Venue: Remote - Virtual Meeting. View directions
Contact: Democratic Services (01737 276182) Email: Democratic@reigate-banstead.gov.uk
Apologies for absence and substitutions
To receive any apologies for absence and notification of any substitute Members in accordance with the Constitution.
Apologies were received from Councillor S. Sinden. There were no substitutions.
To confirm as a correct record the Minutes of the previous meeting.
The Minutes from the previous meeting were approved.
Declarations of interest
To receive any Declarations of Interest (including the existence and nature of any Party Whip).
There were no declarations of interest.
To receive briefings from the three Portfolio Holders – Organisation – Executive Members for Finance & Governance, Investment and Companies and Corporate Policy and Resources.
Members considered the Portfolio Holder Briefings
– Organisation Portfolios from the Portfolio Holders for
Finance and Governance (Councillor T. Schofield), Corporate Policy
and Resources (Councillor V. Lewanski) and Investment and Companies
(Councillor T. Archer). It was noted that the three Executive
Members had received Advance questions which included their two or
three most important objectives in
their portfolios for the year and what they regard as the biggest
risks and challenges.
Councillor T. Schofield said that the main
priorities in the Finance and Governance area were to maintain
effective financial programmes and controls that support the
long-term financial sustainability of the Council. It would
continue to provide and improve clear and transparent financial
information. He was working with his three Heads of Service to
ensure high standards of professionalism in the provision of
services and support both to the organisation and to
Finance priorities included continuing to develop
MTFP budget forecasts taking into account new pressures and
opportunities and uncertainties and ensure borrowing and
investments are in line within the Treasury Management Strategy
limits and continue to develop year-end closedown processes that
have been affected this year. Challenges included continuing to
manage the financial impacts of COVID-19 pandemic and planning for
implementation of the Relative Needs & Resources (Fair Funding)
review and other proposed changes to Government funding
On Revenues, Benefits & Fraud the priority was
working towards a commercial trading company and further developing
external work to provide further new income streams. The ongoing
adverse impacts of COVID-19 on collection rates for council tax and
business rates was a risk.
Governance priorities included planning and delivery
of elections in May 2021 which now included three concurrent
elections including the PCC election with pressure to count and
deliver the results. Also, a refresh and review of the standards
protocol and the meetings cycle to enhance effective working
relations between councillors and officers. The impact of COVID-19
on staffing and management of elections was a risk mitigated by
detailed planning and risk assessments. Legal priorities included
recruitment of a budgeted Property and Planning Lawyer and training
and development of the trainee Solicitor and Paralegal. Risks
included recruitment and retention of skilled and qualified
· Local elections – Members asked what would happen if the local elections in May were postponed again and what the financial implications would be if this happened. Officers confirmed that the government had been very clear that it did not want to postpone the elections again. There were financial implications to run three elections in a covid-secure way and keep residents and staff safe. The Council was lobbying for additional money from Government for this purpose. It was not known yet what the exact figure would be for running the three elections, but officers would keep councillors informed. There may be savings for running three elections on one day and the budget from 2020 had been carried forward. It needed the right PPE and Perspex screens to protect staff ... view the full minutes text for item 48.
To receive a report from the Budget Scrutiny Panel to i) consider the provisional budget proposals for 2021/22 and make recommendations to the Executive in line with the Council’s budget and policy procedure rules.
Members noted that the roll out of recycling to flats had started in 2012 but this still had not concluded and the budget indicated that this project would continue next year. It was acknowledged that there is provision for additional recycling crew in the budget, but more resources might be needed for Neighbourhood Services to speed up the roll-out and support residents, for example, by having half size bins for older residents that were more appropriate to their homes.
It was noted that there were delays this year due to the emergency response to COVID-19. Officers confirmed that the roll-out would restart after Christmas and they would look at smaller bins if necessary, although this would be an additional cost.
Members thanked the Finance team for clarifying the reserves policy and commented that it was a sustainable budget.
They also thanked Councillor T. Schofield, Executive Member for Finance, and Pat Main, Interim Head of Finance, and her team for the work on the budget. Councillor N. Harrison also thanked all Panel Members for contributing and their questions to the Executive Members and Officers.
RESOLVED – that the Committee receive the report from the Budget Scrutiny Panel to go forward to the Executive to i) consider the provisional budget proposals for 2021/22 and (ii) make the recommendations below to the Executive in line with the Council’s budget and policy procedure rules.
That in response to the Service and Financial planning 2021/22 report to Executive on 19 November 2020, the following observations be submitted for the consideration of the Executive:
a) That the Overview and Scrutiny Committee thanks the Executive Member for Finance, Executive and Officers for preparing initial revenue and capital budget proposals for 2021/22;
b) That the Overview and Scrutiny Committee considers the following to be achievable, realistic and based on sound financial practices and reasonable assumptions:
(i) Revenue Budget Savings and Additional Income proposals totalling £2.094m.
(ii) Revenue Budget Growth proposals totalling £0.812m
(iii) Forecast ongoing income budget pressures in 2021/22 as a consequence of the COVID-19 pandemic totalling £1.610m (to be met by one-off funding from the Government Funding Risk Reserve)
(iv) Capital Programme Growth and Reprofiling proposals resulting in a net reduction in the five-year Capital Programme of (£0.286m)
(v) Revenue Reserve Balances at 1 April 2020 of £35.391m;
c) That the Overview and Scrutiny Committee considers the potential negative impact of the savings and growth proposals on service delivery to be minimal and concluded that the Council was managing its finances well on behalf of its residents;
(d) That the budget proposals for 2020/21 included an allowance of £1.256m for the use of reserves including £1m to fund the headroom contingency budget, or a net increase of £256k excluding the headroom contingency budget. For 2021/22 no headroom budget has been established, and a drawing of £539k from reserves is planned. Any overspending will require further drawings from reserves;
e) That implementation of the Council’s Commercial Strategy is vital to meeting the budget gaps in future years, ... view the full minutes text for item 49.
To receive an update on the Environmental Sustainability Strategy and that:
(i) the Committee considers the Environmental Sustainability Strategy and makes any observations
(ii) any observations be reported to the relevant Executive Member with a request that they be taken into account as the Strategy is implemented and through the annual reporting and review process.
Members reviewed the Environmental Sustainability Strategy update report. Portfolio Holder for Corporate Policy and Resources, Councillor V. Lewanski, reported technical problems so did not take part in the agenda item until towards the end of the discussion. Head of Corporate Policy, Cath Rose, introduced the item.
The commitment to produce a new Environmental Sustainability Strategy was included in the Reigate & Banstead 2025 corporate plan in January and the strategy, action plan and performance measures was approved by the Executive on 28 July 2020. An Overview and Scrutiny Committee call-in took place on 27 August 2020 and confirmed that the strategy should be implemented without delay and then a report would come back to this Committee in December for scrutiny. Strategy themes and priority areas of focus included energy and carbon use, low impact consumption and natural environment and biodiversity. The action plan sets out the 24 objectives and 100 plus activities with a timeframe for delivery. The strategy emphasised communications and engagement with local residents and businesses as it was not in the gift of the Council on its own to deliver carbon reduction across the borough as a whole. It needed to work with Surrey County Council as well as respond to central Government targets and funding. There would be formal reporting annually to consider progress and any changing and new priorities and the main strategy would be updated every three to five years. It was noted that there was a cross-party Member task group on this issue which could feed into and comment on work and progress.
Members discussed the item and had the following questions and comments:
· Energy minimisation – Members asked how the Council would approach this and would the Council create its own power through wind or solar means? It was noted that a key element of the strategy was to minimise the energy used (for heating and lighting Council buildings etc) and reduce the fuel that was used. The facilities team was looking at the estate – some measures could be implemented quickly, and others would take longer (such as generating renewable energy). The strategy makes a commitment for the organisation to be carbon neutral by 2030. A website was being produced to provide advice to residents.
· Government updated targets – it was noted that the government had set new higher targets this week for 2030 and the Committee on Climate Change had just produced a report on the Sixth Carbon Budget and what it could achieve from 2033 to 2037. Members asked at what point would the Council updates it plan for the next 10 years. Officers confirmed it would look at this report and keep what it was doing under review to reflect policy and guidance. Members also asked for clarity on which areas were a Borough Council response and which the County Council led on.
· Council buildings – it was noted that that in the 2050 vision it did not mention what would happen to Council buildings. It was confirmed that ... view the full minutes text for item 50.
To consider the Performance Report for Quarter 2 (2020/21) including Revenue and Capital Budget Monitoring report and to make any observations.
Members considered and discussed the Quarter 2 2020/Performance Report. This included the Key Performance Indicators (KPIs), Revenue and Capital Budget monitoring and the allocation of an additional payment of £0.054m in the capital programme for the Horley Pay-on-Exit parking to be funded through prudential borrowing.
Councillor V. Lewanski, Portfolio Holder for Corporate Policy and Resources, said that two KPIs were red rated. These were KPI 7 – Net affordable housing completions and KPI 10 – Recycling performance (Q1 2020/21 performance). The reasons for the red ratings were set out in the report but both were due to the pandemic. The report also contained figures on the Revenue Budget and Capital Budget with some detailed analysis. Councillor Lewanski thanked Councillor T. Schofield, Portfolio Holder for Finance, and the Finance team for their work in preparing this information.
Members asked questions and discussed the following points:
· Building Partnership Control – Members asked about the building partnership control with Tandridge and the budget for a financial shortfall of £197k. It was confirmed that the Council did not have to call on the budget this year. The Director of Place said she would provide a written response to Members giving more details.
· Revenue, Benefits & Fraud service – Members asked why this service was expected to make a net loss on traded services in 2020/21. This is a service that the Council provided to many of the districts and boroughs in Surrey. The Interim Head of Finance explained that there was a small deficit overall which was due to the impact of COVID-19 pandemic when resources were diverted from external work. The Interim Head of Paid Services confirmed that the service currently had 21 clients which included a mix of local authorities, housing associations and private clients. The team’s fraud work in particular saves the Council significant amounts of money, for example, checks were carried out on everyone applying to go on the housing register or who were homeless. Over three months, the team has been awarded four new client contracts, with a number of older contracts currently being renegotiated.
· Underspend this year – Members noted that there was a forecast substantial net budget underspend this year (£1.713m) mainly because the Council had not made as many capital investments or borrowing as expected, and the headroom contingency budget was expected to be underspent. This was a positive position and more than offset the unfunded Covid-costs, which were forecast at £0.613m. Also, it was noted that the uncollected council tax collection rate was down by 1.37 per cent or £1.7m which was considered good in these times.
RESOLVED – that:
(i) the Key Performance Indicator performance for Q2 2020/21 and the observations of the Committee be noted for the Executive;
(ii) the Revenue and Capital Budget position at Q2 2020/21 and the observations of the Committee be noted for the Executive;
(iii) the recommendation of the Executive to Council of the allocation of an additional payment of £0.054m in the capital programme for the Horley Pay-on-Exit ... view the full minutes text for item 51.
To recommend that the Committee:
(i) notes the Commercial Strategy: Part 1, as approved by the Executive at its meeting of 19 November 2020 and set out in Annex 1.
(ii) makes any observations to the Portfolio Holder for Investment and Companies on the Commercial Strategy: Part 1 and to support the ongoing development of Part 2 of the Commercial Strategy.
Members discussed the Commercial Strategy – Part 1 report which sets the scene on what the Council is aiming to achieve. Part 2 of the strategy will come to Overview and Scrutiny next year. Part 2 of the report will set out the specific types of investment and the information the Council is relying on to make commercial decisions and the appropriate governance around decision-making.
Councillor T. Archer, Portfolio Holder for Commercial and Investments, introduced the report. He said Part 1 of the Commercial Strategy set out why it was important to have the current income streams and the clear principles for making ethical decisions, underpinned by relevant and robust assessment of business cases. There was to be an annual action plan with its performance published each year and discussed at Overview and Scrutiny. The strategy went to Executive on 19 November and was presented to this Committee for comments and observations.
Members discussed the following areas:
· Changes to government guidance – it was noted that in the Chancellor’s Spending Review, he introduced new rules for obtaining funding from the Public Works Loan Board (PWLB). Guidance will be provided to support local authorities to determine if a proposed project is an appropriate use of PWLB loans. It was noted that in this Borough the investments were considered carefully to make sure that there would be a good commercial return as well as a social benefit such as regeneration of an area which would benefit businesses and residents.
· New posts for the Commercial Directorate – the Budget included two new posts to work in the Commercial Strategy arena as the current directorate was comprised of the Director, Company Secretary and PMO/admin support. The Council needed to invest and make sure the right team was in place to grow and fill the revenue gap by developing sound commercial activities. It was felt this was a sensible investment given the size and scale of the Council’s commercial ambitions.
· Short-term income opportunities – Members noted that many of the projects were longer-term projects such as the proposed Crematorium and Horley Business Park. In the short-term there were existing commercial assets and the Council was looking to make sure it was getting the best return from these assets. There was work underway to increase income from the Revenue and Benefits service provided to other organisations. The fees and charges review will also bring about additional revenue. It was noted that the Commercial Ventures Executive Sub-Committee had looked at a number of investments and had declined a large number as not right for the Council.
· Setting targets and yields – Members asked about setting targets in terms of assets and yields. This would be contained in Part 2 of the Commercial Strategy and will reflect appropriate market yields for the Council. It was confirmed in a written answer that finance, housing and commercial were all working together to ensure that the Housing Delivery Strategy, Capital Investment Strategy and MTFP and the Commercial Strategy were all aligned ... view the full minutes text for item 52.
To note the Treasury Management Performance for the year 2020/21 to date and note the updated prudential indicators.
Members reviewed the Treasury Management Half Year Report 2020/21 and the updated prudential indicators. This was a substantial report and included all the finalised numbers. It was noted that the Council was well under the borrowing limits it had set itself earlier this year as a result of COVID-19 and the reduced level of new investments.
The Portfolio Holder for Finance, Councillor T. Schofield, said the Council had only one exception to its compliance with Treasury Management. This was due to the Council receiving so many different funding streams from central Government. It was a short-term problem to get the money correctly banked in different accounts and this was now done. Overall, the Council was on track and had complied with the limits that Members had previously approved.
RESOLVED – that the Treasury Management Performance for the year to date be noted and the updated prudential indicators be noted.
To consider updates to the Work Programme for the Overview and Scrutiny Committee for 2020/21 and to consider the Action Tracker from the previous meeting.
Members considered the Future Work Programme. It was noted that the January meeting was looking busy so a meeting in February had been set up to cover the Annual Community Safety Partnership scrutiny with the Borough Commander invited to this meeting. This would be an agenda item on its own to make the January and February meetings more manageable.
To consider any items arising from the Executive which might be subject to the ‘call-in’ procedure in accordance with the provisions of the Overview and Scrutiny Procedure Rules set out in the Constitution.
It was reported that there were no items arising from the Executive that might be subject to the ‘call-in’ procedure in accordance with the provisions of the Overview and Scrutiny Committee Procedure Rules.
Any other urgent business
To consider any item(s) which, in the opinion of the Chairman, should be considered as a matter of urgency - Local Government Act 1972, Section 100B(4)(b).
(NOTE: Under the Committee and Sub-Committee Procedure Rules set out in the Constitution, items of urgent business must be submitted in writing but may be supplemented by an oral report.)
There were no items of urgent business.