Agenda and minutes

Finance, Commercial Revenue and Contracts Policy & Accountability Committee
Wednesday, 4th July, 2018 7.00 pm

Venue: Committee Room 1 - Hammersmith Town Hall

Contact: Kayode Adewumi - Head of Governance  020 8753 2499

Items
No. Item

1.

APPOINTMENT OF A VICE CHAIR FOR 2018/19 MUNICIPAL YEAR

The Committee is asked to appoint a Vice Chair for the 2018/19 municipal year.

Minutes:

RESOLVED

Councillor Donald Johnson was appointed as Vice Chair for the 2018/19 Municipal Year.

2.

APPOINTMENT OF CO-OPTEES

The Committee is asked to agree the re-appointment of the following coopted members for 2018-19:

·         Tony Boys

·         Erik Hohenstein

·         Chris Littmoden

·         Judith Worthy

Minutes:

RESOLVED

The Committee agreed the appointment of Tony Boys, Erik Hohenstein, Chris Littmoden and Judith Worthy as Co-optees for the 2018-19 Municipal Year.

3.

Apologies for absence

Minutes:

Apologies for absence were received from Tony Boys and Eric Hohenstein.

4.

Declarations of interest

If a Committee member has any prejudicial or personal interest in a particular item they should declare the existence and nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

 

At meetings where members of the public are allowed to be in attendance and speak, any Councillor with a prejudicial interest may also make representations, give evidence or answer questions about the matter. The Councillor must then withdraw immediately from the meeting before the matter is discussed and any vote taken unless a dispensation has been obtained from the Standards Committee.

 

Where Members of the public are not allowed to be in attendance, then

the Councillor with a prejudicial interest should withdraw from the meeting whilst the matter is under consideration unless the disability has been removed by the Standards Committee.

 

Minutes:

There were no declarations of interest.

5.

MINUTES OF THE PREVIOUS MEETING pdf icon PDF 340 KB

To approve as an accurate record, and the Chairman to sign the minutes of the meeting held on 16th January 2018.

Minutes:

The minutes of the meeting held on 16 December 2018 were approved and signed by the Chair.

 

Matters Arising

 

Chris Littmoden asked for feedback regarding the action point on the Council’s strategy on Asset Back Securities as part of the Council’s Treasury Management Strategy.  Hitesh Jolapara (Strategic Director – Finance and Governance) noted that a discussion had taken place with the treasury team.  A report will be made available at the next meeting.

 

Action - Hitesh Jolapara

 

6.

2017/18 CORPORATE REVENUE OUTTURN REPORT pdf icon PDF 460 KB

Section 151 of the 1972 Local Government Act requires the Chief Financial Officer (as the responsible officer) to ensure proper administration of the Council’s financial affairs.  This report is the concluding part of the Council’s 2017/18 budgetary control cycle. Budgetary control, which includes the regular monitoring of and reporting on budgets, is an essential requirement placed on Cabinet Members, the Chief Executive, and Directors in discharging the statutory responsibility.

Minutes:

Hitesh Jolapara informed the meeting that accounts for 2017/18 were closed subject to the Audit, Pensions, and Standards Committee approval on 17th July 2018.  The key headlines from the report were set out in Table 1 providing details of the departmental budgets, the actual spend and variance.  The meeting noted the biggest areas of pressures, general fund and reserves balances.

 

Hitesh advised that reserves were stable and slightly increased during the year.  Ideally, the general balance should be between £14 - £20 million.  He noted that other London boroughs faced similar pressures in Adults and Children’s Services budgets. Furthermore, our reserves were around the mid point range which was good.

 

Judith Worthy asked for an explanation of earmarked reserves and the effect of using Section 106 funding to balance the budget. Chris Littmoden further enquired what it meant when funds were earmarked, who earmarks the funds and could they be unearmarked?  Hitesh explained that £1.6m S106 funds were used to mitigate pressures in the budget last year.  S106 funding consists of specific and non-specific spend. He was comfortable to use S106 funding if the spend met the criteria.

 

The Chair asked how long S106 funding would last before there was no more funds left to use? The meeting was informed that there was a need to be disciplined when using reserves and S106 funding.  Some reserves were strictly earmarked for specific purposes and to meet future liabilities while others were a matter of choice. Cabinet takes the decision to earmark and use reserves when appropriate. Due to the financial pressures facing the Council, the use of reserves would be more closely monitored and stricter controls introduced. 

 

Judith Worthy stated that in relation to earmarked funds and the allocation of internal funds, it would have been helpful to see what was spent where. Hitesh agreed that the presentation would be considered in future reports. Emily Hill noted that there were not many significant commitments against reserves. The expectation was for most long-term contracts to be kept within the annual budget.  The Chair asked why just £70m of the £90m was allocated. The £19m General Balances was unallocated. It is the place of last resort. Hitesh explained that certain amounts for provisions were set aside for any future liabilities.  Around £40m in earmarked reserves were restricted.   £14m of restricted funds were set aside to cover grants, insurance and other committed spend. The rest of the reserve funds was uncommitted.

 

The Chair suggested that reports going forward could have key points presented at the beginning.  Hitesh agreed to provide an executive summary with key numbers highlighted with some graphs.  He also offered one to one sessions with members to help explain the figures in more depth.

 

Action: Hitesh Jolapara

 

Hitesh stated that the council is reasonably comfortable at this stage with the current position of having £90m in reserves and £19m in General Balances considering the last 10 years of austerity.  We are not in a bad position compared to other local  ...  view the full minutes text for item 6.

7.

RESIDENTS' SERVICES REVENUE REPORT 2018/19 pdf icon PDF 396 KB

At this early stage, parking is forecasting that it will end the year £413,000 favourable against budget.  Residents’ services department is forecasting that it will end the year £753,000 adverse against budget.  Taken together, the forecast is for an adverse variance of £340,000 if mitigating actions were not taken.  The Committee is asked to note this report and comment on measures that should be considered.

Minutes:

Nick Austin stated that Residents’ Services was a new department and budgets may alter as the structure was still being finalised. He gave a breakdown of services provided by the department.

 

The Chair observed that if by month 2 the department was projecting an overspend in commercial services, how effective was the budgeting forecasting? Nick stated that the budget had been challenging and the department was looking at other ways to resolve the issues.  Councillor Schmid added that the budget was drawn up in the January 2018.  The climate had changed over the past five months.   The department was developing measures to reduce the overspend. Nick explained that as it was early in the year a cautious approach was taken when producing the monitoring report.  There is a reduction in the projected licensing fees due to a change in legal definition about what is recoverable in a licencing fee.  Income targets in some areas will be adjusted if other sources of income cannot be identified.

 

Councillor Vincent questioned whether it would be useful to use trend analysis in our budgeting.  Chris Littmoden asked for a commitment to use trend analysis to help with the budget.  Hitesh informed the meeting that trend analysis was used as part of the budgeting tools.  Prakash Daryanani advised that Social Care used trend analysis to aid forecasting.  At the beginning of the year and during the quarterly budget monitoring process trend analysis were relied upon.

 

It was agreed that the use of trend analysis to aid quarterly budget monitoring would be introduced.

 

Action: Hitesh Jolapara

 

The Chair noted that the sports operations bookings income budget was lower than last year’s outturn and queried the reason for this.  Nick agreed to circulate an explanation.

 

Action: Nick Austin

 

The meeting also noted the drop in projected PCN income.  It was explained that this was a general trend across London.  With the introduction of cashless parking technology, people can now top up their parking from their phones avoiding a PCN for overstaying and other customer behaviour changes.

 

The Chair asked Nick how he used the data detailed in the report with his team and how often did they meet to go through budgets? Nick stated that they met weekly and discussed finance regularly.  Regular monthly income and expenditure reviews also took place with the team.  Nick added that with regards to agency spend, the team had looked at every post to ensure that the use of agency staff was justified.

 

Councillor Quigley inquired about the additional cemeteries income.  Nick explained that an increase in burials was projected.  The Chair asked whether dynamic charging had been considered in relation to the borough’s sports facilities, such as the tennis courts in Ravenscourt Park.  Nick advised he would take this away to look at and consider.

.

 

Action: Nick Austin

 

Councillor Vincent asked for the related costs and savings of the Council’s reorganisation. Hitesh advised that one-off costs of around £500,000 had occurred.

 

Kim Dero (Chief Executive) stated that the reorganisation  ...  view the full minutes text for item 7.

8.

Section 106 Update Report pdf icon PDF 187 KB

This report covers the role of section 106 agreements and use of section 106 funds.

Minutes:

It was agreed that the consideration of the report be deferred to the next meeting.

9.

Work Programme 2018-19

The Committee is asked to consider how it would like to shape its work programme for the remainder of the municipal year.

Minutes:

The following items were agreed for inclusion in the Committee’s work programme:

·         Open Facilitated Session - The Chair informed that Erik Hohenstein had suggested an open facilitated session to look at what were the five key finance issues facing the Council over the medium to long term and what can we do to meet such challenges. The Chair advised that Erik Hohenstein would facilitate the session.

·         Commercial Income and commercial directorate

·         External funding including grant funding, bid writing and other Income sources

·         Contract management – performance, governance, and monitoring. Using a live contract as a case study.

·         Financing our economy – High street renewal, understanding inward investment, business rates.

·         Agency staff – use and costs

·         Work styles and patterns

·         Using our estate more economically

·         Staffing budget

·         IT Desktop strategy

·         Transition to Hampshire IBC

·         Lesson learnt on from savings delivered and the consequences

 

10.

Dates of future meetings

The following dates are proposed:

·         Monday 5th September 2018

·         Monday 5th December 2018

·         Tuesday 12th February 2019

·         Wednesday 27th March 2019

 

Minutes:

The following dates were noted:

·         Monday 5th September 2018

·         An additional meeting in October or November 2018 (TBC)

·         Monday 5th December 2018

·         Tuesday 12th February 2019

·         Wednesday 27th March 2019