There was a change of membership for this meeting: Councillor Jeffree replaced Councillor Derbyshire.

There were no disclosures of interest.

The minutes of the meeting held on 10 July 2013 to be submitted and signed.  (All minutes are available on the Council’s website.)

The minutes of the meeting held on 10 July 2013 were submitted and signed.

Report of the Head of Revenues and Benefits

This report provides an overview of the Financial aspects of Revenues and Benefits, with particular reference to Benefit Subsidy, Council Tax and Business Rate Collection Rates.

The Panel received a report of the Head of Revenues and Benefits which provided an overview of the financial aspects of the Revenues and Benefits service.  The report made particular reference to Benefit Subsidy, Council Tax and Business Rates collection information.

Benefit Subsidy

Councillor Jeffree commented that the report was interesting but he was concerned that the Council always appeared to be at risk if a mistake was made.  He accepted that there would be penalties if the Council made a mistake.  He asked whether the Council was able to claim recompense from outside contractors if they were found to have made mistakes when processing claims.  He also enquired if there were any other ways to mitigate against mistakes happening.

The Head of Revenues and Benefits advised that any overpayment carried an element of risk.  The Council had the power to recover any overpayment from the Applicant.    With regard to the contract with the current contractor, it did not contain a penalty clause related to mistakes.  A previous contract had contained a clause which reduced the amount the Council paid for the service if there was a degree of inaccuracy by that contractor.  This arrangement had been offered by the company to promote their service to the Council.  The current contractor was acting on behalf of the Council.  The majority of overpayments could be attributed to delays in processing changes. 

Following a question from Councillor Counter about technical overpayments, the Head of Revenues and Benefits explained that the Council Tax bills were reduced by the Council Tax Benefit for the duration of that bill.  Following a change in the Council Taxpayers circumstances, for example when they were no longer responsible for Council Tax at that property, the bill was apportioned and the Council Tax Benefit was calculated for the relevant period of time.  He assured Members that the Council did not lose out in these cases. 

Councillor Martins said that the overpayment cost to the Council was unsustainable.  He asked what measures needed to be put in place to reduce the cost.

The Chair commented that he was aware that the Housing Benefits overpayments raised in 2010/11 was £1.9 million and then in 2012/13 the figure was over £3 million.

The Head of Revenues and Benefits informed the Panel that overpayments were caused by people forgetting to advise the Council of changes in their circumstances.  The service was currently working on developing an automatic link with the Department of Works and Pensions.  This link would enable the Council to receive automatic updates on changes to pensions and benefits details.  A further reason for the increase in overpayments was that rents had increased over time and therefore the level of overpayment would increase.

The Chair considered the response was unacceptable.  He asked for the officer’s opinion on the level of overpayments expected for the current year.  He felt too many mistakes were made.

The Shared Director of Finance advised that some errors had been created due to the delays in processing  ...  view the full minutes text for item 12.

Report of the Revenues Manager

This report sets out the various types of relief available to businesses to help them towards their business rates.

The Panel received a report of the Revenues Manager setting out information about the various types of relief available to businesses to help them with their business rates.

The Shared Director of Finance explained which relief was mandatory and which the Council had no control over and those awards which the Council had discretion to grant. 

Following a concern from the Vice-Chair about Empty Property Relief, the Shared Director of Finance advised that this relief was only applicable for three months, following that period the charge reverted to the full amount unless other discounts applied.  She added that local authorities were aware of scams carried out by property owners to try to avoid having to pay business rates.  She informed Members that those premises where the business had gone into administration or receivership, the Council was unable to collect any charges due for the premises.

In response to a question from Councillor Jeffree about the cost to the Council, the Shared Director of Finance stated that since April 2013 different relief cost the Council different amounts.  The funding rules for business rates had changed from April.  The Council only needed to forward 40% to Central Government in respect of any income over and above the baseline figure.  If the Council collected less than the baseline figure there was a cost to the Council. 

The Chair suggested that the new Business Rates regime could be added to the work programme as a training session.

Councillor Turmaine asked a number of questions related to business rates, including whether information about empty properties in the High Street was accessible.

The Shared Director of Finance informed the Panel that if a charity occupied premises the mandatory 80% relief would apply.  The Council had no discretion over this award.  A charity could then apply for the discretionary top up relief.  Sports Clubs were also entitled to apply for relief.  The Shared Director of Finance advised that she would ensure that a list of empty properties was circulated to the Panel. 

The Policy and Guidelines attached to the report were the basis which revenues staff used to grant relief. 

The Chair asked whether the Council should have a policy setting out which businesses would be able to receive discretionary relief.  He also questioned whether the Council should have a policy encouraging local businesses and local charities rather than national companies and organisations.

Councillor Martins suggested that the general principle of the Chair’s suggestion was a good idea.

Councillor Meerabux commented that many residents wondered whether the Council provided flexibility to support businesses.  He referred to Brent Cross Shopping Centre which provided free parking for visitors.  He suggested it was important to look at the long term aspects for the town.

The Shared Director of Finance responded that business rates was just one aspect that could be built into a package for businesses; however, this was not the best support mechanism.  Support for businesses might include how to manage a business.  There was a range of support  ...  view the full minutes text for item 13.

Report of the Shared Director of Finance

This report provides an overview of financial issues affecting the Council over the period up till March 2018 and enables a strategy to be developed to achieve a sustainable budget and set a Council Tax for 2014/15.

The Panel received a report of the Shared Director of Finance which provided an overview of the financial issues affecting the Council up to March 2018. 

The Shared Director of Finance highlighted the sections which had been updated since the Panel’s meeting in July.  She advised Members that no assumptions had currently been made about the collection of business rates and whether it would be over or below the baseline.  She added that the Business Rate Grant changes shown in Appendix 1 to the report reflected the changes happening within Watford.  She informed Members that business rates were key to the Council’s financial position.

Councillor Taylor referred to the New Homes Bonus.  He noted that it appeared to stop by 2017/18.  Councillor Turmaine asked whether the New Homes Bonus had any impact on the number of properties developed in Watford.

The Shared Director of Finance advised this was not a definite end date, but one that she had anticipated might happen.  It may still be in operation after that date. 

The Portfolio Holder responded to Councillor Turmaine’s question.  He said that the New Homes Bonus was unlikely to have an impact on the number of properties developed in Watford.  Watford was seen as a good place to build new residential developments.  The bonus was critical for the Council and its budget. 

The Chair commented on the infrastructure of the town and the lack of sufficient schools and doctors’ surgeries.  The Council, however, still allowed more houses to be built.

The Portfolio Holder reminded the Chair that the infrastructure references he had mentioned were not the responsibility of this Council.  The Council was unable to refuse a planning application if the relevant infrastructure was not in place. 

Councillor Greenslade questioned whether the target of 97% for the Council Tax collection rate was reasonable. 

The Shared Director of Finance said that in her opinion the collection rate was low compared to similar authorities.  One inference could be that there was insufficient recovery action taken.  She felt that the collection rate could be increased.

Councillor Meerabux commented that in his opinion he considered 97% a reasonable figure.  He felt it was difficult to draw comparisons as Watford’s population was continuously changing.

The Shared Director of Finance reiterated that Watford’s collection rate was low compared to similar towns to Watford.

RESOLVED –

that the Panel’s comments be noted.

Report of Finance

The Finance Digest monitors the Council's expenditure and income throughout the financial year. It includes the budgetary variances as at the end of July 2013. 

Budget Panel is asked to review the Finance Digest.

The Panel received the latest edition of the Finance Digest.  The Shared Director of Finance advised that the current prediction that there would be a slight underspend but this was likely to change by the end of the year.

The Head of Finance Shared Services referred the Panel to Table 1 in the digest.  This set out the variances as at the end of July.  This showed that there was only one variance which had arisen during July.  This related to Watford’s share of the cost of IT services and was seen as an invest to save.  This would be funded from the relevant reserve. 

Following a question from Councillor Taylor about the Revenues and Benefits review, the Shared Director of Finance explained that there were ongoing discussions with the service about ways it could improve.  Some minor changes had already been put in place.

RESOLVED –

that the Finance Digest (Period 4) be noted.

Budget Panel is asked to review the work programme and discuss any training requirements.

The Panel received a copy of the latest version of Budget Panel’s work programme.  The Committee and Scrutiny Officer advised that following Members’ earlier discussions a further item needed to be added to the programme for October, ‘Revenues and Benefits follow up’.  It was agreed that the analysis of commercial rents would be moved to November.

The Panel also discussed its training requirements.  The Committee and Scrutiny Officer reminded Members that Welwyn Hatfield Borough Council had extended two training sessions on Local Government Finance to all Councillors across the County.  If Members were interested in attending either of the sessions they would need to contact her the following day so that she could inform the Committee Manager at Welwyn Hatfield Borough Council. 

Members agreed that a training session should be held at the start of the next meeting related to a basic guide to Local Government finance.  In November the training session should be on Business Rates since April 2013.

RESOLVED –

that the work programme be updated to incorporate the changes to the programme and the training sessions.

·               Tuesday 29 October 2013

·               Tuesday 26 November 2013

·               Wednesday 15 January 2014

·               Tuesday 29 October 2013

·               Tuesday 26 November 2013

·               Wednesday 15 January 2014