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CORPORATE PERFORMANCE AND RESOURCES SCRUTINY COMMITTEE

 

Minutes of a meeting held on 13th December, 2016.

 

Present: Councillor M.R. Wilson (Chairman): Councillor G. Roberts (Vice-Chairman); Councillors Mrs. P. Drake, H.C. Hamilton, K. Hatton, R.A. Penrose and E. Williams.

 

Also present: Councillor N. Moore.

 

 

608     APOLOGIES FOR ABSENCE –

 

These were received from Councillors H.J.W. James and Mrs. A. Moore.

 

 

609     MINUTES –

 

RECOMMENDED – T H A T the minutes of the meeting held on 18th October be approved as a correct record.

 

 

610     DECLARATIONS OF INTEREST –

 

No declarations were received.

 

 

611     SICKNESS ABSENCE REPORT – APRIL 2016 TO SEPTEMBER 2016 (REF) –

 

The above matter had been considered by the Cabinet at its meeting on 28th November, 2016 and subsequently referred to the Scrutiny Committee for consideration.

 

The report itself set out the sickness absence information between 1st April, 2016 to 30th September, 2016 including Corporate and Schools’ employees.  The report also included details of sickness absence figures for the period 1st April, 2015 to 30th September, 2015 for comparison purposes.  The Committee noted that the average days / shifts lost per FTE for the period concerned had reduced from 4.12 days to 3.76 days.  In addition, the sickness absence levels for the same period were also below the target of 4.45 days / shifts per FTE, representing a 0.69 reduction of a day per FTE.

 

The Head of Human Resources referred to the summary of the absence within each Directorate which was set out in Appendix A to the report and included a breakdown of absence in each service area.  A further analysis of comparative monthly data was also set out in Appendix B to the report.  In referring to the table of information set out in paragraph 10 of the report, the Head of Human Resources indicated that Corporately, there had been a reduction in sickness absence of over one day per FTE for the first six months of 2016/17. 

 

He indicated that sickness absence recorded in Schools had been slightly higher during this period when compared to the same period in 2015.  However, it was encouraging to note that the performance management measures implemented

over the last year had helped to curb the increase in absence levels, but it was important to ensure that the focus on absence was sustained, particularly during the winter months.

 

The Committee noted the action plan set out in Appendix C to the report which contained arrangements to address sickness absence within each Directorate, including service specific considerations and moreover it provided a position update on each of the identified actions / activities.  He also referred to the most common reasons for sickness absence within the Council and including schools over the same period, details of which were set out in paragraphs 17 to 26 of the report.  He also referred to ongoing performance management arrangements and the main element of the action plan which focused on a range of performance management measures which were set out in paragraph 27 of the report.  His attention then turned to the Employee Assistance Programme which was now fully operational, details of which were set out in paragraphs 28 and 29 of the report.  He also touched upon the Council’s continued efforts to develop positive health support mechanisms which complimented the performance management action plan and a summary of developments was set out in paragraph 30 to the report.

 

He then referred to the new Managing Attendance at Work Policy which had been implemented on 1st October, 2016 which set out a differential approach for the management of long term / chronic absence and short term intermittent absence which allowed the Council to respond to recent increases in long term absence and the specific management approaches to dealing with such absences. 

 

He also made reference to the new Staff Charter which had been launched in September 2016 following the endorsement by both staff and the recognised Trade Unions.  He indicated that the Charter itself set out mutual expectations of staff and managers in a “reshaped” working environment and progress continued to be made in delivering the 15 action points / commitments.  He also referred to the findings of a recent employee satisfaction survey where the findings indicated that 72% of all employees either strongly agreed or agreed with the 20 assertions contained within the Staff Charter.

 

In concluding, he referred to the Council’s absence in wider comparison and referred to Local Government Data Unit information which had been compiled for the financial year 2015/16 to allow the comparison with other Local Authorities within Wales.  This showed that the Council had been the fourth lowest overall for sickness absence per FTE across Wales.

 

The Chairman referred to the information contained in the table set out in paragraph 10 of the report which appeared to indicate that the absence levels within the Learning and Skills Directorate were higher than the data for Schools and enquired as to the reason why.  In response the Head of Human Resources indicated that the data in respect of Learning and Skills contained slightly higher absences linked to long term sicknesses proportionately. 

 

In conclusion, the Chairman noted the pleasing improvement in the attendance figures and the continued hard work of the HR team and managers across all services.

 

RECOMMENDED – T H A T the half year sickness absence report for the period April 2016 to September 2016 be noted.

 

Reason for recommendation

 

In acknowledgement of the Scrutiny Committee’s responsibility to monitor corporate objectives in relation to sickness absence.

 

 

612     EMPLOYEE TURNOVER REPORT – APRIL 2016 TO SEPTEMBER 2016 (MD) –

 

The report updated the Scrutiny Committee on employee turnover for the above period with the Head of Human Resources indicating that figures for the period indicated an increase in turnover from 5.80% to 6.24%, in comparison to the same period in the previous year.  In addition, he also referred to the total number of leavers which had increased from 315 to 329 over this period and separately to Corporate turnover which had decreased over the two year period from 6.00% to 5.57% and turnover in Schools which had increased from 5.62% to 6.84%.  Overall, voluntary turnover had increased from 3.94% in 2015 to 4.37% during the period.  Corporate voluntary turnover had decreased from 4.26% to 4.16% whilst voluntary turnover in Schools had increased from 3.65% to 4.55%. 

 

The Head of Human Resources also referred to turnover by Directorate which was set out in paragraphs 9 to 13 of the report and to turnover by leaving reason which was set out in paragraphs 15 to 19 of the report.  He also referred to exit questionnaires which continued to play a role in identifying the reasons why employees had chosen to leave the employment with the Council and during the period of the report 32 people (31% of Corporate voluntary leavers) took the opportunity to complete and return an exit questionnaire.  Of the exit questionnaire responses, the main reasons given for looking for alternative employment was for “personal, family or social reasons” (33%) followed by “career development” (34%) and “job dissatisfaction” (13%).  The report also set out at paragraphs 22 to 24 of the report the complete range of responses to “what made you look for alternative employment?” and separately in paragraph 25 of the report the responses that employees gave when asked what would have encouraged them to stay with the Council.   His attention then turned to wider staff engagement and the link to turnover / retention and referred to the launch of the Council’s new Staff Charter on 19th September, 2016 and progress made on the same which was set out in Appendix D to the report.  He indicated that a further report on the outcomes of the employee engagement survey would be presented to Cabinet and this Scrutiny Committee in January 2017.  He also referred to the first meeting of the Corporate Management Team / Staff Engagement Group which took place on 9th November, 2016, with the group being formed to maintain regular dialogue with the Council’s Corporate Management Team, with five themes having been identified and would be developed further. 

 

Discussion ensued with Members of the Committee raising specific points relating to the implications for the loss of experience and skilled staff to the Council and arrangements in regard to succession planning, with the need to attract younger candidates into the employment of the Council, the need for further analysis of School staff turnover to identify why permanent staff within schools were leaving the employment of the Council.  However, the Committee noted improvement in the returns of exit interviews by employees leaving the Council.  In response, the Head of Human Resources referred to the Council’s Workforce Plan which had identified 100 critical posts for the Council.  He also acknowledged that there was a need to build on existing work to fully understand issues relating to employee turnover rates in schools and he also reminded the Committee that the Council had a good suite of flexible working arrangements to retain existing staff and to attract potential future employees.

 

Having regard to the information contained in the report, it was

 

RECOMMENDED – T H A T the employee turnover rates within the Council for the period 1st April to 30th September, 2016 be noted.

 

Reason for recommendation

 

To monitor employee turnover rates which may have a bearing on the Council’s delivery of its corporate objectives.

 

 

613     VALE OF GLAMORGAN PUBLIC SERVICES BOARD PROGRESS REPORT (MD) –

 

The Council, at its meeting on 28th September, 2016 had designated the Scrutiny Committee to be responsible for scrutinising the work of the Public Service Board.  At the time, the Council had also determined that specific individual pieces of work relating to the other ‘Wellbeing Outcomes’ would be referred to the relevant Scrutiny Committee of the Council.

 

The Scrutiny Committee gave consideration to the work of the Public Service Board (PSB) in terms of the achievements and challenges detailed within the Annual Report which was attached at Appendix D, including, the performance management arrangements detailed within the report and the work undertaken for the Wellbeing Assessment. 

 

In addition to the above it was noted that the PSB must publish a Wellbeing Plan by May 2018 which must be informed by a Wellbeing Assessment.  Separately, the Wellbeing Assessment must be published 12 months prior to the publication of the PSB’s Wellbeing Plan.  The PSB was required to publish a set of Wellbeing Objectives within the Wellbeing Plan which follow on from the assessment of the state of wellbeing in the PSB area and these objectives must be designed in such a way as to maximise the PSB’s contribution to the achievement of national wellbeing goals.

 

The Scrutiny Committee noted that work had already commenced on the Wellbeing Assessment with the aim to publish the same in April 2017.  This assessment would include a range of Vale wide data with a ‘community focus’ to the work.  The assessment would also utilise a common dataset which had been commissioned by the Welsh Government and produced by the local data unit.  The Committee also noted that the Vale PSB and Cardiff PSB had been successful in obtaining £45,000 funding to support the work on the Wellbeing Assessments. 

 

A number of initiatives had been undertaken on a joint working basis in relation to engagement and a brand had been developed ‘Let’s Talk’ which would be used across the Cardiff and the Vale of Glamorgan for all relevant engagement activities.  Details of activities/initiatives were set out in paragraphs 21 - 22 of the report. 

 

The Committee would also receive a further report to its meeting in January 2017 on the draft Wellbeing Assessment as part of the wider consultation exercise on the same. 

 

A timetable for the key milestones for the Wellbeing Assessment and Plan were detailed in Appendix B. 

 

In regard to Performance Management, the PSB had agreed to adopt the Plans and arrangements that had been set up as part of the work of the former Local Service Board.  This would also include, the existing Performance Management arrangements details of which were set out
in paragraph 25 of the report.

 

It was reported that following the publication of the Wellbeing Plan in 2018, the PSB would be required to produce an Annual Report setting out the steps taken to meet their objectives.  This would build on the Performance Management arrangements already in place.  It was noted that future Annual Reports of the PSB would be reported to this Scrutiny Committee. 

 

Having regard to the above it was

 

RECOMMENDED -

 

(1)       T H A T the Public Service Board Terms of Reference, progress made and timetable for publishing the Wellbeing Assessment be noted.

 

(2)       T H A T the approach to the scrutiny of the Public Service Board as outlined in the report be endorsed.

 

(3)       T H A T the contents of the Annual Report of the former Local Service Board for 2015/16 be noted.

 

Reasons for recommendations

 

(1)       In acknowledgement of the role of the PSB and its work programme for 2016/17.

 

(2)       To include the work of the PSB into the Scrutiny Committee’s work programme.

 

(3)       In acknowledgement of the achievements of the former LSB and challenges for 2016/17.

 

 

614     QUARTER 2 (2016-17) PERFORMANCE REPORT: CORPORATE HEALTH (MD) -

 

Good progress has been made at Q2 towards delivering the key outcomes as outlined in the Corporate Plan 2016-17, giving an overall RAG status of AMBER.  3 out of 4 of the Corporate Plan Well-being Outcomes were attributed an overall RAG status of GREEN with the remaining 1 reporting an AMBER status.

 

Full details of our performance in relation to the Corporate Plan Well-being Outcomes including the key achievements and challenges will be reported to the relevant Scrutiny Committees for their consideration.  The table below provides an overview of progress for each of the Corporate Plan Well-being Outcomes at Q2.

 

An overall GREEN status has been attributed to Corporate Health reflecting the positive progress made to date in integrating our business planning practices and in in promoting a ‘one Council’ approach, to maximising limited resources to deliver our Well-being Outcomes. These developments have contributed to the achievements reported at Q2 and in the long term to achieving improved outcomes for Vale of Glamorgan citizens.

 

A Green performance status has been attributed to all 11 Corporate Plan actions focusing on Corporate Health aspects, reflecting the good progress made by services in implementing planned improvements contributing to positive corporate health overall. 

 

Performance met or exceeded target in 5 out of 6 quarterly PIs reported this quarter with the remaining PI (HR/M001) missing target by more than 10%, resulting in an Amber RAG status for all measures.

 

A detailed report outlining the progress at quarter 2 towards achieving our Corporate Health priorities is provided at Appendix 1.

 

RECOMMENDED -

 

(1)       T H A T the progress made to date in achieving key outcomes in line with the Corporate Plan Wellbeing Outcomes and Corporate Health be noted.

 

(2)       T H A T the performance results and remedial actions be taken to address areas of underperformance and to tackle the key challenges identified be noted.

 

Reasons for recommendations

 

(1)       To ensure the Council clearly demonstrates the progress being made towards achieving its Corporate Plan Well-being Outcomes aimed at making a positive difference to the lives of Vale of Glamorgan citizens.

 

(2)       To ensure the Council is effectively assessing its performance in line with the requirement to secure continuous improvement outlined in the Local Government Measure (Wales) 2009 and reflecting the requirement of the Well-being of Future Generations (Wales) Act that it maximises its contribution to achieving the well-being goals for Wales.

 

 

615     VALUE FOR MONEY - PROPERTY SECTION PROCUREMENT (MD) -

 

The Committee was apprised on the processes followed by the Council’s Property Section to achieve value for money in the procurement process particularly given the concerns previously raised by the Committee specifically in relation to procurement activities in relation to Gladstone Primary School, Barry. 

 

The Head of Finance explained the processes applied when procuring construction works details of which were set out in paragraph 3 of the report. 

 

The Committee noted that value for money in the procurement process was achieved through the use of Constructionline which provided a pre-vetted list of contractors selected in accordance with a range of criteria including the size of the project, the type of work and the geographical location of the contractors office.  Utilising this criteria would ensure the most appropriate contractors were invited to tender for each scheme. 

 

The inclusion of the non-collusion document in the tender documentation ensured that all tenderers were aware of the Council’s policy on collusion during the tender process and required a signature to confirm that each contractor abided by this policy.  The Committee was made aware that tenders were awarded on the basis of being the most economically advantageous tender to the Council.  On larger scale projects this would include a quality matrix.  On smaller schemes this was based solely on price as all compliant tenders would meet the requirements stipulated in the specifications and drawings.  It was further noted that each tender list was randomly generated on Constructionline each time it was run.  Consequently, the same suppliers did not consistently appear at the top of the list of potential tenders for projects of a similar nature and size.  It was also further noted that the Property Section was in the process of setting up a Framework Agreement for smaller scale work.  It was anticipated that this would reduce tendering costs incurred by the Council in procuring lower value building work. 

 

In addition to the above a recent review of contracts awarded over the last 12 months had been undertaken and from the results of this review it was clear that contracts had been awarded on their individual merits and in line with Council Policy. 

 

The Head of Finance’s attention then turned to specific matters relating to Gladstone Primary School and in particular to the renewal of the boiler and she referred specifically to the process followed in the procurement exercise and to the subsequent complications in relation to the physical aspects of the school which had adversely effected the installation works. 

 

It was noted that the installation works had since been completed and it was anticipated that the cost would be slightly less than the approved budget of £130,000. 

 

In summing up the Head of Finance indicated that going forward all estimated budgets included in future Capital Programmes were to be “sense checked” by a second experienced officer to ensure that future estimates were as accurate as possible.  However, on occasions she indicated that there would be certain unforeseen factors that could be impacted upon on the tenders submitted. 

 

Having considered the report it was

 

RECOMMENDED - T H A T the processes followed by the Council’s Property Section to achieve value for money in the procurement process be noted.

 

Reason for recommendation

 

In acknowledgement of previous concerns raised by the Scrutiny Committee in regard to procurement and achieving value for money in the procurement processes.

 

 

616     INITIAL REVENUE BUDGET PROPOSALS 2017/18 (MD) -

 

The Committee was informed that the Scrutiny Committees of the Council had previously considered the Initial Revenue Budget Proposals on the following dates: 

  • Environment and Regeneration - 6th December, 2016
  • Homes and Safe Communities - 7th December, 2016
  • Healthy Living and Social Care - 8th December, 2016
  • Learning and Culture - 12th December, 2016.

Details of each of the Scrutiny Committees recommendations on the Initial Revenue Budget Proposals were tabled for consideration of the Committee.  In particular, the Healthy Living and Social Care Scrutiny Committee had recommended

 

“(2) That the Corporate Performance and Resources Scrutiny Committee be made aware that it was the view of this Committee that all the cost pressures detailed in Appendix 3 should be fully funded.”

 

The Council is required under statute to fix the level of Council Tax for 2017/18 by 11th March, 2017 and in order to do so, would have to agree a balanced revenue budget by the same date.  To be in a position to meet the statutory deadlines and the requirements for consultation set out in the Council’s Constitution, much of the work on quantifying the resource requirements of individual services was required to be carried out before the final RSG settlement was notified to the Council.

 

Appendix 1 set out the Amended Budget for 2016/17, together with the necessary adjustments to be made to the original budget. 

 

Asset Rents, International Accounting Standard (IAS) 19, Transfers and Recharges – These adjustments have no overall effect on the net budget of the Council.  These were accounting adjustments largely outside the control of services.  Also included were transfers of functions and responsibilities between Directorates.  Cabinet on 6th June, 2016, approved the transfer of £62,000 from Development Management to Resources as a result of the transfer of the Drawing Office.

 

Cabinet on 20th June, 2016, agreed the senior management restructure of the Learning and Skills Directorate, which was implemented on 1st September, 2016.  In order to make efficiencies within senior management, a number of changes had been made to the structure of the Directorate which needs to be reflected in the budget.  As a result, the Learning and Skills budget will now be reported under the following headings:

 

-           Schools 

-           Strategy, Culture, Community Learning and Resources

-           Strategy and Regulation

-           Achievement for All

-           School Improvement.

 

The following table compared the amended budget with the projected outturn for 2016/17.  The Learning and Skills Directorate is projecting an adverse variance of £716,000 at year end and the Social Services Directorate is anticipated to outturn with an adverse variance of around £600,000.  It is proposed that reserves will be used to mitigate this position in 2016/17 as outlined later in this report.

 


 

 

2016/17

Amended

Budget

2016/17

Projected

Outturn

Variance

(+)   Favourable

(-) Adverse

 

Directorate/Service

          £’000

£’000

     £’000

 

 

 

 

 

Learning and Skills

        

 

 

Schools

81,009

81,009

0

Strategy, Culture, Community Learning & Resources

13,233

13,029

 +204

Strategy and Regulation

250

218

     +32

Achievement for All

3,573

4,403

 -830

Transfer from Reserves

0

   -716

+716

School Improvement

1,241

1,363

          -122

 

 

 

 

Social Services

 

 

 

Children and Young People

14,913

14,513

        +400

Adult Services

40,096

41,096

            -1,000

Business Management and Innovation

276

276

           0

Youth Offending Service

701

701

            0

Transfer from Reserves

0

          -600

       +600

 

 

 

 

Environment and Housing

 

 

 

Visible Services                  

20,335

20,405

   -70

Transportation

4,836

4,766

     +70

Building Services

0

0

          0

Regulatory Services

2,218

2,218

       0

Council Fund Housing

988

988

             0

 

 

 

 

Managing Director &  Resources

 

 

 

Resources

269

269

      0

Regeneration

2,123

2,123

       0

Development Management

962

962

       0

Private Housing

11,021

11,021

                0

General Policy

16,744

16,744

              0

Total

214,788

214,788

0

Met from General Reserve

(1,500)

(1,500)

0

Grand Total

213,288

213,288

0

             

 

A detailed explanation was provided on the predicted outturn of each of the Directorates Service Budget headings, to allow the Committee to contextualise the reasons for the forecasted outturn, details of which were set out in paragraphs 8 - 34 of the report.

 

In regard to savings for the financial year 2016/17, the Committee noted that a savings target of £9.289m was set for the Council.  Attached at Appendix 2 was a statement detailing all savings targets for the above period and the projected outturn.  Services were working towards currently achieving these savings targets however, at this stage of the year it was anticipated that not all savings would be made and there could be shortfall of £580,000.  Specific issues in regard to Learning and Skills, Social Services, Environment and Housing and the Managing Director and Resources saving targets were detailed in paragraphs 36 - 39 of the report.

 

Having regard to the above it was therefore, proposed in respect of the 2017/18 Budget Strategy that Directors be instructed to prepare Initial Revenue Budget Proposals for 2017/18 based on the cost of providing the current level of service and approved policy decisions, including, the existing savings targets.  This meant the cost of price increases and any allowable pay awards should be included as advised by the Head of Finance and preparation would be on the following basis:

 

-           Capital charges, central accommodation costs and central support costs to be estimated centrally.

-           Services to prepare baseline budgets on current service levels as set out in the 2016/17 Final Revenue Budget report.

-           Budgets to be broken down subjectively and objectively in as much detail as deemed appropriate by the Head of Finance.

-           Budget reports to include revised estimates for 2016/17.

-           Full account to be taken of the revenue costs, other than debt charges, of new capital schemes coming into use.

-           Minimum savings targets to be met initially as detailed in the 2016/17 Final Revenue Budget report. Any savings made directly by services over and above individual service targets to count towards future saving targets or to meet unavoidable service cost pressures.

-           Directors will continue to draw up Service Plans that set out the aims and objectives for the service and any possible future developments and efficiencies.

 -          As stated previously, it is expected that the revenue costs of service development will need to be met from within the respective services (in particular, from the savings made).  As such, no revenue bids are initially to be made. However, services may still be asked to identify and prioritise any burgeoning revenue cost pressures for consideration.

 

In regard to the Medium Term Financial Plan (MTFP) for 2016/17 to 2019/20, this had been approved by the Cabinet at its meeting held on 26th September, 2016 and at that time, it assumed a reduction in Welsh Government (WG) funding of 3% for the years 2017/18, 2018/19 and 2019/20.  This would result in the requirement to find savings of £24.146m over the period, with £7.783m currently being identified.  There was therefore further savings to be identified of £16.363m over the three year period.  The MTFP factored in a managed level of cost pressures, a notional increase in Council Tax of 2% each year, price inflation of 1%, and annual pay awards of 1% each year from 2017/18. 

 

In 2016/17 the Minimum Funding Commitment for schools, equivalent to 1% above the WG’s block grant settlement was an increase of 1.8%.  The MTFP stated that if the Council’s funding from WG reduced by 3% in 2017/18, it would expect the MFC to be at a lower level and included a figure similar to the 2015/16 MFC which was based on an increase of 0.6%. 

 

The Council's provisional settlement was announced by WG on 19th October, 2016.

 

WG had advised the Council that its provisional SSA (Standard Spending Assessment) for 2017/18 is £215.917m. 

 

The Council would receive from WG Revenue Support Grant of £109.193m and a share of the Non- Domestic Rates (NDR) of £40.976m.  Together these figures constitute the Council’s provisional Aggregate External Finance (AEF) of £150.169m. WG reported that this was a cash reduction of 0.2% (£0.352m) for 2017/18.  However, when taking into account new responsibilities, this actually represents a cash reduction of 0.35% (£0.53m).  This is a smaller reduction than the 3% projected in the MTFP.

 

Additional funding was provided through the RSG for new responsibilities were: 

  • Increasing Capital Limits for Residential Care (from £24,000 to £30,000) - £167,000
  • War Disablement Pension Disregard in financial assessments for social care charging - £11,000.

There were transfers into the RSG settlement for 2017/18 as follows: 

  • Delivering Transformation Grant - £106,000
  • Deprivation of Liberty Standards - £8,000
  • Food Hygiene Rating Schemes - £2,000.

There was a transfer out of the RSG settlement for 2017/18 as follows: 

  • Education Workforce Council Teachers Registration Fees - £43,000. 

This year WG have not afforded protection to schools via the setting of a Minimum Funding Commitment.

 

As part of these Initial Budget proposals, it had been necessary to revisit the cost pressures facing services in order to build up a complete and up to date picture of the financial position of the Council and an updated list as set out in Appendix 3.  The final proposal for the increase in the National Living Wage from 1st April, 2017, had yet to be announced, however, it is considered that the 2017/18 pay rates used in these budget proposals for Vale of Glamorgan staff should cover the potential increase.  Any further increase would have a significant effect on services the Council commissions from external organisations.  The main area affected is Social Services and a cost pressure had been included to reflect this.

 

Details of the proposed areas for savings for 2017/18 to 2018/19 were attached at Appendix 4.  The savings did not include the cost of any potential redundancies.  As part of the Budget Strategy 2017/18, Directors were requested to continue to progress the Reshaping Services Programme.  As part of the 2016/17 budget setting process it was recommended that Tranche 3 of the Reshaping Services programme should commence.  A review is being undertaken in order to identify future projects and the Council is currently developing proposals. 

 

A summary of the overall base budget for 2017/18 is attached at Appendix 5.  This has been arrived at by adjusting the 2016/17 budget for items such as inflation and unavoidable growth, but did not include identified cost pressures or savings and related to the following:

 

Asset Rents, International Accounting Standard (IAS) 19 - Related to accounting items outside the control of services.  These reflected charges to services for the use of capital assets and adjustments in respect of pensions to comply with accounting standards.

 

Recharges / Transfers – Related to changes in inter-service and inter Directorate recharges.  The budget transfers that relate to the reorganisation of the Learning and Skills Directorate are shown in a separate column.

 

Budget Adjustment – There was a £320,000 increase in budget due to the change in the use of the Social Services Fund in 2017/18.

 

Inflation – The total figure for inflation of £1.637m related to general price increases (£844,000) and a 1% allowance for pay awards (£793,000).  These figures did not include schools inflation which was included in Appendix 3 as a cost pressure.

 

Committed Growth – This totalled £1.751m and related to the £1.5m reduction in use of the Council Fund.  It also included the net transfers into the RSG of £73,000 and WG funding provided for new responsibilities of £178,000 as previously detailed.

 

Once the base budget for 2017/18 had been established, it must then be compared to the funding available to identify the extent of any shortfall.  With a projected AEF of £150.169m and Council Tax at a current level of £62.84m, total available funding would be £213.009m.  When compared to a base budget of £216.996m, this would result in a funding deficit for 2017/18 of £3.987m.  This deficit is mainly attributable to the allocation of committed growth and pay and price inflation.

 

If all identified cost pressures were funded, this would increase the shortfall to £11.447m.  If all proposed savings were achieved, the shortfall would be reduced to £4.426m as shown in the table below.

 

Projected Budget Shortfall 2017/18

 

 

£000

Funding Available

 

Provisional AEF

150,169

Council Tax (Assumes no increase)

62,840

Projected Funding Available

213,009

 

 

Base Budget

216,996

 

 

Projected Shortfall Against Base Budget

3,987

 

 

Assume all Cost Pressures Funded

7,460

 

 

Projected Shortfall with Cost Pressures funded

11,447

 

 

Assume all Savings Achieved

(7,021)

 

 

Projected Shortfall for 2017/18

4,426

 

This shortfall was based on the assumption that the savings target set for 2017/18 would be achieved in full.  However, a high proportion of these savings relate to Reshaping Services schemes which reflected a new way of working and therefore require a lengthy period of time to implement.  While all services are working towards achieving their 2017/18 targets, not all savings may be achieved in full from 1st April, 2017.

 

The above projections included an assumed pay award of 1% for 2017/18 and the possible impact of the National Living Wage.  Any changes to the current assumptions would be assessed as part of the Final Budget Proposals report.

 

Further work will be undertaken by the Budget Working Group (BWG) in order to achieve a balanced budget for the final budget proposals for 2017/18.  This would include a review of the use of reserves, a possible increase in Council Tax, a review of all cost pressures, possible changes to the approved saving targets, a review of the inflation assumptions and the current financial strategies.  The BWG would also consider the results of the budget engagement process in determining priorities for future savings and service delivery. It would also ensure that budget proposals consider the requirements of the Well-being of Future Generations Act and the Council's 4 well-being outcomes as detailed in the Corporate Plan.

 

There would be difficulties in maintaining the quality and quantity of services in the future without exploring opportunities for collaboration and alternative forms of service delivery.  The Council would continue to develop its Reshaping Services programme via Tranche 3 schemes.

 

The Head of Finance indicated that based on the assumption that all cost pressures would be funded in full, the estimated funding shortfall for 2017/18 would be £4.426m, assuming no increase in Council Tax.  She also indicated that whilst WG had not issued details regarding the level of funding post 2017/18, it was anticipated that there would be further reductions in funding for local government going forward.  Consequently, it was important that Directors achieved approved savings and looked to mitigate further cost pressures through alternative means of service delivery and collaborative ventures. 

 

Her attention then turned to the Council Fund Reserve which as at 31st March, 2017 included a £4m in-year transfer as referred to in paragraph 34 of the report.  Accordingly, the Head of Finance indicated that the Council Fund Reserve as at 31st March, 2017 would stand at £12.572m.  She also indicated that set out at Appendix 6 of the report was the Authority’s actual reserves as at 31st March, 2016 and showed the estimated reserve balance for each year up to 31st March, 2020.  The Council was forecasting the use of general and specific reserves, excluding HRA and schools, totalling circa £38m from 1st April, 2016 onwards, which represented approximately 50% of the balance as at 31st March, 2016.  These levels of reserves were still deemed to be adequate as known risks were largely covered and the Council Fund Reserve did not fall below £7m. 

 

The Head of Finance’s attention then turned to the total cost pressures as indicated in the report and updated Members that the total cost pressures in respect of Social Services had slightly reduced to £3.4m. 

 

At this juncture, the Committee gave consideration to the recommendation of the Healthy Living and Social Care Scrutiny Committee, with the Chairman asking the Head of Finance to comment on the Scrutiny Committee’s recommendation that all the cost pressures within that service should be fully funded.  In response, the Head of Service indicated that most of the Social Services cost pressures were linked to the Community Care budget.  In addition, the service had been significantly impacted upon as a consequence of the introduction of the Living Wage.  Separately, but also in addition to, the service had been met with significant legislative changes and the service was therefore working to manage these challenges.  She acknowledged that the service area was unable to off-set pressures by increasing income and it would be of assistance if the WG raised the ceiling on the Community Care package cap and understood that WG were currently considering proposals to do such.  In specifically commenting on the recommendation from the Healthy Living and Social Care Scrutiny Committee, she suggested that the Committee needed to be mindful not to agree budgetary amendments in the budget proposals that may have a knock-on effect in future years’ budgets of the Council. 

 

In addition to the above, the Council Leader, with the consent of the Committee, spoke on the matter indicating that he was aware of the future budgetary pressures impacting upon Social Services.  He also indicated that Cabinet had agreed to set aside a sum of £4m to the Council Fund Reserve with future consideration being given as to how that allocation would be used to off-set the shortfall in the Revenue Budget and / or used for capital schemes.

 

Having regard to the above and having fully considered the report, the references and in light of the Council’s budget situation, it was subsequently

 

RECOMMENDED -

 

(1)       T H A T the recommendation from the Healthy Living and Social Care Scrutiny Committee be noted.

 

(2)       T H A T the amended Revenue Budget for 2016/17 as set out in Appendix 1 be noted.

 

(3)       T H A T the Initial Revenue Budget Proposals for 2017/18 be noted.

 

Reasons for recommendations

 

(1)       In view of the overall cost pressures facing the Council.

 

(2)       In order that the changes to the 2016/17 budget can be incorporated.

 

(3)       To advise Cabinet.

 

 

617     INITIAL CAPITAL PROGRAMME PROPOSALS 2017/18 (MD) -

 

Set out at Appendix 1 to the report were details of the progress on the Capital Programme as at 30th September, 2016.  In addition, the report also addressed the following changes to the Programme:

 

St. Brides Expansion – An emergency power was approved on 17th October, 2016 to increase the budget to £510,000 in order for the scheme to proceed.  This was funded from S106, and included £10,000 brought forward from 2017/18.

 

Victorian Schools – External consultants were being appointed to project manage this scheme with the aim of appointing contractors in March 2017 for works to start during Easter 2017.  The project would be split between a number of contractors to ensure that the high priority repairs were completed as early as possible and all works were completed by March 2018.  It had been requested that £1.2m be slipped from 2016/17 to 2017/18.

 

Director of Environment and Housing  

 

The proposal to amend the funding for the 2016/17 Housing Improvement Programme was set out in paragraph 52 of the report and included the adjustments detailed below.

 

WHQS Externals – There had been delays in undertaking work this year due to difficulty in sourcing suitably skills labour, ecology issues such as nesting birds and bats and leaseholder issues.  It was anticipated that work would be completed in the next financial year and it had been requested that £7.23m be carried forward into 2017/18.

 

Aids and Adaptions – There had been an increase in demand in this area and to cover required works it had been requested that the budget for 2016/17 be increased from £400,000 to £500,000.

 

Common Parts – As a result of the delay in undertaking the externals works, the start of works under this heading had been delayed as the external works needed to be completed first.  Work was now due to commence however it had been requested that £1.7m be carried forward into 2017/18.

 

Environmental Improvements – In a similar manner to the Common Parts work, the delay in external works had delayed the commencement of this scheme.  Work would commence this year and a programme of works was being prepared for 2017/18.  It had been requested that £400,000 be carried forward to 2017/18.

 

New Build – Proposals for new build schemes were being developed and work on site was due to commence prior to the end of this financial year however a full spend was not anticipated and it had been requested that £1.4m be carried forward into 2017/18 to allow schemes to be undertaken.

 

Ashpath Footpath Improvements – It had been requested that £73,000 be slipped from 2016/17 to 2017/18 as this scheme would not be completed in year due to ongoing land issues.

 

Managing Director and Resources

 

Maendy Pedestrian Sustainable Transport Improvement – It had been requested that £80,000 be slipped from 2016/17 to 2017/18 as scheme options were being considered and land availability was minimal.

 

Barry Regeneration Partnership – It had been requested that £29,000 be slipped from 2016/17 to 2017/18 as the fixed term post in the Economic Development Unit had not yet been filled, and was currently being advertised. 

 

Lighting Scheme for Zig Zag Path – Due to a change in specification of lights, the columns cost less than the original proposal and therefore it had been requested that the balance of £37,000 be slipped into 2017/18 for general sustainable transport improvements in the area.  It had been requested to rename the scheme Sustainable Transport Improvements Penarth Heights.

 

Regeneration Fund – A 2017/18 capital bid had been received relating to renovation works for the Vale Enterprise Centre.  As the Regeneration Fund scheme was unallocated in the 2016/17 Capital Programme, it had been proposed that this funding was utilised to progress the renovations where possible during 2016/17, however, the budget may need to be reprofiled once a programme of works was finalised. 

 

CASH Community Grants – As per the Cabinet report 25th July, 2016, CASH grants totalling £23,508 had been approved.  The balance of £6,492 had been requested to be vired to a new Community Initiatives scheme in 2016/17.

 

All Services Asset Renewal – As this sum had not yet been allocated to specific schemes during 2016/17, it had been proposed that the funding of £484,000 was removed from the 2016/17 Capital Programme and reallocated to other schemes during the five year Capital Programme

 

Regulation 14 Workplace Health and Safety Glazing – The full budgeted sum of £50,000 was not required for safety glazing and it had been requested that the sum of £32,000 be removed from the 2016/17 Capital Programme and reallocated to other schemes during 2017/18.

 

The Welsh Government (WG) announced the provisional 2017/18 General Capital Funding, on 19th October, 2016.  The 2017/18 Capital Settlement was a flatlined capital settlement which for the Vale of Glamorgan Council equated to General Capital Funding of £5.405m which was made up of £2.045m General Capital Grant and £3.360m Supported Borrowing.

 

There was no indication of the level of funding likely beyond 2017/18 and therefore in line with the approach adopted in the Medium Term Financial Plan the proposals assumed a reduction of 10% for each year of the Programme from 2018/19.

 

Appendix 2 to the report set out the Initial Proposals for the Capital Programme between 2017/18 and 2021/22.

 

The Council would seek to mitigate the projected deteriorating funding situation by looking to progress only those schemes which were deemed to be a key Corporate Priority and make a clear impact to the Wellbeing and Future Generation priorities. The Council would seek assurances that schemes included in the Capital Programme could be delivered on time and within budget.

 

The Major Repairs Allowance (MRA), which was the grant that provided capital funding to the Housing Revenue Account (HRA), had not yet been announced by the WG for 2017/18.  Cabinet would be advised once the announcement was made.  An assumption had been made in Appendix 2 that the grant would continue at the allocation reflected in the current business plan of £2.76m in 2017/18 and throughout the period of the Capital Programme.

 

In addition to external funding, the Council would finance part of the Capital Programme from its own resources, e.g. capital receipts and reserves.  

 

The table below detailed the General Capital Funding and internal resources required to fund the proposed schemes which were set out Appendix 2.

 

Analysis of Net Funding Required for the Indicative 2017/18 Capital Programme

GENERAL FUND

£’000

£’000

 

Welsh Government Resources

 

 

 

Supported Borrowing

3,360

 

 

General Capital Grant

2,045

 

 

Total Welsh Government Resources

 

5,405

 

Council Resources

 

 

 

General Capital Receipts

1,006

 

 

Reserves/Leasing

7,142

 

 

Total Council Resources

 

8,148

 

Net Capital Resources

 

13,553

 

HOUSING REVENUE ACCOUNT

 

 

 

Housing Reserves

3,631

 

 

Housing Unsupported Borrowing

12,473

 

 

Net Capital Resources

 

16,104

 

Total Net Capital Resources

 

29,657

 

 

New capital bids were invited for return by 30th September, 2016 and the number of bids received was in line with previous years  Departments were requested to rank their own bids in order of importance before submission and bids from each Department were forwarded to the Insight Group for evaluation.

 

The Insight Group used a number of criteria to assess the Capital Bids. The first criteria used was to classify the nature of the bids, the criteria used is set out below:

 

Priority   Level

Criteria

A

Health and Safety legislation

B

Other Legislation/Statutory Requirement

Ci

Economic Sense/Invest to Save

Cii

Corporate Plan

Ciii

Sufficiency

D

Condition/Suitability

E

Welsh Government Requirements

F

Low Priority

 

Where bids were rated an A or B there would clearly be a legal obligation to ensure that works were progressed in a timely manner within the confines of the funding available.  Schemes that represented an invest to save opportunity or support the achievement of corporate priorities should also be prioritised.

 

 In addition, in accordance with the criteria set out in the Budget Strategy, the bids were prioritised in terms of their corporate priority and the risk they posed to the Council if they were not pursued.  The risk assessment element was undertaken in line with the Council's Corporate Risk Management Strategy.

 

The bids were also reviewed for the contribution that they made to the Wellbeing and Future Generations criteria.

 

Only those schemes assessed as corporate priority 1 or higher and medium risk or higher were included in these proposals.  In addition the schemes put forward should contribute to at least three Wellbeing and Future Generations outcomes and should have a scheme priority factor of either A/B/Ci/Cii/Ciii.  The bids that did not meet these criteria were excluded from consideration as there was insufficient funding available and these bids were detailed in Appendix 3 with a reason for their exclusion.

 

The bids that have been funded are set out below with the proposed funding profile:

 


 

Successful   Bids

2016/17

2017/18

2018/19

2019/20

 Total

 

 £'000

 £'000

 £'000

 £'000

 £'000

Street Lighting Replacement (includes £50,000 from

Visible Services Asset Renewal)

           0

       100

      100

         0

       200

Murchfield Access Bridge

           0

         44

          0

          0

         44

Dinas Powys Library Road Bridge

           0

         97

          0 

          0 

         97

Leisure Works - Capital Bids

             0

       758

          0

          0

       758

Nell's Point Former Toilet Block (includes £100,000 from

Barry Regeneration Partnership)

           0

      255

          0

          0

       255

Housing Regeneration Area

           0

      150

      300

     300

       750

Vale Enterprise Centre Renovations

       100

           0

          0

          0

       100

Total

      100

    1,404

       400

       300

    2,204

 

It was proposed that the existing Regeneration scheme was utilised to fund the bids for schemes that make a contribution to the regeneration of the Vale of Glamorgan.  The Vale Enterprise Centre Renovations should be progressed where possible during 2016/17 as set out in paragraph 16 to the report.  In addition, it was proposed that £100,000 of the Barry Regeneration Partnership funding be utilised towards the Nell's Point Toilet block scheme in 2017/18.

 

Further to the £50,000 allocation for the maintenance of street lighting columns that had been awarded in 2017/18 and 2018/19, it was proposed that £50,000 of the Visible Services Asset Renewal be ring-fenced for these purposes.

 

The changes detailed above had been reflected in Appendix 2.

 

The 21st Century Schools Programme was the WG's funding initiative for investment in schools.  The first tranche of schemes under Band A of the funding were submitted prior to November 2011.  Band A schemes run between 2013/14 and 2018/19. Band B schemes were expected to commence in 2019/20.

 

The schemes included under the Band A submission for construction between 2013/14 and 2018/19 were: Ysgol Nant Talwg, Ysgol Dewi Sant, Ysgol Gwaun Y Nant and Oakfield , Colcot and Llantwit Learning Community.  The Ysgol Nant Talwg, Ysgol Dewi Sant, Ysgol Gwaun Y Nant and Oakfield schemes were now complete and Llantwit Learning Community was on track to complete in September, 2018.

 

In October, 2016 the Vale of Glamorgan Council received notification from WG that the funding envelope for 21st Century Schools would in principle be increased from £30.848m to £32.048m pending the receipt of a satisfactory business case.  This included funding for a new Band A scheme Romilly Primary permanent structure a scheme which was expected to cost £1.2m, funded by £600,000 WG Grant and £600,000 contribution from the School Investment Strategy Reserve.

 

Band B Schemes were expected to commence in 2019/20 and in December 2014 the Council submitted proposals for a number of schemes to WG.  Based on latest indications, it had been assumed that 50% funding would be available from WG to fund these schemes.  However, there was no guarantee that this funding would be available from WG or what form it would take.

 

During 2016/17 reports were taken to Cabinet regarding two key schemes to be progressed under Band B 

  • Proposal to establish new Mixed Sex Secondary Schools in Barry – estimated cost £44m.
  • Proposal to Increase Welsh Medium Secondary School Places – estimated cost £19.3m.

Given the extremely high level of Council funding committed to these schemes any other proposals progressed as part of Band B would needed to be fully funded by Capital Receipts, S106 and WG funding.  If WG funding was not available at 50%, the scale of these schemes would need to be reviewed by the Council.

 

It was proposed that the Band B schemes were funded as follows:

 

Band B Scheme

WG Grant

S106

GCF

Capital Receipts

Cont. from Reserves

Unsupp Borrowing

Total

 

  £'000

  £'000

£'000

    £'000

      £'000

    £'000

    £'000

Welsh Medium Secondary

  9,650

  1,037

2,598

      514

      3,501

    2,000

  19,300

Mixed Sex Secondary School

22,000

     986

1,036

  11,685

      8,293

               -  

   44,000

 

The level of funding committed to Band B from 2019/20 had necessitated a reduction in Education Asset Renewal to £600,000 from 2019/20 to provide funding for the Band B schemes.

 

In 2016/17 a sum of £1.2m was set aside towards medium schemes for schools.  £600,000 of this sum had been allocated to the Romilly scheme referred to in paragraph 42 of the report, the balance of this funding was unallocated and a further report would be brought to Cabinet detailing the proposals for this sum.

 

The planned spend on the Education Capital Programme from 2017/18 to 2021/22 incorporating expenditure under Band A  and Band B schemes funded under 21st Century Schools Programme. Gross Expenditure totalled £75.772m.

 

By Scheme

17/18

18/19

19/20

20/21

21/22

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

Band A Llantwit Major Learning Community

1,240

29

0

0

0

1,269

Band A Colcot Primary

125

0

0

0

0

125

Band A Romilly Primary

1,200

0

0

0

0

1,200

Medium Schools Projects to be allocated

600

0

0

0

0

600

Eagleswell Marketing and Disposal

5

0

0

0

0

5

Schools Asset Renewal / Other

600

600

600

600

600

3,000

Additional Schools Asset Renewal

400

400

0

0

0

800

Education Asset Renewal – contingency

50

50

0

0

0

100

Rhoose Primary New School

1,500

1,762

0

0

0

3,262

Victorian Schools

2,000

0

0

0

0

2,000

Gwenfo Primary Expansion

11

0

0

0

0

11

Band B Welsh Medium

0

250

5,650

10,500

2,600

19,000

Band B Co Ed

0

500

12,900

24,000

6,000

43,400

Schools IT Loans

200

200

200

200

200

1,000

Total

7,931

3,791

19,350

35,300

9,400

75,772

 

The total cost for Band B schemes was projected to be £63.3m (£31.650m WG Funding), however of this total £62.4m related to costs up to and including 2021/22.

The Education Capital Programme was funded as follows:

 

 

17/18

18/19

19/20

20/21

21/22

Total

 

£000's

£000's

£000's

£000's

£000's

£000's

General Capital Funding/General Capital Receipts

3,605

1,785

2,354

2,200

1,147

11,091

Education Capital Receipts

0

0

3,764

7,824

0

11,588

Other Reserves and Revenue Contribution

0

0

2,428

1,543

0

3,971

School Investment Reserve

1,390

444

954

2,260

3,753

8,801

IT Fund

200

200

200

200

200

1,000

Prudential Borrowing

0

0

0

2,000

0

2,000

Total Internal Funding

5,195

2,429

9,700

16,027

5,100

38,451

S106 Agreements

1,011

1,362

0

2,023

 0

4,396

Welsh Government Grant

1,725

0

9,650

17,250

4,300

32,925

Total Funding

7,931

3,791

19,350

35,300

9,400

75,772

 

The 2016/17 Housing Improvement Programme budget currently totalled £34.147m.  It had been requested above that £10.73m be carried forward into 2017/18.  The amended programme also reflected the £100,000 increase in the Aids and Adaptations budget.  The funding of the 2016/17 programme had therefore been amended as set out in the table below: -

 

Funding

Current  2016/17

£'000

Amended 2016/17

  £'000

Major Repairs Allowance Grant

2,770

2,770

Other Grant

251

251

Housing Capital Receipt

0

0

Housing Reserves

2,931

6,231

Unsupported Borrowing

28,195

14,265

Total

34,147

23,517

 

As in the case of the consideration of the Initial Revenue Budget Proposals, similar arrangements were in place for the Scrutiny Committees to pass their comments this Scrutiny Committee who would, on behalf of the other Council’s Scrutiny Committees, form the response to Cabinet by no later than 13th December, 2016.  Each of the Council’s Scrutiny Committees had been previously asked during their consideration of the Council’s Initial Budget Proposals to first consider the Initial Capital Programme Proposals as shown in Appendix 2 to the respective reports presented to those Committees and to make any recommendations for changes.  If they wished to make a change, the reason for this need was required to be recorded in order to assist the Cabinet and Budget Working Group in drawing up the Council’s final budget proposals. 

 

Managers would be asked to revisit the schemes included in Appendix 2 and to confirm final costs and spend profile prior to the final proposals being presented to Cabinet in early 2017.  The Cabinet’s final Capital Programme Budget Proposals would be considered by the Council no later than 11th March, 2017.

 

If the schemes proposed in Appendix 2 were approved, the effect on the General Fund usable receipts was as follows:

 

Capital Receipts

General

Ringfenced Social   Services

Ringfenced Education

 

£000's

£000's

£000's

Anticipated Balance as at 1st April 2017

2,343

1,327

1,299

 

 

 

 

Anticipated Requirements – 2017/18

(1,006)

0

0

Anticipated Receipts – 2017/18

0

0

0

Balance as at 31st March 2018

1,337

1,327

1,299

Anticipated Requirements – 2018/19

0

(1,327)

0

Anticipated Receipts – 2018/19

0

0

8,414

Balance as at 31st March 2019

1,337

0

9,713

Anticipated Requirements – 2019/20

(405)

0

(3,764)

Anticipated Receipts – 2019/20

0

0

1,875

Balance as at 31st March 2020

932

0

7,824

Anticipated Requirements – 2020/21

(659)

0

(7,824)

Anticipated Receipts – 2020/21

0

0

0

Balance as at 31st March 2021

273

0

0

Anticipated Requirements – 2021/22

0

0

0

Anticipated Receipts – 2021/22

0

0

0

Balance as at 31st March 2022

273

0

0

Anticipated Requirements – 2022/23

0

0

0

Anticipated Receipts – 2022/23

0

0

0

Balance as at 31st March 2023

273

0

0

 

The Education Capital Programme utilised general capital receipts in addition to capital receipts ringfenced for Education.

 

The capital receipt balance for Social Services had been ringfenced for Social Services capital expenditure.  Options were being explored by the Council however, it had been assumed that the full capital receipt of £1.327m would be utilised for older persons' accommodation in 2018/19.

 

In line with the overall strategy and specific suggestions proposed by the BWG, in order to resource the Capital Programme, reserves would be utilised over the period of the Capital Programme 2017/18 to 2021/22.

 

The Project Fund would be used to fund schemes assessed on an invest to save basis, and in certain circumstances business critical schemes may also be funded from this reserve with the prior approval of the Head of Finance.  The projected usage of this reserve over the period of the Capital Programme was:

 

Project Fund

             £'000

Anticipated Balance as at 1st April 2017

2,749

Anticipated Requirements – 2017/18

(530)

Anticipated Receipts – 2017/18

      0

Balance as at 31st March 2018

2,219

Anticipated Requirements – 2018/19

      0

Anticipated Receipts – 2018/19

      0

Balance as at 31st March 2019

2,219

Anticipated Requirements – 2019/20

      0

Anticipated Receipts – 2019/20

      0

Balance as at 31st March 2020

2,219

Anticipated Requirements – 2020/21

(212)

Anticipated Receipts – 2020/21

      0

Balance as at 31st March 2021

2,007

Anticipated Requirements – 2021/22

      0

Anticipated Receipts – 2021/22

      0

Balance as at 31st March 2022

2,007

 

The above forecast balances needed to be seen in the context of significant pressures for spending which were not yet included in the Capital Programme.  These included the backlog of school, highways and buildings improvements.

 

Having fully considered the report, and in light of the Council’s budget situation, it was subsequently

 

RECOMMENDED –

 

(1)       T H A T the Initial Capital Budget Proposals for 2017/18 be endorsed and Cabinet informed accordingly.

 

(2)       T H A T the following changes to the 2016/17 and 2017/18 Capital Programme as outlined below be noted: 

  • St. Brides Expansion – An emergency power was approved on 17th October, 2016 to increase the 2016/17 budget to £510,000.
  • Victorian Schools – The carry forward of £1.2m from 2016/17 to 2017/18.
  • Housing Improvement Programme – The carry forward of £10.730m from 2016/17 to 2017/18 for WHQS Externals (£7.23m),Common Parts (£1.7m), Environmental Improvements (£400,000) and New Build (£1.4m).
  • Housing Improvement Programme – To increase the Capital Programme in 2016/17 by £100,000 to fund increased demand for aids and adaptations.
  • Ashpath Footpath Improvements – The carry forward of £73,000 from 2016/17 to 2017/18
  • Maendy Pedestrian Sustainable Transport Improvement – The carry forward of £80,000 from 2016/17 to 2017/18.
  • Barry Regeneration Partnership – The carry forward of £29,000 from 2016/17 to 2017/18.
  • Lighting Scheme for Zig Zag Path – The carry forward of £37,000 from 2016/17 to 2017/18 and to change the scheme description to Sustainable Transport Improvements Penarth Heights.
  • Regeneration Fund – The £100,000 is utilised to progress works at the Vale Enterprise Centre during 2016/17 and the scheme is renamed accordingly.
  • CASH Community Grants – The virement of £6,492 to a new Community Initiatives scheme in 2016/17.
  • All Services Asset Renewal – That £484,000 is unallocated in 2016/17 to allow the funding to be utilised for other schemes during the five year Capital Programme.
  • Regulation 14 Workplace Health and Safety Glazing – That the sum of £32,000 is unallocated in 2016/17 to allow the funding to be utilised for other schemes during 2017/18.

Reasons for recommendations

 

(1)       In acknowledgement of Cabinet’s consultation on the future Capital Programmes.

 

(2)       In acknowledgement of the current position with regard to the 2016/17 and 2017/18 Capital Programmes.

 

 

618     INITIAL HOUSING REVENUE ACCOUNT BUDGET PROPOSALS 2017/18 (MD) -

 

As in previous years the Scrutiny Committee was now considering this matter as the lead Scrutiny Committee overseeing the Council’s initial budget process.

 

The Committee considered the below table which compared the original budget with the proposed amended budget.

 

 

 

2016/17

Original   Budget

2016/17   Proposed Amended

Budget

Variance   Favourable (-) Adverse (+)

 

£'000

£'000

£'000

Housing Revenue Account

(22)

768

+790

 

The net operational budget for 2016/17 had changed from a surplus of £22,000 to a deficit of £768,000.  A review of the current budget had found potential net savings for the year of £2.51m.  The main reason for this was that the estimated increase in the provision for bad and doubtful debts had been reduced by £1.018m as the Universal Credit and its effects were not likely to impact on Housing rent collection in 2016/17.   There had been little increase in the actual level of rent arrears in this financial year and it was not anticipated that the provision would need to be substantially increased.  In addition, there had been a reduction in the Repairs and Maintenance budget of £400,000 which partly related to an external painting programme which was now due to commence in 2017/18 following the completion of the WHQS external works programme.  A reduction in Capital Financing Costs of £649,000 was anticipated, there had been an adjustment in central recharges resulting in a decreased charge of £269,000 and the projected charge for Council Tax at void properties was £40,000 less than anticipated.  Other budgets that were anticipated to outturn with an underspend were Incentive to Move £20,000, survey costs £65,000, compliance costs £42,000 and software costs of £40,000.  There were other minor reductions of £68,000.  These savings had been offset by a reduction in expected rental income from dwellings of £101,000. 

 

The balance on the HRA reserve brought forward as at 1st April, 2016 was £1.468m and was higher than required.  In order to minimise the amount of unsupported borrowing required in year to fund the Housing Improvement Programme, it was prudent to use HRA revenue reserves up to a minimum balance.  The level of Capital Expenditure funded from the Revenue Account (CERA), had been recalculated at £6.231m, which was an increase of £3.3m.  This would leave a balance on the HRA reserve at year end of £700,000, which was in line with the minimum amount required which had been assessed as at least £600,000.

 

The Budget Strategy for 2017/18 outlined that, in order to establish a baseline, services should prepare revenue budgets for next year based on the cost of providing the current level of service and approved policy decisions.  This meant that the cost of price increases and pay awards should be included.

 

Due to the nature of the HRA in that it was ring fenced and any growth had to be funded from the balance no cost pressures had been formally identified.

 

The proposed 2017/18 budget was set out at Appendix 1 to the report.

 

The charges for rent and other services provided by the Housing Service were reviewed annually.  These would be subject to a future report.   Set out below was a table summarising the original budget for 2016/17, with the proposed budget for 2017/18:

 

2016/17

Original

Budget

Inflation /

 Pay Award

Committed

Growth /

(Savings)

Estimated Rent

Increase

Increase/ (Decrease) in CERA

2017/18

Proposed

Budget

£000

£000

£000

£000

£000

£000

(22)

136

(138)

(579)

700

97

 

A provision for general inflation included an allowance of 1% pay awards in 2017/18.  1% increase in pay amounted to approximately £26,000.

 

The net saving of £138,000 was due to a number of factors: 

  • An increase in Capital Financing charges of £223,000 in relation to unsupported borrowing being taken out in 2016/17 to fund the Housing Improvement Programme.
  • An increase in staff costs for increments and staff changes of £79,000.
  • A reduction of £290,000 in central recharges.
  • A reduction in the cost for Council Tax at void properties of £67,000.
  • Various other minor savings of £83,000.

An increase in Capital Expenditure from Revenue Account (CERA) to finance the Housing Improvement Programme of £700,000 had been assumed.  The amount of revenue contribution required was dictated by available revenue balances and the value of the Housing Improvement Programme.  Adjusting the level of CERA by this amount would leave a balance on the HRA Reserve of £603,000, which was in line with the current minimum requirement.


As in the case of the other initial budget proposals considered by this Scrutiny Committee, any comments by the Council’s Scrutiny Committees were required to be made by no later than 13th December, 2016.  The Budget Working Group would consider any subsequent recommendations and would be submitted to Cabinet to enable its final Initial Budget proposals by no later than 20th February, 2017. 

 

Having considered the report, it was subsequently

 

RECOMMENDED -

 

(1)       T H A T the revised Housing Revenue Account budget for 2016/17 be noted.

 

(2)       T H A T the Initial Housing Revenue Account Budget Proposals for 2017/18 be noted.

 

Reasons for recommendations

 

(1)       In order to monitor the amended Housing Revenue Account Budget.

 

(2)       To inform Cabinet of the Scrutiny Committees’ deliberations before making their final proposal on the Initial Housing Revenue Account Budget for 2017/18.

 

 

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