Agenda and minutes

Performance and Finance Scrutiny Committee - Thursday, 9th July, 2020 10.30 am

Venue: Virtual meeting with restricted public access

Contact: Lisa Sampson on 033 022 28193  Email:  lisa.sampson@westsussex.gov.uk

Media

Items
No. Item

70.

Declarations of Interest

Members and officers must declare any pecuniary or personalinterest in any business on the agenda. They should also make declarations at any stage such an interest becomes apparent during the meeting. Consideration should be given to leaving the meeting if the nature of the interest warrants it. If in doubt please contact Democratic Services before the meeting.

Additional documents:

Minutes:

70.1  Cllr Walsh declared a personal interest in relation to the Financial Impacts of COVID-19 item as Leader of Arun District Council.

 

70.2  Cllr Smytherman declared a personal interest in relation to the 2020/21 Scrutiny Work Programme item [climate change] as a Member of Worthing Borough Council.

 

70.3  Cllr M Jones declared a personal interest in relation to the In-sourcing financial services from Support Services Outsource Contract item as a member of Unison.

71.

Minutes of the last meeting of the Committee pdf icon PDF 211 KB

The Committee is asked to agree the minutes of the meeting held on 22 May 2020 (cream paper).

Additional documents:

Minutes:

71.1  Resolved – That the Minutes of the meeting held on 22 May 2020 be approved as a correct record and that they be signed by the Chairman.

72.

Financial Implications of Covid-19 pdf icon PDF 105 KB

A report by the Director of Finance and Support Services updating the committee of the financial implications and pressures for the year 2020/21 as a result of the current pandemic situation.

 

The Committee is asked to review, comment on and make any relevant recommendations for action to the Cabinet Member for Finance.

Additional documents:

Minutes:

72.1  The Committee considered the financial implications of COVID-19 report from the Director of Finance and Support Services (copy appended to the signed minutes). 

 

72.2  The Director of Finance and Support Services introduced the report and highlighted that the report reflects the state of affairs at publication; since 2 July further Government funding has been announced and an additional £500m will be available to local authorities to replace loss of income or to pay the deficit on collection funds, however the allocation of this has not yet been detailed.  The projected budget gap for 2020/21 and Medium-term Financial Strategy (MTFS) will be updated once the detailed allocation of funds is known.  At this time a budget gap for 2020/21 is predicted on an estimated scale of £34m to £50m.  Uncertainty remains around the cost of the COVID-19 response, future economic recovery within the county, and the expected receipt from Council Tax as a result of increased unemployment.  The financial situation is currently reactive, with Government funds coming after the necessary spend; the Council would welcome further support from the Government and, in particular, more funding certainty for the current and next financial year.

 

72.3  The Committee made comments in relation to the report including those that follow.  It:

·       Welcomed this update report providing Members with a strategic overview of the effect of COVID-19 on the Council’s finances, and thanked the Finance team for their work in such uncertain times.

·       Queried whether there was any indication as to the Government’s intentions regarding funding of the COVID-19 effort, and whether it aims to reimburse the additional expense fully or partly.  The Cabinet Member for Finance commented that the initial indication was for expense to be fully funded; the Council has received £36.4m to date and awaits a further announcement.  Modelling commissioned by the County Council Network estimates council tax revenue will be 5-6% lower than expected which would equate to the Council’s income being reduced by £25m. 

·       Commented that the report does not enable scrutiny of the estimated costs and forecast predictions for future years, and requested that future reports must include the key assumptions that underlie the forecasted figures and issues, and also address the risk around the assumptions.

·       Commented that given the emergency nature of the impact on finances, could the normal rules preventing councils from borrowing to fund revenue expenditure be relaxed in order to allow a loan or bond to be taken over a long period.  The Cabinet Member for Finance explained this had been discussed with officers but no new guidance has been given; a letter was sent to the Chancellor recently raising this point and lobbying for flexibility. 

·       Suggested an alternative approach of relaxing the capitalisation of revenue expenditure so the COVID-19 impact could be capitalised from revenue expenditure instead.  The Cabinet Member for Finance explained the capitalisation is restricted to use for transformational purposes.

·       Expressed concern regarding the growing shortfall expected from the Council Tax precept this year, commented that district and borough councils are  ...  view the full minutes text for item 72.

73.

Treasury Management Annual report pdf icon PDF 103 KB

Report by the Director of Finance and Support Services setting out the performance of the Treasury Management function in 2019/20.

 

The committee is asked to review and comment on the Treasury Management Annual Report and make any relevant recommendations for action to the Cabinet Member for Finance in relation to Treasury Management activity.

Additional documents:

Minutes:

73.1  The Committee considered the Treasury Management Annual Report 2019/20 from the Director of Finance and Support Services (copy appended to the signed minutes). 

 

73.2  The Cabinet Member for Finance introduced the report and noted that it is reporting on the position before most of the effects from COVID-19 were seen.  The Cabinet Member thanked the treasury management team for a well-managed year with no breaches of the Strategy. 

 

73.3  The Financial Reporting Manager introduced the report, highlighting that Brexit was a key issue for treasury management activities throughout 2019/20, and the market volatility due to COVID-19 was only evident at the end of the year.  Borrowing rates are low, but bank interest rates have also fallen; pooled investment funds were performing well and have helped to mitigate the lower rate of return, but they should be viewed over the long term. 

 

73.4  The Committee made comments in relation to the report including those that follow.  It:

·       Thanked the treasury management team for a very comprehensive report and their diligent management throughout the year.

·       Commented in relation to the £100m borrowed to pay for internal borrowing that this was a wise and well-timed decision which created a return in a challenging financial environment.

·       Queried how risk is monitored, and how often this is reviewed and policy changed as a result.  The Financial Reporting Manager explained the treasury team receive regular risk updates provided by the Council’s advisor which the team follow closely in addition to updates from the Chartered Institute of Public Finance and Accountancy (CIPFA) and other professional bodies.

 

73.5  Resolved:

 

1)   That the Committee thank officers for a very comprehensive report and good management of the funds over 2019/20; and

2)   That the Committee recognise the impact of COVID-19 and the need to reflect the implications in future budget plans and the Treasury Management Strategy.

74.

2019/20 Scrutiny Annual Report and 2020/21 Work Programme pdf icon PDF 123 KB

Report by the Director of Law and Assurance providing an evaluation of the impact of scrutiny at the County Council during 2019/20 and the work programme for July 2020 – September 2021.

 

The Committee is asked to scrutinise and comment on the report, with a particular focus on:

 

a)    reviewing scrutiny performance and making any recommendations for improvements. It should also consider its role in improving scrutiny practice and, if appropriate, identify any training or development needs for scrutiny members;

 

b)    ensuring that the highest priority areas for scrutiny are included within the work programme for this committee (see Appendix 2);

 

c)     supporting the work programmes of the service scrutiny committees (see Appendix 3) and recommending that County Council in July approves the scrutiny work programme for all committees;

 

d)    considering whether the capacity and resources available for scrutiny are sufficient to ensure the work programmes can be achieved; and

 

e)    giving an early indication of any topics from the work programme for debate at future County Council meetings.

Additional documents:

Minutes:

74.1  The Committee considered the 2019/20 Scrutiny Annual Report from the Director of Law and Assurance (copy appended to the signed minutes). 

 

74.2  The Head of Democratic Services introduced the report which has an updated format to make it more accessible and focused on outcomes.  Scrutiny activity at the Council has continued through the COVID-19 pandemic, unlike a number of other councils, and this should be highlighted as a success.

 

74.3  The Committee made comments in relation to the 2019/20 Scrutiny Annual Report including those that follow.  It:

·       Thanked officers for a helpful report, and thanked Democratic Services staff for their excellent Member support through the year.

·       Commented, as only 19 responses were received out of 70 Members, that perhaps the Member Scrutiny Survey is overlooked and suggested small feedback workshops by Committee or political group may give a better rate of feedback.   The Head of Democratic Services commented that feedback workshops or sessions after the last Committee meeting of the year could be considered.

·       Commented that the Report cannot show the outcomes of the difference scrutiny makes to service outcomes for residents, and suggested that successes should be noted in the Committee meetings.  The Head of Democratic Services agreed that showing soft influence is a challenge for all councils, and welcomed comments on how to do this.  Framing results and considering possible outcomes at the work planning stage could be useful.

·       Noted the feedback that less than half of Members responding to the survey felt scrutiny reflects issues of greatest public concern/importance, and queried whether the survey comments provided guidance on how Business Planning Groups could improve this aspect.  The Head of Democratic Services will share the details of the survey with the Committee Chairmen and BPGs, but there were no comments received to explain this point.

·       Queried how many suggestions for scrutiny topics were received from the public via the website form and how many were taken up.   Suggested that potential matters for scrutiny could be requested from the public via pro-active press releases put out ahead of Business Planning Group (BPG) meetings, via standing item on County Local Committee (CLC) meeting agendas, or by including public questions at Scrutiny Committee meetings.  The Head of Democratic Services explained suggestions were mostly received from members of the public via their local Member, but also from interested partner agencies, charities etc.  Scrutiny committees all have a standing agenda item for Members to raise suggestions, and any Member can make a suggestion directly to a Committee Chairman or Committee member.

·       Highlighted the need for better business and agenda planning to ensure timely and effective influence, as reports provided are sometimes superseded before the meeting takes place, and the importance of scrutiny focusing on the policy and strategy issues rather than detailed delivery methods.

·       Regarding the Council’s organisational culture and attitude, commented that there are still some concerns around this, evidenced by Unison not being formally recognised for negotiating annual pay reviews by the Council.  The Head of Democratic Services commented that  ...  view the full minutes text for item 74.

75.

In-sourcing financial services from Support Services Outsource Contract pdf icon PDF 102 KB

Pre-decision scrutiny of the decision to in-source financial services from the Support Services Outsource (SSO) Contract.

 

The Committee is asked to scrutinise the decision report and make any relevant recommendations to the Cabinet Member for Economy and Corporate Resources ahead of the decision being taken.

Additional documents:

Minutes:

75.1  The Committee considered the Insourcing financial services from Support Services Outsource (SSO) Contract report from the Director of Finance and Support Services (copy appended to the signed minutes).

 

75.2  The Cabinet Member for Economy and Corporate Resources introduced the report and informed the Committee that the proposed in-sourcing of the financial services team would offer greater flexibility and enable the team to offer improved features to customers, including implementing the Minimum Income Guarantee (MIG). 

 

75.3  The Committee made comments in relation to the report including those that follow.  It:

·       Commented that the report states the increased pension costs of £160k will be from the “Current cost envelope for service delivery”, and queried what changes will be made to make the £160k available.  The Director of Finance and Support Services confirmed the exact cost rise due to pension auto-enrolment will not be known until the end of the TUPE process, but the salary and pension costs will be met from the Council’s Capita contract budget.

·       Commented that the information is incomplete and insufficient, that the report is not very clear on the financial and resource implications of the decision, and requested clarity on how the estimated saving will be realised.  The Director of Finance and Support Services clarified that the proposed in-source aims to achieve qualitative improvements rather than financial savings.  A reduction in the Capita contract price has been agreed to take into account the cost of the staff TUPE’ing to the Council (excluding pension costs).  A benefit was agreed on top of this to fund a Project Manager to oversee the transfer and manage the backlog of work.  The in-source is a neutral situation and no saving is due to be made as part of this.

·       Requested that the decision report be clarified ahead of the Cabinet Member taking the decision, in particular to clarify the financial and staffing implications and the costs involved to in-source the service. 

·       Queried the reason driving the decision which appears to be being taken quickly given the SSO contract is due to end in two years.  The Cabinet Member for Economy and Corporate Resources explained it is a pragmatic approach and shows a readiness to review service planning.  Discussions on in-sourcing financial services have been ongoing for some time already; there is no urgency to the decision other than to fit into the timetabled process. 

·       A Member commented his own research has shown there are delays in obtaining information requested from Capita to enable Council staff to effectively recover debt, which often prejudices recovery, and queried how much has not been recovered due to Capita delays.  The Cabinet Member for Economy and Corporate Resources will look into this matter for the Committee.

·       A Member commented his own research has shown safeguarding matters are often identified by Council staff that have not been picked up in Capita processes, including potential mis-use of funds by representatives, which results in delays in raising safeguarding alerts and queried whether this is a reason for the in-sourcing.  ...  view the full minutes text for item 75.

76.

Forward Plan of Key Decisions pdf icon PDF 783 KB

Copy of the ForwardPlan dated 22 June 2020.

 

Anextract fromanyForwardPlan entries publishedbetween the date of despatchof the agenda and the date of the meetingwill be tabled at the meeting.

 

The Committee is asked to consider whetheritwishes to enquireinto any of the forthcoming decisions withinits portfolio.

Additional documents:

Minutes:

76.1  The Committee considered the Forward Plan of Key Decisions (copy appended to the signed minutes).  No additional items for scrutiny were identified.

 

76.2  Resolved – That the Forward Plan be noted.

77.

Possible Items for Future Scrutiny

Members to raise any items which they believe to be of relevance to the business of the Scrutiny Committee and suitable for scrutiny, e.g. raised with them by constituents, arising from central government initiatives, etc.

 

If any member puts forward such an item the Committee’s role at this meeting is to assess, briefly, whether to refer the matter to its Business Planning Group (BPG) to consider in detail.

Additional documents:

Minutes:

77.1  A Member commented that the Committee may wish to scrutinise the stalled progress of developing the Novartis site in Horsham which is of local concern.  The Committee agreed to bring the request to the next Business Planning Group meeting for discussion and supported Novartis being added to the Committee’s work programme for agreement by Full Council.

 

77.2  The Chairman agreed to the propose climate change scrutiny being added to the ECFSC work programme for agreement by Full Council.

78.

Date of Next Meeting

The next meeting of the Committee will be held on 10 September 2020 at 10.30am.  Probable agenda items are to be confirmed.

 

Any member wishing to place an item on the agenda for the meeting must notify the Director of Law and Assurance by 28 August 2020.

Additional documents:

Minutes:

78.1  The Committee notes its next meeting will take place on 10 September 2020, commencing at 10.30am.