Meeting documents
Finance and Best Value Overview and Scrutiny Committee
Tuesday, 26th September 2006
Present
Chair
DM Elderton
Councillors
AER Jones, ED Prout, WW Smith, CM Teggin, Mrs K Wood
Deputy
Cllr GD Mitchell (for Cllr FM Doyle)
Index to Minutes
- Minute 25 - CHAIRMANS OPENING REMARKS
- Minute 26 - DECLARATIONS OF INTEREST/PARTY WHIP
- Minute 27 - MINUTES
- Minute 28 - PRESENTATION - SERVICE RE-ENGINEERING
- Minute 29 - FINANCIAL MONITORING STATEMENT
- Minute 30 - MONITORING REPORTS A. GENERAL FINANCIAL MATTERS B. FINANCE DEPARTMENT - FINANCIAL MONITORING C. TREASURY MANAGEMENT - FINANCIAL MONITORING D. CORPORATE RISK AND INSURANCE MANAGEMENT E. FINANCE DEPARTMENT - PERFORMANCE MONITORING APRIL TO JULY 2006
- Minute 31 - CORPORATE SERVICES - PERFORMANCE MONITORING REPORT JUNE - AUGUST 2006
- Minute 32 - FINANCIAL MONITORING SUMMARY 2006/2007
- Minute 33 - CAPITAL MONITORING SUMMARY 2006/2007
- Minute 34 - PROJECTED BUDGET 2007/2008
- Minute 35 - SERVICE RE-ENGINEERING - HOUSING AND COUNCIL TAX BENEFITS
- Minute 36 - SERVICE RE-ENGINEERING - PRINT SERVICES
- Minute 37 - SERVICE RE-ENGINEERING MONITORING SUMMARY 2006/2007
- Minute 38 - PROCUREMENT EVALUATION PROCESS MODEL GUIDANCE
- Minute 39 - COUNCIL TAX COLLECTION: USE OF INSOLVENCY PROCEEDINGS - BANKRUPTCY AND LIQUIDATION
- Minute 40 - RECOVERY OF ADULT SOCIAL SERVICES INCOME
- Minute 41 - BENEFITS UNIT COSTS
- Minute 42 - LOCAL GOVERNMENT CHRONICLE (LGC) AWARDS 2006
Minute 25 - CHAIRMANS OPENING REMARKS
Minute Text :
The Chairman welcomed those present to the Overview and Scrutiny Committee. He identified those agenda items that were for information and highlighted those, which in his opinion required more serious debate. These largely related to variations from the net budget, and the need to review service re-engineering savings. He referred also the Virtual Committee, and proposed that without losing control of responsibility for overview and scrutiny, non-controversial information be placed on the Virtual agenda, in order that this Committee may concentrate on more pressing matters as they arose.
He proposed also that the Financial Monitoring spreadsheet, at agenda item 4 (see minute 29 post) be distributed to members on a monthly basis by e-mail, in addition to being presented on a cyclical Committee basis.
The Director of Finance commented that monitoring reports were presented to Overview and Scrutiny Committees in accordance with a decision of the Cabinet, but with the exception of those, greater use would be made of the Virtual Committee.
Minute Decision :
Resolved -
(1) That, with the exception of financial monitoring reports, non-controversial information items be placed on the Virtual Committee, in order that the Finance and Best Value Overview and Scrutiny Committee may concentrate on dealing with more pressing matters as they arise.
(2) That this Committee be presented with a regular statement as to what reports have been placed on the Virtual Committee.
Minute 26 - 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 27 - MINUTES
Minute Text :
Minute Decision :
Resolved - That the minutes of the meeting held on 21 June 2006, having been confirmed by the Council, be received.
Minute 28 - PRESENTATION - SERVICE RE-ENGINEERING
Minute Text :
The Director of Finance gave a presentation upon savings as a result of service re-engineering. He set out the monitoring process, and indicated that the delivery of savings was the responsibility of appropriate Chief Officers, with support from the Information Technology service, Customer Services, Transformational Change, and the Procurement Unit. Although initially for the three years 2004 - 2007, the programme would need to continue in order to ensure the achievement of Gershon Savings, which were currently in the order of £8.51m, excluding schools and benefits. He commented that the reality was that the budget requirement would continue to grow at a rate that outstripped income, and that each year it would be more difficult to deliver the budget. In response to comments from members, the Deputy Chief Executive/Director of Corporate Services outlined the role of the Head of Transformational Change, and commented that in order to deliver the budget and the required savings, the authority would have to challenge existing customs and practices. However, members expressed the view that the savings amounted to cuts in service, which were not to the benefit of the people of Wirral.
Minute Decision :
Resolved - That the presentation be noted, and copies be circulated to members of the Committee by e-mail.
Minute 29 - FINANCIAL MONITORING STATEMENT
Minute Text :
Following requests by the Chairman, the Director of Finance provided a summary in tabular format of the current position of the Authority revenue accounts and General Fund balances, which would be updated and submitted to each meeting of this Committee. The monitoring statement included the composition of the 2006/2007 budget by department including agreed Service Re-Engineering (SRE) savings, other saving and policy options, monitoring against the 2006/2007 budget, anticipated variance against original budget, and an explanation of variances and areas identified as requiring further attention. The monitoring statement was based upon the information provided within the departmental budget monitoring reports submitted to each Overview and Scrutiny Committee, which contained further details.
Members welcomed the document as it provided an overview of budget monitoring across all departments, and highlighted areas of concern. In response to concerns expressed by members in respect of Adult Social Care Services, the Director of Adult Social Services indicated that SRE savings of £355k had been made, and he referred to measures that had been put in place to identify outstanding savings in the order of £106k. In response to further comments, the Director of Finance reported that Chief Officers were confident of achieving the outstanding SRE savings identified in the report, with the exception of Cultural Services savings in the sum of £560k, which was unlikely to be achievable in the current financial year.
On a motion by Councillor D Elderton and seconded by Councillor Mrs K Wood, it was unanimously -
Minute Decision :
Resolved -
(1) That the contents of the financial monitoring statement be noted.
(2) That financial monitoring statements be issued to members on a monthly basis, and presented to all future meetings of this Committee.
(3) That the following Overview and Scrutiny Committees be requested to examine how the relevant Chief Officers intend to deliver their outstanding service re-engineering savings in 2006/2007 -
- (a) Children's Services and Lifelong Learning - Director of Children's Services
- (b) Culture Tourism and Leisure - Director of Regeneration
- (c) Social Care Health and Inclusion - Director of Adult Social Services
- (d) Streetscene and Transport Services - Director of Technical Services
(4) That the Cabinet be advised of the Finance and Best Value Committee's concerns with regard to the currently forecasted failures of the above departments to meet their budget targets for 2006/2007.
Minute 30 - MONITORING REPORTS A. GENERAL FINANCIAL MATTERS B. FINANCE DEPARTMENT - FINANCIAL MONITORING C. TREASURY MANAGEMENT - FINANCIAL MONITORING D. CORPORATE RISK AND INSURANCE MANAGEMENT E. FINANCE DEPARTMENT - PERFORMANCE MONITORING APRIL TO JULY 2006
Minute Text :
The Director of Finance presented for information, a series of monitoring reports in accordance with the timetable agreed by the Executive Board at its meeting on 6 April 2006 (minute 36 refers). 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 also upon 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 tor those services, and anticipated developments in the coming months. He presented also the Finance Department Performance Monitoring Report April to June 2006 (Appendix E), which highlighted performance in respect of the Council's Corporate Plan and Improvement Agenda, and provided a summary of the next quarters activities.
In response to comments of members with regard to vacancy control targets, the Deputy Chief Executive/Director of Corporate Services indicated that the application of such measures was a matter for relevant Chief Officers, who would consider various factors in determining how best vacancy control would be managed.
Minute Decision :
Resolved - That the monitoring reports be noted.
Minute 31 - CORPORATE SERVICES - PERFORMANCE MONITORING REPORT JUNE - AUGUST 2006
Minute Text :
The Deputy Chief Executive/Director of Corporate Services presented the Corporate Services Performance Monitoring Report June - August 2006. He commented that the report should be viewed in conjunction with the Financial Monitoring report for the same period, and indicated that performance was based on the objectives and targets identified in the Departmental Plan, presented in January 2006 and agreed by the Cabinet on 20 February 2006. He outlined the structure and purpose of the report, and indicated that its aim was to provide members with the information they needed to consider future options and recommend decisions, which would make service outcomes better for the people of Wirral.
In response to a comment from a member with regard to Local Performance Indicator 6202, which related to the number of visitors staying overnight in the Borough, he commented that the figures had been extrapolated from a sample survey that had been undertaken into the total number of overnight stays in the Borough, including those with families and friends.
Minute Decision :
Resolved - That the performance of the Department during the period June – August 2006 and the future performance issues anticipated in the coming period, be noted.
Minute 32 - 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 reported upon progress on policy options, savings, savings from service re-engineering, savings funded by bridging finance, and upon the impact of Cabinet/Executive Board decisions. The areas that were traditionally regarded as being a financial risk continued to be closely monitored, and the Director set out the items that had been, or were to be reported to Overview and Scrutiny Committees during the current cycle. The Chairman expressed concern with regard to a projected overspend of £1.2m on a budget of £4.7m for foster care payments, which was to have been met from reductions in Independent Residential Care placements and agency costs. The Director reported that the increase in foster caring capacity and the guidance issued by the DfES on minimum fostering allowances placed further pressures on the service, and although plans remained in place to reduce the numbers in the most expensive care, overall the numbers in care continued to rise. Savings to date had provided only £0.3m of the £1.2m required, and compensatory savings had yet to be identified.
The General Fund balances at 1 April 2006 were forecast to be £1.5m and, subject to the Audit of the annual accounts were anticipated to be at this level. He commented that when setting the budget for 2006/2007, it had been anticipated that balances would increase to £4m by year-end. However, from the items highlighted, the projected balances at 31 March 2007 were now £2m based on latest projections.
Minute Decision :
Resolved - That the report be noted.
Minute 33 - 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. He submitted a comparison of the base programme with the forecast at June, and the latest forecast position. Resources similarly compared the developing programme and reflected the changes in expenditure. 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.
The Director highlighted a number of variations that had been included within the Capital Programme, and reported that in overall terms there had been additional grants in respect of Children & Young People and a reduction in the Regeneration (Housing Market Renewal Initiative) grant. Progress on the Invest-To-Save schemes in respect of Adult Social Services had been delayed and so the spend and resource would slip into 2007/2008.
Minute Decision :
Resolved - That the report be noted.
Minute 34 - PROJECTED BUDGET 2007/2008
Minute Text :
The Director of Finance reported that the summary budget for 2006/2007 was £249.4m, and he reported upon a number of variations that had been identified for 2007/2008. The indicative Formula Grant from the ODPM for 2007/2008, issued as part of the move to three year budgets was £133.8m, although the final figure could be amended as a result of changes in population, service responsibility, changes between Formula Grant and specific grants, changes to the allocation of specific grants, or other data changes. Although it would be updated regularly throughout the year, the Director reported that at the present time, the projected budget for 2007/2008 showed a projected budget gap of £14.4m.
Minute Decision :
Resolved - That savings be identified and reported to the Cabinet.
Minute 35 - SERVICE RE-ENGINEERING - HOUSING AND COUNCIL TAX BENEFITS
Minute Text :
Further to minute 577 (Cabinet - 25 April 2006), the Director of Finance reported upon the key findings of a review of the Housing and Council Tax Benefit Service due to ongoing changes and developments. He set out the current position, and in the light of findings from the review, the Employment and Appointments Committee at its meeting on 29 June 2006 (minute 18 refers) had agreed to changes to the staffing establishment to ensure service delivery in the light of frequent and regular changes to the delivery and funding of the service made by the Department for Work and Pensions (DWP).
The estimated additional cost of £190,000 for permanent staffing would be met from increased subsidy and grants of £509,000, thus releasing £319,000 as a service re-engineering budget saving. Additional temporary posts were estimated to cost a total of £190,000 during 2006/2007 and 2007/2008. This sum would be met from Departmental staffing budgets and specifically from the additional £250,000 allocated for the new Revenues and Benefits system approved by the Cabinet on 1 December 2005 (minute 370 refers).
Minute Decision :
Resolved - That the estimated service re-engineering saving of £319,000 be agreed.
Minute 36 - SERVICE RE-ENGINEERING - PRINT SERVICES
Minute Text :
The Director of Finance reported upon developments and future requirements in the provision of printing services to the Council following the restructuring of the service and the appointment of a Print Manager. More work was now carried out in house and a significant operating surplus had been achieved. In order to further improve the service, at its meeting held on 28 June 2006, the Cabinet had agreed (minute 53 refers) to the replacement of high volume black-and-white and digital colour copying equipment in the Print Unit with technically more advanced equipment, and the procurement of a refurbished four colour offset litho printing press, to be financed from the Printing reserve, which would allow £200,000 annually of externally sourced print to be produced internally at a saving to the Council of £90,000, rising to £177,000 by 2010. At its meeting held on 29 June 2006, the Employment and Appointments Committee (minute 17 refers) had approved the creation of two additional permanent posts as part of further restructuring, with costs being met from existing resources.
Minute Decision :
Resolved - That the estimated service re-engineering saving of £90,000 rising to £177,000 by 2010 be agreed.
Minute 37 - SERVICE RE-ENGINEERING MONITORING SUMMARY 2006/2007
Minute Text :
The Director of Finance reported that on 1 March 2006 the Council agreed a budget for 2006/2007 that identified gross service re-engineering savings of £3.7m, and of this sum £1.2m represented a service re-engineering investment budget. He reported that the current position regarding the delivery of savings had been incorporated within the departmental Financial Monitoring reports, presented to the current cycle of Overview and Scrutiny Committees, and he presented a summary of progress being made. At this stage five departments had to reach the targeted savings, and of those it appeared unlikely that Cultural Services would be able to meet all of the savings, with £560,000 still to be identified. He reported also on the use of the service re-engineering reinvestment budget, and commented that with £0.6m having been agreed to date by the Cabinet/Executive Board, £540,000 was still to be allocated.
Minute Decision :
Resolved - That the report be noted.
Minute 38 - PROCUREMENT EVALUATION PROCESS MODEL GUIDANCE
Minute Text :
Further to minutes 31 (Cabinet - 28 June 2006) and 80 (Executive Board - 19 June 2006), the Director of Finance reported that the revised Contracts Procedure Rules (14.1 (ii)) referred to 'an appropriate evaluation model to be adopted when awarding tenders' and to 'guidance' in choosing appropriate selection and evaluation models issued by the Procurement Unit. His report presented the proposed guidance to be used by procurement project teams as a point of reference in all future major procurement projects, and the revised Contracts Procedure Rules underpinned the objective of the Corporate Procurement Strategy to obtain 'best value' by choosing the provider that offered ‘the optimum combination of whole life costs and benefits to meet Council requirements’. The Director submitted the Evaluation Model Guidance that had been approved by the Cabinet and had been referred to this Committee for its views. It set out various models to be applied, within the procurement process, for both the selection of tenderers at pre-qualification and the evaluation of bids for award.
Whist the focus on cost still remained a vital ingredient within the award of contracts, the guidance would assist in reaching procurement decisions that reflected the broader objectives and priorities the Council was seeking to achieve. It did not predetermine the criteria that would be measured and scored within a procurement contract, which would be determined by members and officers on a project specific basis. It merely suggested various models/frameworks that should be considered in achieving best value for the council. All models on strategic high risk/high value projects would be subject to member, Project Board and/ or Procurement Unit approval.
In response to concern expressed by members, the Director set out the rationale behind the assessment scoring or ranking tenders in terms of a quality and price balance.
Minute Decision :
Resolved - That the approval of the Evaluation Model Guidance be endorsed, subject to further periodic monitoring reports, and the Cabinet be advised accordingly.
Minute 39 - COUNCIL TAX COLLECTION: USE OF INSOLVENCY PROCEEDINGS - BANKRUPTCY AND LIQUIDATION
Minute Text :
The Director of Finance presented an analysis of two of the lesser known statutory collection methods that were available to the Council to collect money owed by defaulting Council Tax payers. He reported that as part of the Council Tax legislation, there were various collection methods prescribed after a non payer had been taken to Court and a Liability Order obtained. These were Attachment of Earnings, Deduction from Benefit, Bailiffs, Insolvency, Charging Orders and Committal to Prison. Any action could be used more than once and in any order except Committal, which was the ultimate sanction, where an attempt to collect by bailiffs was a prior requirement. During the financial year 2005/2006, Wirral undertook recovery work and obtained 11,878 Liability Orders against non-payers. From those 1,388 had Attachment of Earnings made, 4,614 requests for Deductions of Benefit were made, and 8,319 accounts were passed to Bailiffs to collect. Some recovery methods were used more than once in a case. Insolvency action was commenced on 118 accounts and Charging Orders applied for in 12 cases. 84 Committal summonses were issued. No one was committed to prison for non-payment, although suspended sentences were issued in some cases.
He set out the criteria for the use of insolvency proceedings, which were a last resort prior to seeking a committal to prison after alternative methods had been tried and failed. A recent High Court case stated that the use of Insolvency was not excessive given that the alternative course of action was Committal to prison, and often the threat of Insolvency was sufficient to encourage payment, where bailiff action had failed as had the threat or issue of committal proceedings. He set out a number of examples of bankruptcy proceedings, which showed that if the process was aimed correctly at debtors who had the means to pay, it was a very useful collection tool.
The Director indicated that he had received correspendance from a representative of the Citizens Advice Bureau, which set out concerns with regard to collection methods. However, insolvency was a statutory function, and as the courts were unwilling to agree to committal proceedings without first exhausting other means, there was a need for the Council to demonstrate that it was prepared to take such steps.
Minute Decision :
Resolved -
(1) That the report be noted.
(2) That details of insolvency proceedings be included in future General Financial Matters reports.
Minute 40 - RECOVERY OF ADULT SOCIAL SERVICES INCOME
Minute Text :
The Director of Finance reported upon the current position of collecting Adult Social Services income with specific emphasis on the billing and collection of Primary Care Trust (PCT) debts. He commented that the financial relationship between the Authority and the Trusts comprised, in the main of free nursing care, continuing health care and joint finance schemes. The majority of charges raised related to the free nursing care - the fee paid to providers as part of the set contract price and recovered from the Trusts at regular intervals dependent upon actual placements. The next largest element was continuing health care - funding generally related to people reaching the end of their life and/or with very complex nursing or care needs. The third element related to shared services and joint finance schemes which the Authority had entered into in conjunction with the Trusts.
He submitted details of billing and miscellaneous income invoices over the last two years to date, which indicated a marked rise over recent years in the volume and value of transactions between the Authority and the PCTs. Some of the charges raised were, by their very nature, complex and time consuming to reconcile, and it had been reported that the delay in payment often related to those issues. However, it had also been noted that payment of most PCT invoices tended to be outside the thirty day settlement period. The Director of Adult Social Services reported that most liability had been accepted by the PCTs, and he was confident of recovery of the outstanding arrears in relation to Wirral PCTs. In addition, fewer invoices would be issued in future, as part of a rationalisation of the joint funded care packages and service level agreements. In response to comments from members, he confirmed that all debts would continue to be pursued, and he indicated that those deemed to be uncollectable were largely related to instances where a person had died, and recovery from their estate had not been possible.
Minute Decision :
Resolved -
(1) That the report be noted.
(2) That the efficient collection of debt in line with best practice procedures be continued.
(3) That a further report be presented to the next meeting of the Committee by the Director of Adult Social Services, to include details of miscellaneous arrears, and debt owed by non-Wiral PCTs
Minute 41 - BENEFITS UNIT COSTS
Minute Text :
The Director of Finance presented an analysis of the unit costs of the provision of the Benefits service, compared to other local authorities. Because the Audit Commission used the total population and the expenditure on Housing Benefit administration to determine the per capita cost of service delivery in comparison with other local authorities, the outcome of the study suggested a relatively high per capita cost. However, in funding the Housing and Council Tax Benefit administration, the Department for Work and Pensions (DWP) weighted the live caseload by applying a weighted cost per claim. As a result, the analysis indicated that the unit cost of service provision on Wiral was very low at £42 per weighted claim, less than amounts that ranged between £44 and £92 for national benchmarking authorities.
Minute Decision :
Resolved - That the report be noted.
Minute 42 - LOCAL GOVERNMENT CHRONICLE (LGC) AWARDS 2006
Minute Text :
The Director of Finance reported upon the intention to submit an entry for the LGC Awards 2006. He commented that the awards had been held for a number of years and were intended to celebrate the highest levels of achievement in the world of local government. It was expected that entries would be made in the categories of Best Exchequer Function and Risk Management. The closing date for entries was 30 September 2006 and the awards ceremony for shortlisted entries would take place on 6 November 2006 at the Dorchester Hotel in London. He indicated that the Authority had previously been shortlisted for awards but had never won a LGC award. He requested members to consider attendance at the awards ceremony, if the Authority was shortlisted. There was no charge for entering the awards competition or for attendance at the awards ceremony. The cost of travel to London and overnight accommodation in London for those attending could be met from within the existing budget provision.
Minute Decision :
Resolved -
(1) That attendance at the awards ceremony be supported in the political ratio 1:1:1.
(2) That attendance be referred to the Cabinet for approval of duty.
(Minutes Published: 9 October 2006)