Apologies for absence were received from Councillors Greenslade and Rackett.

There were no disclosures of interest.

The minutes of the meeting held on 11 March 2013 to be submitted and signed.  (All minutes are available on the Council’s website.)

The minutes of the meeting held on 11 March 2013 were submitted and signed.

Report of Head of Strategic Finance

To consider the attached report to Cabinet on 8^th July 2013.

Appendix 2 is also printed separately

The Panel received a report of the Head of Strategic Finance and Shared Services which included the report and its appendices to Cabinet on 8 July 2013. 

The Head of Strategic Finance and Shared Services highlighted paragraphs 6.2.2 and 6.2.3 of the report which set out the major favourable and adverse variances.  Too many of these variances had not been highlighted in the Finance Digest.  The Head of Strategic Finance and Shared Services confirmed that monitoring procedures had been tightened up for 2013/2014.  He suggested that the Panel might wish to review the financial performance of revenues and benefits and the commercial rent portfolio during 2013/2014 as they were both significant cost centres.  He advised that before he retired from the Council he would be reviewing the Medium Term Financial Strategy (MTFS) and an updated version would be presented to the Panel in September. 

Pension Fund

Following a question from Councillor Turmaine, the Head of Strategic Finance and Shared Services provided the Panel with the distant background to the pensions history and how people on leaving the Council had been given enhancements and the pensions fund had been expected to fund the cost.  This process had been changed four years ago and services were required to ensure that any pension strain was paid during the year it had occurred.  The ad hoc payment in 2012/2013 was a necessary action to reduce the inherited shortfalls.  The Council always followed the Actuary’s advice which aimed to eliminate any shortfalls over a 20 year perspective.

It was noted that there were other factors that had contributed to the shortfall in the pension fund, such as people living longer and poor investment returns due to the current low interest rate environment.

Budget Estimates

The Chair asked whether the estimates were realistic and if the budgets should be amended at the start of the year.  This could mean that the Council would not have to consider cutting budgets.

The Head of Strategic Finance and Shared Services replied that across Hertfordshire many authorities had an underspend.  Due to the austerity environment Heads of Service were being prudent with their spending but agreed that any slack in budgets should be identified. 

Revenues and Benefits Service

The Chair referred to the comments in the report about the Revenues and Benefits services’ costs.  He questioned whether it would not have been better to employ permanent staff rather than using agency staff.

The Head of Strategic Finance and Shared Services responded that he felt it would be useful to find out the new Director of Finance’s views about the service.  It had become apparent that initially the Benefits service had not measured how many cases staff could process.  It was only recently that individual performances had been measured and had shown variances.

Councillor Derbyshire informed the Panel that he was a Member of the Shared Services Joint Committee.  The Joint Committee had followed the performance of Revenues and Benefits very closely.  It had been noted that the Watford Borough Council  ...  view the full minutes text for item 4.

Report of Head of Strategic Finance

This report informs the Budget Panel of the report to go to Cabinet on 8^th July 2013. 

The Panel received a report of the Head of Strategic Finance and Shared Services which included the report and its appendix to Cabinet on 8 July 2013.  The report provided an update on the Council’s Medium Term Financial Strategy. 

The Head of Strategic Finance and Shared Services informed the Panel that there were a number of areas that needed to be addressed and were set out in the Cabinet report.  An updated strategy would be presented to Budget Panel in September which would enable Members to make recommendations to Cabinet. 

Outsourced Contracts

Councillor Martins referred to outsourced services and the cost incurred by the Council to manage the contracts.  He asked how it was monitored.

The Head of Strategic Finance and Shared Services explained that a client section was built into the contracts.  The client team was based in Corporate and Client Strategy Services, part of the Council’s new corporate structure.  As part of outsourcing it was also necessary to review the cost of support services and assess any reductions required.

Government Grant

The Chair commented that as set out in the report, the Government had announced a further 10% cut in government support to local government.  He felt that this could lead to some local authorities going bankrupt.  He asked about the predictions for Watford. 

The Head of Strategic Finance and Shared Services referred to the changes to the New Homes Bonus proposed by the Government.  Local authorities were also restricted in the amount they could increase Council Tax unless they arranged a referendum.

Councillor Derbyshire said that the saviour for the Council’s budget had been the New Homes Bonus.  He asked for the reason that two thirds had been placed in the revenue budget and one third into capital. 

The Head of Strategic Finance and Shared Services explained that this had been done to allow procedures to be put into place to identify permanent savings in a controlled manner.  Further information would be available in the report for the September meeting.

CCTV relocation

Following a question from Councillor Turmaine, the Head of Strategic Finance and Shared Services explained that the CCTV control room had been based at Charter Place.  Accommodation had been made available by the Police at Shady Lane and the offer had been accepted, which should result in reduced ongoing costs. 

Cost of welfare benefits

Councillor Turmaine requested further information about the impact universal credit might have on the Medium Term Financial Strategy.

The Head of Strategic Finance and Shared Services explained that aspects of the benefits system would be transferred to HM Revenues and Customs.  The proposed timetable had slipped.  Local authority staffing implications had not yet been assessed.  It had been made clear however, that if there were to be a reduction in staff they would have to be made redundant and could not be TUPE’d over.

Business Rates

Following a question from Councillor Turmaine, the Head of Strategic Finance and Shared Services briefly explained the redistribution of business rates income.  He  ...  view the full minutes text for item 5.

The Panel is asked to review the work programme and consider what it would like to be programmed in over the coming year.

Members are also asked to consider any training requirements for inclusion in the programme.

The Panel received the latest version of the work programme for 2013/14.  The Committee and Scrutiny Officer advised that the programme would be updated to include those reports highlighted throughout the meeting.  An updated version of the work programme is attached as an appendix to these minutes.

RESOLVED –

that the work programme be updated.

·               Tuesday 10 September 2013

·               Tuesday 29 October 2013

·               Tuesday 26 November 2013

·               Tuesday 10 September 2013

·               Tuesday 29 October 2013

·               Tuesday 26 November 2013

The Chair informed the Panel that this was the last Budget Panel meeting for the Head of Strategic Finance and Shared Services.  He said that Bernard had always been helpful and had made his role easier.  Bernard had always answered questions fired at him and was approachable and open to all political parties.

The Chair wished Bernard a long and happy retirement, which was echoed by all Members.