Meeting documents

To be presented by Mr M Strevens, Corporate Finance Director

Mr M Strevens, Corporate Finance Business Partner attended the Committee to update Members on the development of the Corporate Debt Management Strategy.  Mr Strevens highlighted the following points:

• Debt management had recently been reviewed by the Risk Management Group (RMG) and comments from this session were actions in progress.
• Levels of debt were reducing but needed to come down further.

Mr Strevens highlighted the following updates in relation to the progress on the updated Debt Management Strategy:

• A task and finish group was created in December 2016 to address the levels of debt within business units.
• Three key timeframes had been including in the reporting, December 2016 as a baseline, April 2017 as year-end and November 2017 as latest position.
• Debt in total had fallen and level of sales had increased.  Debt had fallen from 25.5% to 15.5% which included secured debt in Adult Social Care There had been an 8.3% to 5.1% reduction in unsecured debt.  Mr Strevens confirmed that this excluded any sales where payment had been taken in advance and that moving to online payments in advance was being implemented where possible.
• There had been spikes in the number of invoices falling into the agedness category and these were being investigated within the business units.
• There had been an additional post recruited to look at the most aged debt and following work carried out this had been reduced from £2.1m to less than £0.8m.  The post was due to finish in January 2018 and actions for each Business Unit would be taken forward by the relevant Finance Director.
• Monthly reports were produced for the Corporate Management Team (CMT) and base data was also provided to the finance team to drill down in to.
• There had been a new process in SAP to remind managers when debts were overdue and dunning codes had been refreshed to give more clarity regarding the status of the debt.
• Adult Social Care (ASC) had seen an increase in the uptake of Direct Debit payments which was now over 70% of clients.
• Bad practices and inconsistency had been addressed with workshops and training taking place with those that raise invoices.  These workshops would be rerun to embed best practices.
• Going forward there would be a new model of operation with a central debt management team, with there being process changes such as when debts are 5 days overdue the BU would be alerted and the central team  would be able to take over the debt, unless the BU stated how they are going to recover the debt themselves.

The Committee raised and discussed the following points:

• If the impact of writing debts off had an impact on the annual accounts or if provisions were made.  Mr Strevens confirmed that there were provisions made for bad debts, but any impact on the accounts would depend on the magnitude of the requirement to write off debts.
• A member of the committee requested that data be provided about the agedness of the debt when reporting on those that had been written off.

ACTION: Mr Strevens

• A member of the committee asked when the report from the debt management post would be available.  Mr Strevens confirmed that the post was ending at the end of January 2018 and following this a report would be shared with the business units.  This would give recommendations on debt that could be recovered and the debt advised to be written off.  Mr Strevens also stated that this process would now become business as usual and would be kept under review.
• The committee discussed cancelled debts and those written off to be treated in the same way in particular those over £10k and for the S151 officer to have sight of them.  Mr Strevens agreed to feedback the suggestion.

ACTION: Mr Strevens

• Mr Strevens confirmed that new starters would receive the same training as given in recent workshops and that ongoing training would be provided going forward to ensure consistency and best practice when raising invoices.

The Corporate Debt Management Strategy would be put on the forward plan for a future meeting.

ACTION: Ms Gibb

RESOLVED:  The Committee NOTED the report