum requirements, and resulted in an overall score of 3, and the Director reported upon the issue that had resulted in the lower score in the administration of Appeals and Complaints. This would form the basis of mitigation to the DWP and BFI, as a case was made to demonstrate that were it not for that one issue, performance would otherwise have remained unaffected from the previous review, which secured a top score and led to the overall service assessment for Benefits of 'Excellent' for CPA purposes.

Minute Decision :

Resolved - That the report be noted.

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Minute 23 - USE OF DELEGATED AUTHORITY - ACQUISITION OF PROPERTIES

Exempt :

NOT FOR PUBLICATION - Exempt by virtue of paragraph 3 of Part 1 of Schedule 12A (as amended) to the Local Government Act 1972

Minute Text :

The Deputy Chief Executive/Director of Corporate Services reported, in accordance with the "Approved Scheme of Delegation", upon those occasions where delegated authority had been used to acquire various properties in Housing Market Renewal Initiative Areas, or in Neighbourhood Renewal Areas during the period 16 March 2006 to 21 June 2006.

Minute Decision :

Resolved - That the Committee recommends to the Cabinet that the report be noted.

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Minute 24 - SCRUTINY TRAINING

Minute Text :

Members expressed a number of concerns with regard to the scrutiny training that was being provided for members of the Overview and Scrutiny Committees by NW Employers Organisation.

Minute Decision :

Resolved - That the Deputy Chief Executive be requested to take up members concerns and report back in due course.

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(Minutes Published: 3 July 2006)