Meeting documents

To approve as a correct record the Minutes of the meeting held on 15 October, 2018, copy attached as an appendix.

RESOLVED –

That the minutes of the meeting held on 15 October, 2018, be approved as a correct record.

To consider the attached report.

Contact Officer:  Nuala Donnelly (01296) 585164

The Committee received the Quarterly Financial Digest for the period from 1 April to 30 September 2018, which represented financial information on the Council based on the actual income and expenditure for the first six months of the 2018/19 financial year.

As at the end of September 2018, an overspend against budgets was reported of £457,979, along with forecast full year overspend of £238,100, before the use of reserves, for the full year to the end of March 2019.

The Medium Term Financial Plan (MTFP) agreed by full Council in February 2018 had assumed a contribution to balances of £240,000 for 2018/19.  Based on the forecast financial position, there was now an assumption that there would be no contribution to balances.

The forecast level of balances for the financial year was reported as £1.927m, marginally below the minimum assessed level of balances of £2.0m.  The forecast position did not currently assume any use of reserves to support emerging overspends.  Earmarked reserves were held for legitimate reasons and the balances represented a fair assessment of the budgetary pressures that they were held against.  Any use of reserves was an essential part of sound financial planning.  The use of reserves would be assessed in year with any use of them resulting in a reduction of the forecast overspend and lessening the call on balances.

The end of second quarter position and forecast outturn continued to highlight a number of emerging financial risks that would allow considered corrective actions to be taken.  Members were given an assurance that budget holders, managers and finance business partners were working to mitigate issues and to address the year to date financial position.

The main reason for the overspend to date had been for the use of agency staff to support vacancies and some activity pressures.  The use of agency staff incurred a premium and an adverse variance to agreed budgets.  Members were informed that the dependency on high cost agency staff was being targeted to reduce the risk of further in–year overspends.  For all of the areas identified as using agency staff, plans were being developed to address spend and mitigating actions were being taken.   Some vacancies were being filled and proposals are being put forward for most effective delivery models

For the 6 months to date, agency staff had been employed in a number of key operational areas to support project work and service delivery.  These included:

·                    People and Payroll department where agency costs had been incurred to support both vacancies and prolonged periods of sickness absences.

·                    The Connected Knowledge and GDPR programme:  These were work programmes for which funding had been allocated.

·                    IT:  to cover key vacant posts.

·                    The Depot to employ loaders and also to meet additional costs of new waste rounds.  The use of agency staff in these areas had allowed for flexibility to meet staffing patterns.

·                    Planning Department:  to cover key vacant posts and to manage workloads.

Budget managers were provided with detailed agency staffing analysis on a monthly basis to  ...  view the full minutes text for item 2.

To consider the attached report.

Contact Officer:  Nuala Donnelly (01296) 585164

The Committee received a report promulgating the high level issues facing the Council in developing budget proposals for 2019/20 and in terms of updating the Medium Term Financial Plan (MTFP).  The report had been submitted to Cabinet on 20 November 2018 and further details were included in the minutes of that meeting.  Cabinet had approved the approach outlined in the report, as well as the MTFP, to be used for developing the budget for 2019/20.  Cabinet had also approved, for the purposes of budget planning, to the repurposing of the Business Rates Equalisation Reserve and the Interest Equalisation Reserve (that would have a combined value of £5m as at the end of 2018/19), in order to provide the Council with initial financial capacity to respond to the costs of reorganisation.

The largest and most significant factor impacting on the budget setting process was the recent announcement of the Secretary of State that there should be a single unitary district council for the whole of Buckinghamshire (excluding Milton Keynes) with effect from 1 April 2020.  It was however too early to determine the exact implications from a budgetary point of view, although it would be prudent to make provision for transition costs.  The report also set out a timetable for agreeing the budget.

The report had been split into specific sections dealing with:-

·                     The background to the development of the current MTFP and the key assumptions used in its formulation.  Reference was also made to the recent budget announcement of the Chancellor of the Exchequer, with particular reference to local authority spending requirements.  The report covered the risks arising from Brexit, the roll out of Universal Credit and increases in the national living wage. Reference was made to the implications of changes in the application of business rates and the significant year on year reductions in Central Government Grant.

·                     The timetable for development of the budget.  The Government had announced the provisional finance settlement on 13 December, 2018, which had been in line with the estimates used for budget planning.

·                     The report contained a commentary on the position around Government funding and its impact on the wider landscape.  Local authority funding in England had undergone considerable upheaval in recent years.  For AVDC, reductions to Grant funding had been the most significant factor underlying historic financial planning assumptions and the Council’s current strategy of balancing the budget had been predicated on this continuing.  In this respect, the Council’s strategy around commercialism and efficiency had been proved to be correct within the context of dealing with the financial challenges being faced by the Authority.  The Government had announced a consultation exercise in relation to the future funding of local government (A Fair Funding Review).  This would affect how funding was allocated between local authorities from 2020 onwards.  Alongside this a new phase for the business rates retention programme would be introduced.  The Buckinghamshire Councils had been chosen as a pilot area for this in 2019/20 which was likely to benefit AVDC by approximately  ...  view the full minutes text for item 3.

To consider the attached report.

Contact Officer:  Nuala Donnelly (01296) 585164

The Authority’s Treasury Management Policy required an annual report to be brought to Council after each year end and a mid year report for the current year.   A synopsis of treasury management activities had been included in the Quarterly Financial Digest submitted to the meeting. 

Members were informed that the amount of money deposited with banks and building societies at the end of September 2018 was £40 million with another £7.3 million held in the two Money Market Funds.  The outstanding balance on borrowings was £18.5m with £5m having been repaid to the London Borough of Newham Council in May 2018/19 using investment balances.  As there had been no new no new borrowing taken out there had been no change to the Council’s Authorised and Operational Limits.

The objectives for the Treasury Management team for 2018/19 had been laid out in the Treasury Management Strategy agreed by Council in February 2017.  The main activities continued to be:-

·                    Foremost, to maintain, the security of the Council’s deposits by only depositing with trusted financial institutions and limiting the size and length of deposit with each organisation.

·                    To directly manage a range of deposits in order to provide sufficient flexibility to meet day to day operational needs.

·                    To only undertake new long term borrowing where the business case justifies it.

The Treasury Management team continued to invest money in line with its list of approved (safe) institutions, varying the amounts and length of deposit according to the institution and the cash flow requirements at the time.  Historically, the majority of the Council’s lending had been with Building Societies but over the last year the Council had invested more of it’s portfolio with major UK banks and had also began depositing funds with other Local Authorities as a more secure option. The lending list was monitored throughout the year to take account of any changes within the sector i.e. building society mergers / conversions to banks, and ratings changes.

Members were informed that actual performance was largely in line with the plan. With interest rates still at a low level, the actual amount of deposit income generated exceeded the half year target of £165,000 by £1,454.17.  The target for 2018/19 had been increased to reflect historic activity and anticipated changes in the market.  Generally interest rates were improving.  For the first 6 months of 2017/18, the weighted rate of return on the investment portfolio had been 0.48% compared to 0.76% for April – September 2018.

The interest rate had increased in August 2018 and the market indications were that there may be further interest rate changes in 2019/20. There were however a number of economic factors e.g. Brexit that would influence interest rate changes over the coming months.  The Council ability to manage capital spend without additional borrowing has resulted in financial efficiencies and savings on the cost of borrowing

The report also contained graphs and information on the average monthly balances deposited by the in house team and rates of return  ...  view the full minutes text for item 4.

To consider the attached report.

Contact Officer:  Maryvonne Hassall 901296) 585663

The Committee received a report on the progress made against the Connected Knowledge Programme over the last two years.  AVDC had approved a total of £3.1m over the period 2017/18 and 2018/19 for Phases 1 and 2 of the programme up to March 2019.

The report contained information looking back at what had been delivered by the programme to date and would be delivered up to March 2019.  This included information on the financial spend and the benefits delivered.

Information on Phase 3 (future phase) of the Connected Knowledge Programme would be included in the budget setting papers to be submitted to the scrutiny committee in January 2019 and to full Council in February 2019.  Future planning had included looking at the lessons learnt to date and ensuring that the Council built on the work that had already been delivered to date.

The programme had delivered 46 projects to date, with 27 in flight and a further set in the planning stages.  It had delivered the first council Alexa skill, and then improved it by adding ‘Find Your Bin Day’ in line with customer demand.  It had delivered the first true Artificial Intelligence in the Council’s customer services area and continued to expand this capability to include more breadth of queries and automation.  There were currently 59,881 active My Accounts, with the team able to handle 1,900 webchats per month.

The Programme board and Steering Group had provided governance to control the call off of funds for each project once a business case, including benefits realisation has been put in place. In addition, there had been a strong focus on closing down projects and moving to business as usual.

Some elements of the programme have been delayed due to resourcing issues, but funding for these elements had been ring fenced to ensure they could still be delivered.  The Connected Knowledge programme had continued to deliver in line with these key areas:-

·                     Innovation - the introduction of innovative new solutions such as voice recognition and artificial intelligence for call handling and decision making.

·                     Transformation - the rollout of internal process automation and customer self service.

·                     Legacy reduction - the removal of legacy technology and introduction of more flexible systems that will further support integration of data to enable customer needs to be anticipated.

The programme had delivered

·                     the first council to have an Alexa skill.

·                     use of Artificial intelligence in customer services.

·                     a new corporate network with improved resilience.

·                     a new public wifi network with increased capacity for staff usage.

·                     new licensing and environmental health system on an integrated platform.

·                     new building control system on an integrated platform.

·                     new planning and land charges system on an integrated platform (still in flight).

·                     more resilient Revenues and Benefits system.

The advances had created a strong foundation for the next five years, enabling the Council to think bigger and more creatively about the challenges and opportunities and how it was best positioned to benefit from them.

Members requested further information and were informed:-

(i)  ...  view the full minutes text for item 5.

To consider the future work programme.  Meetings are scheduled as follows:-

14 January 2019

Budget Planning 2019-20

Capital Programme Update

Public Sector Equality Duty

Treasury Management Strategy

Debt Management report

8 April 2019 and 2 July 2019

No items as yet

The Committee considered their work programme for the period until July 2019.

The agenda for future meetings would be:-

14 January 2019 – Budget Planning 2019-20, Capital Programme Update, Public Sector Equality Duty, Treasury Management Strategy and Debt Management report.

8 April 2019 and 2 July 2019 – no agenda items as yet.

RESOLVED –

That the work programme be agreed, as discussed at the meeting.