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SHARED REGULATORY SERVICES JOINT COMMITTEE

 

Minutes of a Special meeting held on 17th December, 2015.

 

Present:

Representing Bridgend County Borough Council – Councillor R. Williams.

Representing Cardiff Council –  Councillors D. De’Ath (Chairman) and Ms. J. Parry.

Representing the Vale of Glamorgan County Borough Council –  Councillor A.G. Powell (Vice-Chairman).

 

 

(a)       APOLOGIES FOR ABSENCE –

 

These were received from Councillor C.E. Smith (Bridgend County Borough Council) and Councillor Ms B.E. Brooks (Vale of Glamorgan County Borough Council).

 

 

(b)       DECLARATIONS OF INTEREST –

 

No declarations were received.

 

 

(c)        DRAFT BUDGET PROPOSALS 2016/17 (HOF/S151) –

 

Consideration was given to the proposed draft Budget for 2016/17.

 

The current Joint Working Agreement (JWA) stated that the Joint Committee should agree the draft Proposed Budget, by 31st December each year prior to the commencement of the Financial Year to which the Proposed Budget relates and that the Proposed Budget should be submitted to each of the Authorities for approval.

 

Included as part of the JWA was a Business Plan which set out the detailed financial model that sits behind the Shared Regulatory Service and gave projections of expenditure for the first three years of its operation.  Accordingly the Proposed Budget had been drawn up to reflect the applicable Business Plan.

 

The Service was split into Core services and Authority Specific services.  The Core service was operated on behalf of all Authorities and the JWA outlined the agreed percentage contribution to be made.  Authority Specific services were paid for by individual Authorities and cover Pest Control (Vale), Additional Licensing (Vale), Night Time Noise Pollution and HMO Cathays and Plasnewydd (Cardiff), Licensing (All) and Port Health (Cardiff), Student Liaison (Cardiff), Kennelling and vets’ fees (Bridgend and Vale) and Illegal Money Lending Unit (IMLU) is fully grant funded (via Cardiff).

 

The Head of Finance drew the Committee’s attention to the Budget assumptions, the largest element of the budget was staffing.  Some 170 staff transferred from Bridgend and Cardiff Councils to the Vale of Glamorgan Council on 1st May, 2015 to create the Service.  The post transfer restructuring consultation process had been completed between June and August, 2015, as part of the refining of the new staffing structure and the finalising of job descriptions.  Populating the new structure was nearing completion, however, it had not yet been finalised prior to the production of the Proposed Budget for 2016/17 and therefore, some assumptions based on the original Business Plan for the service had been made regarding certain levels of the structure and the level of salary protection required as part of the TUPE provisions.  All costs relating to redundancy and the organisational restructuring would be shared between the Partner Authorities on the agreed percentage basis after a period of 12 months following the commencement date of 1st May, 2015.  Any costs occurred during the first 12 months after the commencement would be borne by the Authority with whom the relevant employee was employed immediately prior to the transfer date.

 

In line with these Business Plan assumptions, the projections included an assumed pay award of 1% for 2016/17 and no increase for other price inflation.  In addition, the increase in employers’ National Insurance contributions which would take effect from April 2016, which for this service was in the region of £125,000  (excluding IMLU which is 100% grant funded) had been taken into account   

 

In line with the Joint Working Agreement, the population figures had been updated to match the population figures as quoted in Welsh Government's Green Book.  No additional savings had been included in the Proposed Budget for 2016/17, as it was considered that the new service required a period of consolidation to allow its operation to be assessed prior to the identification of extra savings.

 

In regard to proposed financial contributions, the Head of Finance indicated that the Business Plan included as part of the JWA, projected that the gross expenditure for the Core services for 2016/17 would be £6.445m.  The gross expenditure of the Core services for 2016/17 was now projected to be £6.173m.  The reduction of £0.272m was due in part to now treating Student Liaison and Additional Licensing as Authority Specific budgets (for Cardiff and Vale respectively).  The original Business Plan allocated savings to the Authority Specific budgets.  However, as many were self-funding, those savings would not materialise and consequently had now been fully allocated to the core budget where they would be achievable.  The contributions due from each Authority for Core services were set out below using the population basis of apportionment as agreed in the JWA, taking account of the Welsh Government's Green Book 2015/16.

 

Core Services

 

Original

Proposed

Variance

Authority

Updated   %

£000

£000

£000

Bridgend

22.47

1,454

1,387

67

Cardiff

57.23

3,676

3,533

143

Vale of Glamorgan

20.30

1,315

1,253

62

Total Core Services

 

6,445

6,173

272

 

The Business Plan also projected that the gross expenditure for Authority Specific services for 2016/17 would be £2.392m.  The gross expenditure on Authority Specific services for 2016/17 was now projected to be £2.610m.  The increase of £218k was due to the inclusion of Student Liaison (Cardiff) and Additional Licensing (Vale) as well as reversing the original apportionment of savings to the Authority Specific budgets, as outlined above.  Grant funding for the IMLU service has been reduced by some 25% for 2016/17 and by costs which would be incurred and claimed directly from the grant by Cardiff. The resulting in-scope IMLU budget was estimated at £379k.  The charge to each Authority for these services was set out below:

 

Authority Specific Services

 

Original

Proposed

Variance

Authority

 

£000

£000

£000

Bridgend

 

318

360

-42

Cardiff

 

1,642

1,698

-56

Vale of Glamorgan

 

432

552

-120

Total Authority Specific Services

 

 

 

2,392

 

2,610

 

-218

 

She referred to the more detailed breakdown of Authority Specific budgets as set out in Appendix 1 to the report.  The analysis showed how each service was funded, where they were grant funded or recovered via fees; assumptions would be made regarding additional income to cover the increased costs.  Some services were however not externally funded so Authorities would need to net off savings made in the core service by these amounts.

 

The Business Plan also included projections for implementation costs that would be incurred during 2016/17 which totalled £127k.  The total cost of implementation in 2016/17 was now projected to be £404k.  The difference of £277k was due to re-profiled ICT expenditure for the project, mainly relating to the new £400k software solution for the Shared Service (which had originally been profiled to be spent in 2015/16) which would now be spent over 2016/17 and 2017/18, at an estimated £200k each year.  As such, Partner Authorities should anticipate a further charge in 2017/18, based upon the agreed allocation basis. 

 

The contributions due from each Authority for implementation costs for 2016/17 were set out below, using the population basis of apportionment as agreed in the JWA, and also reflected the Welsh Government's Green Book 2015/16.

 

Authority

Original

Proposed

Variance

 

£000

£000

£000

Bridgend

29

91

-62

Cardiff

72

231

-159

Vale of Glamorgan

26

82

-56

Total Implementation Costs 2016/17

127

404

-277

 

In terms of the next steps, subject to a decision by the Joint Committee to approve the Proposed Budget, each Partner Authority would be requested to approve their respective contributions for 2016/17.

 

In the event of the Proposed Budget not being approved by any Authority, the Joint Committee would be required to meet as soon as practicable to formulate a revised budget for approval by the Partner Authorities.

 

If the revised budget was not approved by all of the Authorities by 31st March, 2016, the Authority or Authorities who do not approve the revised budget would be treated as if they had given notice of intention to withdraw from the Joint Working Agreement.

 

In addition to the above, the Joint Committee also considered the resource implications contained within the report, the implications of such, were summarised below for 2016/17 and outlined the gross expenditure budget as referred to above. The figures excluded implementation costs, as referred to early in the minute:

 

Authority

Original

£000

Proposed

£000

Variance

£000

 

Bridgend

1,772

1,748

24

Cardiff

5,318

5,231

87

Vale of Glamorgan

1,747

1,805

-58

Total Gross   Expenditure 2016/17

8,837

8,783

54

 

An analysis of anticipated income was also provided in order to ensure that increased Authority Specific budgets could be offset by income. The following table summarised the 2016/17 net position (excluding implementation costs) once estimated income for each Authority had been included:

 

Authority

Original

Proposed

Variance

 

£000

£000

£000

Bridgend

1,387

1,374

13

Cardiff

3,047

3,023

24

Vale of Glamorgan

1,374

1,410

-36

Total Net   Expenditure 2016/17

5,808

5,807

1

 

The Joint Committee was informed by the Head of Finance that in regard to predicting Licensing income, there was an element of uncertainty as licenses could be purchased up-front to cover one, three or five years.  The Licensing income position would be reviewed in order to ensure that full cost recovery was achieved and fee setting reports would be submitted to each Partner Authority Licensing Committee for consideration. 

 

When the Proposed Budget was approved by each Authority in writing, then it would become the Approved Budget for the Financial Year to which it related.

 

RESOLVED –

 

(1)       T H A T the Proposed Budget for 2016/17 be approved.

 

(2)       T H A T Individual Authorities be requested to confirm their approval in writing of the Proposed Budget 2016/17 for the Joint Shared Service, by no later than 10th March, 2016.

 

Reason for decisions

 

(1)       To approve the Proposed Budget in accordance with the requirements of the JWA

 

(2)       To allow the Shared Regulatory Service Budget to be approved prior to the commencement of the financial year 2016/17.

 

 

 

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