| Time: | 7.30pm | Place: | Council Chamber, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor M.E. Weeks (Chairman), Councillor Simon Harwood (Vice-Chairman), Councillor Ian Albert, Councillor John Bishop, Councillor Jim McNally and Councillor Deepak Sangha. |
| IN ATTENDANCE: | Norma Atlay - Strategic Director of Finance, Policy and Governance Ian Couper - Head of Finance, Performance and Asset Management Ian Gourlay - Committee and Member Services Manager Fiona Timms - Shared Risk Manager Terry Barnett - Head of Assurance (Shared Internal Audit Services) |
| ALSO PRESENT: | |
| Meeting attachments |
Agenda Front Pages Audio Recording of Meeting |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 48 |
APOLOGIES FOR ABSENCE Apologies for absence were received from Councillor Terry Tyler. |
Noted | ||
| 49 |
MINUTES Minutes RESOLVED: That the Minutes of the Meeting of the Finance, Audit and Risk Committee held on 21 November 2016 be confirmed as a true record of the proceedings and be signed by the Chairman. |
Agreed | ||
| 50 |
NOTIFICATION OF OTHER BUSINESS There was no other item of business tabled. |
Noted | ||
| 51 |
CHAIRMAN'S ANNOUNCEMENTS (1) The Chairman announced that Members of the public and the press may use their devices to film/photograph, or do a sound recording of the meeting, but he asked them to not use flash and to disable any beeps or other sound notifications that emitted from their devices. In addition, the Chairman had arranged for the sound at this particular meeting to be recorded; and (2) The Chairman advised that, in line with the Code of Conduct, any Declarations of Interest should be declared immediately prior to the item in question. |
Noted | ||
| 52 |
PUBLIC PARTICIPATION There was no public participation. |
Noted | ||
| 53 |
SHARED INTERNAL AUDIT SERVICES - UPDATE ON PROGRESS AGAINST THE 2016/17 AUDIT PLAN Cover Page SIAS - Update on Progress against 2016/17 Audit Plan The Head of Assurance (SIAS) presented an update report on progress against the 2016/17 Audit Plan. The Head of Assurance advised that, as at 25 November 2016, 43% of planned audit days for 2016/17 had been delivered; and 29% of planned projects had been delivered to draft stage. This was slightly behind the expected position, but all programmed work had commenced, with the exception of a few pieces of work delayed due to the concentration of resources on Key Financial Systems to meet the requirements of External Audit. The Head of Assurance referred to some amendments to the Audit Plan, the main one being that, owing to slippage and in consultation with NHDC Management, the Office Accommodation Project audit would now be carried out in the First Quarter of 2017/18. The audit of the Baldock Town Partnership had been cancelled. The time allocated for those audits had been returned to contingency, which now stood at five days. The Head of Assurance drew attention to some other minor changes to the Plan. The Grants audit had been returned to its original allocation of 15 days, to reflect the whistleblowing and investigation into grants work reported to the Committee earlier in the year. The Head of Assurance commented that some high priority recommendations had been actioned, and would be removed from the Plan, whilst the others would be carried forward due to slippage reported by NHDC officers. In response to a Member's question as to why the Plan was slightly behind schedule, the Head of Assurance advised that this was primarily due to an excessive amount of staff sickness, almost double of that in 2015/16, although a significant amount of this sickness related to one-off surgical operations, and hence it was not anticipated that this would be a recurring problem. In reply to a Member's request, the Head of Assurance undertook to ensure that a summary of the medium level recommendations in audits were included in all future SIAS Audit Plan progress reports. RESOLVED: (1) That the Internal Audit Progress Report for the period to 25 November 2016 be noted; (2) That the amendments to the Audit Plan, as at 25 November 2016, be approved; and (3) That the implementation status of the high priority recommendations be noted. REASON FOR DECISION: To allow the Committee to review, comment and challenge the current status of the Internal Audit Plan. |
Agreed | ||
| 54 |
RISK MANAGEMENT UPDATE Report Appendix A - Risk and Opportunities Management Strategy Appendix B - Risk and Opportunities Management Policy The Shared Risk Manager presented a report which provided an update on Risk Management. The report also detailed changes to the Council's Risk and Opportunities Management Strategy and Policy. The Shared Risk Manager advised that the Risks summarised in Table 1 of the report had been reviewed and agreed by Senior Management Team. Members were able to view the current risk descriptions on Covalent, the Council's performance and risk management software. There had been no changes to the assessment of the current "Top" or "Corporate" risks. The Shared Risk Manager explained that the Risk and Opportunities Management Strategy had been reviewed and was attached at Appendix A to the report. There was one fundamental change in that "Top" risks were to be known as "Corporate" risks and there was just one set of these risks, rather than separate "Cabinet" and "SMT" risks. Other minor revisions had been made, such as references to "Performance and Risk Manager" being changed to "Head of Finance, Performance and Asset Management" and the replacement of "Portfolio Holder" with "Executive Member". In addition, the Risk and Opportunities Management Policy had been updated to reflect the current Strategic Objectives, and was attached at Appendix B to the report. The Shared Risk Manager answered a number of Members' questions regarding the report and Risk Management process. RECOMMENDED TO CABINET: That the changes to the Risk and Opportunities Management Strategy (Appendix A to the report) and Policy (Appendix B to the report) be approved. REASON FOR DECISION: To monitor the effective development and operation of risk management. |
Agreed | ||
| 55 |
CORPORATE BUSINESS PLANNING - DRAFT BUDGET 2017/18 Report Addendum report Appendix 1 - General Fund Estimates (1.9% Council Tax increase) Appendix 2 - General Fund Estimates (£5 Council Tax increase) Appendix 3 - Revenue Efficiency and Investment Proposals Appendix 4 - Capital Investment proposals Appendix 5 - Notes of November 2016 Member Workshops (Revenue savings and investments) Appendix 6 - Notes of November 2016 Member Workshops (Capital) The Head of Finance, Performance and Asset Management presented the report and addendum report of the Strategic Director of Finance, Policy and Governance in respect of the Draft Budget for 2017/18. The Head of Finance, Performance and Asset Management referred to Section 8.1 of the report regarding Central Government funding. At the time of writing the report, the major uncertainty concerned the future of the New Homes Bonus. The Provisional Finance Settlement from Central Government has subsequently been received on 16 December 2016, and the details were set out in the addendum report. The Head of Finance, Performance and Asset Management explained that the Provisional Settlement contained confirmation of the fact that the period over which the New Homes Bonus would be paid had been reduced from 6 to 4 years. A 0.4% baseline would also be introduced, so that for the first element of new housing growth, the Council would receive no New Homes Bonus, and therefore the Bonus would only apply to new homes above that baseline level. The Head of Finance, Performance and Asset Management commented that, by using the estimated future housing projections for NHDC, it had been calculated that the impact would mean a reduction in funding of approximately £750,000 by 2020/21. Therefore, the £2.75Million savings to be delivered up to 2020/21 would be increased to £3.5Million. With the use of reserves and savings, the £6.15Million shortfall over the period would increase to around £7Million. In respect of Section 8.2 of the report regarding Council Tax and Business Rates, the Head of Finance, Performance and Asset Management advised of the uncertainty brought by Business Rates revaluation. There was already a large provision for Business Rates appeals, which was an on-going risk. The Provisional settlement also gave Local Authorities the option of increasing Council Tax by either 2% or £5, and Table 3 in the report showed the financial impact of both options. In relation to Section 8.3 of the report regarding Balances and Reserves, the Head of Finance, Performance and Asset Management stated that combining the risk allowances for specific and unknown risks meant that a General Fund balance of at least £1.569Million should be maintained. The current General Fund balance was above this total and allowed the smoothing of the impact of future savings. The Head of Finance, Performance and Asset Management drew attention to the chart at Figure 7 in the report, which though based on information before the Provisional Finance Settlement, already showed a declining level of General Fund balance up to 2020/21. The Head of Finance, Performance and Asset Management commented that an application had been made to the Government for the capitalisation of a lump sum payment to the Pension Fund. If agreed, this would reduce the funding gap over the next three years. However, the forthcoming review of pay scales could well result in an overall increase to the salaries budget. Neither of these matters had been included in the savings and investment figures. The Head of Finance, Performance and Asset Management referred to Section 8.5 of the report in respect of Capital Programme and funding, and advised that the Council's Capital reserves were forecast to fall below £20Million during the last quarter of 2016/17. As set in the Medium Term Financial Strategy, this meant that there should be a review of how the Council continued to fund capital expenditure going forward. It was proposed that capital reserves would be used for this purpose, on the basis that the Council had an insufficient revenue budget to fund the Capital Programme from revenue. The Head of Finance, Performance and Asset Management concluded by stating that there was now an opportunity for new capital receipts to be used to fund the up front revenue costs of projects where there would be on-going revenue savings generated. Two potential examples were set out in Paragraph 8.5.8 of the report. The Committee considered the Revenue efficiency and investment proposals set out in Appendix 3 to the report, and commented as follows: - E14/15 - Corporate Restructuring - concerns about whether this would maintain sufficient staff resources to run services, and especially key projects; - E25 - Replace Area Committees with a more informal alternative - it was premature/speculative at the current time to identify a savings figure, without a fully costed alternative; and - E30 - Frequency of Outlook Magazine - publication should be reduced to twice a year; be subject to an effectiveness review; and corporate sponsorship/advertising be explored with a view to the magazine becoming cost neutral. The Committee also debated the issue of a 1.9% or £5 increase in Council Tax for 2017/18. In view of the ongoing financial pressures on the Council, the Committee agreed to recommend to Cabinet that it was in favour of the £5 increase option. RECOMMENDED TO CABINET: (1) That, in relation to the Revenue efficiency and investment proposals set out in Appendix 3 to the report: - E14/15 - Corporate Restructuring - concerns about whether this would maintain sufficient staff resources to run services, and especially key projects; - E25 - Replace Area Committees with a more informal alternative - it was premature/speculative at the current time to identify a savings figure, without a fully costed alternative; and - E30 - Frequency of Outlook Magazine - publication should be reduced to twice a year; be subject to an effectiveness review; and corporate sponsorship/advertising be explored with a view to the magazine becoming cost neutral. (2) That, in view of the ongoing financial pressures on the Council, a £5 increase in Council Tax for 2017/18 be proposed. REASON FOR DECISION: To provide an opportunity for the Committee to comment as appropriate on the Draft Budget for 2017/18. |
Noted | ||
| 56 |
FUTURE MEETINGS - POSSIBLE AGENDA ITEMS Following a request from the Vice-Chairman of the Committee, it was RESOLVED: That the Head of Finance, Performance and Asset Management submit a report to a future meeting of the Committee regarding the direct costs/expenditure in respect of the Council's Car Parks. |
Noted | ||