Agenda and minutes

The Chairman will read the following announcement:

“I would like to remind everyone present that this meeting will be recorded for subsequent repeated viewing on the Internet and copies of the recording could be made available for those that request it.

By being present at this meeting it is likely that the recording cameras will capture your image and this will result in the possibility that your image will become part of the broadcast.

You should be aware that this may infringe your human and data protection rights. If you have any concerns please speak to the webcasting officer.

Please could I also remind members to put on their microphones before speaking by pressing the button on the microphone unit”

The Chairman reminded everyone present that the meeting would be broadcast live to the Internet, and that the Council had adopted a protocol for the webcasting of its meetings.

(Assistant to the Chief Executive) To declare interests in any item on this agenda.

There were no declarations of interest pursuant to the Council’s Code of Member Conduct.

To confirm the minutes of the last meeting of the Committee held on  26 September 2011 (previously circulated).

Resolved:

(1)        That the minutes of the meeting held on 26 September 2011 be taken as read and signed by the Chairman as a correct record.

(Acting Chief Executive) To consider the attached report (FPM-014-2011/12).

The Acting Chief Executive introduced a report on Revenue Income Optimisation.

The Acting Chief Executive reported that in July 2011, the Council had commissioned PricewaterhouseCoopers (PwC) to undertake an exercise to identify options for the generation of increased revenue income. This exercise was funded by and part of Improvement East’s Efficiency Challenge for 2011/12 and was carried out using PwC’s ‘Revenue Income Optimisation’ (RIO) methodology. This sought to identify opportunities for new or increased income generation and possibilities for improved structures for fees and charges. In attendance at the meeting were Mark Stevenson, a Director from PwC, and Richard Holmes, the PwC Consultant who had undertaken the study at the Council.

Mark Stevenson stated that the RIO project had identified a number of business case opportunities which could deliver increased revenue income for the Council. The relatively low number of possible opportunities identified had been recognition of the work that the Council had already undertaken in relation to the ‘selling’ of services and expertise to its partners, in securing external funding, and in ensuring cost recovery in specific service provision. Additional opportunities raised through the RIO exercise were being reviewed to determine whether anticipated business benefits were realisable, and these might further increase overall levels of income if implemented.

It was highlighted that PwC had undertaken over 40 similar exercises across the country, and that the exercise was not simply one of trying to squeeze as much money as possible from residents. The annual Fees and Charges report was highlighted as good practice by the Council but that the current income from fees and charges represented only 8% of the Council’s annual expenditure; this was low by the standards of the other Councils in the CIPFA benchmarking group. Three principal business cases had been identified as possible opportunities for additional revenue generation, these were:

(a)        Advertising and Sponsorship:

·                     Council’s website;

·                     Council’s vehicle fleet;

·                     Prime locations throughout the District where the land was owned by the Council; and

·                     Sponsorship of events and services.

(b)        Off-Street Car Parking:

·                     Restructuring the Council’s existing tariffs;

·                     Removing free parking on Saturdays, the pre-Christmas period, Sundays and other Bank Holidays;

·                     Introduction of parking charges for Blue Badge holders; and

·                     Development of other businesses within the Council’s car parks, e.g. car washes.

(c)        Solar Photovoltaic Energy Generation:

·                     Installation of renewable energy initiatives throughout the Council’s operational properties.

The Cabinet Committee welcomed the report but was disappointed that the prospective income identified within the report was not more significant, although it was accepted that this could be because the Council had already made progress in identifying all available sources of income. In respect of advertising and sponsorship, there were significant initial costs involved in some of the suggestions, but the inclusion of advertising on the Council’s website could be an initial low risk project for the Council to pursue and the proposed new website had been designed to facilitate appropriate advertising. With regard to Solar Photovoltaic (PV) energy generation, the report indicated a 14-year payback  ...  view the full minutes text for item 23.

(Director of Finance & ICT) To consider the attached report (FPM-015-2011/12).

(Director of Finance & ICT) To consider the revised attached report (FPM-015a-2011/12).

The Director of Finance & ICT presented the mid-year progress report on Treasury Management and Prudential Indicators for 2011/12, which was a requirement of the CIPFA Code of Practice on Treasury Management and covered the treasury activity for the first half of 2011/12.

The Director reported that during the first half of the year: the Council had rephased its capital programme with £1.1million moving out of 2011/12 and some moving into future years; the Council had remained debt free and no borrowing had occurred; the average net investment position has been approximately £54.6million; and there had been no breaches on any of the prudential indicators. It was noted that the Council’s banker, NatWest, had fallen below the minimum credit criteria for investments by the Council during the first half of the year. It was proposed that the Council gave approval to reduce the minimum long term rating criteria from A+ (or equivalent) to A- (or equivalent) to allow the Council to continue to use the NatWest bank for short term liquidity investments.

The Cabinet Committee was informed that the Audit & Governance Committee had been satisfied with the report at its meeting ten days earlier, and it was felt that the use of NatWest as the Council’s bank was of little risk while it remained in public ownership, despite the recent fall in its credit rating.

In response to questions from the Members present, the Director commented that there was no real risk from using a bank scored at A-, and there would be costs associated with the Council moving its accounts to another Bank. The reality of the marketplace was that there was little interest in running local authority bank accounts; NatWest and the Co-Operative Bank monopolised the market, and the Co-Operative Bank’s credit rating was worse than NatWest’s.

The Cabinet Committee noted the advice from the Council’s Treasury Management Consultants, Arlingclose, that the minimum rating for long-term investments could be reduced to A- (or equivalent) but felt that this should only be applied to the Council’s banker, NatWest, and only while it remained in the ownership of the UK Government.

Recommended:

(1)        That the management of the risks associated with the Council’s Treasury Management function during the first half of 2011/12 be noted; and

(2)        That the change in strategy to reduce the minimum long-term rating from A+ (or equivalent) down to A- (or equivalent) specifically only for the use of the Council’s bank, NatWest, and only while it remains in the ownership of the UK Government be recommended to the Council for approval.

Reasons for Decision:

To comply with the CIPFA Code of Practice on Treasury Management.

To ensure that the continued use of NatWest by the Council as its banker did not contravene the Council’s own Treasury Management Strategy.

Other Options Considered and Rejected:

To not comply with the CIPFA Code of Practice on Treasury Management.

To move the Council’s Bank Account to another provider, however the other major player in the market had a credit rating that  ...  view the full minutes text for item 24.

(Director of Finance & ICT) To consider the attached report (FPM-016-2011/12).

The Senior Finance Officer (Risk & Insurance) presented a report regarding the quarterly updating of the Corporate Risk Register.

The Senior Finance Officer stated that the Corporate Risk Register had been considered by both the Risk Management Group on 17 October and the Corporate Governance Group on 19 October.The reviews had indentified a number of amendments to the Corporate Risk Register. In addition, the Cabinet Committee at its meeting on 20 June 2011 had requested a review of a number of different risks concerning the East of England Plan, Gypsy & Traveller Provision, Business Continuity Management and the expenditure of Capital Receipts on non revenue generating assets.

As a result of the review, Risk 4, ‘East of England Plan – Unable to agree a joined up plan’, had been deleted whilst Risk 3 had been revised as ‘Potential Difficulty producing Local Plan to timetable’ and scored as significant likelihood, critical impact (C2). There was an increased possibility of the Council facing planning appeals and increased costs awards if the Local Plan was not completed on time. Risk 29, ‘Gypsy Roma Traveller Provision’, had been revised and scored as significant likelihood, critical impact (C2), which had put it above the tolerance and an action plan had been prepared. Risk 8, ‘Business Continuity Management’, had been updated to reflect the results of the recent exercise, and the likely level of debt for risk 33, ‘Reform of Housing Revenue Account’, had been amended from £200million to £190million. Updates had been made to the Further Action sections for risks 17, ‘Capital Receipts spent on non revenue generating assets’, and 27, ‘Shortfall in key income streams’ whilst the rating for risk 20, ‘Collapse of Key Contract’, had reduced to significant likelihood, critical impact (C2) as both the Waste Management and Leisure Management contracts had been recently extended.

Recommended:

(1)        That the deletion of risk 4, ‘East of England Plan – Unable to agree joined up Plan’, be agreed;

(2)        That the review and re-naming of risk 3, ‘Potential difficulty producing Local Plan to ttimetable’, be agreed;

(3)        That the review of risk 29, ‘Gypsy Roma Traveller Provision’, by the Risk Management Group and the Corporate Governance Group and their conclusion that the score should be increased to ‘Significant Likelihood, Critical Impact’ (C2) be agreed;

(4)        That the Consequences for risk 8, ‘Business Continuity Management’, be updated following the recent exercise;

(5)        That the Effectiveness of Control and Required Further Action for risk 17, ‘Significant Amounts of Capital Receipts spent on Non Revenue Generating assets’ be updated;

(6)        That the Further Management Action for Risk 27, ‘Shortfall in Key Income Streams’, be updated following the recent Pricewaterhouse Coopers study;

(7)        That the review of risk 20, ‘Key Contract collapses or service levels deteriorate’, by the Risk Management Group and the Corporate Governance Group and their conclusion that the score should be decreased to ‘Significant Likelihood, Critical Impact’ (C2) be agreed;

(8)        That risk 33, ‘Reform of Housing Revenue Account’, be updated to reflect the Council’s likely  ...  view the full minutes text for item 25.

(Director of Finance & ICT) To consider the attached report (FPM-017-2011/12).

The Senior Finance Officer (Risk & Insurance) presented a report on Insurance Performance Monitoring.

The Senior Finance Officer reminded the Cabinet Committee that the Council had entered into a five-year agreement with Zurich Municipal in June 2005. A new three-year agreement had been signed with Zurich Municipal in June 2010, and there was an option to extend the agreement for a further two years in 2013. The Council’s excess level had been increased from £500 to £5,000, which had generated a saving of £69,030 per annum on the insurance premiums. Claims trends were monitored regularly and an analysis had been presented in terms of open and closed claims for Motor, Property and Casualty insurance over the previous five years. Casualty claims were further analysed to show those closed claims that had been repudiated or paid. This had shown that only for Casualty claims in 2010/11 had Zurich Municipal paid out more in claims than they had received in premiums, and that the decision to increase the Council’s excess to £5,000 had generated accumulated savings of £181,005 over the previous five years.

The Senior Finance Officer added that the Council had entered into a new three-year agreement with Zurich Municipal on 30 June 2010, on the basis of the current levels of excess. The agreement included an option to extend the contract for a further two years after the initial period and it was intended to open negotiations in January 2012 with Zurich Municipal. Following the initial three-month trial period, the Council had continued to handle the insurance claims for Uttlesford District Council; this arrangement was assisted through insurance cover for both councils being provided by Zurich Municipal. From April 2011, the Council had extended its service to provide answers to underwriting queries for Uttlesford, and the arrangement had generated income of £18,000 per annum.

The Director of Finance & ICT reassured the Cabinet Committee that Zurich Municipal had been the cheapest bid during the previous tender process, although they were only interested in being the Council’s sole provider and had not offered individual policies. The Council was actively seeking to extend its insurance service to other Councils.

Resolved:

(1)        That the Insurance trends and statistics for the previous five years be noted;

(2)        That the savings achieved from the increase in the public liability excess during the period 2005/06 to 2010/11 be noted; and

(3)        That the continuation of the Council handling insurance claims and underwriting queries for Uttlesford District Council be noted.

Reasons for Decision:

An Internal Audit report had recommended that annual reports should be presented to the Cabinet Committee to monitor the trends in claims and whether the increase in public liability excess to reduce insurance premiums had continued to generate savings for the Council.

Other Options Considered and Rejected:

To reduce the Council’s public liability excess, however this would result in an increase in the insurance premium.

(Director of Finance & ICT) To consider the attached report (FPM-018-2011/12).

The Assistant Director (Accountancy) presented a report on the setting of fees and charges for 2012/13.

The Assistant Director stated that the Medium Term Financial Strategy, which had been presented as part of the Financial Issues paper at the previous meeting, had shown a need to identify savings of £300,000 for the General Fund were required by the Medium Term Financial Issues paper for 2012/13. Whilst the majority of the savings required had already been identified, one option to help achieve this target would be to increase the fees and charges levied by the Council for various different services. In some cases, there was no scope for the Council to increase certain fees and charges as these were set by the Government.

In relation to specific fees and charges, the Assistant Director reported that it was intended not to increase the fees for Local Land Charges as the situation was still uncertain following the introduction of the Local Land Charges (Amendment) Rules 2010. It was proposed not to increase the fees for the Hackney Carriage Operators and Vehicle Licences either, as well as the fee for conducting MOT tests by Fleet Operations. It was also felt that the fees and charges levied for services such as New Horizons, Sports Development and Lifewalks provided by the Office of the Deputy Chief Executive should also not be increased, on account of the health benefits for those residents that participated. Pre-application charges for major planning applications were proposed to be increased by 5%, whilst the fees levied for trade waste would remain the same provided that SITA did not increase their fees to the Council.

It was proposed to increase the majority of Housing fees  by 5.2%, with a higher increase for heating charges at sheltered housing schemes to enable the Council to set charges at a sufficient level to reclaim the cost to the Council next year. The Housing Portfolio Holder emphasised that to continue to charge for heating in sheltered housing schemes at the current levels would cost the Council approximately £56,000 from next year. Some housing charges were proposed to remain the same, particularly in relation to Telecare charges, and some housing charges were proposed to be reduced in 2012/13.

The Cabinet Committee felt that residents and traders would welcome the parking fees being retained at their current levels, however, it was possible that these fees might have to rise at some point in the future. The Cabinet Committee felt that a number of the fees and charges should not be increased, given the current economic conditions faced by residents and local traders.

Recommended:

(1)        That the fees and charges levied for Council Services in 2012/13 be set at the levels as Appendix 1 of the report, with the exception of:

(a)        Bulky household waste collections to remain the same as 2011/12; and

(b)        trade waste collections to remain the same as 2011/12, provided Sita UK did not increase their fees to the Council;

(2)        That the fees and charges  ...  view the full minutes text for item 27.

(Director of Finance & ICT) To consider the attached report (FPM-019-2011/12).

The Assistant Director (Accountancy) presented the Quarterly Financial Monitoring Report for the period April to September 2011, which provided a comparison between the original profiled budgets for the period and the actual expenditure or income as applicable. The report provided details of the revenue budgets – both the Continuing Services Budget and District Development Fund – as well as the capital budgets, including details of major capital schemes.

The Assistant Director highlighted some of the issues arising from the Council’s budget monitoring. Investment interest levels were above expectations as there had been an average of £4million more invested than expected. Building Control income was expected to generate a surplus for the year, whilst income from the MOT tests carried out by Fleet Operations was slightly down. The introduction of the Local Land Charges (Amendment) Rules 2010 had led to a reduction in income compared to previous years, but the income to date this year had been better than expected. The Salaries schedule was underspent by £413,000, whilst the Housing Repairs Fund was underspent by £767,000.

The Assistant Director stated that income and expenditure was broadly in line with, or slightly better than, expectations. The budgets were in the process of being reviewed as part of the 2012/13 budget setting exercise, and the outturn reports would be adjusted to reflect any changes during the year.

Resolved:

(1)        That the Quarterly Financial Monitoring Report for the period April to September 2011 regarding the revenue and capital budgets be noted.

(Director of Finance & ICT) To consider the attached report (FPM-020-2011/12). (Report to follow).

The Assistant Director (Accountancy) presented a report concerning the first draft of the General Fund Continuing Services Budget and District Development Fund schedules for 2012/13, along with an update on the budget process and the savings achieved to date.

The Assistant Director advised the Cabinet Committee that the Council was still at an early stage of the budget preparation process and the figures would be further refined before the final budget was published. The savings required for 2012/13 identified in the Medium Term Financial Strategy had been achieved, and any further savings identified would contribute towards the savings targets for 2013/14 and 2014/15. It was acknowledged that the emphasis would be on savings, but some growth in the Continuing Services Budget was inevitable, particularly relating to pension deficit payments. The full schedules for the Continuing Services Budget and District Development Fund had been attached to the report as annexes, and represented best estimates at the current time. These would be further refined as the budget setting process continued.

The Assistant Director concluded by stating that £6,000 of savings had been previously identified within the Chairman’s budget in error, and that this had now been re-instated. The Portfolio Holder for Finance and Economic Development stated that this was the first step in the budget setting process, and reminded all present the Portfolio Holders had not yet had a chance to review the lists in detail.

Resolved:

(1)        That the draft Continuing Services Budget (CSB) and District Development Fund (DDF) schedules for 2012/13 be noted.

Section 100B(4)(b) of the Local Government Act 1972, together with paragraphs 6 and 25 of the Council Procedure Rules contained in the Constitution require that the permission of the Chairman be obtained, after prior notice to the Chief Executive, before urgent business not specified in the agenda (including a supplementary agenda of which the statutory period of notice has been given) may be transacted.

In accordance with Operational Standing Order 6 (non-executive bodies), any item raised by a non-member shall require the support of a member of the Committee concerned and the Chairman of that Committee. Two weeks’ notice of non-urgent items is required.

It was noted that there was no other urgent business for consideration by the Cabinet Committee.