| Time: | 7.30pm | Place: | Committee Room 1, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor John Booth (Chairman), Councillor Clare Billing, Councillor Paul Clark (substitute), Councillor Simon Harwood, Councillor Jim McNally and Councillor Deepak Sangha. |
| IN ATTENDANCE: | Andy Cavanagh - Head of Finance, Performance and Asset Management Tim Neill - Accountancy Manager Kerry Shorrocks - Corporate Human Resources Manager Nigel Schofield - Committee and Member Services Officer Terry Barnett - Audit Manager - SIAS Richard Lawson - Grant Thornton |
| ALSO PRESENT: | At commencement one member of the public. |
| Meeting attachment |
Agenda |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 33 |
APOLOGIES FOR ABSENCE Councillor Michael Weeks had tendered his apologies. An apology for absence had been received from Councillor Steve Jarvis and in accordance with NHDC regulations Councillor Paul Clark advised the Chairman that he would be a substitute for Councillor Jarvis. An apology for absence had been received from Norma Atlay - Strategic Director for Finance, Policy and Governance and Fiona Timms - Performance and Risk Manager. |
Noted | ||
| 34 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 18 September 2014 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 35 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 36 |
CHAIRMAN'S ANNOUNCEMENTS Councillor John Booth advised that Committee that he would be Chairman at this meeting due to the non attendance of Councillor Michael Weeks. The Chairman welcomed everyone to the meeting and reminded Members that, in line with the Code of Conduct, any Declarations of Interest should be declared immediately prior to the item in question. The Chairman welcomed Terry Barnet from SIAS and Councillor Simon Harwood to his first meeting of this Committee. |
Noted | ||
| 37 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 38 |
NORTH HERTFORDSHIRE DISTRICT COUNCIL - THE ANNUAL AUDIT LETTER Introduction Report Mr Richard Lawson of Grant Thornton thanked the Chairman for the opportunity to address the Committee. Mr Lawson stated that the Audit Letter summarised the key findings that arose from the work carried out at North Hertfordshire District Council for the year ended 31 March 2014. Mr Lawson was pleased to advise that as per previous years Grant Thornton were able to issue an unqualified opinion on the Council's financial statements for 2013-2014 at 18 September 2014. The Committee were advised also that Grant Thornton had issued an unqualified Value for Money conclusion for 2013-2014 at 18 September 2014 and overall Grant Thornton were satisfied that in all significant respects the Council had in place the proper arrangements that secured economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2014. Mr Lawson advised that Grant Thornton had been unable to complete the programme of grant claims and returns for Housing Benefits due to a difference in the dates required to complete documents at the Council and deadlines set by the Department of Works and Pensions. Consequently Grant Thornton would present the Grant Certification Report to the meeting scheduled for 26 January 2015 and the final calculation of the Audit Fee had yet to be finalised. Mr Lawson advised that there would be an additional fee of £900 in respect of work on material business rate balances. The Chairman thanked Mr Lawson for the summary of the Audit Letter and upon enquiry there were no questions from the Committee. RESOLVED: (1) That the ‘unqualified opinion' on the Council's 2013-2014 financial statements be welcomed and noted; (2) That the ‘unqualified conclusion' on the Council's Value for Money arrangements be welcomed and noted; (3) That the statement by the external auditor confirming that in all significant aspects the Council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2014 be welcomed and noted; (4) That the external audit report on the Grant Certification - Housing Benefit Claim would be presented to the Finance, Audit and Risk Committee at the meeting scheduled for 26 January be noted; REASON FOR DECISION: To confirm that the findings of the external auditor were reviewed and noted. |
Noted | ||
| 39 |
PAYROLL SERVICE UPDATE Report The Corporate Human Resources Manager (HRM) reminded Members that Midland the provider of the Trent Payroll Service had terminated the contract effective at 31 March 2014 with the option of a costly upgrade to continue an in house service with Midland. The other option open within the limited time available was to enter into a framework agreement with Hertfordshire County Council (HCC) for a payroll service currently provided by Serco. The payroll service started on 1 April 2014 and had been in place for nine months. The HRM advised that actual payment of staff salaries had not been effected at any time. Prior to the first contract meeting on 9 July 2014 there had been weekly conference calls and since 9 July 2014 there had been six performance meetings to ensure good performance. There had been some initial complications which had subsequently been resolved. The HRM confirmed that there had been an internal audit of the Serco BACS controls audit in July 2014 which gave a moderate level of assurance and that outcome was being managed through the usual audit management process. The Annual payroll audit had commenced on 24 November 2014 and the BACS control audit would be reviewed as part of the Payroll Audit. The HRM concluded her presentation by referring the Committee to Agenda Item 8 - Risk Management Update where there was a proposal to reduce the impact score for the Senior Management Team Top Risk of the Payroll System for consideration. The Chairman thanked the Corporate Human Resources Manager for the update on the new payroll service and invited questions from Members. Initially there were concerns expressed about whether the sudden termination of the payroll contract by Midland could be repeated under the present contract. The HRM explained that being part of a much larger contract helped reduce such a risk. The HRM advised that outsourcing of the payroll service would improve the resilience of the service alongside the delivery of £20K of savings. A Member queried the problems caused by the termination of the payroll service by Midland and whether the choice of Serco was based purely on size against the known savings of £20K The HRM advised that the Trent system was not supported and by appointing Serco this would be resolved The HRM confirmed that all Councillors were covered by the Framework Agreement and in response to a question on a possible termination by Serco and possible problems the HRM stated that the Council had the same contract with Serco as did HCC with the overall contract being re-tendered in 2019. Also that NHDC were the first District Council to join the Frame work Agreement with HCC and with Dacorum Borough Council exploring the possibility of joining next. Several Members enquired about the number of emergency payments paid in the first and second quarters and the HRM confirmed that one error could have an impact on more than one employee. Serco had corrected underpayments very quickly and that no employee or Councillor was financially worse off because of any errors. The HRM stated that although there had been similar payments made in July and August 2014 there had only been one emergency payment in September 2014 which was a good reflection of efforts made by officers which was supported by the appointment of a temporary payroll specialist until December 2014 who had experience of outsourced payroll management. RESOLVED: (1) That the update on the NHDC Payroll Service be noted; (2) That the reduction in the impact score for the Senior Management Team Top Risk of the Payroll System be noted. REASON FOR DECISION: To ensure that the Committee are informed of the outcomes of the transfer of the Payroll Service to Serco. |
Noted | ||
| 40 |
RISK MANAGEMENT UPDATE Report Appendix A Appendix B Appendix C The Head of Finance, Performance and Asset Management (HF) advised that the purpose of the report was to update the Committee on the management of the Strategic and Corporate Risks owned by Cabinet and the Senior Management Team. The HF confirmed that the Cabinet Top Risks and Senior Management Team Top Risks had been reviewed and were summarised in the Matrices at Tables 1 and 2 respectively. The HF advised that this Committee had to consider and review the Top Risks and that any changes to the Cabinet Top Risks must be referred to Cabinet for approval. The HF reminded the Committee that at the meeting held on 18 September 2014 (Minute 22 refers) the changes to the Waste and Street Cleansing Contract Renewal was referred to Cabinet and that the Senior Management Team (SMT) risk for the development of Careline had been agreed. Since the September meeting all of the Top Risks for Cabinet and SMT had been reviewed and the HF updated the Committee on recent developments. Of most concern was the Cabinet Top Risk concerning North Hertfordshire Museum and Hitchin Town Hall where there had been notice of a potential loss or unavailability of key personnel at Hitchin Town Hall Ltd. Notice had also been taken of the possible lack of resources to operate the building as a Community Facility. The Council were also aware through recent announcements that there was a lack of fund raising and a ramp up plan from Hitchin Town Hall Ltd. Accordingly the HF proposed that Cabinet should be advised that this project should be moved to the top scale of 9 - high impact and top scale of 3 risk likelihood. The HF advised the Committee that it was proposed to reduce the likelihood of the Northern Transfer Station and Ancillary Cabinet Top Risk from Impact of 9 to Impact of 6 and reduce the likelihood to a low 1. This was due to the resolution of the short term risks relating to the lease and contract arrangements for Bury Mead Road in Hitchin and that Hertfordshire County Council continued to use this site as a residual waste transfer station for the District, but not domestic waste. The HF stated that the SMT risk for the Payroll system service was given a reduced likelihood as the system had ‘bedded down' well and consequently the risks had passed or not happened. There was also a likelihood of reduced risks and or errors by SERCO staff or NHDC employees which in turn reduced the likelihood of additional risks. The HF referred the Committee to Appendix A for a more detailed description of the revised risks. In addition to the proposed changes to the Cabinet and SMT top risks the HF advised the Committee that the Risk and Opportunities Management Policy as presented at Appendix B had been revised to reflect the Council's current priorities and that by managing risk the Council could: - Explore ways to generate additional income to protect and enhance the facilities, services and environment that we already have; - Encourage an environment in which businesses and people can flourish; - Use resources such as people, knowledge, investments and land and buildings to make changes to services and how they are delivered." The PRM also advised that although the Risk and Opportunities Management Strategy was not due for review at this meeting there had been some recent minor revisions put forward and these were contained in the Strategy at Appendix C. It was very clear from the ensuing discussion that Members had a great concern about the viability of the Hitchin Town Hall Project should Hitchin Town Hall Limited withdraw from the Development Agreement (as indicated by letter from Hitchin Town Hall Limited to all NHDC Councillors) and discussed at length the proposal to increase the likelihood score. It was accepted that a top score of ‘9' was the highest allowable under the current matrix arrangement but the Committee expressed great concern that a full description of the mitigation of risks had not been provided with the officer's report. The HF advised that this information could be found in COVALENT and that he would ensure that the Performance and Risk Manager made arrangements for COVALENT training for any Member that requested it. Members expressed a view that in such a case as this very important risk other information could not be assessed outside this meeting. Members also considered that the description of the risk at Appendix A did not have sufficient information about this project which could have very serious consequences for the Council if the risk was not managed or assessed in the correct way. Members were also very concerned about the lack of a Business Plan for the North Hertfordshire Museum and Hitchin Town Hall Project provided in the officer's report as supporting information for the proposed increase in the likelihood to ‘3' and impact to ‘3'. Consequently the Committee agreed that they could not support the proposal to increase the likelihood score to ‘9' without much more supporting information and in particular the mitigation of risks. In response to a question concerning the Local Plan and its ranking of ‘9' the HF advised that this item was at a ‘9' and would remain at ‘9' and that this report had been published before the meeting of Council on 27 November and that the decision taken on 27 November (Minute 51 refers) confirmed the listed score. In response to another question concerning a new paragraph 6.2 in the Risk and Opportunities Management Strategy which addressed risks in Service Areas the HF confirmed that this was at the level of Service Areas and not at Directorate Level. The HF advised that this allowed peer challenges on the lower level risks to avoid a large grouping of risks in any service area that were listed to cover all events that might occur when a good assessment of the mitigation of a risk could avoid a risk being listed. The Chairman thanked Members and Officers for their contribution to the debate and emphasising the need for adequate information when important and major risks were considered for an increase in the risk rating. RESOLVED: (1) That the proposal to reduce the likelihood score for the Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal be agreed; (2) That the proposal to reduce the impact score for the Senior Management Team Top Risk of the Payroll System be agreed; (3) That the proposal to increase the likelihood score for the Cabinet Top Risk ‘ North Hertfordshire Museum and Hitchin Town Hall Project to category 9 be noted and that Cabinet should be advised that the Committee were unable to agree this proposal due to the lack of any information on the mitigation of risks presented at this meeting; (4) That the Performance and Risk Manager be requested to ensure that any future reports on a risk with a proposed increase in overall risk score to a ‘9' should include supporting comprehensive information including the mitigation of risks; (5) That the proposed changes to the Risk and Opportunities Management Policy (Appendix B) be agreed and forwarded to Cabinet for consideration and endorsement; (6) That the proposed changes to the Risk and Opportunities Management Strategy (Appendix C) be agreed and forwarded to Cabinet for consideration and endorsement. RECOMMENDED TO CABINET: (1) That the proposal to reduce the likelihood score for the Cabinet Top Risk ‘Waste and Street Cleansing Contract Renewal' be endorsed; (2) That the proposal to increase the likelihood score for the Cabinet Top Risk ‘ North Hertfordshire Museum and Hitchin Town Hall Project be noted with the proviso that Cabinet should be aware that there was insufficient information provided on the mitigation of risks to allow the Committee to agree the increase of the likelihood score; (3) That the proposed changes to the Risk and Opportunities Management Policy (Appendix B) be endorsed; (4) That the proposed changes to the Risk and Opportunities Management Strategy (Appendix C) be endorsed. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee would receive updates on the assessment of changes to Cabinet and Senior Management Team Top Risks and advise Cabinet of any decisions made by this Committee concerning such risks. |
Agreed | ||
| 41 |
PROPOSED SHARED ANTI - FRAUD SERVICE PARTNERSHIP Report The Head of Finance, Performance and Asset Management (HF) advised the Committee that this was a draft report that would be presented to Cabinet on 16 December 2014 seeking approval to enter into a Shared Anti - Fraud Service Partnership at 1 April 2015 which would investigate possible fraud in Single Occupancy (Council Tax), Payroll, Grants, Procurement and Business Rates collection. The HF confirmed that the Partnership would not be involved with Welfare Benefit Fraud and that all NHDC Welfare fraud detection officers would transfer to the Department of Work and Pensions and be based at Cambridge or Stevenage with no redundancy issues. The HF stated that NHDC was one of six local authorities in Hertfordshire who had agreed in principle to join an Anti Fraud Partnership and the set up would be very similar to that used for the Shared Internal Audit Service where the initial core group of five authorities had been joined by two more authorities since the start. The HF advised the Committee that the Strategic Director for Finance, Policy and Governance had reviewed the Business Case on behalf of the Council and concluded that the Council should become a Partner. Preparatory work was on going but in response to a question the HF confirmed that a grant had been awarded to offset start up costs and that detected fraud on single occupancy Council tax netted £225,000.The HF reported that there were a number of drivers behind the shared Business Case and the proposed shared service approach. The HF described to the committee the Objectives and Benefits of a Shared Anti - Fraud Services and stated that to date there had not been a high incidence of detected fraud in Hertfordshire and that the new service may well identify more fraud. In response to a question the HF confirmed that as and when the Housing Benefit Team transferred to the DWP then NHDC would be without any fraud investigators and the consequence would be the recruitment of internal transfer of staff with no fraud investigation skills and NHDC officers had to protect the public purse. A Member enquired as to the actual staff numbers affected by the proposed changes and the HF advised that there were four people working in the investigations team at NHDC and as default would transfer to DWP. The Member also enquired as to what was the tangible benefit to NHDC if the Council joined the shared service. The HF considered that the shared working would contribute to an increased detection of fraud which in turn would be of great benefit to all the local authorities. In response to another question the HF advised that it was estimated the full cost of the current team to NHDC was in the order of £110K and that officers concentrated very much on Council Tax fraud and Housing Benefit fraud and referred the Committee to Table 1 in Appendix 1 for details of the Audit Commission Fraud Categories that NHDC worked to. The HF advised that the main anti fraud effort at NHDC was Housing Benefit. A Member stated that there had been problems with the establishment of a Shared Financial Services of neighbouring Local Authorities which had not proceeded due to NHDC non - acceptance of the Business Case. With this in mind the Member enquired if this proposal had ever been listed as a Top Risk and that the latest proposed shared service should be managed as a Top Risk. The HF advised that this shared service would be using the same protocol as the SIAS and following a short discussion the Committee agreed that the Performance and Risk Manager should take the appropriate action to include the proposed Shared Anti - Fraud Service as a Senior Management Team Top Risk. The HF advised that all Council's in Hertfordshire supported this proposal but not every Council had agreed to join as yet. A Member applauded the proposal to enhance fraud detection but considered that there should be careful selection of investigators and enquired if the results could be measured against Performance Indicators. The HF advised that new staff would be employed by Hertfordshire County Council and the Accountancy Manager referred the Committee to Table 5 in Appendix 1 for details of the costs per in scope authority. The SIAS Audit Manager confirmed to the Committee that as per the current contract for the Internal Audit Shared Service this Committee would be able to request a review of the anti - fraud shared service and that there would be a two year ‘break clause'. A short discussion ensued as to the deterrent measures pursued by this Council to reduce fraud and the HF agreed that it would be necessary to raise awareness of anti fraud investigations and the profile of the anti - fraud team. RESOLVED: (1) That the proposal for North Hertfordshire District Council (Appendix 1) to become a partner in a Shared Anti - Fraud Service for non welfare and corporate fraud be noted; (2) That the proposal to investigate ‘in principle' the proposal for North Hertfordshire District Council to become a partner in a Shared Anti - Fraud Service be supported; (3) That the Head of Finance, Performance and Asset Management be requested to provide at a future date an updating report to this Committee prior to any formal agreement being made with other local authorities; (4) That the Performance and Risk Manager be requested to include as a Senior Management Team Top Risk this proposal for a Shared Anti - Fraud Service and report back at the meeting scheduled for 26 January 2015. REASON FOR DECISION: To ensure that the Finance, Audit and Risk Committee undertakes its role as per the Terms of Reference. |
Agreed | ||
| 42 |
SIAS - UPDATE ON PROGRESS AGAINST THE 2014-2015 AUDIT PLAN Introduction Report The Audit Manager (AM) at SIAS presented the report to the Committee and advised that three audits had been completed since the last meeting on 18 September 2014 viz. Health and Safety Matters, Business Continuity and Main Accounting which had moderate, substantial, and substantial levels of assurance respectively. The AM confirmed that there were amendments to the Audit Plan as requested by Senior Management i.e. Localism of Planning Reforms audit was deferred plus an extension of time for the Payroll Service Audit to include Election Payroll matters. The AM was pleased to advise the Committee that progress with the Audit Plan was more advanced at November 2014 than at the same time last year and that the year end target would be met. The AM referred the Committee to Appendix A for more details of progress of each audit against the plan, to Appendix B which gave the implementation status of High Priority Recommendations and to Appendix C which listed start time and completion times for each audit on a monthly tabulation. The Committee noted that the audits in August had the fieldwork completed, Benchmarking Risk Registers had completed field work in October, in November the audit of Creditors, Debtors and Payroll had reached the draft stage and Terms of Reference had been issued for the audits of Payroll Contract Management and IT Change Control. In response to a question concerning the audit of the Customer Service Centre the AM advised that the audit was scheduled to commence in late January 2014, take 15 days and a final report by the end of March 2014. The Chairman thanked the Audit Manager for the update of the internal audit and upon enquiry there were no further questions. RESOLVED: (1) That the Internal Audit Progress Report for the period to 21 November 2014 as presented at Appendix A be noted; (2) That the proposed amendments to the Audit Plan at 21 November 2014 - Deferral of Localism Planning Reforms and extended coverage of Payroll Activities (including Election Payroll matters) be noted; REASON FOR DECISION: To confirm that the findings of the external auditor were reviewed and noted and that the recommendations were acted upon. |
Noted | ||
| 43 |
AMENDMENTS TO THE COUNCIL'S FINANCIAL REGULATIONS Report Appendix A Appendix B Appendix C The Head of Finance, Performance and Asset Management (HF) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 27 January 2014. The HF confirmed that the Strategic Director had reviewed the revised Financial Regulations (last reviewed in 2012) and referred the Committee to Appendix A which had a summary of the main changes, a full copy of the new Financial Regulations in Appendix B and a copy of the previous Financial Regulations including track changes at Appendix C. The HF reminded the Committee that the NHDC Financial Regulations were embedded in the Council's Constitution and were an important element within the overall control framework. The HF described to the Committee five key changes in the revised document: That Accountancy Services must record under or overspends which exceeded the budget by at least £10.000 or five per cent of annual budget whichever was the smaller; All virements between budget lines would be subject to a de-minimis of £100; Any proposals for an improvement or an alteration to any asset must be approved by the Head of Finance, Performance and Asset Management and the Senior Management Team; Any write off up to £500 can be approved by the budget holder in consultation with the Head of Service or Corporate Manager and that purchase orders were not required to match purchases made by officers as payment would have been made previously. A Member sought clarification at Paragraph 8.5.6 of the Financial Regulations as to what was urgent and not urgent and the HF stated that changes could be made to the Capital Programme in case of an emergency or an unanticipated capital need by the Portfolio Holder but Cabinet would have to take the final decision. The Chairman enquired about the size of the Contracts register (Paragraph 11.4.1 of the Financial Regulations) if the level of entry was for contracts in excess of £5000 and the HF advised that this had been increased to £10,000 at the last review, but had reverted to £5,000 to be in line with the requirements of the Government's Transparency agenda. A Member sought clarification as to the status of the Financial Regulations within the Council's Strategy and the HF advised that the regulations were mandatory that set minimum standards and were part of the Council's Constitution. RESOLVED: (1) That the contents of the report be noted; (2) That the proposed changes to the Council's Financial Regulations as presented at Appendix B be noted. REASON FOR DECISION: For this Committee to comment if appropriate on changes to the Council's Financial Regulations that would contribute to effective organisational internal control. |
Noted | ||
| 44 |
SECOND QUARTER REVENUE MONITORING 2014-2015 Report Appendix A The Accountancy Manager presented the report of the Strategic Director of Finance, Policy and Governance and clarified that this was a report in draft format that would be presented to Cabinet on 16 December 2014. The AM advised that the report was to inform Cabinet of a decrease in net expenditure in the General fund of £111K for 2014-2015 (Total = £15.996M) and an increase of £56K in the net expenditure of the General Fund for 2015-2016. The Committee noted that of the £351K carried forward from 2013-2014 budgets some £116K had been spent by the end of the second quarter, and that 99 per cent (£1.510M) of projected efficiencies had been achieved. Of the Key Financial Indicators presented at Table 4, four were at green and one was at amber (Car Parking Fees). The AM referred the Committee to Table 1 which detailed the significant changes to the General Fund and a Member questioned the problems on the Homelessness Initiative where long term but temporary use of bed and breakfast accommodation was the result of poor access to the private rented sector. The AM was unable to provide a detailed answer but agreed that outside of this meeting he would contact the Strategic Housing Manager and request an answer to the Member's question. The AM referred the Committee to Table 2 which detailed the progress with carry forward budgets which must be sent in the first six months, to Table 3 which gave a summary of the 2014/2015 Efficiency Proposals, to Table 5 which gave the Projected General Fund Balances, to Table 6 - Known Financial Risks, where balances had increased, to Table 7 - Earmarked Reserves for 2014-2015 and to Table 8 - The Collection Fund Monitoring. The AM advised the Committee that the total funding of £16,842M was made up of: Council Tax Precept = £9.590K; New Homes Bonus= £1.982, Retained Business Rates = £2.510M and the Revenue support Grant of £2.760M. The Chairman thanked the Accountancy Manager for the update on the Revenue budget at the end of the second quarter in 2014-2015. RESOLVED: (1) That the contents of the draft report to Cabinet on the Revenue Budget Monitoring 2014 - 2015 be noted; (2) That the proposed changes to the 2014-2015 General Fund Budget giving a £111K decrease in net expenditure be noted; (3) That the proposed changes to the 2015-2016 General Fund Budget giving a £56K increase in net expenditure be noted; (4) That the Accountancy Manager be requested to provide to the Committee outside of the meeting further clarification of the Homeless Initiatives and access to the private rented sector (Table 1: Significant Changes to the General Fund refers). REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Draft Second Quarter Revenue Monitoring report in 2014-2015. |
Noted | ||
| 45 |
SECOND QUARTER CAPITAL MONITORING 2014 - 2015 Report Appendix A Appendix B The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 16 December 2014. The AM advised the Committee that the total capital expenditure in 2013-2014 was £11.527M and that a useable capital receipt balance of £1.339M was available at 1 April 2014. The projected capital expenditure for the current year on existing schemes was £9.433M and that a total of £1.438M of new capital schemes had been approved in the 2014-2015 Corporate Business Planning Process giving a grand total of £10.871M for 2014-2015. The AM proceeded to describe to the Committee at Table 1 the Capital Scheme timetable revision, and at Table 2 the changes to the Capital Schemes commencing in 2014-2015 The AM advised that Cabinet would be requested to approve the implementation of the Telephony Infrastructure project (£95K) prior to the Office Accommodation project scheduled for 2016, as this new system would further facilitate flexible working as well as being more cost effective to operate than the current telephone system. The AM concluded his updating on the draft report to Cabinet by referring the Committee to Appendix A for additional details on the Capital Programme by Service Group, Capital Funding Source and Capital Receipt Analysis and to Appendix B for amplification of the individual capital schemes from 2013- 2014 to 2017 - 2018. The Chairman thanked the Accountancy Manager for the updating on the Capital Programme and invited comments and or questions from the Committee. Whilst accepting the overall programme for the capital projects as outlined in the report it was evident to Members that there was a considerable outstanding sum of £278K allocated to the implementation of the NHDC Cycle Strategy. Members were concerned that it had been stated that there was insufficient resource to progress this project. Following a short discussion it was evident that the Committee considered that Cabinet should be requested to provide resources to implement this strategy as a matter of urgency and that the newly appointed Principal Transport Policy Officer should be provided with sufficient resource to implement the strategy. In response to a question concerning S106 projects and the allocated monies totalling £116K the AM confirmed that this sum was the total of projects agreed to date and was not a finite figure for 2014-2015 and that it was expected that other allocations would be made for S106 monies. RESOLVED: (1) That the proposed changes to the projected capital programme for 2014-2015 arising from the re- profiling of schemes as detailed at Paragraph 8.3 and Table 1 Scheme Timetable Revision be noted; (2) That the proposed changes to the projected capital programme for 2014-2015 as a result of changes to the capital schemes be noted; (3) That the proposal to implement the Telephony Infrastructure Capital Scheme with immediate effect before the Office Accommodation project in 2016 be noted; (4) That Cabinet be requested as a matter of urgency and as a priority allocates resources to implement the Cycle Strategy in the Capital Programme (Table 1: Scheme Timetable Revision refers). RECOMMENDED TO CABINET: That Cabinet be requested as a matter of urgency and as a priority allocate resources to implement the Cycle Strategy in the Capital Programme (Table 1: Scheme Timetable Revision refers). REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Capital Programme for 2014-2015. |
Agreed | ||
| 46 |
TREASURY MANAGEMENT MID YEAR REVIEW 2014 - 2015 Report Appendix A The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 16 December 2014. The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance which was in a draft format prior to presentation to Cabinet on 16 December 2014 and that Cabinet would be requested to note the update of Treasury Management at the end of September 2014. The AM advised that there had been no breach of the Treasury Management Strategy in the year to date and no poor indicators with investments standing at the corrected value of £38,203,703 and that the average rate of interest was 1.53 per cent. The AM referred the Committee to Appendix A which was the mid year review for 2014-2015 of the NHDC Treasury Management Strategy by Capita Asset Services. The AM referred to the Placement of Investments pie graph and the Investment Maturity of the NHDC Investments. The AM advised that there had been no new investments in the second quarter of 2014-2015 and confirmed that investments may be kept short to cover any shortfall in cash flow towards the end of this financial year. The Chairman thanked the Accountancy Manager for the update on the management of the NHDC Treasury Investments at the end of September 2014 and upon enquiry there were no questions. RESOLVED: That the position of the Treasury Management activity at 30 September 2014 be noted. REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Treasury Management Strategy and the position at second quarter end. |
Noted | ||
| 47 |
CORPORATE BUSINESS PLANNING: DRAFT BUDGET 2015 -2016 Report Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7a Appendix 7b Appendix 7c Appendix 7d Appendix 8 Appendix 9 The Accountancy Manager (AM) presented the report of the Strategic Director of Finance, Policy and Governance and advised the Committee that this report to Cabinet on 16 December 2014 was in a draft format at the publication of this agenda. The AM stressed that this budget was very much in draft form with the final budget presented to Council on 12 February 2015 preceded by presentation to Cabinet on 27 January 2015 and to this Committee on 26 January 2015. The AM advised the Committee that the Government announcement on the grant settlement for 2015-2016 would not be known until 17 December (the day after Cabinet) and that this may well have an effect on this draft budget for 2015-2016. The AM reminded the Committee that the Medium Term Financial Strategy was adopted by Full Council on 4 September 2014 (Minute 39 refers). This Strategy provided the financial background to the Corporate Business Planning process for 2015-2020. The AM was pleased to advise the Committee that NHDC over achieved the efficiencies target of £600K needed to balance the 2014-2015 budget with £1.514M savings achieved. Unfortunately the reduction in size and capacity in response to a reduction of resources had meant that any continuation of such efficiencies without impacting on services or performance was now extremely restricted. However, the need to address the on-going and widening budget gap whilst ensuring a sustainable financial position was unavoidable. The AM stressed that the challenging budget balancing requirements would continue for several years and consequently the use of non government funds sources of income would be critical in achieving the Council's statutory duty to set a balanced budget year on year. The AM also stated that attached to the on-going impacts of reduced Government funds there were a number of key risks (see Table 3): Localisation of Business Rates; Implications of the Welfare Reform Bill (Universal Credit); Possible changes to the New Homes Bonus system and changes to existing funding streams. The sources of income were a major worry for the Council and the question of raising Council Tax was a very critical aspect of the budget. The Committee noted that if there was a 0 per cent increase in Council Tax and there were no efficiencies the special reserve and balances would fall from £7M in 2014-2015 to only £2.1M in 2019-2020. This balance would leave the Council in an exposed position, however by a continuation of efficiencies with modest Council Tax increases and that to maintain a reasonable use of reserves the Council would have to make savings of £1.7M in the period 2016-2017 to 2019-2020. The AM referred the Committee to Table 1 which detailed the estimated amounts of government funding for 2015-2016 onwards to 2019-2020 and to Table 2 which presented an analysis of specific government grants. Other Reserves and provisions for 2014-2015 were presented at Table 4 and Key Factors for Capital and Revenue Investment were presented at Table 5. The AM reminded the Committee that staff costs was one of the major costs to the Council each year and approximately 47 per cent of gross expenditure - when housing benefits were excluded - and this area of spend must be considered when deciding on efficiencies and Table 7 gave details of the reductions in this budget from 2009-2010 to 2015 - 2016. The AM referred the Committee to Appendices 1 to 9 which gave details of all the contributing factors for the preparation of the 2015-2016 budget including comments made at the Members Workshops (Appendices 7a, 7b, 7c and 7d). The Chairman thanked the Accountancy Manager for the clarification of the many aspects of the Corporate Business Planning Process and the Budget for 2015-2016 and onwards to 2019-2020 and invited comments and or questions from the Committee. A Member referred to Appendix 7d and the IT investment proposals (Items C46, C47, C48, C49, C50, C51 and C55) where the investments were indicated for the 2015 - 2016 financial year only. The Member advised that he was very experienced in IT and that IT software and associated support could easily change within 24 months. The overall budget of £300K to purchase IT products could be out of date in a short time and he was concerned that there was no budget estimates for IT in ensuing years and that the IT investment policy should be for a least five years. The Head of Finance, Performance and Asset Management (HF) advised the Committee that a reference to a ‘cloud provider' could be very expensive as the Cabinet Office had dictated as far as he understood from IT colleagues to all Local Authorities that only the Cabinet Office approved ‘cloud provider' could be used. The Committee agreed that Cabinet should be advised of the concerns expressed over IT budget forecasts and that IT developments evolved very quickly as did costs. Following an introduction by a Member on the Efficiency Savings E6 - Area Committees moving to Local Forums it was established very quickly that Members were very concerned that the comments made at Members Workshops in November 2014 by the three political parties at NHDC had not been recognised by officers. It was agreed that Cabinet should be advised that this Committee were not minded to support any changes to the Area Committee format and that any decisions on a change should follow discussions on amending policy and not as part of the budget setting process. In response to a question concerning I 4 - Parking Services and C 23 - King George V Recreation Ground the AM agreed to advise the Member outside of the meeting of additional information supporting these two items. The HF noted the concern of the Member regarding any increases in car parking charges which should be levied throughout North Hertfordshire and not in one town and that there should be involvement of local community groups when any works were carried out at the car parking area to avoid any clash with the timing of structural works at the Rugby Club Pavilion. RESOLVED: (1) That the expected announcement of the provisional finance settlement from central government on 17 December 2014 be noted; (2) That the estimated position on the Collection Fund and impact on the General Fund for 2015-2016 as identified at Paragraph 9.1.17 to the draft report be noted; (3) That the position on the General Fund balance as identified at Paragraph 9.2.3 to the draft report be noted; (4) That the position of the other reserves and provisions as identified at Paragraph 9.3 to the draft report be noted; (5) That the inclusion of the efficiencies and investment proposals as detailed in Appendices 3,4,5 and 6 to the draft report be noted; (6) That the proposal to included details of the draft budget for 2015 - 2016 in a future Members Information Service be noted; (7) That the comments made at the Members Budget Workshops as detailed at Appendices 7a,7b,7c and 7d be noted; (8) That Cabinet be requested to consider the comments made by the three political parties at the Members Workshops concerning efficiency E6 - Replace Area Committees with Informal Area Forums where it was clear that debate was sought on the NHDC policy concerning Area Committees and that there was no support for this efficiency saving as it was un - democratic and should be a policy decision and not part of the budget setting process; (9)That Cabinet be requested to consider the removal of Efficiency Saving E6 from the budget proposals for 2015-2016 due to this proposal being a policy decision and that excess savings had been made to date for 2015-2016 that would accommodate the removal of this item; (10)That Cabinet be requested to consider the concerns of the Committee concerning the lack of budget forecasts for IT investment beyond 2015-2016 and that IT investment forecasts should be considered for at least three more years to 2018 - 2019; (11)That Cabinet be requested to ensure that there was a good and detailed IT Strategy at NHDC; (12)That the advice on budget estimates and the provisional Council Tax charge may be subject to change before 27 January be noted; RECOMMENDED TO CABINET: (1) That Cabinet be requested to consider the comments made by this Committee concerning Efficiency E6 - Replace Area Committees at with Informal Area Forums where it was clear at Members Workshops that debate was sought on the NHDC policy concerning Area Committees and that there was no support by Members for this efficiency saving as it was un - democratic, it should be a policy decision and not part of the budget setting process; (2) That Cabinet be requested to consider the removal of Efficiency Saving E6 from the budget proposals for 2015-2016 as this proposal should be subject to a policy decision and that excess savings had been made to date for 2015-2016 that would accommodate the removal of this item; (3) That Cabinet be requested to consider the concerns of the Committee concerning the lack of budget forecasts for IT investment beyond 2015-2016 and that IT investment forecasts should be considered for at least three more years up to 2018 - 2019. (4) That Cabinet be requested to ensure that there was a good and detailed IT Strategy at NHDC; REASON FOR DECISION: For the Finance, Audit and Risk Committee to comment as appropriate on the Corporate Business Planning - Draft Budget for 2015-2016. |
Agreed | ||
| 48 |
FUTURE MEETINGS - POSSIBLE AGENDA ITEMS The Chairman requested that the Committee Clerk should send to all Members and Substitute Members the known agenda items for the next two meetings and invite comments and proposals for agenda items for future meetings. |
Agreed | ||