Agenda and minutes

Resources Overview and Scrutiny Committee
Thursday 19th January 2017 7.30 pm

Venue: Council Chamber, Campus East, Welwyn Garden City, Herts, AL8 6AE. View directions

Contact: Gurdip Paddan 01707 357349 Email: democracy@welhat.gov.uk 

Items
No. Item

33.

SUBSTITUTION OF MEMBERS:

To note any substitution of Members made in accordance with Council Procedure Rules 19-22.

 

Minutes:

The following substitution of Committee Member had been made in accordance with Council Procedure Rules 19-22:

 

Councillor B Fitzsimon for M Levitt

34.

APOLOGIES:

To note any apologies.

 

Minutes:

Apologies for absence were received from Councillor M Levitt.

35.

MINUTES:

To confirm as a correct record the Minutes of the meeting held on 8 November 2016 (previously circulated).

 

Minutes:

The Minutes of the meeting held on 8 November 2016 were confirmed as a correct record and signed by the Chairman.

 

36.

ACTIONS UPDATE: pdf icon PDF 73 KB

Report of the Director (Governance) on the status of actions agreed at the last meeting of this Committee/Board/Panel.

 

Minutes:

The Committee noted the report of the Director (Governance) giving an update on actions from the meeting held on 8 November 2016.

37.

EMPLOYEE TURNOVER 1 NOVEMBER 2015 - 31 OCTOBER 2016 pdf icon PDF 451 KB

Report of Executive Director (Public Protection, Planning & Governance) to provide the Committee with an analysis of employee turnover for the twelve month period ending 31st October 2016.

 

Minutes:

Committee received a report of Executive Director (Public Protection, Planning and Governance), which provided an analysis of employee turnover for the twelve month period which ended 31 October 2016.  The report noted the reasons for employees leaving and the profiles of those employees who have left the Council.  The employee turnover rate for the period was 18.6%, compared to 22.87% for the same period in 2014/15.

 

The report noted that whilst the last report gave a high level overview statistically which was useful to a degree, it did not provide any depth to the reasons why employees leave.  Mostly employees had left through voluntary resignation but there was little evidence as to why the resignation occurred. 

 

Members asked about the data and how it was reviewed and used.  The Officer advised that a review of the data collected from exit interviews has highlighted the need for a more robust questionnaire that would drill down into the reasons behind an employee’s decision to leave.  Unfortunately the current method of gathering this data does not provide the Council with enough information and it has been highlighted that the Council does not know how the leaver felt about certain aspects of their employment. In future HR would be taking more proactive approach to leavers with effect from January 2017, all employees would be given the opportunity to attend an exit interview with HR and this would in return provide the valuable information.  Also it was suggested that the employee may find it easier to talk to HR about the issue rather than their line manager, particularly if the issue was with their line manager.

 

Members were advised that the data collected would be collated into a spreadsheet.  This would in return allow the officers to report on specific areas of the organisation; length of service; age banding and to record employees answers to specific questions.  The spreadsheet would be anonymous although HR will be able to identify individuals.  The information will also be provided to the Executive Board on a regular basis.

 

Members asked how the Council’s pay scales compared with other local authorities.  The officer advised that pay scales were in line with the Local Government remuneration. Clarification was also sought on future apprenticeships and the Government’s Apprenticeship Levy.

 

RESOLVED:

 

(1)  That the report be noted.

 

(2)  A salary comparison report to be provided at a future meeting.

38.

2017/18 BUDGET REPORTS: pdf icon PDF 112 KB

Report of the Executive Director (Resources, Environment & Cultural Services) introducing the budget proposals for 2017/18 as considered by the Cabinet on 10 January 2017:

 

 

Minutes:

The Committee received a report of Executive Director (Resources, Environment and Cultural Services) which advised that the Cabinet at its meeting held on 10 January 2017 had considered the details for the proposed General Fund Budget, Capital Programme, Housing Revenue Account Budget, Medium Term Financial Strategy and Treasury Management Strategy for financial year 2017/18. 

 

In accordance with the Council’s budget and policy framework rules, the Resources and Overview Scrutiny Committee was formally invited to consider the proposals as part of the budget setting process and make comments to the Special Cabinet meeting on 24 January 2017.

 

Members made the following comments:

 

 

 

 

 

.

38a

Medium Term Financial Strategy 2017/18 to 2019/20 pdf icon PDF 125 KB

Report of the Executive Director (Resources, Environment and Cultural Services) setting out the financial strategy for 2017/18 to 2019/20 providing a framework for the Council to plan and manage its resources. 

Additional documents:

Minutes:

Members asked about the £1.5 budget gap and what measures were in place to bridge the gap.  It was explained that the budget gap had not been assumed to be met from reserve funds.  It was noted that the new 100% Business Rates Retention Scheme would have an impact on budgets in the future and that there would be additional responsibilities given to local authorities; further information would be made to Members when the Government consultation is published.  Clarification was also sought on the new Business rates appeal process from April 2017. 

 

Concern was expressed in respect of how further welfare reforms would impact on HRA projections and Members were advised that further announcements were awaited from the Government.   

 

The Strategy sets out principles to source efficiencies beyond 2017/18 and proposals to deliver these will be reported to Members.

 

38b

Housing Revenue Account Budget 2017/18 pdf icon PDF 745 KB

Report of the Executive Director (Resources, Environment and Cultural Services) on the Housing Revenue Account budget for 2017/18 together with the proposed rent decrease in line with proposed Government legislation.

 

Minutes:

The budget figures reflected the decision to return the management of the Housing stock directly to the Council and all housing services will be managed within a simplified structure and there will be no management fee.

 

Rents have been set in accordance with the proposed legislative directive to reduce Council rents by 1% each year for four years.  This has led to an average weekly rent for 2017/18 for £105.33.  The Housing Revenue Account position for 2017/18 is an operational deficit of £4.7m.  The report noted that there has been an increase in the net financing cost of loan repayments of £1.8m which has put pressure on reserves and along with further rent reduction increases the difficulty in supporting service requirements without a restructure of the loan repayments over the medium term.

 

Member were advised that savings had been made to cover the pressures from a reduction in the bad debt provision, staff budget reduction, increases in fees and charges and the introduction of a vacancy factor in the HRA to match that already in place in the general fund.  Appendix 1 within the report was explained in terms of the HRA operating balances. 

 

38c

General Fund budget 2017/18 pdf icon PDF 372 KB

Report of the Executive Director (Resources, Environment and Cultural Services) presenting a first view of the General Fund revenue budget for 2017/18. 

 

 

Additional documents:

Minutes:

Members asked how the Government’s austerity measures will affect the Council’s budget, as the deficit continue to impact on local authorities.  It was noted that the Borough Council proposes to increase the average Band D Council Tax rate by £5 and that this was the first increase in eight years.

 

There will be a cut in grants to parish and town councils following the decline in grant income from central government.  The core grant from Government is set to drop by 18% to £3.3m.

 

The Executive Director (Resources, Environment & Cultural Services) explained that the business rates pooling regime for Hertfordshire has collapsed for 2017/18 but it would have a minimal impact on the 2017/18 budget.  The other change to the budget recently is the impact of the triennial pension fund valuation on the 2017/18 budget, now that the valuation covers both the Housing Trust and the Council.  It was noted that a decision will be made by Cabinet next week regarding the options to address the pension deficit, which will lead to a few minor changes to the budget.

 

A question was asked about possible funds being available for youth projects.  It was explained that the 2017/18 budget includes a youth and sport budget.  Members expressed concern regarding reduction in some grants for voluntary organisations that represent value for money and any review of grants should be viewed in this light.  It was advocated that a reduction would have an impact on the valuable service that our Voluntary sector provides, who is already facing difficulties finding volunteers to provide their service.

 

38d

Capital Programme 2017/18 to 2021/22 pdf icon PDF 395 KB

Report of the Executive Director (Resources, Environment and Cultural Services) providing details of capital expenditure and funding for the period 2017/18 to 2021/22.

 

Additional documents:

Minutes:

The report noted that the Capital expenditure programme for 2017/18 was £43.6m, of which the General Fund schemes were £17.4m, S106 £1m, Affordable Housing programme £13.9m and Housing major repairs scheme £11.3m.

 

Members considered the capital expenditure programme for the period to 2021/22 as detailed within the report and included – General Fund capital schemes, S106 schemes, Affordable housing programme, Housing repairs schemes and other housing schemes e.g. sheltered housing refurbishment.

 

Clarification was sought from officers in respect of S106 receipts and the use of funds.  It was explained that £0.8m during 2017/18 will support local organisation to upgrade football facilities in Hatfield and £0.2m during 2017/18 to support rugby facilities.  There were no further S106 receipts identified to support non housing schemes in the future.

 

A question was raised in respect of the increase of charges for garages for the ongoing garage renovations.  It was explained that a capital budget was required for the refurbishment of the garages following complaints from garage tenants and this would help reduce the void rates in garages.  Explanation was sought on the history of increase of charges for garages, what was the typical void period for garages and whether the demand for garages was on the decline?

 

Members enquired about the Splashlands project in terms of timescales and officers responded that work is currently underway to get the right leisure mix to enable use of the site during the whole year to maximise the income.

 

Key projects highlighted for 2017/18 General Fund schemes included:

 

-       Hatfield Town Centre - £1.6m

-       High View £0.4m

-       Property Company £5m

-       Huntersbridge car park £0.6m

-       Bereavement Services £4.2m

-       Splashlands £2.3m

 

 

38e

Treasury Management Strategy 2017/18 pdf icon PDF 125 KB

Report of the Executive Director (Resources, Environment and Cultural Services) presenting the proposed Treasury Management Strategy for 2017/18. 

 

Additional documents:

Minutes:

Members enquired about the current treasury portfolio and future investments.  It was noted that long term or with unrated counterparties was being increased from £35m to £45m.  This was to reflect a likely increase in use of medium term pooled bond and/or equity funds.  It was explained that funds were more volatile in the short term but highly diversified and were likely to yield higher returns than fixed deposits with banks.

 

In terms of changes being made to lending, the Bank Rate remains at 0.25% for some time.  Forecast predicts that a return in the region of £450k for 2017/18 based on an assumed average investment balance through the year of £50m and an average return on investments of 0.9%.

 

Clarification was sought on the previous monies borrowed and how the fund was utilised. Discussion ensued on future borrowing and investments.  It was suggested that if the Council was taking out a further loan it would be best to borrow earlier rather than leave for later. 

 

The investments detailed in Appendix A were explained.  It was clarified that Council’s treasury consultants, Arlingclose Ltd, generally recommend a secured bank deposit limit of 30% of general fund reserves and unsecured limit of 15% to ensure resilience in the event of a default. Members were advised that Arlingclose Ltd provided advice and information on investments, debt and capital finance issues.

 

A question was asked in respect of paying the loan back before maturity and it was explained that it would not be of benefit to the Council. 

 

RESOLVED:

 

(1)  That the Committee’s comments on the Council’s budget proposals for 2017/18 be submitted to the Special Cabinet meeting on 24 January 2017 for consideration following which the budget would be presented to Special Council meeting 6 February 2017.

 

(2)  That the Special Cabinet consider the Committee’s request for review of the reduction in grants for voluntary sector, community services, as this provision of services represents value for money.

 

 

39.

COMMITTEE OVERVIEW WORK PROGRAMME 2016/17: pdf icon PDF 76 KB

The pro-forma which sets out the Committee’s overview work programme has been updated since the last meeting to enable forward planning of items to be considered to take place.  Items which the Committee agrees it would like to consider will be scheduled into the work programme.

Minutes:

Members received a pro-forma of the work programme for the Committee for

2016-2017.

 

RESOLVED:

 

That the report be noted.