Agenda and draft minutes

Finance, Commercial Revenue and Contracts Policy & Accountability Committee
Tuesday, 2nd July, 2019 7.00 pm

Venue: Courtyard Room - Hammersmith Town Hall. View directions

Contact: Kayode Adewumi 

Items
No. Item

1.

Minutes pdf icon PDF 147 KB

To approve as an accurate record, and the Chairman to sign the minutes of the meetings held on 12 February and 27 March 2019.

Additional documents:

Minutes:

The minutes of the meetings held on 12 February and 27 March 2019 were approved and signed by the Chair.

2.

Appointment of Co-Opted Members

The Committee is asked to agree the re-appointment of the following coopted members for 2019/20:

·         Tony Boys

·         Erik Hohenstein

·         Chris Littmoden

·         Judith Worthy

 

Minutes:

The Committee agreed the appointment of Tony Boys, Erik Hohenstein, Chris Littmoden and Judith Worthy as co-optees for the 2019-20 municipal year.

 

3.

Apologies for absence

Minutes:

Apologies for absence were received from Chris Littmoden.

4.

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.

 

At meetings where members of the public are allowed to be in attendance and speak, any Councillor with a disclosable pecuniary interest or other significant 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.

 

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.

 

5.

2018/19 Reserves Outturn Report pdf icon PDF 102 KB

Council reserves are an important element of good financial management. They exist to enable investment in priorities and service transformation or to respond to unexpected events or emerging needs.  The Committee is asked to note the 2018/19 outturn reserves position.

Minutes:

 Hitesh Jolapara reported that the Council’s accounts for 2018/19 were closed and subject to an audit. The statutory deadline for closure was 31 May with external audit completed by 31 July. Audit, Pensions and Standards Committee later in the month will consider the outcome of the audit.

The movement in reserves and balances over recent years was noted. £32.7 million of General Fund earmarked reserves were spent in 2018/19. The use of earmarked reserves included provision for NNDR movement due to technical adjustments, spending on approved projects, funding of the in-year general fund overspend and provision for the Dedicated Schools Grant (DSG) reserve. The closing balance was now £62.3 million.

The general balance stood at £19 million which represents 3.3% (equivalent to 12 days spend) of the Council’s gross budget of £560 million. The general balance should be maintained within the range of £14 million to £20 million over the next 3 years to allow for the identified financial risks and support effective medium-term planning. Officers are undertaking a review of all current reserve commitments. The reserves and general balances closing balance stood at £81.3 million.

Councillor Vincent inquired how much had been set aside from reserves for the West King Street renewal programme and how much of the £62.3 million balance was at risk. It was explained that additional work was required on use of reserves as officers were considering alternative funding options before use of reserves. The West King Street renewal programme would be funded at the point of expenditure.

Councillor Schmid added that West King Street programme would be funded through the most economical advantageous funding streams available. We have not shown a commitment to use reserves because this would be a last resort. The Town Hall project could be financed from CIL, S106 funding, profit from the JV, savings from not occupying the building such as utilities, business rates, capital etc and as a last resort use of reserves. A use of reserves forecast and strategy will be agreed to protect the level.

In response to a question about of £19.0 million represents 3.3% (equivalent to 12 days spend) of the Council’s gross budget, Hitesh explained that £20 million was the average level maintained by other local authorities. The general balances would not be touched. Councillor Murphy asked why we are keeping money that we do not plan to spend. Councillor Schmid explained that £19 million was a guarantee to residents that the Council would be able to continue providing essential services to vulnerable residents in the case of catastrophe. The general balances act as a safety net for the organisation.

Action – Officers to submit an update report on reserves and future commitments.

Action by – Hitesh Jolapara

In response to Erik Hohenstein’s question about DSG reserves provision, it was noted that the £13 million was an accumulated overspend. The Education and Skills funding Agency expects Councils to draft a 3-year recovery plan to recover their deficit. Councillor Schmid recalled that the DSG overspend was  ...  view the full minutes text for item 5.

6.

Section 106 Agreements - Update Report pdf icon PDF 136 KB

This report summarises the role of Section 106 (s.106) agreements, the use of s.106 funds and how decisions are made regarding expenditure of s.106 funds.  It also provides an overview of s.106 receipts and the current position regarding s106 balances and current and future expenditure by category. It reports on the notable s106 agreements that have been signed this year and provides an overview of the community benefits that have been achieved from s106 funding.

Additional documents:

Minutes:

Emily Hill and Matt Patterson provided an update on section 106 (s106) agreements.

The meeting noted that since 2014 the Council had negotiated over £600 million worth of funding through developer contributions as part of new developments in the borough. This included financial and non-financial contributions received along with the Community Infrastructure Levy (CIL). The non-cash contributions covered provision of affordable housing, transport improvement and public realm schemes. Planning and finance officers monitor the programme through s106 Board where formal bids are assessed. Councillors Jones and Schmid sign off the final approvals.

The current available balance was £42m with a further £180.5m negotiated as potential future receipts. There are currently £45m of approved commitments and £9 million of earmarked commitments. The 4 largest schemes signed over the last 12 months amounted to £16.9 million. Officers were confident of the current position and the monitoring that was in place.

The Committee welcomed the report and inquired if there was a strategy which underpinned the expenditure. Jo Rowland stated that the local plan and industrial strategy contained policies which drove the expenditure. Where necessary, officers can review old s106 agreements with a view to renegotiating whether they could be spent in line with current Council priorities.

Councillor Quigley asked for clarification on how affordable housing provision was calculated as non-financial benefits. Jo Rowland gave the example of Fulham Gas works which has a 35% affordable homes provision where the developer is required to build affordable housing as part of their scheme. Due to the need for affordable homes in the borough this has a benefit to the Council which can be quantified and considered as non-financial benefits.

Action – A copy of the industrial strategy to be sent to Members.

Action – Officers’ to provide a split between actual cash received and work which has a cash value.

Action by – Joanne Woodward

 

7.

West Kings Street Renewal Update pdf icon PDF 2 MB

This report provides an update on the overall progress of the programme.

Minutes:

David Burns and Emily Hill presented the update report.

 

David reported that the overarching programme was green. There were risks rated amber due to the continuing risks around the decant programme though these are moving in a positive direction.  The 1st move took place successfully during the 14th – 17th June weekend. 

 

We are not expecting any issues with the Secretary of State’s approval for the sale of land.  We have informally been told that the Secretary of State’s approval may not be required.  The Deputy Mayor of London’s approval would be granted on 8th July.  Full planning and listed building consent are now scheduled for the end of July 2019 which does not impact on the project’s critical path.  Town Hall site demolition works would start in September and the construction works in February 2020.  The programme is currently deliverable within the approved programme budgets.

 

In response to a question regarding project management approach, the Committee was informed that both the waterfall and agile approaches were used.  By December 2019, the bottom line would be above the top line in the progress tracker.  A2 dominion would employ a development manager and a clerk of works to ensure quality control.  Currie & Brown would provide the quality assurance and cost control work for the Council.

 

Councillor Murphy inquired about the contingency provision for the decant costs.  It was explained there is a contingency for the construction elements of the project. Members asked for clarification between the responsibilities for the Town Hall refurbishment and new Town Hall extension construction work. David noted that the JV was responsible for new Town Hall extension construction work in while the Council was responsible for the refurbishment. There was likely to be 1 contractor with 2 separate contracts for 1 project.  Both contracts would be managed by the JV acting as the development manager for the Council on the refurbishment element.

 

In response to Councillor Murphy’s question regarding how the project would be funded, Emily noted that the £85 million project cost would be financed through multiple funding streams – CIL, S106 funding, profit from the JV, savings from the not occupying the building such as utilities, business rates, borrowing etc and as a last resort use of reserves.  David noted that the Council was putting its contribution into the JV via the land sale.  We have the authority to lend the JV up to £90 million to fund the development.  Any funds loaned to the JV would be at market rate.  They can seek funding from alternatives sources if they want to.

 

In response to Councillor Quigley question about what the £85 million expenditure cover, it was reported that it included the decant and refurbishment costs.

 

Councillor Schmid stated that members require a detailed knowledge of the scheme to scrutinise and track the progress.  This might come from discussions outside a formal meeting setting. Judith Worthy asked officers to think about the structure of the report and take on board the comments made particularly  ...  view the full minutes text for item 7.

8.

Building Homes and Communities Strategy pdf icon PDF 87 KB

The report seeks agreement in principle to a self-funding programme of investment in homes and community assets which aims to:

 

·       Build new, genuinely affordable housing which will help maintain the borough’s vibrant social mix;

·       Supports the Council’s Business Plan priority of ‘Building Shared Prosperity’;

·       Renew key community assets, including schools and leisure centres; and

·       Generates income to reinvest in frontline services

 

 

This report has an appendix which contains information exempt within the meaning of Schedule 12A to the Local Government Act1972 and is not for publication. The appendix has therefore been circulated to Members only.

 

Any discussions on the contents of an exempt appendix will require the Committee to pass the proposed resolution identified at the end of the agenda to exclude members of the public and the press from the proceedings for that discussion.

 

Additional documents:

Minutes:

The Committee in February received a presentation on the Council’s approach to using its estate more economically.  David Burns reported that the new Homes and Community assets strategy element of the approach was approved by Cabinet on 1 July.  Further aspects of the approach will be brought forward as they are developed.

 

Members noted that the programme sought to deliver approximately 1,800 homes over a period of up to ten years and generate long-term income to support the Council’s financial challenge.  The strategy will commit the Council to utilising its land and property assets to meet key administration priorities to deliver affordable housing and support the Council’s financial challenge.

 

In welcoming the report, Councillor Vincent asked what the implications of the Government’s removal of the HRA borrowing cap and how much can we borrow under the new regime.  Officers responded that borrowing would be in line with the Council’s HRA Business plan and Asset management plan. We cannot calculate a maximum borrowing amount allowed at this time.  Officers told Councillor Murphy that we can fund the purchase of houses and building new ones with borrowing. However, this programme only covers new housing.  No existing units are involved.

 

The Committee welcomed the report.

 

9.

Tech-Tonic Programme Delivery Update - Desktop Strategy & Solution pdf icon PDF 261 KB

The Desktop strategy programme, known as Tech-tonic, will modernise the Hammersmith & Fulham (H&F) mobile and desktop technologies, as well as updating the associated backend infrastructure.  This will enable mobile working from any location to support the Council’s vision of delivering services at the point when they are needed and to help optimise the efficiency and flexibility of our services.  Members are asked to review progress and provide feedback.

 

This report has an appendix which contains information exempt within the meaning of Schedule 12A to the Local Government Act1972 and is not for publication.  The appendix has therefore been circulated to Members only.

 

Any discussions on the contents of an exempt appendix will require the Committee to pass the proposed resolution identified at the end of the agenda to exclude members of the public and the press from the proceedings for that discussion.

Additional documents:

Minutes:

Veronica Barella introduced the report noting that the programme covered the provision of a mobile device and smartphone for each officer and deliver a telephony strategy which supports flexible working.  This would involve the migration of applications, a new remote working solution, new network and telephony solutions, and the migration of all users to the new solution.  The total approved value of the programme is £6,214,304. The programme will deliver up to £1,400,000 savings annually on the IT Services budget by 2020/21.  The design and build of the Windows 10 image on computing devices was completed in November 2018.  1724 laptops and 641 smartphones have been rolled out to Council officers to date.  She noted that several stakeholder user groups have been set up to assist with the rollout and upskilling programme.

 

Councillor Quigley stated that she had been using one of the Toshiba laptops for a while and it has been a fantastic experience.  She can work from home with ease.  She was delighted with the Council’s approach. 

 

Councillor Murphy asked how would officers keep the momentum going?  Veronica replied that the team leaders will be encouraged to share best practice across the Council.  Regarding the choice of equipment, extensive testing was undertaken on a wide range of devices.  The Toshiba devices met all our requirements and it comes with a 3-year warranty supported through a maintenance contract with BT.  

 

The Committee commented that this was a major cultural change programme which would affect how we work, how we manage staff who are working from home or in client’s house and monitor productivity. Services will need to redesign how they work to ensure that the 6:10 desk ratio is maintained.

 

The Committee thanked the officers for their hard work.

 

10.

Task Groups

Minutes:

Councillor PJ Murphy asked for comments on setting up Task and Finish Groups to strengthen the delivery of the PAC’s functions and ensure the experience of PAC Members are best used.   He noted that the Committee undertook a lot of scrutiny, but it needs some time to support officers to generate new ideas, think and work differently. The Groups would be forward looking chaired by a coopetee with officers and Councillors assigned to support them.   He had spoken to Kim and Hitesh to look at 3 main areas particularly the governance to support this work: -

 

·       Multi Year Financial Strategy

·       Efficiency & Productivity

·       Contracts & Commercial

 

In welcoming the idea of setting up Task Groups, the following comments and issues were raised: -

 

Erik Hohenstein welcomed the idea which would generate creative thinking but was concerned that the role would overlap with their scrutiny function. He requested for transparency in the work of the Groups.  Tony Boys was of the view that there were some areas the cooptees could help such as contracts management.  Judith Worthy noted that a collaborative structure was required.  We need to be clear about its status, so it does not undermine the scrutiny role.  She was uncomfortable with co-optees being the Chair.

 

Councillor Vincent asked officers to consider the cost/benefit of more reports and meetings.  Any new Groups should not be paper heavy conversations.  The Group could act as a critical friend to officers.  Councillor Quigley noted that it was a good idea for groups to be established.  She expressed concerns about conflict of interest and stressed that coopetes should not scrutinise their own work in the future. 

 

Regarding the scrutiny of zero-based budgeting (ZBB), Kim clarified that the scrutiny of ZBB fell within the remit of PSR PAC while the Finance PAC would look at efficiencies and savings. The Groups would have access to more detailed background information to enable Members build a better understanding of the subject matter and generate creative ideas.  Creating a space for more conversations and obtaining more from cooptees’ learning was important.  We are trying to get the governance right, so we would not undermine the formal scrutiny function.  Getting the balance right was key.   It would not be a formal meeting.  She identified contracts & commercial, multi-year financial strategy and efficiency & productivity as areas where groups could help.

 

Hitesh noted that Rhian Davies (Monitoring Officer) was working on the governance particularly safeguarding the scrutiny/executive functions and to ensure that the right people would be part of the conversations.

 

RESOLVED: -

 

To establish a Task and Finish Group on Dedicated Support Grant with a membership of all cooptee Members supported by officers.

 

The meeting was extended by 5 minutes before the guillotine fell at 10.00pm.

 

11.

Committee Work Programme pdf icon PDF 63 KB

The Committee is requested to consider the items within the Work Programme attached as Appendix A to this report and suggest any amendments or additional topics to be included in the future.

 

Minutes:

The Committee noted its work programme.

12.

Dates of future meetings

The following dates have been approved for the new municipal year:-

·         Wednesday 18 September 2019

·         Wednesday 20 November 2019

·         Wednesday 29 January 2020

·         Wednesday 1 April 2020

Minutes:

The following dates for the new municipal year were noted:-

 

·                Wednesday 18 September 2019

·                Wednesday 20 November 2019

·                Wednesday 29 January 2020

·                Wednesday 1 April 2020