There were no apologies for absence. 

There were no disclosures of interest.

The minutes of the meeting held on 8 March 2023 to be submitted and signed.

The minutes of the meeting of Finance Scrutiny Committee held on 6 March 2023 were signed.

Training presentation by Head of Finance.

The committee received a presentation of the Head of Finance. Following the presentation, the officer responded to questions.

Report of the Head of Finance

The committee received the report of the Head of Finance.  The report informed the committee of the revenue and capital year-end position for the financial year 2022-23 and the variations on the agreed budget, which was agreed at Council in January.  The committee was asked to review the recommendations for Cabinet and make any further comments.

The Head of Finance introduced the report and highlighted the key areas, in particular:

·       Overspend on year-end revenue budget of £401,000, funded from the economic impact reserve.

·       Financial challenges faced by the council during the year, especially inflation.

·       Pay award negotiations, which were likely to be drawn out and likely to result in an award that will be higher than the currently allocated budget.

·       Projected inflationary pressure for 2023-24 related to the Veolia contract.

·       The 7% allowed for inflation would be insufficient to deal with the inflation in 2022-23 in addition to the projected inflation for 2023-24.

·       The amount of uncertainty was stressed in relation to forecasting income and expenditure in 2023/24 and financial planning for 2024/25 onwards,

·       Several capital budgets asking to be rephased including in relation to Watford Business Park and Town Hall Quarter.

·       There was a net underspend on the capital programme.

·       The additional budget for the Town Hall Quarter of £2.4 million, was highlighted and this was to be funded by the Community Infrastructure Levy (CIL) subject to agreement by Council.

·       Despite a heavier drawdown on the economic impact reserve than expected, the situation remained positive with the general fund remaining at the risk assessed level of £2 million and £1 million remaining in the economic impact reserve. 

The Chair reminded the committee of the recommendations contained within the report, to allow their questions to be directed. 

There was a question about an underspend in housing services of £363,000, due to an additional grant.  The Head of Finance explained that there were several grants for that service.  The grant from government was ring fenced and had to be spent within the financial year.  Therefore, this grant was prioritised to be spent ahead of the council’s own base budget.

In response to a question about the council’s exposure due to the Veolia contract in 2023-24 from 2022-23, the Head of Finance explained that the additional inflation element was approximately £600,000.  There was income from recycling gate fees which often cycled between profit and loss.  Currently the situation is around £70,000 per month of budget pressure, but that could quickly move to a profit situation. 

In response to a question about the budget pay award and asking how much each additional one percent would cost the council, the Head of Finance stated this would be approximately £100,000.

There was a question regarding income budgets.  The Head of Finance confirmed that revised income profiles had been factored into the 2023-24 budget as part of the review of fees and charges. 

There was a question concerning the capital budget of 2023-24, where grants are not received and how these were funded, and through fixed  ...  view the full minutes text for item 5.

Presentation from the Head of Revenues and Benefits.

The committee received a presentation by the Head of Revenues and Benefits which covered the process for billing, collection and recovery for council tax and business rates.

More specifically, the presentation ran through the following processes:

·       Billing, both annual and adjustment.

·       Method for instalments and payments.

·       How this is administrated.

·       Collection process, including reminders.

·       Escalation of response for non-payment, including liability orders, attachment of earnings, use of enforcement agents to obtain compliance.

·       Enforcement action.

·       Further recovery, including charging orders, bankruptcy, and committal proceedings.

·       Identification of persons classed as vulnerable and ways to assist and support them. 

Throughout the presentation, the Head of Revenues and Benefits stressed that throughout the various processes and their escalation, every effort was made to engage with the debtor.  This effort was continued at every stage and de-escalation would occur if at any stage the debtor engaged and made efforts to pay. 

Following the presentation, the officer responded to several questions, in particular the committee were interested in further detail about vulnerable people and there was some concern about the use of enforcement agents. 

RESOLVED –

that the Finance Scrutiny Committee notes the presentation.

The committee is asked to consider the work programme for the year.

The committee received a draft work programme which had been devised by officers in consultation with the Chair.

The Chair introduced the report noting that there were several standing items reflecting the financial reporting cycles. The work programme provided an outline and it was for the committee to direct its focus. It was intended to be a flexible document and could be reviewed throughout the year. Further suggestions could be made to the Chair and/or Democratic Services.

RESOLVED –

that the work programme be agreed as drafted and kept under review.