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SCRUTINY COMMITTEE (CORPORATE RESOURCES)

 

Minutes of a meeting held on 10th February, 2015.

 

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

 

Also present: Councillor N. Moore.

 

 

866     APOLOGIES FOR ABSENCE – 

 

These were received from Councillors K. Hatton and H.J.W. James.

 

 

867     MINUTES – 

 

RECOMMENDED – T H A T the minutes of the meeting held on 20th January, 2015 be approved as a correct record.

 

 

868     DECLARATIONS OF INTEREST –

 

There were no declarations received.

 

 

869     ENERGY COMMISSION RE-INVESTMENT SCHEME (REF) –

 

At its meeting on 26th January, 2015, Cabinet had approved plans to establish an Energy Fund for investment into energy and water efficiency projects within Council buildings.  The Managing Director had been granted delegated authority in consultation with the Leader to develop detailed criteria and conditions for use of the Energy Fund in order to improve the energy and water efficiency of Council buildings.

 

The report outlined that the Council was obligated to participate in the Carbon Reduction Commitment (CRC) scheme.  This scheme would require the Council to annually report on the energy consumption and associated carbon dioxide emissions within its non-domestic buildings and pay for each year an associated amount.  In 2013-14 the amount paid was £126,000 whereas in 2014-15 the amount would be around £240,000 as street lighting was included in Phase 2 of the CRC. 

 

The Council’s carbon management strategy and implementation programme was currently overseen by the Carbon Management Group which reported through the Operational Manager (Property) to the Sustainable Development Working Group.  In addition the Council, with Local Service Board partners, had agreed to collectively reduce emissions from its buildings in the Vale by 3% per annum.  This was in line with the Welsh Government national targets for a 3% reduction in emissions per annum. 

 

The Council satisfied the mandatory qualifying criteria for the CRC scheme and submitted its first CRC report in July 2011, covering the 2010-11 financial year.  The scheme encouraged participants to take up voluntary Automatic Meter Reading (AMR) facilities in order to improve the accuracy of building and to benefit via the “early action metric†within the CRC scheme.  The Council proceeded with the installation of the AMR which had helped with the provision of more robust data concerning energy use.

 

The cost of the AMR for gas meters was 50p per day, whilst for electricity meters the cost varied depending on the profile class for the meter, but the average cost was approximately £70 per annum. 

 

It had only been since AMR had been installed that enough quality data had been collected to produce reasonably accurate annual energy use figures.  This had helped to inform a range of energy savings schemes funded through the Salix finance arrangement.  The Council had participated in this arrangement since 2009 which provided interest free loans for qualifying energy efficient projects for Council buildings.

 

Since June 2009 the Council had spent over £700,000 from the Salix fund with a further £110,000 of projects agreed and awaiting installation.  In addition, a further £100,000 worth of projects considered viable were awaiting agreement from budget holders.  The projects installed or awaiting installation were predicted to save the Council £195,000 per year in fuel costs and reduce emissions by 1,330 tonnes per annum.  The lifetime savings from Salix match funding measures was predicted to be £4.2m and 28,500 tonnes of carbon dioxide emissions. 

 

A full list of the type of projects that the Energy Fund could be used for was attached at Appendix 1 to the report.  Appendix 2 attached to the report contained budget figures and expected savings for an initial list of projects that, upon approval, could be progressed as funds would allow.  Completion of the schemes would result in the reduction of 1% per annum in carbon dioxide emissions for the Authority and around a £26,000 annual reduction in electricity costs. 

 

The Energy Fund could also be used to provide additional discretionary funding for projects that did not quite achieve the five year payback required to attract a Salix loan but still achieved an eight year payback as dictated by the rules within the Salix scheme.  This would allow more flexibility in the type of energy efficiency projects taken forward.

 

A key driver in determining which projects to fund would be those that reduced energy consumption figures and met the Council’s targets for reducing carbon emissions.  Another factor in determining which projects to fund would be to spread the benefits across a number of different buildings in recognition of the contribution made to the fund by a number of services.

 

A Committee Member queried whether the Energy Manager could clarify the Council’s position in respect of the Solar Schools Project which had been rolled out across the whole of the United Kingdom, but so far only two schools in Wales had signed up.  In response the Committee was advised that it was for individual schools to apply to join the Solar Schools Project.  Our Legal Department had reviewed the schemes and was satisfied that our schools could participate.  Any funds raised by schools via the Solar Schools Project could help in attracting funding from the 'Energy Commission Re-Investment Scheme’.

 

In answer to a Member’s question regarding whether the strategy could be applied to the transport fleet within the Vale of Glamorgan, the Energy Manager informed Members that the main principle of the reinvestment scheme was around achieving savings through surcharges placed upon energy bills specific to buildings.  However, the Council was open to any ideas and recommendations as part of the plan and these would be considered as the scheme progressed. 

 

The Chairman, referring to the potential use of virtual computers detailed within Appendix 1 of the covering report, asked if officers could provide a bit more clarification around this.  The Energy Manager informed Members that the use of virtualisation for computers was a specialist IT function that would help cut down the amount of energy consumed by computers which would not be required to run at all times.  The Committee was also asked to note that certain functions such as the updates and backing of computer systems was carried out overnight during which the energy tariffs were at their most affordable. 

 

In answer to a Member’s comments regarding the cost benefits of building insulation and the amount of money lost to water leaks, the Energy Manager advised that water meters were the main part of the energy efficiency project and that unreported water leaks would cost the Council considerable amounts of money.  He also advised that individual schemes within the project would usually have five to seven year payback periods and this would give the Council the ability to evaluate and change schemes as new technology became available. 

 

A Committee Member enquired whether the Council planned to use new fuel cell combined heat and power units commonly known as Blue Gen units.  In response the Committee was advised that Rhondda Cynon Taff Council had trialled the use of these Blue Gen units in one of its buildings and it had been reported that this was working extremely well and that the use of these would be considered by the Council in due course. 

 

The Chairman commented that there was the opportunity to use smart meters within the Welsh Housing Quality Standard improvement scheme and he enquired whether there was any potential for these smart meters to be sponsored by suppliers in order to bring the costs down.  The Committee noted that as the Council was fully funding the installation of smart meters, this would be extremely costly and that the most likely option would be a partnership arrangement with a utility company.  This would be something that the Council would enquire about and consider. 

 

A Committee Member queried whether improvements to energy consumption were part of the negotiation process for the development of new building projects.  In response, Members were informed that there were opportunities to negotiate with developers but that this was something that was not currently undertaken.  A number of cases had been reported within England in which S106 monies had been used to progress energy efficiency projects. 

 

The Chairman thanked the Energy Manager for his report and the Committee

 

RECOMMENDED –

 

(1)       T H A T the Scrutiny Committee endorse the Cabinet’s decision in delegating authority to the Managing Director for the use of the Energy Fund to improve the energy and water efficiency of Council buildings.

 

(2)       T H A T the Committee receive six monthly updates around the Investment Scheme and the projects contained therein.

 

Reasons for recommendations

 

(1)       To provide the Committee’s endorsement for the Cabinet decision.

 

(2)       In order to keep the Committee abreast of developments of energy saving projects devised by the Council.

 

 

870     RESHAPING SERVICES – A NEW CHANGE PROGRAMME FOR THE COUNCIL (REF) –

 

Cabinet, at its meeting on 26th January 2015, was provided with an update on the development of the Reshaping Services Programme.  The report had been referred to the Scrutiny Committee for the purpose of consideration.

 

On 3rd November 2014 Cabinet had approved the Reshaping Services Strategy (the Strategy).  The Strategy was developed following a programme of consultation and engagement with key stakeholders groups, including briefing sessions for Members and officers.  The Strategy provided a framework for the Council to work within for the next three to five years.  The implementation of the Strategy would be consistent with the Council’s project management toolkit, including consideration of sustainability, equality and legislative requirements. 

 

The latest financial projections estimated that the Council would need to find savings of over £7m in 2015/16 and approximately £24.6m over the next three years.  A further sum of £6.6m would need to be found to balance the various budgets for the period to 2017/18.  This would be a major challenge for the Council, for which the Reshaping Services Programme aimed to help address.  The main aim of the Strategy was to reshape the Council to enable it to meet the future needs of citizens of the Vale of Glamorgan within the context of unprecedented financial challenges.  The objectives would be:

  • To identify alternative ways of delivering services which provided better outcomes for citizens and / or more efficient means of delivery
  • To meet the future financial challenges while mitigating the impact of cuts on service users
  • To develop the Council and its partners to ensure that they were able to meet future challenges.

Stage One of the challenge process was overseen by the Challenge Group that comprised the Leader, Deputy Leader and portfolio holder of the service area.  The Challenge Group was supported by the Managing Director, Head of Finance, Head of Human Resources, Head of Performance and Development, the relevant Service Director and Executive Director of the Vale Council for Voluntary Services. 

 

The challenge process was summarised as below:

 

Stage One

  • Service Area Baseline Assessments completed for all services
  • Challenge Group sessions
  • Scrutiny and engagement on identified opportunities
  • Initial proposals to Cabinet and Scrutiny Committees.

 

Stage Two

  • In-depth assessment of opportunities in tranches of projects
  • Approval and scrutiny of business cases.

 

Stage Three

  • Implementation, monitoring and review.

 

The Challenge Group would meet to review all Council services and identify proposals for those services which should progress to Stage Two of the process.  Cabinet approval would subsequently be sought for both the development of the detailed business cases at Stage Two and for those projects which proposed to move to Stage Three (implementation).  The Challenge Group met during September – November 2014 and it was intended that the challenge process would be repeated in September – November 2015. 

 

The Council’s Corporate Management Team would be responsible for the operational delivery of the Reshaping Services programme.  Service Directors and Heads of Service would be asked to used their expertise to challenge, review and identify alternative means of achieving objectives.  Their role would be to champion change and not to instinctively defend the status quo. 

 

Stage One of the challenge process would include the completion of Service Area Baseline Assessments and cost centre analysis documents would be completed by Service Directors for each service area.  The documents would highlight the current performance, costs, risks, trends and opportunities as identified by Council services themselves.  The cost centre analysis documents included the existing savings targets which were contained in the initial budget proposals.  These documents were summarised within the covering report at the following appendices:

  • Appendix B – Development Services
  • Appendix C – Learning and Skills
  • Appendix D – Resources
  • Appendix E – Social Services
  • Appendix F – Visible Services and Housing.

The Service Area Baseline Assessment documents and cost centre analysis documents would be presented to the Challenge Group by the relevant Service Director.  This information, in addition to the Group’s discussion and experience, would be used to inform the development of the proposals outlined in the covering report as to how the programme should proceed.

 

The report highlighted that the Challenge Group had identified a series of opportunities that would benefit from a corporate-wide response and these would be progressed as corporate workstream projects as follows:

  • Town and Community Councils
  • Demand management
  • Effectiveness of spend
  • Income generation.

In addition to the corporate projects workstream, the Challenge Group considered specific service areas for possible projects.  The Challenge Group used the information contained in the Service Area Baseline Assessments, the cost centre analysis and the discussion arising as part of the challenge process in order to identify those services that would progress to Stage Two of the Reshaping Services process as individual service reviews.  In identifying the services to be progressed to Stage Two, the Challenge Group considered the evaluation criteria outlined in the Strategy which was summarised by the following aspects:

  • Existing service analysis
  • Opportunity analysis
  • Financial appraisal
  • Impact analysis.

Appendix I of the covering report described the various elements of the proposed initial overall Reshaping Services Programme.

 

Whilst the service areas identified for inclusion in tranches 1 and 2 had been selected on the basis of the initial high level assessment of their ability to benefit from reshaping via an alternative method of service delivery or to generate efficiencies, the business cases developed at stage 2 would consider the entirety of the opportunities offered within each of the service areas.  The business cases would therefore appraise the potential for alternative methods of service delivery, the ability to generate efficiencies as well as those aspects of reshaping services that were to be progressed as a corporate workstream project.  In this way, a complete and comprehensive review of the service areas would be undertaken. 

 

The challenge process had been designed to be repeated throughout the duration of the programme to ensure ongoing and rigorous challenge of all service areas on a continual basis.  This process would allow lessons learned from projects in the Vale of Glamorgan and elsewhere to inform future tranches of projects.

 

It was intended that the Challenge Group would therefore meet again next for the second round of challenge sessions in September 2015.  The initial proposals resulting from these challenge sessions would form the third tranche of services to be reshaped and would be defined by February 2016 for Cabinet’s consideration.

 

A Committee Member, referring to alternative models of service delivery, queried the potential for Town and Community Councils or the Voluntary Sector in taking over the running of certain services.  In response, the Head of Performance and Improvement advised Committee that this was a difficult question to answer since the Councils in question had not yet been engaged in detail.  This was to be a corporate review and its outcomes were awaited. 

 

Further to this, the Committee Member questioned the level of engagement with Town and Community Councils and whether appropriate channels were being used.  The Committee noted that there were over 20 Town and Community Councils within the Vale of Glamorgan, all of which would have different views and opinions.  The Community Liaison Committee would not be the only forum in which the Reshaping Services Strategy would be discussed and consultation would be made with each individual Town and Community Council as the process progressed. 

 

The Committee then discussed the potential for a Town and Community Council representative to be appointed to the Challenge Group that would be overseeing the recommendations contained within the Reshaping Services Strategy.  The Committee questioned as to how the appointment would come about as it may be difficult to obtain a consensus around the appointment of a representative.  The disparity in size of some Town and Community Councils was also an issue, with some more able to provide services than others. 

 

The Committee also discussed the potential for a sub-group of Members from the Community Liaison Committee to look at and approve the appointment of a representative, the Committee considered that this point should be referred to Cabinet for further consideration and for Cabinet to refer this issue on to the Community Liaison Committee.

 

The potential for One Voice Wales to provide a representative was considered, but the Committee was not sure that they had enough intimate knowledge of the Vale of Glamorgan in order to provide the necessary level of representation. 

 

Referring to certain service areas within the Appendix in which no savings targets had been indicated, the Committee was advised that any extra savings would be on top of those already identified.  Further to this the Head of Performance and Improvement provided further explanation around the process used within the current stage of the Reshaping Services Strategy.  He advised that Heads of Services and Directors had been asked to conduct a 'baseline assessment' for the services for which they were responsible.  The appendices were a summary of what those officers had said as part of their baseline assessments.  The next stage would involve full reviews which would test all the assumptions made and possibly come up with different conclusions as to what changes and savings were possible. 

 

A Committee Member then raised a number of points and questions.  The first question related to Appendix B (Page 1) and was around whether there was any potential double counting within the savings targets identified for Disabled Facilities Grants.  In response the Committee was advised that this was not the case and that the savings identified would be on top of those already agreed.  The Member’s second query was in asking as to what exactly was Legacy Leisure as mentioned in Appendix B (Page 8).  In reply the Committee noted that this was a trust set up by Parkwood in order to achieve savings in the running of the local leisure centres. Negotiations for which were still ongoing, but there were potential savings to be apportioned to the Council.  Finally, the Committee Member commented that from his perspective, there were two quick wins and these related to the enforcement of car parking fees and around the potential for MOT certificates to be issued for motor bikes. 

 

The Chairman queried the reasoning behind the proposal around not locking local parks between certain times. He stated that this could be questioned and that, in his view, this could cause potential issues such as an increase in antisocial behaviour.  In response to this, the Head of Performance and Improvement advised that Members would have the opportunity to challenge any recommendations made as a result of the reviews when they were presented in due course. 

 

A Committee Member, in querying the cessation of the supplying of waste management materials at Civic Offices Reception, was advised that this was needed in order to reduce the footfall of people visiting the Civic Offices.  There were opportunities for waste management materials to be collected through other receptions and Council facilities such as libraries.  The potential for vending machines was also being explored and an evaluation would be conducted in due course.

 

Having considered the report, the Committee

 

RECOMMENDED –

 

(1)       T H A T the views and observations of the Scrutiny Committee be referred to Cabinet.

 

(2)       T H A T Cabinet consider the possibility of the Town and Community Councils appointing a representative to sit on the Challenge Group and if appropriate for this to be referred onto the Community Liaison Committee.

 

Reasons for recommendations

 

(1)       In order for Cabinet to receive the views and observations of the Scrutiny Committee (Corporate Resources).

 

(2)       So that Cabinet can consider the level of representation for Town and Community Councils within the process of Reshaping Services.

 

 

871     EMPLOYEE PAY POLICY 2015/16 (REF) –

 

With the exception of the Scrutiny Support Officer and the Web Editor, all officers vacated the room during consideration of this item.

 

The Leader, in presenting the report, advised that on 9th February 2015, Cabinet had endorsed the Council's Pay Policy for 2015/16 as required by the Localism Act 2011 prior to its submission to Council for consideration and approval. 

 

The Council had a statutory requirement under the Localism Act 2011 to prepare a pay policy statement for each financial year.  The first statement was approved by Council in March 2012.

 

The proposals set out in the report raised a number of potential conflicts of interest for members of the Council's Corporate Management Team.  In view of this, the Director of Employment from the Welsh Local Government Association (WLGA) was also in attendance at the meeting to answer any questions or points of clarification that were required.

 

The Policy had been produced on the basis of statutory guidance, advice from the WLGA and guidance from Welsh Government and provided a framework for ensuring that employees were rewarded fairly and objectively, in accordance with the service needs of the Council and that there was openness and transparency in relation to the process.

 

The Pay Policy for 2015/16 attached at Appendix A to the report had been updated to incorporate the following:-

  • Updated guidance from Welsh Government as issued in February 2014
  • Changes as prescribed by the Local Authorities Standing Orders (Wales) (Amendment) Regulations 2014 which took effect from 1st July, 2014
  • The details of a national pay award for employees covered by the National Joint Council for Local Government Services
  • The outcome of a local collective agreement in relation to the removal of telephone allowances and the phasing out of remaining essential car user allowance payments.

In addition, paragraphs 6.19 to 6.25 of the Pay Policy set out the detail of remuneration arrangements for staff undertaking duties in respect of elections and referenda / ballots.

 

The Policy also reflected updated guidance from Welsh Government as issued in February 2014 and changes prescribed by the Local Authorities Standing Orders (Wales) (Amendment) Regulations 2014 which took effect from 1st July, 2014.

 

A particular change, as set out in the Local Authorities (Standing Orders) (Wales) (Amendment) Regulations 2014, was the introduction of the requirement that: 'The relevant authority must determine the level, and any change in the level, of the remuneration to be paid to a chief officer'.

 

The impact of the amendment was that all changes to chief officer pay must be voted on by Full Council, not just those that were determined locally.  This included any pay rises that had been nationally negotiated by the Joint Negotiating Committee (JNC) and these now could not be paid, unless and until, they had been agreed by Full Council.

 

The Council’s Pay Policy had to be approved and re-published by 31st March, 2015 in order to comply with the provisions of the Localism Act.

 

The Policy would be updated as appropriate to take into account any changes to the Council's senior management structure resulting from the Managing Director's recent decision to retire from her post in November 2014.

 

The Committee raised some points for clarification in relation to the Pay Policy.  The first related to paragraphs 8.3 and 8.4 which appeared to contradict each other.  The Committee queried whether greater clarification could be provided within the report In order to detail the differentiation between the maximum amount of £30,000 redundancy payment shown within paragraph 8.3 and the £100,000 highlighted within paragraph 8.4.  In answer to this query, the Committee was advised that the figure within paragraph 8.3 referred to Council Policy on discretionary payments while 8.4 referred to Welsh Government guidance for which Full Council approval was needed in cases with severance packages of over £100,000.  This related more to the strain imposed upon the pension fund and not to the amount paid to an individual. 

 

The Committee also asked for clarification around paragraph 10.1 that highlighted the minimum spinal pay point.  Members were advised that paragraphs 10.1 and 10.2 referred to the removal of the bottom pay scale which was based on the ratio pay differentiation between the lowest paid and the Managing Director.  The Committee advised that it would be appropriate for the Pay Policy to show a comparison to last year’s pay scales to those currently proposed.

 

A Committee Member, in referring to paragraph 6.9, commented that in referring to 'annual cost of living pay increases’ it would be prudent to also mention that this could be affected be deflationary pressures.

 

RECOMMENDED – T H A T the changes to the Council’s Pay Policy for 2015/16 be endorsed subject to the amendments detailed blow by the Scrutiny Committee:

 

'The Committee raised some points for clarification in relation to the Pay Policy.  The first related to paragraphs 8.3 and 8.4 which appeared to contradict each other.  The Committee queried whether greater clarification could be provided within the report In order to detail the differentiation between the maximum amount of £30,000 redundancy payment shown within paragraph 8.3 and the £100,000 highlighted within paragraph 8.4.  In answer to this query, the Committee was advised that the figure within paragraph 8.3 referred to Council Policy on discretionary payments while 8.4 referred to Welsh Government guidance for which Full Council approval was needed in cases with severance packages of over £100,000.  This related more to the strain imposed upon the pension fund and not to the amount paid to an individual. 

 

The Committee also asked for clarification around paragraph 10.1 that highlighted the minimum spinal pay point.  Members were advised that paragraphs 10.1 and 10.2 referred to the removal of the bottom pay scale which was based on the ratio pay differentiation between the lowest paid and the Managing Director.  The Committee advised that it would be appropriate for the Pay Policy to show a comparison to last year’s pay scales to those currently proposed.

 

A Committee Member, in referring to paragraph 6.9, commented that in referring to 'annual cost of living pay increases’ it would be prudent to also mention that this could be affected be deflationary pressures.'

 

Reason for recommendation

 

In order to pass on the Scrutiny Committee’s views and observations to Cabinet.

 

 

872     TREASURY MANAGEMENT (S151O) –

 

The Head of Finance presented the report, the purpose of which was to apprise Members of the Council’s treasury management operations for the period 1st April to 31st December 2014 and to submit for consideration the proposed 2015/16 Treasury Management and Annual Investment Strategy.

 

Subject to the Scrutiny Committee’s comments, the matter would then be forwarded to Cabinet and thereafter Full Council for approval. 

 

The proposed Treasury Management and Annual Investment Strategy for 2015/16 was attached at Appendix 1 to the report.  The Treasury Management Strategy itself covered a rolling period of three years and was intended to include the Medium Term Financial planning process.  The Investment Strategy covered the next financial year.  The document also included a number of statutory Prudential Indicators that may be used to support and record local decision-making. 

 

Interim Report

 

Insofar as the Council’s treasury management operations entered into for the period 1st April to 31st December 2014 were concerned, all activities were in accordance with the Council’s approved strategy on Treasury Management.  The following table sets out the monies borrowed / repaid during the period.

 

 Loan Type

Opening Balance

        Received

Repaid               

Closing Balance

 

01/04/2014

 

 

31/12/2014

 

       £’000

       £’000

   £’000

         £’000

PWLB

 89,267

           0

   1,600

      87,667

Other Long Term Loans

  6,002

           0

          0

        6,002

Temporary Loans

    100

           0

0

          100

Totals

     95,369

           0

     1,600

      93,769

 

 

Loans borrowed from the Public Works Loan Board (PWLB) were intended to assist Local Authorities in meeting their longer term borrowing requirements.  The above loans were all at fixed rates of interest.  The rate paid on each loan was largely dependent upon the original duration of the loan and date taken out.

 

Other Long Term loans represent those non-PWLB loans that are repayable at least one year or more from the date they are advanced.  The bulk of this debt was represented by two market loans of £2,000,000 and £4,000,000.  The balance of this debt was local bonds.  These totalled £2,100 and were made up of small individual sums that were invested with the Council for a number of years by members of the public.  

 

Temporary Loans represent those loans that are borrowed for a period of less than one year. They are borrowed on notice. 

 

External interest at an average rate of 5.54% and amounting to £3,915,405 had accrued on these loans for the first nine months of 2014/15.

 

The Council had made the following investments for the period 1st April to 31st December 2014 and are set out below:-  

 

Borrowing

Institution

Opening Balance

    Invested

     Returned

Closing Balance

 

01/04/2014

 

 

31/12/2014

 

        £’000

     £’000

      £’000

         £’000

Local Authorities

    24,000

38,000

    (28,000)

      34,000

Debt Management

 

Account Deposit Facility

   71,550

1,135,200

(1,158,750)

      48,000

Totals

       95,550

1,173,200

(1,186,750)

       82,000

 

 

 

 

 

 

Interest, at an average rate of 0.30% and amounting to £208,828 had been accrued from these investments for the first nine months of 2014/15.

 

In referring to the Investment Strategy for 2015/16 the Head of Finance drew Members’ attention to paragraphs 4.3 detailing the authorised limits for external debt in respect of which it was recommended that the Council approves the authorised limits for its total external debt gross of investments as set out in Chapter 7 of the report.  In terms of financial forecasts, it was noted that Arlingclose continued to forecast the first rise in official interest rates in Quarter 3, 2015.  Their forecast had also detailed momentum in the economy, but inflationary pressures would be benign while external risks would have increased, which reduced the likelihood of immediate monetary tightening.  The pace of interest rate rises would be gradual and the extent of rises limited.  Short term running of gilt yields would be flatter due to the deteriorating Eurozone situation and an upward path in medium term was projected.  Estimated percentage rates for various options up to March 2018 were outlined on page 14 of the Strategy.

 

The Committee was also asked to note that in terms of investment funds, the Council’s in-house managed funds as at 30th March 2014 totalled £95m.  Of this figure, £30m could be treated as cash flow derived and therefore, was only used for short term investment options.  The remaining balance of £65m was made up of reserves, funds, etc. and it was intended that some £35m of these reserves would be spent by 31st March 2018.  Therefore, the estimated net available balance of £30m (£65m less £35m) could be viewed as core funds and could be considered for longer term investment (i.e. for periods greater than 364 days).  This represented the upper limit for principal sums invested over 364 days included in the table of Prudential Indicators at 7.1 to the Strategy report. 

 

The Committee was also asked to note in respect of debt rescheduling and repayments, the Public Works Loan Board allowed Authorities to repay loans before maturity and either pay a premium or receive a discount according to a set formula based on current interest rates.  The Council may take advantage of this and replace some high rate loans with new loans at lower interest rates or repay some higher rate loans by using investment balances where this would lead to an overall saving or reduce risk. 

 

The Chairman, referring to negative interest rates as experienced within the Swiss banking system, queried whether the Council was going to review the financial advice that it had received and, if so, would the Council amend the Strategy accordingly?  In reply, the Head of Finance stated that the Council would continue to pursue a prudent and safe approach to its Investment Strategy through placing security and liquidity ahead of yield.

 

RECOMMENDED –

 

(1)       T H A T the Treasury Management interim report for the period 1st April to 31st December 2014 be endorsed.

 

(2)       T H A T the amendment of the borrowing figure for the Authorised Limit for External Debt for 2014/15 included in the current Treasury Management and Investment Strategy to £262,000,000 be endorsed and the amendment and any comments forwarded to Cabinet and thereafter referred to Council for approval.

 

(3)       T H A T the amendment of the borrowing figure for the Operational Boundary for External Debt for 2014/15 included in the current Treasury Management and Investment Strategy to £244,000,000 be endorsed and any comments forwarded to Cabinet and thereafter referred to Council for approval.

 

(4)       T H A T the proposed 2015/16 Treasury Management and Investment Strategy be endorsed and any comments forwarded to Cabinet and thereafter referred to Council for approval, including the following specific resolutions as set out in the Strategy Action Plan:

  • The Authorised Limit for External Debt be set at £262,000,000 for 2014/15, £280,000,000 for 2015/16, £296,000,000 for 2016/17 and £300,000,000 for 2017/18.
  • The Operational Boundary for External Debt be set at £244,000,000 for 2014/15, £262,000,000 for 2015/16, £277,000,000 for 2016/17 and £281,000,000 for 2017/18.
  • The Section 151 Officer be given delegated authority within the total Authorised Limit and Operational Boundary as estimated for individual years to effect movement between the separately agreed limits for borrowing and other long term liabilities.
  • An upper limit is set on its fixed interest rate exposures for 2014/15 of £143,000,000, for 2015/16 of £251,000,000, for 2016/17 of £266,000,000 and for 2017/18 of £269,000,000 of its net outstanding principal sum on its borrowings / investments.
  • An upper limit is set on its variable interest rate exposures as an absolute value for 2014/15 of +/-£149,000,000, for 2015/16 of +/‑ £146,000,000, for 2016/17 of +/- £142,000,000 and for 2017/18 of +/- £138,000,000 of its net outstanding principal sum on its borrowings / investments.
  • An upper limit of £30,000,000 is set for total principal sums invested for over 364 days for 2014/15, 2015/16, 2016/17 and 2017/18.
  • The amount of projected borrowing that is fixed rate maturing in each period as a percentage of total projected borrowing that is fixed rate for 2015/16 be set as below:

 

Upper Limit

Lower Limit

Under 12 months

20%

0%

12 months and within 24 months

20%

0%

24 months and within 5 years

30%

0%

  5 years and within 10 years

40%

0%

10 years and above

100%

0%

  • The Prudential Indicators set out in paragraphs 4.1 and 4.2 in the Strategy attached at Appendix 1 to the report be approved. 

Reasons for recommendations

 

(1)       To present the Treasury Management Interim Report.

 

(2)       To endorse the amendment to the 2014/15 figure for Authorised Limit for External Debt.

 

(3)       To endorse the amendment to the 2014/15 figure for Operational Boundary for External Debt.

 

(4)       The Treasury Management and Annual Investment Strategy is prepared as required by the Local Government Act 2003.

 

 

873     WEBSITE DEVELOPMENT UPDATE (HPD) –

 

The Operational Manager, Customer Relations, presented the report, the purpose of which was to provide an update around the development of the Council’s website, digital access channels and Vale Connect service. 

 

The report outlined that the external website played a crucial role in achieving key objectives in the Council’s Connecting With Our Customers Strategy.  The report gave an account of actions taken to date to develop the website, including the use of social media as a key contact channel and the development of the Vale Connect e-mail subscription service, both designed to drive traffic to the website. 

 

The website had been reconfigured to promote transactional opportunities for customers.  Top tasks were prominently displayed on the home page, together with opportunity to pay bills, access Council Tax, report issues, request services and register for Vale Connect. 

 

Appendix 1 to the report detailed that between Quarter 1 2013/14 and Quarter 3 2014/15 average weekly visits to the website had increased by 21% from 23,483 to 28,542.  Over the same period average visits to the Welsh language site had increased from 87 to 104.

 

The Council’s understanding of how customers accessed the website had grown through improved reporting.  Appendices 1 and 2 detailed the make, types of devices and the manufacturers used by customers when access the Council’s website. 

 

The Committee noted that the experience of accessing the website using smartphones and tablets had been improved through the use of response design.  Content layout and menu presentation would now change depending upon what device was being used when viewing the site.  Customer relations had commissioned a 12 month pilot for a mobile app to allow customers to report service issues.  The IOS version of the application was available already through Contact1Vale.  The Android version was expected to be available in the week commencing 2nd February, with the Windows version following shortly afterwards.  A promotional campaign was planned for February and March 2015 to encourage take up and use of the application.

 

The Vale Connect e-mail subscription service was launched in 2013 with the aim of proactively providing customers with information about services that specifically interested them.  The service was used to promote the use of the website to access services and to minimise telephone calls to Contact1Vale, thereby delivering operational savings. 

 

The service was launched with 8,000 individual subscribers and had grown to over 23,000 by the end of December 2014.  This was detailed at Appendix 4 to the report.

 

Customers could subscribe to receive updates from 32 individual topics and as of December 2014, these amounted to 44,714 or 1.91 topic subscriptions per customer, shown under Appendix 5.

 

The report also outlined that social media had grown to become an important contact channel during 2014/15.  As of date the main corporate Twitter account had over 9,000 followers while the Facebook account had over 5,500 followers.  These channels were becoming increasingly important when answering customer queries and in being proactive around informing customers of events and incidents. 

 

The Operational Manager for Customer Relations then conducted a demonstration of the website in order to show the Committee how customers would access and navigate the Council’s website. 

 

A Committee Member, in querying the 8,000 individual subscribers who had signed up to the Vale Connect e-mail subscription service, asked whether this figure could be provided as a percentage of people who owned a laptop or personal computer in the Vale of Glamorgan.  In response the Committee noted that the Council did not wish to close off all channels of communication and that telephone calls and walk ins were still an important part of the customer engagement strategy.  The Vale of Glamorgan was one of the most connected regions in the UK in terms of website coverage, with 82% of the population either had access or were able to have access to broadband connection.  Also, the Vale of Glamorgan had one of the highest rates of mobile phone ownership in the UK and the level was increasing.  Information however was not available on a ward by ward basis, but this would change once the digital inclusion strategy was developed and progressed.  This would also allow the Council to identify target groups such as the older people’s population who may have been left out. 

 

The Chairman, in querying ways to improve the directiveness and responsiveness of the service, referred to the further use of the Oracle system, the use of which was highlighted at a recent Welsh Government event around the use of aircraft technology and modern techniques to improve information technology processes.  The Committee was advised that the Council, when considering which applications to use, would work with its IT department but there were opportunities for the Council to look at third party solutions if these presented real cost benefits.  Unfortunately, in most cases, the Council would not the necessary in-house expertise to determine which applications were most effective and a main stumbling block was the access to data which supported the rationale for its procurement.  The Council would need to determine if the numbers were high enough to inform whether the decision to proceed was appropriate.  The Council would also need to properly advertise and inform people of the benefits of such a system and the Members were advised that in some parts of the county the take-up and use of the system had been low as the service had not been actively promoted.

 

The Chairman thanked the Operational Manager for Customer Relations for the demonstration and in presenting the report and stated that the Committee would be keen to monitor the future success of the Council’s website.

 

RECOMMENDED – T H A T the progress made in developing digital services be noted.

 

Reason for recommendation

 

To ensure that the Council was meeting customer expectations regarding digital access to services.

 

 

874     REVENUE MONITORING FOR THE PERIOD 1ST APRIL 2014 TO 31ST DECEMBER 2014 (MD) –

 

The Head of Finance presented the report, the purpose of which was to update Members of the revenue expenditure for the period 1st April to 31st December 2014.

 

Overall, the current forecast for this year’s revenue budget was a favourable variance of £715,000. 

 

The Housing Revenue Account budget for 2014/15 was forecast to outturn on target.

 

Within Learning and Skills it was projected that by year end there would be an underspend of £288,000.  It had been proposed that at year end, any underspend would be transferred into the Libraries reserve to assist with the implementation of the Libraries Review.  The schools delegated budget was expected to balance as any under / over spend would be carried forward by schools.

 

School Improvement and Inclusion – it was anticipated that this area would overspend by £37,000 after offsetting adverse variances on the internal respite provision of £50,000, recoupment income of £38,000 and behaviour support of £22,000 with favourable variances on Additional Learning Needs staffing and resources of £73,000. 

 

For Service Strategy and Regulation, this service would outturn with a favourable variance of £13,000 due to efficiencies within the Business Support section. 

 

Strategic and Resources – this budget was anticipated to show an underspend of £189,000 after funding overspends on urgent repairs in schools and Special Education Needs transport had been taken into account.

 

The Children and Young People’s Partnership was also anticipated to show an underspend due to savings being implemented earlier and through temporary changes to the funding of childcare umbrella groups. 

 

In respect of the Libraries service, this was projected to show a favourable variance of £63,000 due to staff vacancies.  It was intended that any underspend would be transferred into the Libraries reserve to assist with the implementation of the Libraries Review. 

 

The Youth Service would outturn on target following the transfer of £107,000 from the Youth Service reserve to fund the Area 41 dilapidation costs, Westhouse surrender payment and the Youth Engagement and Progression Framework in schools.

 

Adult Community Education would outturn at a revised budget following the transfer of £62,000 from reserves. 

 

The Catering Service would outturn on target through the use of transfers and projected underspends.

 

Within Social Services the current year end forecast was a budget overspend of £100,000.  Children and Young People’s Services was currently anticipated to outturn £500,000 under the Service’s budget at year end while Adult Services was currently anticipated to outturn £600,000 over the original budget. 

 

In respect of Visible Services and Housing Services, it was currently projected that overall services would outturn within target at year end. 

 

Highways Maintenance and Engineering Design and Recruitment – there was currently a favourable variance of £210,000 to the amended profiled budget.  This budget had pressures due to car parking income being significantly less than budgeted, street lighting energy costs that were higher than budgeted and also pressures on the budget for routine maintenance of potholes.  However, these pressures would be offset by a one off transfer of budget of £350,000 from central policy and also an underspend on a central energy recharge budget of £460,000.  Works to be undertaken during the winter period would reduce the current variance, however, it was projected that the budget could be managed in order to achieve underspend at year end of £100,000, covering the projected overspend identified in Building Services.

 

Waste Management – there was currently an adverse variance of £33,000 to the amended profiled budget.

 

Grounds Maintenance – this budget was projected to show an adverse variance of £24,000 to the profiled budget.  There was an overspend on legal costs, however, vehicles had again been identified for disposal over the coming months.  It was therefore currently projected that the budget would outturn on target. 

 

Support Services – there was currently a nil variance to the profiled budget. 

 

Building Services – at this stage, it was currently anticipated that the Building Cleaning and Security trading unit would outturn with a deficit of £100,000 at year end.  The main reason for this was the pay award recently agreed for all staff.

 

General Fund Housing – this budget currently showed a £346,000 underspend due to savings being made around the use of Temporary Accommodation for the homeless. 

 

The Public Sector Housing (HRA) budgets had been amended to allow for any in year underspends to be utilised on fire risk assessments and resulting remedial works within the Council’s blocks of flats and resurfacing of highways on Housing land.  To allow effective management of the budget, £251,000 for highway resurfacing on Housing land had been moved to the capital Housing Improvement Programme, via Capital Expenditure from Revenue Account and £300,00 for Fire Risk Assessments and associated works vired to the Housing Repairs budget.  In addition, there had been a transfer of £54,000 from the Housing Repairs Budget to the Housing Improvement Programme to allow completion of elements at Redlands House. 

 

Development Services – it was currently projected that this service would outturn within target at year end. 

  • Public Protection – there was currently a favourable variance of £13,000 to the profiled budget.
  • Public Sector Housing – this budget currently showed a favourable variance of £18,000.
  • Planning and Transportation – a favourable variance of £234,000 was forecast for this budget at year end.
  • Leisure – there was currently a favourable variance of £97,000 to the profiled budget.
  • Economic Development – currently a favourable variance of £109,000 was shown against the profiled budget.

Having regard to the above, the Committee

 

RECOMMENDED – T H A T the position with regard to the Authority’s 2014/15 Revenue Budget be noted.

 

Reason for recommendation

 

That Members are aware of the projected revenue outturn for 2014/15.

 

 

875     CAPITAL MONITORING REPORT FOR THE PERIOD 1ST APRIL TO 31ST DECEMBER 2014 (MD) –

 

Details of the financial progress on the Capital Programme was shown in Appendices 1 and 2 to the report.

 

The Head of Finance referred Members to paragraphs 6 to 22 of the covering report, which contained a summary of progress up to 31st December 2014 for individual Capital Programmes.

 

The report also highlighted that where schemes had a value of over £500,000 and showed a variance of 20% or more between the actual spend and the profiled budget, further information would be provided.  The following schemes met this criteria:

  • Ysgol Gwaun y Nant / Oakfield – amendments to programming / sequencing of works had resulted in actual expenditure that was less than the initial spend profile.  This did not adversely affect the final cost of the project.
  • In respect of the Welsh Housing Quality Standards works, there was likely to be a variance in the expenditure as the extent of the works required in a property was not known until the works commenced.  More had been spent than was projected on Kitchen Replacements, Bathrooms and Asbestos Management.

It was subsequently

 

RECOMMENDED –

 

(1)       T H A T the following recommendations that amend the 2014/15 Capital Programme be endorsed and reported to Cabinet for approval:

  • Hen Goleg Boiler Replacement - It is requested that the 2014/15 Capital Programme be increased by £14,000 to be funded by a contribution from revenue
  • Dinas Powys to Cardiff Corridor Bus Priority Measures - It is been approved by emergency powers that the 2014/15 Capital Programme be increased by £52,500, funded by a grant from Welsh Government.
  • Hensol / Pendoylan Traffic Calming - Request to amalgamate this scheme and Hensol Sustainable Transport Facilities scheme.  It is also requested that this scheme budget be increased by £1,453, to be funded by a contribution from S106. The total budget for the amalgamated schemes will be £51,516.
  • Llandough Sustainable Transport Schemes - It is now proposed that Dochdwy Road bus shelter does not go ahead as part of this scheme however a bus shelter in a nearby location will be taken forward instead.
  • Culverhouse Cross to St. Athan Bus Priority Scheme - It is requested that the 2014/15 Capital Programme be increased by £70,000, funded by a grant from Welsh Government.
  • Penarth Renewal Area - It is requested to vire £66,000 from Penarth Renewal area to Castleland Renewal Area.  The amended budgets in 2014/15 for Castleland Renewal Area will be £723,000 and £50,000 for Penarth Renewal Area.

(2)       T H A T Cabinet recommend to Council that the following changes to the 2014/15 and 2015/16 Capital Programme be approved:

  • Oakfield Playing Fields - It is requested to carry forward £147,000 budget to the 2015/16 Capital Programme to support the delivery of the Ysgol Gwaun Y Nant / Oakfield Scheme.
  • Hen Goleg Clock Tower – It is requested that £98,000 is carried forward into 2015/16 Capital Programme.
  • Cross Common Bridge - It is requested that £574,000 is carried forward into the 2015/16 Capital Programme.
  • Boverton Flooding - It is requested that £170,000 is carried forward into the 2015/16 Capital Programme.
  • Tackling Poverty - It is requested to carry forward £5,000 into the 2015/16 Capital Programme.
  • Holton Road Shop Fronts - It is requested to carry forward £82,000 (of which £77,000 is S106 monies) into the 2015/16 Capital Programme. 
  • Barry Island Regeneration - It is requested that £45,000 of this budget is carried forward to 2015/16 Capital Programme to meet the costs of retention against the eastern promenade contract.  It is also requested that the 2014/15 Capital Programme be increased by £285,000 to be funded from a revenue contribution from Development Services to meet the additional charges that have been incurred. 
  • Pedestrian Crossing across Ffordd Y Millennium and Improved Bus Access - It is requested that the budget of £17,000 is carried forward into the 2015/16 Capital Programme.
  • Pedestrian Crossing across Thompson Street / Holton Road - It is requested that the budget of £6,000 is carried forward into the 2015/16 Capital Programme.
  • Pedestrian Crossing across Buttrills Road / Holton Road - It is requested that the budget of £23,000 is carried forward into the 2015/16 Capital Programme.

Reason for recommendations

 

(1&2)  To allow schemes to proceed in the current or future financial years.

 

 

876     EXCLUSION OF PRESS AND PUBLIC –  

 

RESOLVED – T H A T under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part 4 of Schedule 12A (as amended) of the Act, the relevant paragraphs of the Schedule being referred to in brackets after the minute heading.

 

 

877     UPDATE ON THE BANK TENDER PROCESS (MD) (EXEMPT INFORMATION – PARAGRAPH 14) –

 

The Head of Finance presented the Part II report, the purpose of which was to advise Members of the process undertaken to appoint the new bank provider for the Council.

 

The Scrutiny Committee (Corporate Resources) held on 11th November 2014 received a report entitled Treasury Management.  This report advised that the Council had appointed new bankers who were Lloyds Bank.  The new banking arrangements went live during November 2014.  The Committee requested that further information be provided to Members on the procurement / selection process resulting in the appointment of the Council’s new bankers. 

 

The procurement process was undertaken as detailed below, following EU regulations:

 

Date

Stage

28th February 2014

Issue Contract Notice

15th April 2014

Tender Submission

24th April 2014

Supplier Presentations

2nd May 2014

Selection of Preferred Supplier

 

Two tenders were received and evaluated using the following process. 

 

The tenderers were subject to an initial check, to ensure that they met the Council’s requirements for the economic and financial standard ratings.  Only if they were above the minimum score specified would they progress through the tender process.

 

Following this, the tenderers were provided with a set of mandatory questions which they had to pass prior to progressing to the final stage which was a set of scored questions and they were required to present their proposals in detail covering:

 

-           The proposed approach

-           The e-banking solution

-           The branch network.

 

Tender submissions were then evaluated on the basis of price and quality (70% price and 30% quality).

 

During May 2014, delegated authority was exercised by the Section 151 Officer, the Managing Director and the Leader to appoint Lloyds Bank as the new banking services provider for the Vale of Glamorgan Council

 

A Committee Member commented that the only issue was the 70:30 ratio split between price and quality and that the amount being saved was not relatively huge and queried whether this figure could have been increased.  In response the Head of Finance advised that the ratio split was mandated to the Council’s tendering and procurement policy with which the service had to adhere by. 

 

RECOMMENDED – T H A T the contents of the report be noted.

 

Reason for recommendation

 

To provide an update to Members on the procurement process.