Agenda item

To receive and consider the attached report of the Head of Scrutiny and Member Development

The report of the Head of Scrutiny and Member Development requested members to note the Council’s Financial Performance, Performance Report and highlight any further related areas for scrutiny.  The following reports were appended to the Agenda:

• Appendix 1 – Government Spending Review 2010
• Appendix 2 – Financial Health Monitoring 2010/11 – Half Year Report
• Appendix 3 – Council Business Plan Performance Report Quarter 2 2010/11

The Chair welcomed the following officers to the meeting:

• James Rogers, Assistant Chief Executive (Planning, Policy and Performance)
• Doug Meeson, Chief Officer (Financial Management)
• David Almond, Head of Human Resources
• Alex Watson, Human Resources Manager
• Paul Broughton, Chief Customer Services Officer

Doug Meeson gave the Board an overview of Appendix 1, Government Spending Review 2010.  He reported that it covered the main aspects of the Comprehensive Spending Review and implications on Local Authority funding but did not give further detail on the final Local Government Financial Settlement which was due to be reported the following week.  He also referred to other significant issues included the proposed significant grant reductions for Local Authorities, the freeze on Council Tax, funding for affordable housing and changes to the setting of public sector rents.

In response to Members comments and questions, the following issues were discussed:

·  Precise details of how formula based allocations would be made were not yet known.

·  Councils who froze Council Tax would receive funding from the Government to the equivalent of a 2.5% increase and the Government still retained capping powers.  There had also been discussion on bringing business rates back to the use of local authorities.

·  Pooled budgets and more flexible working across different organisations – there were already examples of this in Leeds with health partners.

·   Concern regarding the timing of the financial settelement and potential on the Council’s budget setting timetable, It was acknowledged that this could cause a problem, but budget proposals, based on assumptions if necessary, would still be considered at next weeks Executive Board and be available to Scrutiny in January 2011.

·  The setting if the budget to reflect priorities.

·  Proposals under social housing reforms, particularly changes to rents, would only apply to new tenants.

·  Housing finance issues – it was reported that the new Housing Bonus would affect all new properties that came into taxation and match funding of Council Tax would be provided on each new home.  Members also discussed the implications of the proposals to increase rents and it was suggested that Steve Carey, Chief Revenues and Benefits Officer be consulted for further information.

·  Cuts to the Building Schools for the Future – the first wave of schools were close to completion and it was not thought that these would be affected.  Ministerial agreement was still awaited on the next wave.

The Board then focussed on Appendix 2, Financial Health Monitoring 2010/11 – Half Year report.  It was reported that there was a projected overspend of £8.5 million mainly in Adult’s (Domiciliary and Residential Care) and Children’s (Foster Care) Services.  The Board was also informed that whilst Council resources were considered to be low, there was no concern that they would fall below the minimum reserve level.  In terms of action taking place, there had a been a freeze on external staff recruitment and use of agency staff along with other measures being considered by the Corporate Leadership Team.

In relation to the Financial Health Monitoring paper and Members’ comments and questions, the following issues were discussed:

• Main areas of spending where saving could be made included the reduction of the Council’s workforce – 1,700 people had shown an interest in the Early Leaver’s Initiative or reducing their working hours and opportunities on saving via more efficient procurement of goods and services.
• Concern that not enough had been allocated to the budgets for Adult’s and Children’s Services.  It was hoped that demand on these services had peaked but allocations did need further consideration.  There was also a need to look at the value for money provided by these services and a need to look at work with other partners such as Health Service providers to investigate best use of resources.
• Members discussed the potential of the Council having its own agency or pool of staff.  It was reported that this would not necessarily be more cost beneficial due to issues such as equal pay.
• Projected savings on pension contributions following the implementation of the Early Leavers Initiative and subsequent reduction in staff.
• It was recognised that current reduction measures were unprecedented  and that there were challenges for both officers and Elected Members to balance the Council’s budget whilst maintaining and improving services.

Members gave consideration to Appendix 3, the Council Business Plan Performance Report, Quarter 2 2010/11 which presented an overview of performance against the Council’s priority outcomes.

In response to Members comments and questions, the following issues were discussed:

• Issues regarding the Westgate Contact Centre included service provision and staff training.  Members were briefed on services available and the successful contribution of the centre to council services.  Members requested that congratulations be passed to those involved.
• Progress on the Council’s financial plan.  Although there had eben a deterioration since the last quarter, partly due to financial issues already mentioned, it was hoped that the position would be improved by the next quarter.
• Procurement issues – re-negotiation of contracts was ongoing and Members discussed the possibility of collective procurement between different service areas and bulk buying to reduce costs.

The Chair thanked those present for their attendance.

RESOLVED – That the Council’s Financial and Performance Reports be noted.

(Councillor Taggart joined the meeting at 11.05 am. During the discussion on this item)