There were no apologies for absence.

There were no disclosures of interest.

The minutes of the meeting held on 25th October 2010 were agreed.

The meeting noted that this item was covered in minute number BP35-10/11 below.

The Panel received a report of the Head of Strategic Finance.

The Head of Strategic Finance explained that there had been little change since the previous edition as full information had not been received. He drew the meeting's attention to the Reserves figures in the report and advised that the overspend had been anticipated at £300,000 and consequently £222,000 had not been unexpected. He said that there were likely to be further adverse variances but that this would be offset by salary under-spends with the freeze on recruitment. In the realm of Supplies and Services there would be a degree of flexibility; Heads of Service would consider where further savings could be made. This would reduce the over-spend.

Replying to a question about use of Reserves, the Head of Strategic Finance said that low interest rates had affected the Council's investment income. He advised that there had been some ‘seepage' in commercial rents although there had been recent signs that the market could experience an upturn. He added that clients using trade waste facilities were fewer in the current economic climate; this had put pressure on the business community. He concluded by reminding the Panel that Reserves were for use in economically depressed times such as at present.

One Member asked why under spends had been carried forward.

The Head of Strategic Finance replied that £80,000 was related to necessary Project Management Training which had not so far been implemented. He added that external audit fees had also been carried forward as a charge had been expected. This amount had not been needed and had consequently been returned to the budget. He advised that this was an exception rather than the rule.

The Panel considered Table 1 in the report. The Head of Strategic Finance explained figures relating to the working balance of £346,000.

The Panel considered Table 2 in the report.

Waste and Recycling
The Head of Environmental Services explained that Trade Waste collection was a competitive area in which the Council was under pressure to maintain its client base.

Transport and Infrastructure
The Portfolio Holder advised that a review would be conducted on the Cassiobury Controlled Parking Zone (CPZ).

Corporate Costs
Job Evaluations were still on-going and part of the budget had been earmarked for this.

Corporate Services
The variation was due to costs associated with superannuation and was explained by the cost of one member of staff having been previously omitted as a contributory member.

Parking Account - CPZ
In reply to a query from a Member, the Portfolio Holder advised that it was a necessity that parking machines were replaced periodically.

Capital Receipts
One Member noted the figure of £500,000 per year for generating new receipts from disposals and asked for an explanation of this figure.

The Head of Strategic Finance advised that receipts were expected from disposal of land in the Borough.

Performance Indicators

The Panel then considered the report on Performance Indicators.

The Head of Strategic Finance advised that with regard to investments, security was the top priority and that Watford Borough Council was currently out-performing the market due to its maturity profile.

Council Tax and Business Rates
One Member noted that there was a downward trend in Council Tax collection.

The Head of Strategic Finance advised that problems had been encountered due to a change in software. Although collection had been down towards the start of the financial year, figures had picked up during the latest month.

It was noted that, apart from one month, Business Rates collection was consistently ahead of target.

Complaints resolved at Stage 1
The Executive Director (Resources) explained that although the figure did not appear to reflect normal performance, this reflected the complexity of complaints received.

The Head of Strategic Finance restated that it was necessary to make savings of £3.8 million. He advised that the Central Government Revenue Support Grant (RSG) had been anticipated on the day of the meeting but that it had been delayed. He explained that Watford Borough Council would be disadvantaged in that small councils would receive a 30% reduction in the grant.

The Head of Strategic Finance noted that figures contained in the report had necessarily been speculative but would be confirmed within the following week. He confirmed to the Chair that headline figures would almost certainly be circulated on the morning following receipt of the RSG Settlement.

Revised Medium Term Financial Strategy

The Panel considered the Revised Medium Term Financial Strategy.

Figures for elections were noted: costs would be NIL to the Council in 2012/2013 as this was a year for county council elections. The panel noted that price inflation included figures for fuel and gas and electricity costs and uplift factors linked to outsourced contracts.

The Executive Director (Resources) advised that both Watford and Three Rivers Councils had agreed on three years of Shared Services which would produce a saving of £500,000 to be shared between the two councils.

In response to a question from a Member, the Head of Strategic Finance advised that job evaluations had resulted in some staff moving ‘upwards' to the bottom level of the next grade. This had produced increments in salary costs to the Council. He advised that the MTFS assumed no increases for pay awards in either 2011/2012 or 2012/2013 (other than a small provision for lower paid staff). It was accepted that this situation would not continue indefinitely and that the MTFS might be understated for future years.

The Panel discussed increases in Council Tax in line with salary increases. One Member felt that no increases in Council Tax would be unsustainable beyond two years and that Council Tax increase should be used to cover the salary increases. Other Members deemed it unwise to ‘hamstring' the Council for four years.

The Partnership and Performance Section Head advised on the Consultation on Budget setting. She noted that findings across all groups who had been surveyed had been very similar. She advised that Community Safety and dealing with anti-social behaviour had been perceived as very important but that residents had indicated that some falling in standards in statutory services was anticipated. She said that comments were currently being analysed and would be ready in time for the Cabinet report. She added that feedback from a recent One Watford meeting should also be available in time for the Cabinet meeting.

One Member noted that those surveyed had not understood the significance of voluntary sector funding. He advised that it would be wise to investigate reasons why opinions had been formed with regard to funding in this area.

Another Member said that residents in general did not understand that considerable help was given to these groups by the Council.

A Member noted that 47% of those surveyed considered that parking permits could be cut and asked whether this figure was composed of those who lived in the CPZ area. The Partnership and Performance Section Head agreed to analyse the figures and advise.

The Panel considered the gap between identified savings (£3.1m) and the target (£3.8m ) and discussed the options to make up the ‘shortfall' as detailed within the report.

The Chair advised that all four options should be applied and that the Council should not rule out the use of Reserves.

A Member agreed that as much had been achieved as was possible in the current situation; it would be sensible to look at fees and charges for services. He considered that an ongoing review of charges would be wise.

Another Member said that it would be advisable to use reserves. It would be impossible, he felt, for some services to do any more than had already been achieved. He suggested that the Managing Director look further at Management Costs.

One Member noted that the Government Spending Review included the year 2014/2015 and stated that it could be possible that in that year any deficit carried forward from earlier years could be addressed.

The Head of Strategic Finance said that the four years which the government had specified had been condensed into a three year period in Watford. He agreed with a Member's statement that the situation should be under continuous review and advised that this would be considered by the leadership team.

The Portfolio Holder advised that Cabinet was concerned with service delivery. He noted that certain councils had been obliged to increase Council Tax as the only method of raising revenue. He concluded by stating that he would convey the views of the Panel to Cabinet.

The Head of Strategic Finance introduced his report on the Draft Revenue and Capital Estimates 2011/2015 and Service Prioritisation proposals.

The Panel considered the efficiency savings proposed within the report.

The Panel discussed the proposals in the light of £3.8 million savings required during the following four years. The recommendations would be advised to Cabinet at its next meeting.