Meeting documents

Apologies for absence were received from Timothy Butcher, Bill Chapple OBE, Raj Khan and David Martin.

Steven Lambert was in attendance as a substitute for Raj Khan.

There were no declarations of interest.

of the meeting held on 19 November 2013

The Minutes of the meeting held on 19 November 2013 were agreed and signed as a correct record.

Matters arising

Page 2 – is the Council contributing to Public Health staff pensions? Ian Dyson to follow up – Action: ID

Page 2 – information about annual leave in regard to fraud work – Ian Dyson said that a report would be run on this but had not yet been done.

Ian Dyson, Chief Internal Auditor

The Committee received the report of the Chief Internal Auditor. The report set out the audit reports finalised since the previous meeting and the status of the management actions, as well as the areas of activity which would be looked at in Quarter 4.

In terms of resources, the Principal Auditor secondment had been extended to April 2014, which would support the completion of the Audit Plan. An IT Audit Specialist had been commissioned to undertake a needs assessment and would carry out assurance mapping in Quarter 4.

Three limited audit reports were being brought to the Committee’s attention. These were the audit reports for:

·       Pebblebrook School

·       Transport for Buckinghamshire Highways Contract

·       Amey Contract

The Amey audit report would be discussed later in the meeting in closed session as it contained commercially-sensitive issues.

Pebblebrook School

The internal audit had looked at the financial management processes. The School had a significant unplanned deficit on its budget, and the level of financial control had been found to be unacceptable. However the School had embraced the audit and the actions coming out of it.

This issue did not have a significant impact on the Council. The limited opinion had been given due to the financial management in the School.

A member said that Pebblebrook School was on the edge of their electoral division, and said that the report was so brief that they could not match up their existing knowledge with the information in the report. Ian Dyson said that the internal audit had looked at the School’s financial management processes, and had found that these were not good. There had also not been a good system of internal control in place. The School had responded very positively to the audit outcomes.

The member asked if the audit recommendations had been sent to the School Governors, and the member said that they had taken a phone call from the Press the previous day. Ian Dyson said that the audit report went to the headteacher, the Chair of Governors, the Service Director and the Strategic Director.

The member asked if local Councillors received copies of audit reports. Ian Dyson said that they did not issue operational internal audit reports as a matter of course to members, but that they could do this if the Committee wished them to.

Anne Davies suggested that the local member could be sent the opinion from the audit report.

A member said that they received a number of emails asking if people were suitable as school governors. It would be helpful for him to be aware of any issues with his local schools. However he would not need to see the full audit reports.

It was suggested that this issue could be referred to the Deputy Leader and Cabinet Member for Education and Skills for consideration.

Ian Dyson then told members that there was currently a large piece of work being carried out (led by Ian Dyson) regarding assurances of financial management in schools. Internal Audit had identified that  ...  view the full minutes text for item 4.

Bob Cooke, Senior Project Manager, Place Service

Sean Rooney, Senior Manager, Transport

Bob Cook (Interim Highway Manager, Place Service) and Sean Rooney (Senior Manager, Transport) were welcomed to the meeting.

Sean Rooney said that he was grateful to Ian Dyson and his team in providing this report and that the findings were fair and reflective of the service provided. They had had the opportunity to work with the Internal Audit Team and had been kept appraised of progress throughout the process.

Sean Rooney said that there was one outstanding action from the findings of the previous audit report carried out in 2011. This action had recently been part of business negotiations carried out between the Service Director and senior managers of Place, in conjunction with the directors of the service provider, Ringway Jacobs. Those conversations were drawing to a conclusion and they would soon be in a position to close this action. Service Directors for Legal and Finance Services had been kept appraised of the discussions throughout the process.

A previous outstanding action related to KPIs had been resolved through the contract governance. It should be noted that as part of the recent Environment, Transport and Locality Services Select Committee review of the contract, it had been recommended that KPIs were reviewed and the process had included elected members in the discussion.

Following the commencement of the Select Committee review, and subsequent conversations with the contractor, they had initiated and undertaken their own internal review of the process. This review had only just been completed and the Client was expected to receive the findings of this report in the near future (see page 12, final paragraph, of the agenda papers).

It had also been agreed that the contractor would identify improvements to the processes involved in the delivery of the Capital Maintenance Programme.

Transport for Buckinghamshire (TfB) had commissioned work to develop the TfB improvement plan. This had identified opportunities for improvement across a number of areas of the service. This improvement plan had also been reflected in the Select Committee review responses.

Sean Rooney referred members to Appendix A on page 17 of the agenda papers, which showed actions for improvement. To date, of the 121 actions, over 40% had been completed, and it was expected that 80% of the actions would be delivered by the end of May 2014.

Sean Rooney said that it should not be forgotten that the contract had provided a flexible platform to adapt to the changing services that had been requested by the Client.

It was Sean Rooney’s opinion that the Service did have areas for improvement but that it was by no means beyond getting back to the ‘best in class’ contract that it had originally set out to be. It was a ground-breaking concept in the industry, although there were now more authorities willing to look at different ways of service delivery.

Reference had been made to the capacity of the Client. Again through recommendations from the Select Committee review, this was being addressed and they were looking to strengthen the Client so  ...  view the full minutes text for item 5.

Richard Schmidt, Assistant Director (Strategic Finance), Finance and Commercial Services

Richard Schmidt (Assistant Director, Strategic Finance) referred members to page 25 of the supplementary papers, which gave the recommendations from the Capital Programme Audit. Richard Schmidt said that he agreed with the recommendations and had come to similar conclusions himself.

A number of senior managers were confused by the processes, and it was not clear whether officers should go to the Business Investment Group (BIG) or the Commercial Services Board. The processes for the two needed to be joined up. Richard Schmidt said that he would work with Rose Younger on this and said that he had agreed a gateway process.

Richard Schmidt said that there was capital programme slippage at many local authorities. The Council needed to be more open about what the issues were.

They would need to communicate the new process to managers, and aimed to have this in place by the end of the financial year.

The terms of reference for BIG were on the intranet site.

Richard Schmidt said that he sat on BIG, where slippage had been discussed. BIG welcomed the audit report.

A member said that project management was inherent to spending money. Members needed to see the process chart at the next meeting, showing step by step progress of an issue. This might help to inform the recommendations.

The member asked who would take ownership for capital projects from the Strategic Directors. Chris Munday said that he was responsible for school strategic projects and that he had regular meetings with his team. There were regular monitoring meetings between him and the responsible officers. The work was also monitored by the Children and Young People’s RPD Board.

The member said that it was of great concern that the Council did not have a single ‘snapshot view’ of a change management programme. This was a risk to the Council. The member said that the Council needed to act quickly and that there were too many governance boards and decision points, with no overarching programme.

Richard Schmidt said that the Future Shape programme should pick up on wider governance arrangements.

The Chairman said that they would like feedback on the recommendations at the April 2014 meeting.

Ian Dyson said that they did have a gateway process. The disconnection was between the various boards and the overall arch of BIG and the Commercial Services Board.

Julie Edwards, Pensions and Investments Manager

John Chilver, Deputy Cabinet Member for Finance and Resources, was welcomed to the meeting.

John Chilver took members through the Treasury Management Strategy Report and said the following:

·       There was no fundamental change to the Treasury Management Policy. The Council was committed to achieving value for money in treasury management.

·       The changes to the Treasury Management Strategy were shaded grey.

·       The Investment Strategy would enable the Council to make the best decisions, with advice from Arlingclose.

·       Both the Chartered Institute of Public Finance and Accountancy (CIPFA) Code and Department for Communities and Local Government (DCLG) guidance required the Council to invest its funds prudently, and to have regard to the security and liquidity of its investments before seeking the highest rate of return, or yield. 

·       The Council’s borrowing objectives were to minimise the revenue costs of debt while maintaining a balanced loan portfolio.

·       Page 36 showed the Council’s treasury portfolio position as at 31 December 2013. The net investments figure (less debt) had been £35.5m.

·       The Bank of England Base Rate, the official base rate paid on commercial bank reserves, had been 0.5% since March 2009.

·       The Council was committed to building an Energy from Waste plant. This might require additional borrowing during 2016/17, although in practice much of this might be financed through a combination of earmarked reserves and current cash investments.  The Council might borrow £10m per annum in advance of need during 2014/15 and 2015/16 and a further £10m in 2016/17. This would provide flexibility to spread borrowing over a longer period if required.

·       During 2014/15 the Council would be borrowing £16m on behalf of the South East Local Enterprise Partnership (LEP) Buckinghamshire for the Aylesbury Eastern Link Road and High Wycombe Town Centre Transport Projects.  HM Treasury had agreed that the LEP could access the Public Works Loan Board (PWLB) Project Rate at a discount of 40 basis points below the standard PWLB rate. The Council would arrange the loan and pay the interest to the PWLB on behalf of the LEP and the LEP would reimburse the costs incurred to the Council so that the loan was cost neutral to the Council.

·       The Council might borrow short-term loans, normally for up to one month, to cover unexpected cash flow shortages.

·       The overall limit that could be invested in non-specified investments was £150m. Non-specified investments were any with a maturity date of over 12 months, or any that were unrated.

·       Paragraph 37 gave details of the benefits of new investment holdings. There had been benefit from the widening scope of activities. Following changes to the Strategy approved by County Council in November 2013, a £5m investment in the CCLA LAMIT Property Fund had increased by 3.45% in value during December 2013.

·       From time to time an institution would be placed on negative watch or negative outlook, indicating that a downgrade was either likely or possible in the future.  Watches were considered short-term actions, whereas outlooks were considered over a longer time horizon.  If an institution  ...  view the full minutes text for item 7.

Rose Younger, Commercial Manager, Finance & Commercial Services

Rose Younger, Commercial Manager, was welcomed to the meeting.

Rose Younger told members that when she had joined the Council, the exemptions process for contracts standing orders was the issue that services had complained about the most.

A new process for exemptions had now been running for a number of months. The new process had reduced the number of retrospective exemptions. The contract register would also reduce the number of exemptions as there would be more forward management of contracts.

‘Quick quotes’ had been introduced into the e-payments portal. This allowed visibility of data regarding quotations or tendering to local businesses.

The Council had tried to get Amey to put their contracts through the e-portal. This had been due to be done by November 2013, but had now been put back to February 2014. Rose Younger said that this was of concern to her.

Rose Younger then referred members to the table of exemptions received and registered retrospectively (page 26 onwards). The risk rating stated referred to the risk to the Council.

13/14-023 had been in regard to actuarial services. There had been insufficient time to undertake a competitive process, and there had been no choice, other than to go ahead, even though this might lead to a challenge being received.

13/14-028 referred to the Project Abode, which was an ongoing project at Mackintosh homes for people with learning disabilities. It related to care that had been provided to the homes.

Page 28 showed that the estimated value of tenders greater than £100k had increased from £37 412 967 in 2012-13 to £232 666 000 in March-December 2013. This increase reflected the increased visibility.

A member said that the biggest number of exemptions was in the Place Service, which could be due to the number of contracts which were handled by the Service. The member queried whether these had gone through the proper governance procedures.

Rose Younger said that currently a common reason for requesting an exemption was because of the need to install a new boiler in a school (there had been three of these).  Rose Younger had spoken to the Place Service and had told them that a framework was needed. The Place Service had accepted this and had requested quotes for this.

A member referred to page 21 and asked how the limit of £50k had come about, and how this had been communicated to small and medium enterprises (SMEs).

Rose Younger said that the £50k limit was a contract standing order limit at the Council. The Council had worked hard with Bucks Business First to get the SMEs to register on the e-portal, so that they received alerts. They were also looking at other ways of advertising (e.g. Twitter).

The rule was that if the system requested three quotes, two of these needed to be from a business with a Buckinghamshire postcode.

A member said that there was a lack of time to tender, and asked what steps were in place to prevent this. Rose Younger  ...  view the full minutes text for item 8.

Rose Younger, Commercial Manager, Finance & Commercial Services

Rose Younger, Commercial Manager, referred members to her report, which provided a summary on progress with the implementation of the Council’s Contract Management Framework and the Contract Management Application.

Contract management was a key control for the Council in becoming a commissioning authority. A demonstration of the system was planned for 25 February 2014, and members of the Regulatory and Audit Committee would be invited to attend this.

The work streams for the Contract Management Framework and the Contract Management Application had now been brought under one project team.  The work was governed by the Contract Management Implementation Group. There had been some delays regarding the project team. Rose Younger was now the Project Manager. Her team had been working really hard with service areas. A weekly surgery had been held with the Contract Management Application provider (Arcus).

A pilot group of eleven platinum contract managers had been through a contract management training course. Feedback from the pilot group and their managers indicated that the training had been successful and had increased the contract managers’ understanding of their role, developing both technical and ‘soft’ skills. They would be rolling out the training to other platinum and gold managers in the first half of 2014.

The Contract Management application would supply visibility. Rose Younger said that she would be asking members what level of access they would like to the system.

The contract register relied on the completion and upload of contract details. This could be a very lengthy process for complex contracts and had been delayed due to technical issues with the application.

The Contract Management system allowed officers to work out the resources needed to manage a contract. It would be really helpful to identify where a client had got too ‘thin.’ Some of the capital contracts would be pulled into the new system.

A member said that this was very positive. There needed to be a balance between monitoring on the one hand, but not too much bureaucracy on the other. The member asked how they could define the relationship between contract managers and members.

The member also referred to page 35 and said that a Transport for Buckinghamshire enquiry had showed that annual savings were hampering long-term benefits.

Rose Younger said that one issue was how the saving was captured, whether it was an MTP saving or a contract management saving. It was a much bigger piece of work than just pushing savings in contracts.

Improvement plans were visible on the system. Different levels of access were available on the system.

Ian Dyson said that the system was a manager information system, so it would be the main system used by BIG etc. The system should pick up on where there were RAG (red, amber, green) issues. It was a brilliant tool for governance.

Rose Younger said that quite a lot of other local authorities were interested.

Members asked that a report on the exemptions and on the Contract Management Application be brought to the Committee every  ...  view the full minutes text for item 9.

Clare Gray, Senior Democratic Services Officer

Clare Gray, Senior Democratic Services Officer, was welcomed to the meeting.

At the last meeting of the Regulatory and Audit Committee a draft protocol had been presented to the Committee and members had asked for the following changes:-

• For local members to be involved at the earliest stage
• To simplify the route into the Council and the process so that it was clear to the petitioner how to submit the petition
• To review the threshold for signatures to make a petition valid

These changes had now been made. At the previous meeting, members had supported a 28 day limit for e-petitions, to avoid decisions being delayed.

Anne Davies, Service Director for Legal and Democratic Services, had recommended that members agree thresholds for a valid petition of 1000 signatures for a corporate issue, and 20 signatures for a local issue. Local issue petitions would go the relevant Local Area Forum (LAF).

A member said that they were concerned about the threshold and queried how a petitioner would know how many signatures they would get.

A member said that the remit of LAFs was inflexible. Anne Davies said that LAFs could express support for a petitioner and a member could then present the petition at full Council. The member said in that case they were happy with the proposals.

A member said that the changes made encapsulated the tone from members at the previous meeting. The member suggested that the flowchart could include reference to the number of signatures for the threshold. Even if a petition was not valid in terms of the number of signatures, the issue should still be communicated to the local member. This should be added to the flowchart.

A member said that their concern about using the LAF was that a LAF covered a huge geographical area, and met infrequently. If an issue was urgent, members needed to take this forward in a different way.

Clare Gray said that currently if there was a long delay, a response was sent to the petitioner in the interim.

A member referred to page 41, and said that the first paragraph under the role of county councillors should be changed to read, "Before considering whether or not to raise a petition to the Council the petition organiser SHOULD discuss the issue with their local County Councillor…"

A member referred to page 42 and asked if the postcode of a petitioner was checked. Anne Davies said that in the previous petitions scheme a petitioner did not need to be a resident in Buckinghamshire. The member said that it would be interesting to know if an issue in a petition was a true Buckinghamshire issue.

A member referred to page 47 and asked Clare Gray to clarify if petitions referred to LAFs were then reported to full Council for information – Action: CG

RESOLVED

Members noted the Forward Plan.

Chris Munday, Service Director, Learning, Skills and Prevention

This item was taken out of order due to timing at the meeting.

Chris Munday, Service Director, Learning, Skills and Prevention, was welcomed to the meeting.

Chris Munday told members that the Buckinghamshire Learning Trust (BLT) had been operational since 1 August 2013. The BLT was a platinum contract. The first performance monitoring review had been positive. There had been very good progress on narrowing the gap in attainment between pupils receiving free school meals and pupils not in receipt of free school meals, to 7% at primary and 5% at secondary.

A ‘Lessons Learned’ Review had been commissioned and shared. There had been a smooth transition of traded services. BLT had not needed to pull down a working capital loan.

There had been some delay in filling senior posts but these were now filled.

The only compliance issue was in regard to the Exit Strategy. This would be pulled together over the next two months.

16 April 2014, 9am, Mezzanine Room 1, County Hall, Aylesbury

16 April 2014, 9am, Mezzanine Room 1, County Hall, Aylesbury

The confidential minutes of the meeting held on 19 November 2013 were agreed and signed as a correct record.

RESOLVED

That the press and public be included.

The Chairman said that he had requested this extra item as the report was of relevance to the Committee.

Iain Murray (Grant Thornton) circulated some slides which pulled out some key themes in the report ‘2016 tipping point? Challenging the current,’ which had previously been circulated to members. The report was based on analysis of 138 local authorities. This was the third version of the report which Grant Thornton had written.

The report had a focus on health integration and economic development. There was the possibility of reorganisation (e.g. a unitary model or strategic partnerships).

Two more pieces of work were being prepared, on alternative delivery vehicles and on corporate governance.

A member asked if Grant Thornton had done any work on the cost to create business to then generate revenue. Iain Murray said that it was very early days. There were currently only three local authority trading companies in the UK. One of the risks with income generation was that it distracted from the ‘day job.’

A member said that they thought that there was still plenty of scope for cost-savings and for income generation. The Council did well with that, but there would be a hiatus at some point.

A member said that some predicted 2017-19 to be the period of the ‘tipping point’, when the Government would not provide funding for anything other than statutory services. The member asked if a catastrophic tipping point for local government was predicted for the next five years. Iain Murray said that local government was good at ‘horizon spotting’ of problems. Those in local government knew that they would need to do something fundamentally different. It depended on how each Council was managed.

A member said that it was still not clear what the Department for Communities and Local Government (DCLG) would do if a Council was not able to function. Iain Murray said that if this happened to an NHS Trust, services would be split among other providers.

The Chairman thanked Iain Murray for this item, and said that it would be useful for the Committee to look at the other two reports.