Members of the Cabinet were asked to consider whether they had any disclosable pecuniary or non pecuniary interests in connection with any item(s) on this agenda and, if so, to declare them and state the nature of the interest.

All Members of the Cabinet declared their personal interest in agenda item 7 – Schools Budget 2014/2015 (see minute 147 post) by virtue of their membership of various schools governing bodies.

The minutes of the last meeting have been printed and published. Any matters called in will be reported at the meeting.

RECOMMENDATION:  That the minutes be approved and adopted.

Resolved – That the minutes of the meeting held on 16 January 2014 be approved

A report of the Director of Resources presented the proposed Budget for 2014/2015 and the projections for 2015/2016 and 2016/2017. It indicated that Budget Council was scheduled for 25 February 2014 and the Council had to agree a Budget and set the level of Council Tax for 2014/2015 by 10 March 2014. The Budget Projections 2014/2017 report considered by the Cabinet on 10 December 2013 (minute 114 refers) had set the context in which budget decisions were being made and had indicated a forecast net funding available over the three year period of £780m against a current net spend forecast of £863m – a funding deficit of £83m.

The report highlighted the key issues and the following documents were appended to it –

·  Appendix 1A  Savings Agreed 2014/2017 – March 2013

Savings approved by the Council in March 2013 as part of the 2013/2014 budget, which impacted into future financial years.

·  Appendix 1B  Savings Agreed 2014/2017 – December 2013

Savings approved by the Council in December 2013, following the ‘What Really Matters?’ consultation programme.

·  Appendix 2  Growth Submissions 2014/2017

Growth bids that had been approved by the Council, where increased demand was placing uncontrollable pressure on safeguarding services for Adult’s and Children’s Services and other services where the Council had a contractual obligation to fulfil.

·  Appendix 3  Fees and Charges

A Directory of Fees and Charges, with a recommendation that Delegated Authority be given to the Director of Resources to update the Directory as charges were finalised, prior to publication before 1 April 2014.

·  Appendix 4  Level of General Fund Balances

The level of General Fund Balances the Council maintained and the risk based assessment used to determine that the level was sufficient to provide a financial reserve for unanticipated expenditure and/or expenditure that was of an unforeseen emergency nature.

·  Appendix 5  Reserves

A mid-year review of the amounts held in balances, provisions and reserves, which recommended the release to the General Fund balance of those provisions and reserves no longer required.

·  Appendix 6  Robustness of the Estimates

The report, under Section 25 of the Local Government Act 2003, of the Chief Financial Officer (Director of Resources) on the robustness of the estimates made for the purposes of the Council’s Budget calculations and the adequacy of the General Fund balances and reserves.

The report set out the Budget assumptions for growth in the levies, highlighted the increased costs of the Merseyside Pension Fund and indicated that the Council Tax Base for use in 2014/2015 had been agreed by the Cabinet on 10 December 2013 (minute 117 refers) and approved by the Council 16 December 2013 (minute 57 refers). It referred also to the new Local Government Finance System introduced on 1 April 2013, under which billing authorities retained a proportion of locally raised business rates. However, as the complexity and volatility of business rates brought increased risk, any surplus arising from Business Rates from 2013/2014 would be held in a General Fund reserve, which could then be used to meet  ...  view the full minutes text for item 143.

The Director of Resources presented for consideration and referral to Council for approval, a draft Capital Programme for 2014/2017, together with the related capital financing requirements based upon the prudential indicators that informed the Treasury Management Strategy. As the Council had to manage demands for investment within the financial constraints that Wirral operated, prioritisation criteria had been developed to assess capital bids to ensure that the Programme was targeted to Council priority areas. The Programme therefore consisted of a combination of –

(i)  Schemes originally approved as part of the 2013/2016 Programme and updated through the Capital Monitoring reports in 2013/2014, with schemes re-profiled into 2014/2015.

(ii)  New/revised bids for consideration, with details of the schemes and the criteria against which they were scored.

The Council had also identified a requirement to upgrade the IT and, whilst it was an essential investment, the cost would vary, dependent on the chosen route of working more closely with others and alternative methods of delivery being investigated. The Director therefore recommended at this stage, that £4m be included in the Capital Programme 2014/2015, which would be refined over the coming months.

Capital receipts generated from the sale of Council assets were an important element of funding the Capital Programme and the assumption for capital receipts for the next three years was partly based upon the work of Lambert, Smith, Hampton who had been commissioned to advise and market a number of major assets, estimated at up to £20m, which were anticipated to be realised from 2015/2016 onwards. However, the Director commented that the usage of capital receipts could only be when the receipt was guaranteed so at this stage the projections were that there would be £6.2m available at 31 March 2014. Over £4m of that sum had provisionally been identified as funding for the 2014/2015 Programme and this would be re-assessed as further information became available in relation to both the Disposals and the Council Remodelling Programme.

The Director advised the Cabinet that, in considering the Capital Programme for 2014/2017, there was a need to fund up to £13.1m of new unsupported borrowing in 2014/2015 which, based upon current interest rates, equated to an increase of £1.2m in revenue borrowing costs. This, and the impact of a £0.5m reduction in investment income, could be accommodated within the £1.7m included for Capital Financing in the Revenue Budget projections for 2014/2015. The Cabinet was also advised that if a decision was taken to spend in excess of the level of identified resources, then this would require increased use of borrowing, which incurred annual revenue costs at the rate of £90,000 per £1m of capital expenditure. In considering the impact upon Council Tax levels, each 1% rise in Council Tax equated to £1.1m of increased expenditure.

Resolved –

(1)  That the new bids as detailed in Sections 2.7 and 2.8 of the report of the Director of Resources be approved.

(2)  That the overall Capital Programme 2014/2017, as detailed in Appendix 4 to the report  ...  view the full minutes text for item 144.

The Director of Resources set out the financial position for Month 9 (ended 31 December 2013) and provided in appendices to her report, separate monitoring reports for Revenue and Capital.

Resolved –

A  REVENUE

(1)  Cabinet notes that at Month 9 (December 2013), the full year forecast projects a gross General Fund under spend of £982,000, net £213,000. Cabinet previously agreed to earmark £519,000 of any forecast under spend against future Council restructuring costs and a further £250,000 to replenish General Fund Balances used for the clean up and repairs to infrastructure from December’s exceptional weather events. This would result in a net £213,000 available should the forecast be realised at the end of the financial year. This would be required to contribute further to the restructuring reserve or to assist in raising the level of General Fund Balances depending upon the requirement identified.

B  CAPITAL

(2)  Cabinet notes –

(a)  the spend to date at Month 9 of £17.9m, with 75% of the financial year having elapsed;

(b)  the agreed funding from Public Health of £0.484m

(3)  Cabinet agrees –

(a)  the revised Capital Programme of £36.7m;

(b)  the re-profiling of a number of schemes into 2014/2015, totalling £4.191m

The Director of Resources presented the Medium Term Financial Strategy 2014/2017, which was a strategic, financial document that set out the Council’s financial approach for the planning period 2014/2015 to 2016/2017. It also incorporated the Treasury Management and Investment Strategy for 2014/2017 in accordance with the CIPFA Code of Practice for Treasury Management in Public Services.

The Director commented that over the next three years the services the Council provided faced a very challenging financial future with a £44m anticipated funding gap. This had led the Council to consider how the total financial resources of the Council and its partners would need to be maximised, prioritised and channelled to the right areas and activities. The Medium Term Financial Strategy focused on ensuring that resources were matched to priorities as identified in the Corporate Plan, whilst ensuring that statutory functions were provided in the most efficient way.

The Chair noted that the savings introduced in the four year period Spending Review 2010 (SR10) 2011/2012 to 2014/2015 represented the largest reduction in public government spending since the second world war. In addition, local government would face further funding reductions in real terms and it was anticipated that further reductions due to austerity would continue until at least 2017. The Medium Term Financial Strategy as well as providing financial background, set out the Councils budget strategy, the aim of which was not to give provisional budget figures, but to provide the Council with a framework with which to support planning considerations for the medium term.

The report stated that the Treasury Management Strategy remained a key area of the financial strategy, especially with low interest rates and limited investment opportunity. It was incorporated in the Medium Term Financial Strategy and was subject to approval by the Council at the same time as the budget. She set out the CIPFA definition of treasury management as “the management of the organisation’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”

The Council had endorsed the definition and had acknowledged that effective treasury management would provide support towards the achievement of its business and service objectives. It was, therefore, committed to the principles of achieving value for money in treasury management and to employing suitable comprehensive performance measurement techniques, within the context of effective treasury management.

Resolved –

A  That in respect of the Treasury Management Strategy 2014/2017 –

(1)  The Treasury Management Strategy for 2014/2017 be approved

(2)  The Prudential Indicators be adopted

(3)  The Council’s Minimum Revenue Provision policy be approved

(4)  The Council Officers listed in Appendix G of the Director’s report be authorised to approve payments from the Council’s bank accounts for all treasury management activities.

B  That is respect of the Medium Term Financial Strategy 2014/2017 –

(1)  The Medium Term Financial Strategy be approved

(2)  Regular updates of the Medium Term Financial Strategy be reported to Cabinet  ...  view the full minutes text for item 146.

Councillor Tony Smith, Cabinet Member for Children and Family Services, presented the report of the Director of Children’s Services, which recommended the approval of a Schools Budget 2014/2015 of £240,058,000 for early years, maintained schools, academies, colleges and providers in Wirral. The Budget had been considered by the Wirral Schools Forum on 22 January 2014 (minute 269 refers), who had agreed the following recommendations –

·  The Dedicated Schools Grant (DSG) funded Schools Budget for maintained schools and academies be approved in the sum of £240,058,000.

·  The headroom of £1,215,100 be allocated within the formula to all schools and early years providers.

·  The High Needs Contingency totalling £908,900 be agreed.

·  A reduction for Planned Programmed Maintenance (PPM) of £200,000 be agreed.

·  The use of DSG reserves totalling £732,000 in setting the schools budget be agreed and the remaining balance for Automatic Meter Readers be reclassified as a reserve for installation of defibrillators.

The Schools Funding Allocations were issued by the Department for Education on 18 December 2013 and the basis of the grant continued to be the ”Spend Plus” methodology introduced in 2006, with four unringfenced spending blocks for each authority, which indicated the levels of expenditure anticipated for each authority.

In the case of the Schools and the Early Years blocks, they were updated for changes in pupil numbers. Pupil numbers for the Schools Block were those recorded in the October 2013 census, whereas Early Years Funding was a combination of the census in January 2014 and January 2015. The dates for the Early Years Census meant that the exact DSG would not be finalised until June 2015 and the Early Years grant used for the purposes of the 2014/2015 Schools Budget would be the indicative figures (based on January 2013). The High Needs Block provided an allocation for the funding of all High Needs Students aged 0 – 24, including the Hospital School and the Other Block was in respect of Free Education for 2 year olds.

The report outlined significant Budget changes in each area and referred also to the use of reserves and centrally held budgets. A number of budget savings options for 2014/2015 arising from working in partnership with schools had been progressed, in relation to –

·  Planned Programme Maintenance

·  School Crossing Patrols

·  Non Teaching Trade Union Facility Time

·  Private Finance Initiative (PFI) Affordability Gap

Councillor Smith referred specifically to funding for the Schools PFI. He commented that the Council currently added £2.6m to the ring fenced schools budget in respect of the PFI funding gap. £2.3m of the funding was an agreed saving in 2015/2016 and the remainder had been protected. However, he proposed that the Council funding for PFI be reduced by £600,000 in 2014/2015 rather than 2015/2016.

He stated that the 2014/2015 Schools Budget had already been submitted to the Education Funding Agency (EFA) and was finalised. However, there was approximately a £1m schools budget carry forward from 2013/2014, which could be used to ‘compensate’ for the £600,000 funding gap. Schools would therefore  ...  view the full minutes text for item 147.

Councillor Brian Kenny, Cabinet Member for Environment and Sustainability, presented the report of the Assistant Chief Executive upon the corporate and departmental progress made against the Carbon Budget 2013/2014 and the revisions that were required to meet Corporate Goals for 2014/2015. The Carbon Budget for 2014/2015 and the Performance Timetable towards the 2013/2014 target was set out in Appendix 1 to the report. The Carbon Budget had been established at the request of the Council (minute 77 (14 December 2009) refers) and the Corporate Plan 2013/2016 stated that we should spend less on ourselves and obtain best value for every penny we spend. In the portion related to Asset Management, the Transformational Projects report (minute 249 (Cabinet 23 May 2013) refers) identified: the lowering of building running costs; carbon output; and associated penalties as measures that would deliver budget savings through reduced running costs.

The Carbon Budget process promoted those aims and although it was not a statutory requirement, it was Wirral’s only method of managing CO₂ emissions in order to reduce our carbon footprint and the costs associated with it. Meeting the annual targets of reduced carbon emissions would result in financial savings through reduced energy use and CRCEES charges.

Resolved –

(1)  That progress towards the 2013/2014 target be noted.

(2)  That the Carbon Budget for 2014/2015 be approved.

(3)  That the current Carbon Budget method be applied until the impacts of: the ongoing simplification of the CRCEES and the Corporate restructuring are assessed and that Officers be instructed to report further to Members to make recommended alterations as a result of these processes.

(4)  That managers be directed to ensure that Carbon Reduction Implications of projects and initiatives are assessed and reported as required by the standard report template and that impacts are required to be reported to the Building Services and Sustainability Section to support the carbon management process.

With the permission of the Cabinet, this item was withdrawn.

Further to minute 97 (7 November 2013), Councillor Harry Smith, Cabinet Member for Highways and Transportation, presented the report of the Strategic Director for Regeneration and Environment upon the outcome of the procurement exercise for the new Traffic Signal Maintenance Contract, which would replace the current contract that was due to expire on 31 March 2014. The contract, when awarded, would provide a contract mechanism to allow statutory maintenance duties of the traffic control network to be fulfilled and provide for the new installations, funded by capital investment, to be implemented. The tender report contained an evaluation of the tenders submitted, based on quality and price and was included within an exempt appendix, due to the commercially sensitive nature of the information (see minute 152 post).

It was recommended that the contract be awarded to the preferred bidder, as their tender was the most economically advantageous to the Council. The contract would be for a four year term with the potential for a two year extension, subject to satisfactory contract performance and management. The cost was approximately £350,000 per annum, which would cover revenue maintenance and capital investment, although the actual expenditure could vary each year, dependent on the overall maintenance required and the level of new schemes introduced through capital investment.

He commented also that, under the Public Contracts Regulations 2006, there was a statutory ten day ‘standstill period’ to enable unsuccessful tenderers to obtain feedback on the Council’s contract award decision and potentially lodge a legal challenge if they were not satisfied on the legality of the decision.

Resolved –

(1)  That the outcome of the procurement exercise be noted.

(2)  That Cabinet approves the award of the contract, subject to the statutory standstill procedures, for the maintenance, supply and installation of Traffic Control Systems and Associated Equipment for a four year period, with the potential for a two year extension subject to satisfactory performance, to the preferred tenderer listed in the exempt appendix to the report now submitted.

At its meeting held on 27 January 2014, the Regeneration and Environment Policy and Performance Committee considered a presentation from the Chief Fire Officer upon the impact of Government proposals on the residents of Wirral.

The Committee requested the Cabinet to support any lobby for additional funding for the Fire and Rescue Service (minute 30 is attached)

Further to an earlier Notice of Motion ‘Cuts to Merseyside Fire and Rescue Service’, the Regeneration and Environment Policy and Performance Committee, at its meeting held on 27 January 2014 (minute 30 refers), considered a presentation from the Chief Fire Officer upon the scale of the cuts faced by Merseyside Fire and Rescue Authority and the impact of Government proposals on the residents of Wirral. The Committee requested the Cabinet to support any lobby for additional funding for the Fire and Rescue Service.

The Chair commented that the cuts to the Fire and Rescue Service were making the job of keeping local people safe more difficult and he noted that the options that had been put forward by the Chief Fire Officer were the least worst, none of which would improve safety.

Resolved – That any lobby for additional funding for the Merseyside Fire and Rescue Service be supported.

Resolved – That, under section 100 (A) (4) of the Local Government Act 1972, the public be excluded from the meeting during consideration of the following item of business on the grounds that it involves the likely disclosure of exempt information as defined by the relevant paragraphs of Part I of Schedule 12A (as amended) to that Act.

The following appendices are exempt in accordance with paragraph 3 by virtue of the commercially sensitive nature of the information they contain.

·  Former Pacific Road Arts Centre & Taylor Street Transport Museum

Agenda Item 9 refers

Appendix 3 – Cash Flow Forecast

Appendix 4 – Financial Implications

·  Traffic Signal Maintenance

Agenda Item 10 refers

Appendix 1 – Tender Report

Cabinet noted the detail of the following appendix, which was exempt in accordance with paragraph 3 by virtue of the commercially sensitive nature of the information it contained.

·  Traffic Signal Maintenance

(see minute 150 ante)

Appendix 1 – Tender Report