Agenda and minutes

To confirm as a correct record the Minutes of the previous meeting.

RESOLVED that the minutes of the previous meeting held on 12 October 2023 be approved and signed.

To receive any apologies for absence and notification of any substitute Members in accordance with the Constitution.

Apologies were received from Councillor Elbourne, Councillor Kulka was substitute.

Apologies were received from Councillor Sachdeva, Councillor Hudson was substitute.

Apologies were received from Councillor Parnall; there was no substitute.

To receive any Declarations of Interest (including the existence and nature of any Party Whip).

There were no declarations of interest.

To consider the Council’s performance in Quarter 2 2023/24 including Key Performance Indicators for Q2 2023/24, Revenue Budget and Capital Programme forecasts for Q2 2023/24, and the Treasury Management Performance Update for Q2 2023/24.

RECOMMENDED that Overview and Scrutiny Committee:

      i.        Notes the Key Performance Indicator (KPI) performance for Q2 2023/24 as detailed in the report and in Annex 1 and make any observations to the Executive.

    ii.        Notes the Revenue Budget and Capital Programme forecasts for Q2 2023/24 as detailed in the report and at Annex 2 and make any observations to the Executive.

   iii.        Notes the Quarter 2 Treasury Management Performance Update for 2023/24 at Annex 3 and makes any observations to the Executive;

The Committee received the Performance Reports for Quarter 2 2023/24 including the Key Performance Indicators (KPIs) and Budget Monitoring forecasts Quarter 2 2023/24, both for revenue and capital. The reports were due to be presented to the Executive on 14 December 2023.

Key Performance Indicators

Of the ten KPIs reported on, eight were on target or within agreed tolerances. Two KPIs were off target: KPI 6 – housing completions, and KPI 7 – Net affordable housing completions. Although Affordable housing completions had not met their target within this quarter, in Quarter 2, 52 dwellings were completed, 40 at market rate and 12 affordable. The majority of completions had come from the developments at the Horley North West Sector and 136 Brighton Road, Hooley.

Advance Questions

Several advance questions on the Key Performance Indicators had been submitted prior to the meeting. The advance questions and their responses can be viewed here:

Document Advance Questions and Answers OS 7 December 2023 | Reigate and Banstead Borough Council (moderngov.co.uk)

The following clarifications were provided:

KPI 10 – The percentage of household waste that is recycled or composted

Although the target for KPI 10 had not been met for several quarters, it was explained that this target was set by the Surrey Environmental Partnership and was a stretch target, which the Council aspires to achieve. The Council was currently reviewing how the service is delivered and considering how to best make changes to ensure that the new Government waste and recycling guidelines will be met. This includes a full recycling roll-out to all households in the borough. The Chair added that this was one of the uncertainties identified by the Budget Scrutiny Panel.

Finance

Councillor Lewanski, Deputy Leader and Portfolio Holder for Finance, Governance and Organisation, gave an overview of the Quarter 2 Budget Monitoring set out in the report, which also included an update on the quarter’s treasury management activities.

At Quarter 2 the projected full year outturn is £21.911m against a management budget of £23.194m resulting in an underspend for the year of £1.283m (5.5%).

Details of the more significant budget variances were set out in the report.

At this stage in the year there were no significant areas of concern, but further work is being carried out to look into the adverse variances.               

The full year Capital Programme forecast at the end of Quarter 2 of £27.074m is 26% below the approved Programme for the year.

The variance is predominantly as a result of £9.752m slippage.

The reasons for the slippage at this stage were primarily because of updated forecasts of the time required to deliver the larger programmes.

Capital spending plans were based on information available at the start of 2023 and, six months later, some timescales have been revised. 

The Portfolio Holder also confirmed that the balance of the £30.0 million that was previously approved for investment in Housing schemes remains available but not yet committed. Reference to this was omitted in the report; that would be corrected in  ...  view the full minutes text for item 48.

To receive the report from the Budget Scrutiny Panel from its meeting on 29 November 2023.

RECOMMENDED that Overview and Scrutiny Committee:

      i.        Considers the provisional budget proposals for 2024/25.

    ii.        Makes recommendations to the Executive in line with the Council’s budget and policy procedure rules.

   iii.        Confirms as a correct record the minutes from the Budget Scrutiny Panel meeting held on 29 November 2023.

(This report will follow as an addendum.)

Members received the report from the O&S Budget Scrutiny Panel which met on 29 November 2023 to consider the provisional Budget proposals for 2024/25 and to make recommendations to the Executive in line with the Council’s budget and policy procedure rules.

Councillor Harrison, Chair of the Budget Scrutiny Panel, summarised the findings from the Panel to the Committee, which were set out in the report to the Committee as an addendum to the agenda pack, and in the recommendations set out in the minutes of the Budget Scrutiny Panel meeting. He drew attention to the following:

·         The changes to the Local Council Tax Scheme would be financed by changes to Council tax premiums on empty properties.

·         The financial settlement from Government was yet to be published and that the Overview and Scrutiny Committee would have an opportunity to view and comment on any consequential changes to the budget at the Overview and Scrutiny Committee meeting on 25 January 2024, prior to the Executive meeting on 1 February 2024.

·         The budget is balanced, but there are uncertainties.

·         Proposed savings were not expected to have a significant impact on the scope or quality of service delivery.

·         There were concerns regarding inflation.

·         The importance of Council’s Commercial Strategy to address future budget gaps.

He thanked the Portfolio Holder, the Chief Finance Officer and the Finance team for their report and responses to the advance questions.

Pay award

The Managing Director informed the committee that formal notification had been received from both Trade Unions that the pay offer for 2024/25 had been accepted.

Local Government Finance Settlement

The Chief Finance Officer informed the committee that a Local Government Finance Policy Statement had been received earlier in the week which gave an indication about the parameters around next year's funding for local government and the indication was that there would not be any significant or severe reductions. However, it would not be known how the funding envelope would be shared between the different tiers and types of authorities until later in December.

Members made comments and asked questions on the following areas:

Empty homes

It was confirmed that there were approximately 300 empty and furnished second homes.

The Housing Department has started a 12 month pilot scheme to employ a part time officer to engage with social tenants that are interested in downsizing from family homes, freeing up homes for homeless families.

The officer would assist tenants with all aspects of their move. Six weeks into the project, there were thirty people interested in moving to more appropriate accommodation for them. As more tenants register their interest in moving, tenants can be matched with suitable homes in their own community. Following the one-year pilot project, consideration would be given to continuing to fund that role and potentially increase that resource.

Electric Vehicle charging points

It was confirmed that although there was no specific budget allocation for Electric Vehicle charging points in car parks. However, the Environmental Strategy had both capital and revenue allocations that  ...  view the full minutes text for item 49.

To receive a progress update on work aligned with the Council’s Commercial Strategy and objectives.

RECOMMENDED that Overview and Scrutiny Committee:

Notes the Commercial Strategy Report and Annex 1 and makes any observations to the Executive.

Councillor Andrew King, Portfolio holder for Commercial and Community Assets, introduced the second annual update on the Council’s Commercial Strategy.

Part one of the Commercial Strategy was agreed in November 2020 and part two in December 2021. As set out in the Commercial Strategy, all the Council’s commercial activity is guided by three principles, first, that it is ethical and meets the Council’s statutory responsibilities; secondly, commercial decisions will be robust, consistent and supported by due diligence; and third, that income will be used to support financial sustainability and services for residents.

Within this year's report is an overview of the changing context in which the Council operates and its influence on commercial activities. As the overview identifies, national guidance and controls on commercial activity by local authorities, now more closely steer the available investment approaches. As a result, there is an increased emphasis on ensuring that investment and commercial activities should directly serve the Council's role in benefiting their local areas.

For this Council, this renewed emphasis aligns with its wider objectives and principles. As set out in the report, consideration of commercial matters is now primarily taking place within the context of the Council's Financial Sustainability Programme, updates on which are provided as part of the quarterly reporting to this Committee and the Executive.

The goals within the Commercial Strategy of effective management of assets and investments, operating in a financially efficient manner, and reviewing opportunities for investment to benefit the Borough, remain relevant, but there should also be awareness of this change in operational context and the move towards focusing on commercial activities as part of the broader approach that is the Council's Financial Sustainability Programme.

In terms of this year’s activity, the Council's commercial activity can be broken down into two main areas - commercial assets and commercial services.

Progress this year has continued to be positive, with achievements, including

·       The completion of The Rise development at Marketfield Way, with more information provided in the parallel report to the committee.

·       A contribution of an additional £700k towards the revenue budget from Council property assets and

·       Additional income of nearly £540k from planned updates to fees and charges.

Work is also continuing on other elements, with improvements now made on property reporting, a review of potentially underutilised assets underway, and consideration being given to a framework for future development activities. There is also note of the approval of acquisition of additional temporary and emergency accommodation, which will both improve the service the Council can offer and reduce the costs associated with relying on external provision.

As identified in the previous annual report, there has been a move away from the use of company structures to support commercial activities, with potential company structures around housing activity and revenues and benefit work no longer viewed as required. More information on existing companies is available in the Winter 2023 Companies Performance Update. Work on improvements to contract management procurement are also continuing with more information provided in an annex to  ...  view the full minutes text for item 50.

To provide an update on the companies owned and part-owned by the Council.

RECOMMENDED that Overview and Scrutiny Committee:

Notes the Companies Performance Update, as set out in the report, and makes any observations for consideration by the Partner, Shareholder and Trustee Executive Sub-Committee.

Councillor Andrew King, Portfolio holder for Commercial and Community Assets, introduced the six-monthly update on the performance of companies owned or part-owned by the Council.

The report provides an overview of the performance of the companies currently owned or part-owned by the Council. The currently operational companies are Greensand Holding Limited, Horley Business Park Development LLP, and Pathway for Care Limited.

Considering these companies in turn

Preparations are being made in anticipation of Greensand Holdings Limited being dissolved in an orderly manner, with its assets being transferred to direct holdings by the Council. The Council is continuing to work with the company's directors to ensure that the company's affairs are properly managed and to review its future strategy. The company's assets are continuing to be managed with options for their future use being reviewed.

Horley Business Park Development LLP is on track to be dissolved by way of a Members Voluntary Liquidation, with a plan to resolve its financial affairs currently being implemented. Interest owed by the LLP to the Council is impaired in the Council accounts to reflect the risk of credit loss.

There is an ongoing, commercially sensitive dialogue with the majority shareholder in Pathway for Care Limited; with it considered likely that the company will be forced into administration unless a negotiated settlement can be reached. The most recent company accounts received by the Council for the year to the 31st of December 2022 do not have a valid audit opinion and show that the company is technically insolvent. The redemption date of the 23 April 2023 for the Council's £1.1 million of preference shares in the company has not been honoured.

More information on the details of these company arrangements is available in the confidential Part 2 section of the report.

Whilst the performance of these companies is not as was originally envisaged when they were created, and is in some cases markedly unsatisfactory, every effort is being made to ensure that current situations are effectively managed to secure best available value for the Council, the borough, and its residents.

The Council also owns RBBC Limited, created to preserve the company name in case of future need. Options for the future of this company are being developed for consideration by this Partner, Shareholder and Trustee Executive Sub-Committee.

Several advance questions on the Companies Performance Update – Winter 2023 had been submitted prior to the meeting. The advance questions and their responses can be viewed here:

Document Advance Questions and Answers OS 7 December 2023 | Reigate and Banstead Borough Council (moderngov.co.uk)

The Portfolio holder for Commercial and Community Assets, invited Members to ask questions and comment on the Companies Performance Update – Winter 2023 provided in the agenda pack.

In response to the questions raised, the following clarifications were provided:

It was confirmed that by “to secure best available value for the Council, the borough, and its residents” the Council would minimise the financial impact of involvement in these companies.

Members noted that it could be  ...  view the full minutes text for item 51.

To receive an update report on the progress of the Marketfield Way project.

Councillor Michalowski, Portfolio Holder for Place, Planning and Regulatory Services, gave an update on Marketfield Way as set out in the report.

The report provided an update on progress to deliver the Marketfield Way project since it was last considered by Executive in December 2019.

Acting as developer over the last four years, the Council has overcome numerous challenges to bring this project forward to get to this stage. The most significant challenge had been the huge uncertainty brought about by the pandemic. The Council made a conscious and deliberate decision to press ahead with entering into a building contract shortly after the pandemic hit and, when there was huge global uncertainty. The pandemic resulted in the Council not being able to secure early pre-lets on any of the commercial space; the cinema operator was lost, and complex logistical challenges were faced to ensure safe working on site. While a fixed rate contract was in place, when changes were made, this resulted in cost increases due to high build cost inflation not only because of pandemic but also the Ukraine crisis.

Complex engineering challenges were also faced, including the relocation of a power sub-station, statutory services, and the build over of a large public sewer.

These factors ultimately resulted in delay and consequential cost increases for the project. The pandemic and the cost of living crisis have resulted in much more uncertainty for prospective tenants and has brought about less rental income than originally forecast.

Despite these challenges, this Council has now completed the main build. The residential part has been sold to the Council’s private sector partner; over 70% of the commercial floorspace has been let, and letting agreements are currently being secured on the remaining three units.

The new development, The Rise is now well and truly open for business, welcoming thousands of people every day. The Rise is already home to over 100 people who benefit from living in the heart of Redhill with its excellent transport links. The palatable difference this Council's commitment to the project our investments is making to the regeneration of Redhill in line with the Council’s corporate objectives is now being realised.

The Rise has become a true leisure destination alongside the Harlequin with a forecast of 400,000 visitors to The Light this year. Residents’ views are that they love the new leisure facilities. Footfall in town is substantially increased, bucking national trends. More people are visiting the town from a wider catchment. More people are staying longer, and businesses report that trade is up.

The Portfolio Holder thanked both past and current Members and officers of the Council, as well as the local community, for their continued support in bringing this project forward. He stated that this project is a clear example of how, through intervention, the public sector can deliver a true place-making project that makes a great difference to the lives of local residents and businesses.

Several advance questions on the Marketfield Way Update – December 2023 had been  ...  view the full minutes text for item 52.

RECOMMENDED that members of the Press and public be excluded from the meeting for parts of items 7 and 8 under Section 100A(4) of the Local Government Ac 1972 on the grounds that:

i.  It involves the likely disclosure of exempt information as defined in paragraph 2 of Part 1 of Schedule 12 A of the Act;

and

ii. The public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The exempt business was discussed during the exempt part of the meeting due to the confidential nature of the discussions held.

RESOLVED that Overview & Scrutiny Committee:

Noted the exempt information regarding Winter 2023 Companies Performance Update as set out in the report.

Noted the exempt information regarding the Marketfield Way Update – December 2023.

To consider and agree any changes to the schedule for Overview and Scrutiny Committee’s Forward Work Programme 2023/24 and to consider the Action Tracker from the previous meeting.

The Chair explained that there had been an update on several of the pending items on the Overview & Scrutiny Forward Work Programme.

Due to the RAAC problem at The Harlequin, the Leisure and Culture Strategy would be delayed and would be presented to Overview & Scrutiny Committee in the next Municipal year.

The Greenspaces Strategy had also been delayed. It had been planned that the Greenspaces Strategy would be presented before the Review of the Greenspaces Team, however, due to the delay in the strategy, it was proposed that the Review of the Greenspaces Team be presented first, to the February meeting.

Government guidance had now been issued on Waste and Resources; it was expected that the Review of the Recycling Service would be presented to Overview & Scrutiny Committee in March or June 2024.

It was proposed that the Leaders’ Update be moved from March 2024 to January 2024, to allow more time for the items on the March agenda.

RESOLVED that the Committee agreed the amendments to the Overview and Scrutiny Committee’s Work Programme for 2023/24 and noted the updated action tracker.

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 Procedure Rules.

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 was no urgent business.