Agenda and minutes

Finance, Commercial Revenue and Contracts Policy & Accountability Committee - Wednesday, 14th November, 2018 7.00 pm

Venue: Committee Room 1 - Hammersmith Town Hall. View directions

Contact: Kayode Adewumi  020 8753 2499

Items
No. Item

8.

Minutes pdf icon PDF 127 KB

To approve the minutes of the meeting held on the 5th of September 2018.

Minutes:

The minutes of the meeting held on 9 October 2018 were approved and signed by the Chair.

9.

Apologies for absence

Minutes:

No apologies for absence were submitted.

10.

Declarations of interest

If a Councillor has a disclosable pecuniary interest in a particular item, whether or not it is entered in the Authority’s register of interests, or any other significant interest which they consider should be declared in the public interest, they should declare the existence and, unless it is a sensitive interest as defined in the Member Code of Conduct, the nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

 

Where Members of the public are not allowed to be in attendance and speak, then the Councillor with a disclosable pecuniary interest should withdraw from the meeting whilst the matter is under consideration. Councillors who have declared other significant interests should also withdraw from the meeting if they consider their continued participation in the matter would not be reasonable in the circumstances and may give rise to a perception of a conflict of interest.

 

Councillors are not obliged to withdraw from the meeting where a dispensation to that effect has been obtained from the Audit, Pensions and Standards Committee.

Minutes:

There were no declarations of interest made.

11.

Section 106 Agreements - Update pdf icon PDF 112 KB

Since 2014 the Council has negotiated over £310 million worth of funding through developer contributions as part of new developments in the borough. This report sets out the role of section 106 agreements and the use of section 106 funds. It also provides an overview of those section 106 receipts, the current position regarding overall expenditure, and how decisions are made regarding expenditure.

Additional documents:

Minutes:

The meeting was informed that since 2014 the Council had negotiated over £310 million worth of funding through developer contributions as part of new developments in the borough.  This includes financial as well as non-financial contributions received through section 106 (s106) agreements, along with the Community Infrastructure Levy.

 

Members considered a report which sets out the role of s106 agreements and the use of the funds.  Joanne Woodward (Chief Planner and Economic Development Officer) gave an overview of those s106 receipts agreed as financial contributions per agreement, and the current position regarding overall expenditure and commitments for such types of agreement.  Members also considered further additional information contained in a tabled supplementary appendix 1(3) which detailed information on the top 20 largest s106 agreements.

 

Judith Worthy asked why had the funds been sitting in the s106 account for so long.  Joanne responded that some funds had only just been received but there are currently over 900 heads of terms where financial contributions have been received and officers are reconciling the figures to understand why and improve the data produced. The meeting noted there are 3 broad categories of s106 contributions received:

 

·         for a specific purpose defined and described in the s106 agreement

·         for a general functional purpose defined and described in the s. 106 agreement but with geographical constraints

·         for a general purpose defined and described in the s106 agreement but with no borough geographical constraints.

 

Members noted the typical obligations agreed by the Council which were summarised in Appendix 2 of the report.

 

Councillor Murphy asked how much cash is earmarked or committed.  It was reported that there is £67 million of other commitments as part of a total of £74 million earmarked commitments and which are subject to the reconciliation process currently underway.

 

Judith Worthy asked would a substantial piece of work be undertaken on CIL as well?  Hitesh responded that a substantial piece of work was not required as CIL can easily be reconciled.  However, the same governance applies to CIL and s106.  CIL can be spent only on infrastructure necessary to support growth in the borough.

 

Councillor Quigley asked for clarification of admin charges incurred and which schools can we fund through s106.  Joanne noted that the charges paid cover the Council’s staff responsible for managing the s106 programme and the Council only funds LA schools.

 

Councillor Vincent noted that the £50 million balance of s106 funding and inquired where the money was held, does interest accrue and what was the interest used for.  Emily Hill (Assistant Director – Corporate Finance) stated that the money was held and invested alongside other Council funds and interest was allocated to each project annually.

 

Councillor Johnson noted that a major data cleansing exercise was required as some of the projects listed such as the Hurlingham Retail Park would never be developed nor the future receipts received.  Joanne agreed that some projects would not be built and therefore the agreed receipts wouldn’t be received, or the developer or Council might  ...  view the full minutes text for item 11.

12.

Ruthlessly Financially Efficient pdf icon PDF 83 KB

The Council’s Vision sets out five council priorities, which includes being ‘ruthlessly financially efficient’. In response to this essential priority, the Chief Executive and Strategic Director of Finance and Governance have issued a strategic approach to all directors and managers, sharing expectations and setting out the standards that must to be followed. The Committee is asked to review this approach and provide feedback.

Additional documents:

Minutes:

Hitesh Jolapara (Strategic Director of Finance and Governance) presented a report setting out the Council’s 5 priorities which includes being ‘ruthlessly financially efficient’ (RFE).  The document had been approved by SLT, Cabinet and passed down the organisation.  The Chief Executive and Strategic Director of Finance and Governance have issued a strategic approach to all directors and managers, sharing expectations, and setting out the standards that must to be followed.  All officers and Cabinet members are expected to adhere to the expectations and standards which reflects the Council’s Financial Regulations.

 

Chris Littmoden welcomed the approach and it was agreed that post implementation reviews(PIRs) will take place in future.

 

Action by Hitesh Jolapara (Strategic Director of Finance and Governance)

 

 Councillor Vincent asked how could officers demonstrate the effect of RFE upon the business, what is audit’s role and had this been pushed to schools?  Hitesh noted that its introduction had caused disruptions.  Officers are more aware of financial regulations and following them. There is better governance of projects.  Lesley Bell also explained how their day jobs had been impacted by RFE.  He would check with David Hughes and Rhian Davies on how this could be extended to schools.

 

Action by Hitesh Jolapara (Strategic Director of Finance and Governance)

 

Hitesh noted that this document was one of a suite of 5 key documents which had been produced by the Council.  The Committee requested for the other 4 documents noted in the document to be circulated.

 

Action by Hitesh Jolapara (Strategic Director of Finance and Governance)

 

Tony was of the view that the documents was thin on income generation and asked how much income had been generated.  Committee requested for a paper on income generation.

 

Action by Lisa Redfern (Strategic Director of Adult Social Care and PSR)

 

Hitesh noted that any use of reserves had to be signed off by the Chief Executive and himself.

 

Councillor Johnson observed that there was a massive communication role in getting the message across to staff.  He did not feel a sense of the leadership trying to change human behaviour.  The document seems to be heavily process oriented.  Hitesh responded that lunchtime briefing sessions had been held with newsletters and intranet messages to staff.  The Council had also asked for ideas from staff.

 

The meeting was informed that with the introduction of IBC, the Council was reviewing the number of budget holders.  Budget accountability was currently at a service level.  Eric Hohenstein agreed to send his comments to Hitesh direct.

 

Action by Eric Hohenstein

 

Councillor Murphy asked if staff were able to change their behaviour to ensure RFE is successfully implemented and what support was given to officers to draft business cases.  Hitesh said that finance officers are sitting within the businesses to support the business but reporting to Hitesh.  The project management office had drafted templates for officers to use.  Business cases are considered by SLT, DMTs and the Finance Board before being recommended to Members. He agreed that training for writing business cases was needed.

 

Councillor  ...  view the full minutes text for item 12.

13.

HR, Payroll and Finance Service Transition Programme pdf icon PDF 126 KB

In September 2017, Cabinet agreed to move the Council’s HR, Payroll and Finance services, currently provided by BT, to a public-to-public partnership led by Hampshire County Council using the SAP platform.This report summarises the progress made and the key activities scheduled between now and go live of the new system. 

Minutes:

Mark Grimley (Director of Corporate Services) presented a report summarising the progress made and the key activities scheduled between now and 1st December 2018 – the go live of the new system.

 

We have been through a rigorous period of change using a tried and tested onboarding route.  We have worked closely with Hampshire County Council, Deloitte (their onboarding partner) and BT to ensure all stakeholders are committed to a successful outcome. The organisational structure has been rebuilt and we have 100% reconciled records.  We have completed System Integration Testing (SIT) and User Acceptance Testing (UAT) and satisfied the entry/exit criteria.  The key challenges are change management and paying everyone correctly on the 1st payroll run.  As part of our learning from Agresso, we have put in place a 3 months remediation plan to resolve any issues before the project team shuts down.

 

The Business Development team had produced a communications and engagement strategy, a change management plan, a stakeholder assessment, a detailed change impact assessment, a knowledge share needs assessment and a communications plan.  These identify all the groups of users, covering the entire organisation, who need to learn to use the system and understand the changes they will see from the previous system. This has been complimented with a poster campaign, leaflets, intranet pages, a microsite and a regular newsletter.  The newsletters have raised awareness and informed staff and managers of what is coming with useful information on how to undertake common processes.

 

Councillor Murphy asked how much did it cost to exit the BT Agresso contract?  Hitesh noted that due to the commercially sensitivity of the negotiations, officers will circulate reports previously considered by the Finance PAC and Audit Committee.

 

Action by Hitesh Jolapara (Strategic Director of Finance and Governance)

 

In response to a question regarding costs, officers noted that this is a well-resourced programme due to its importance and complexity.  The original allocated budget for the programme is £7,911,000 including contingency.  As of 31 October 2018, the forecast spend across the programme was under by around £620,000.  The forecast budget includes LBHF programme costs and programme staff until programme shuts down and all Hampshire/Deloitte costs until go live.

 

Tony Boys commented that as more authorities come on board the partnership, the cost to us should reduce.  He asked for the details of the system’s capacity.  Mark responded that the system has additional functionalities such as recruitment, learning and development, performance management and workforce planning models.  Some would be accessed later.

 

Judith Worthy asked who is carrying the risk and what is the contingency for the risk? Mark noted that payroll and technical problems at go live were the 2 main risks.  Several actions have been put in place to mitigate against these risks.  It was noted that it is a partnership not customer/supplier relationship.  There is a good governance model with detailed roles, responsibilities, and liabilities in place.  H&F has officers on the Integrated Business Centre (IBC) Board.  The SAP platform holds  ...  view the full minutes text for item 13.

14.

Temporary Staffing and Establishment Report pdf icon PDF 128 KB

This paper sets out the current temporary resourcing arrangements across the council. The paper also sets out directorate action plans to use agency staffing appropriately, and to better plan for their workforce needs over the coming years as part of the council’s Ruthlessly Financially Efficient policy.

Minutes:

Mark Grimley (Director of Corporate Services) presented a paper setting out the current temporary resourcing arrangements across the Council.  He noted that the scrutiny of agency spend cuts across PSR and Finance PACs.

 

As at September 2018, the Council directly employed 1,959 staff with the full-time equivalency (FTE) of 1,755 and in addition, a further 395 agency workers.  Agency staff represented 18% of the Council’s staffing resource.  Over the past 3 financial years, the use of agency staff had increased from an annual spend in 2016/17 of £16.5 million to an estimated outturn in 2018/19 of £19 million.

 

Agency staff have been used to cover vacancies, sickness absence, project work and peak demand in services.  40% of our agency staff have been with us for 2 years or more.  These staff would be moved over to permanent contracts.  The Council currently monitors staffing resources through the monthly Corporate Revenue Monitoring report against budgeted allocations for staffing.  We are exploring the better use of graduate and apprenticeship programmes to reduce this area of expenditure.  With our transformation plan in place, the aim is to reduce the agency ratio by 25% by the end of the year. 

 

In response a question from Councillor Murphy, regarding the link between the use of agency staff and the Council’s business plan, it was noted that there was a 50:50 split between one off specialist recruitment and non-specialist agency staff.

 

Due to the evolving nature of our transition programme, rapid decision making had resulted in the increase use of agency staff.  We had to go to the market at short notice resulting in some higher spend.  Better workforce planning and project management would ensure that we plan our use of resources better. Replacing all agency staff would yield a savings of £400,000 per annum. 

 

Councillor Vincent asked what was the % of the agency fees on the £19 million spend.  It was reported that there is a 12% fee for recruitment within the framework and up to 43% for off framework recruitment.  Officers are trying to contain recruitment within the framework.

 

Although we employ around 2,000 staff, officers will look over the lifetime of the medium-term financial strategy to identify any areas where it would not be advantageous to recruit to permanent or fixed-term roles where workforce reductions are anticipated.  This would assist the Council in avoiding potential redundancies and pensions costs where restructures or reductions are required.

 

In response to Councillors Vincent and Murphy’s questions, it was noted that there are some roles where we would recruit to could result in some savings. Councillor Quigley asked for a breakdown of the number and cost of qualified and unqualified social workers.

 

Action: Prakash Daryanani (Head of Finance – Adult Social Care) and Tony Burton (Head of Finance – Children’s)

 

Chris Littmoden asked how does the Council determine where the cost was too high particularly measuring cost vs productivity.  It was noted that there is a 5 – 7% loss of productivity within the system.  We do  ...  view the full minutes text for item 14.

15.

Committee Work Programme pdf icon PDF 50 KB

The Committee is asked to consider the items on the work programme and suggest any amendments or additional topics to be included in the future.

Minutes:

The work programme was noted.

16.

Dates of future meetings

The following dates are proposed:

· Monday 5th December 2018

· Tuesday 12th February 2019

· Wednesday 27th March 2019

Minutes:

The following dates were agreed: -

·         Wednesday 30th January 2019

·         Wednesday 27th March 2019