Councillor Derbyshire sent apologies, advising that he would be late as he had a prior appointment.

There were no disclosures of interest.

The minutes of the meeting held on 12 June 2012 to be submitted and signed. 

The minutes of the meeting held on 12 June 2012 were submitted and signed.

Presentation explaining how the Council’s Corporate Recharge System works

The Panel received a report of the Head of Strategic Finance and a presentation explaining the background and current system for recharging support costs to individual service cost centres.

The Finance Manager provided the presentation which included two examples of the recharge process.  It was noted that if a service were to be outsourced, the recharge support costs would be shared between the remaining council-run services.  This could lead to questioning as to whether the levels of staffing in the relevant support services were still appropriate for the remainder of the council-run services.

Following a question from the Vice-Chair, Councillor Rackett, the Finance Manager explained that the recharge was calculated on historical information.  For example, officers were currently calculating the recharge support costs for the 2013/14 budget.  The estimates were then reviewed once the final accounts were closed.  He advised that the legal department completed time sheets recording the support they gave to other services.  Other support services calculated the charge in other ways; Human Resources calculated the recharge based on the number of people within a service; IT calculated it by the number of computers in each service. 

Following a question from Councillor Khan, the Finance Manager advised that if a service were outsourced then the support services' functions were likely to be carried out by the new service provider.  This would mean that either the support charges to those services remaining with the Council would be increased or there would be a review of the support service and possibly the reduction in the number of staff within that support service.

The Finance Manager commented that as yet there had been no recalculation of support charges should IT be outsourced.

The Head of Strategic Finance provided an example.  He explained that if Waste Services were to be outsourced there would be an overall reduction in the need for support services as much of this work would be carried out by the outsourced supplier. In the case of the HR support service it had been estimated that there could be a reduction of up to two people from the section.

The Chair asked whether the Council could incur additional costs due to redundancy costs for any staff who were no longer required.

The Head of Strategic Finance advised that it was in the interest of staff to be TUPE’d to the outsource provider.  Should they not transfer then there may not be the work within their original department and they would be made redundant. 

Councillor Watkin, Portfolio Holder for Finance and Shared Services, referred to a previous review of recycling costs and comparisons with other authorities.  This had been made difficult as it was not possible to compare like for like costs.  He had noted that the Finance Manager had referred to the CIPFA Code of Practice and a standard approach for all authorities.  He asked whether this was the case.  He felt that in smaller organisations it would become more difficult to redistribute costs amongst the remaining services. 

The  ...  view the full minutes text for item 11.

Report of the Head of Strategic Finance

This report provides an update on progress in devising a local scheme to provide support to Council Tax payers and outlines the consultation process that will occur.

The Panel received a report of the Head of Strategic Finance which provided an update on progress in devising a local scheme to provide support to Council Tax payers.  It also outlined the consultation process.

The Partnerships and Performance Section Head informed the Panel that the Council had sent out 3,700 letters about the consultation to working aged people in receipt of benefits and organisations across the town had also been informed of the consultation.  People had been offered the opportunity to receive the survey online or in paper format.  They had also been offered face-to-face meetings and briefing sessions.  She had received a number of telephone calls enquiring about the survey.  The survey was being carried out between 15 August 2012 and 8 October.  To date there had been 168 responses and the majority of these had been completed online.  Three-quarters of those people responding had said that different options should be considered to achieve the saving needed rather than an across the board reduction.  The most popular option so far was to lower the level of savings a person was able to hold.  The option causing the most concern was if the support was capped at the Band D Council Tax level.  Most people supported changing the exemptions relating to second homes and empty homes.

The Partnerships and Performance Section Head advised that it was proposed the final consultation and the scheme would be presented to Budget Panel prior to its submission to Cabinet.

The Partnerships and Performance Section Head confirmed that the survey had not been sent out to pensioners in receipt of council tax benefit who would be impacted following the introduction of the scheme.  It would have been sent to those of working age who had working age family members living with them.

Following a question about the voluntary sector, the Partnerships and Performance Section Head replied that the survey had been sent to the Council for Voluntary Services (CVS) and it had been requested that the organisation forward it to the voluntary sector.  She added that she had not yet received a response from the CVS.  There was further work to be carried out in this sector of the community to ensure that they had the opportunity to respond.

Councillor Derbyshire cautioned that officers needed to be careful when they said that the Council Tax Support scheme would not affect pensioners.  Not all pensioners received Council Tax Benefit.  If Council Tax had to subsidise the support scheme then pensioners would be affected.  Officers needed to make it clear that they were referring to those pensioners in receipt of Council Tax benefit.

Councillor Derbyshire also questioned whether, with such a low response rate, the survey results could be considered as being representative.

Councillor Derbyshire said that his third point was that it would be useful to know how many household were in receipt of Council Tax Benefit.  He felt that those who were not in receipt of Council Tax support would have a different view  ...  view the full minutes text for item 12.

Report of the Head of Strategic Finance

This report informs the Budget Panel on income charging policy considerations.

The Panel received a report of the Head of Strategic Finance setting out income charging policy considerations. 

The Head of Strategic Finance outlined the background to the current charging policy.  He advised that the report contained three examples of policies which he considered to be good examples from the responses he received.  He said that he would welcome Members' views on commercial sponsorship. 

The Vice-Chair commented that he considered the Watford policy to be fairly non-existent.  He welcomed the principles in the report and said that it was good starting point.  He noted that there was no logic how sports charges were applied.  There were also other examples.

Councillor Derbyshire said that it was not an easy task to get an overarching framework.  It was necessary to know the true cost of the service being provided.  Appendix 1 to the report appeared to set out reasonable principles. 

Councillor Khan said that it was fair that if someone was on a low income they should pay a reduced charge.  He asked whether it would be possible to offer a service to other authorities.  He also referred to the cost of burials in Watford.  Although there was a higher charge if someone lived outside the Borough, the cost was still lower than London Boroughs.  If the charges were on a par with neighbouring authorities there would be no impact on local people.

The Head of Strategic Finance responded that with regard to the cost of burials, these had been doubled two years ago.  The biggest rival to the cemeteries was the West Herts Crematorium, which made a profit.

Following a comment by the Chair about charging for waste services, the Portfolio Holder advised that the domestic refuse service was a statutory function.  The Council was able to charge for collecting large items.  Following on from the comments about the cemeteries, the Portfolio Holder advised that a Task Group had looked at the fees and had established the real cost.  The Task Group had then made recommendations about the charging structure.

Councillor Jeffree stated that this was an interesting topic for discussion but it was difficult when Members did not know details of the discretionary services provided by the Council.  He said it would be useful to see a list of services and then it would be possible to map them against the charging strategy shown in paragraph 7.3.1 of the officer's report.  Other services the Council could provide could also be considered.  He suggested this was brought to a future meeting.

Councillor Martins agreed the information in the report was a good starting point.  Members needed to understand the cost base and then policy decisions could be made.  Members might consider that some services could charge commercial rates.  Selling the Council's own services to others, for example planning advice, would have implications on resources but it could be looked at from a commercial view.

Councillor Meerabux considered that the issue of sponsorship could be explored further.

The Head of Strategic Finance  ...  view the full minutes text for item 13.

Report of the Head of Strategic Finance

This report informs the Budget Panel of the revenue and capital outturns for 2011/2012 and will subsequently be reported to Cabinet on 17^th September.

The Panel received a report of the Head of Strategic Finance informing Members of the revenue and capital outturns for 2011/2012 which would be reported to Cabinet on 17 September 2012.

Councillor Derbyshire noted the carried forward under spend amounts and said that this always concerned him.

Councillor Khan asked whether investigations were carried out why under spending had occurred. 

The Head of Strategic Finance advised that there had to be acceptable reasons for an under spend being carried forward.  He explained about the carried forward amount for repairs.  It was agreed that this could be carried forward as it was necessary to have funds available should any emergency repairs need to be carried out.

Following a question from Councillor Derbyshire about the reserves, the Head of Strategic Finance said that due to a series of favourable outcomes, which were set out in the report, it had been possible to transfer a larger sum into the General Fund reserves.  The level of reserves would be reviewed further at the October meeting.

The Vice-Chair referred to Multi Storey Car Park Reserve.  He said that it was clear that there were insufficient reserves.

The Head of Strategic Finance advised that the current car park contract would be reviewed and that, as part of that process, this reserve would also be reviewed.

The Vice-Chair said that he did not want to see an increase of parking charges, possibly by 300%, without the ability to get people into the town by other methods.  It would also affect the retail trade.

The Head of Strategic Finance acknowledged the Vice-Chair's comments.

Councillor Khan asked whether it would be possible to use the £287,000 proposed for the Capital Fund Reserve to reduce Council Tax or indeed the £1.2m increase in reserves.

The Head of Strategic Finance responded that either could be used for that purpose.  In the case of the increase in reserves, this would reduce Council Tax by 15%, but it would only be relevant for one year.  The following year Council Tax would have to be increased.

Following a question about the Housing Benefit Subsidy Reserve, the Head of Finance Shared Services explained it had been practice to retain the balance on account with the Department of Works and Pensions (DWP) in general debtors rather than a personal account.  For 2011/12 the opening balance was transferred from general debtors.  The increase in transfer from the revenue account to the housing benefit subsidy reserve was the opening balance on the personal account.

The Head of Strategic Finance added that it was prudent to maintain this reserve in case it was needed for the 'claw back' of subsidy by the DWP. 

Councillor Meerabux asked whether there was any reserve which covered the Council if it broke commercial contracts, for example legal obligations.

The Head of Strategic Finance explained that there was no specific reserve which covered contractual disputes.  Reserves were set up for specific areas but there was some flexibility.

The Chair suggested that further debate  ...  view the full minutes text for item 14.

Report of the Head of Strategic Finance

This report informs the Budget Panel of the reported budgetary variances as at end of July 2012.

The Panel received a report of the Head of Strategic Finance including the Finance Digest for period 4 and setting out the reported budgetary variances as at the end of July 2012.

RESOLVED –

that the Finance Digest as at the end of period 4 be noted.

·               Tuesday 23 October 2012

·               Tuesday 27 November 2012

·               Wednesday 16 January 2013

·               Tuesday 23 October 2012

·               Tuesday 27 November 2012

·               Wednesday 16 January 2013