Agenda, decisions and minutes

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Items
No. Item

44.

Apologies for absence

To receive any apologies for absence.

Additional documents:

Minutes:

Apologies for absence were received from Councillor Bramhall, Councillor Humphreys and Councillor Neame.

Councillor Sachdeva attended virtually so could not vote at the meeting.

45.

Minutes

To approve the Minutes of the last meeting on 17 November 2022.

Supporting documents:

Minutes:

RESOLVED that the minutes of the meeting of the Executive held on 17 November 2022 be approved.

46.

Declarations of interest

To receive any declarations of interest.

Additional documents:

Minutes:

There were no declarations of interest.

47.

Commercial Strategy: Progress Update

The Executive Member for Investment and Companies.

Supporting documents:

Minutes:

The Portfolio Holder for Investment and Companies, Councillor Archer, presented the first annual update on progress to deliver the Council’s Commercial strategy, Part 1 of which was agreed in November 2020 and Part 2 in December 2021.

 

Progress on commercial assets and commercial services this year had been positive with work on commercial assets making a particular contribution. Achievements set out in the report included: securing almost £1.2m from new property lettings, preventing nearly £400k of costs from void properties and good progress on developments at The Rise and Wheatley Court enabling cautious income projections of £250k in 2024/25, increasing to £800k by 2027-28. The Council had also agreed to buy temporary and emergency housing units, approved a programme of re-letting café premises in parks to improve income and develop future opportunities on remaining key properties and potential land assembly.

 

A review of fees and charges had been completed to make Council services more commercial. This exercise had identified approximately £1m in savings and additional income. Information on those changes was considered in the annual budget papers.

 

There were areas where plans had changed following new government funding regulations. For example, the Council was no longer progressing plans for a holding company. Proposals to strengthen the Council’s procurement and contract management skill base had also been slower than envisaged due to recruitment challenges.

 

The report was considered by Overview and Scrutiny Committee at its meeting on 8 December 2022 and additional information including the outcome of individual development projects would be provided. Committee Members also expressed interest in continuing to explore all options for future use of assets and service provision but agreed that in some cases the decision not to progress with a commercial opportunity was the right decision.

 

Chairman of Overview and Scrutiny Committee, Councillor Harrison, thanked Councillor Archer for highlighting the good progress and achievements that had been made over the year. Additional financial information on projects with both revenue and capital implications had been requested and provided as well as information on revenues and benefits trading activities. In addition, there had been interest in the progress on the housing strategy and plans to move forward future projects using the housing reserve. The formal quarterly asset performance report to the Partner, Shareholder and Trustee Sub-Committee was welcomed.

 

Visiting Members commented that questions had been raised and information sought on business plan feasibility on housing projects such as Wheatley Court in Redhill. They had also raised questions on social housing future developments as well as information set out in the section on Priority 3: Asset (Re-) Development – Securing new income streams and/or capital receipts from development projects (p28 of the agenda pack).

 

Councillor Brunt, Leader of the Council, noted that the housing strategy was separate to the commercial strategy, being about delivering more affordable housing across the borough. He confirmed that the Council was now a registered provider of social housing since earlier this year and the Council was providing housing already through that mechanism.  ...  view the full minutes text for item 47.

48.

Quarter 2 2022/23 performance report

The Executive Member for Corporate Policy and Resources and the Executive Member for Finance and Governance.

Supporting documents:

Minutes:

Members received the Quarter 2 2022/23 performance report which gave an overview of the Council’s performance from July to September 2022 including Key Performance Indicator (KPI) reporting, as well as revenue and capital budget monitoring and a progress update on the Financial Sustainability Programme.


The Executive Member for Policy and Resources, Councillor Lewanski, updated the Committee on the Council’s Key Performance Indicators – of the 10 KPIs reported on, nine were on target or within the agreed tolerance. One red-rated indicator (KPI 3 – Staff Turnover) showed 16% turnover as against a target of 12%.  During COVID-19, turnover had been lower than expected and was now ‘catching up’ due to the strong labour market. 

The report had been considered by Overview and Scrutiny Committee on 8 December 2022. Overview and Scrutiny Committee Chairman, Councillor Harrison, noted that the Committee had commented on affordable housing completions (KPI 7), requested information on projects that had received planning permission, but work had yet to commence,  staff turnover (KPI 3) and food waste (KPI 10 Recycling).

 

Visiting Members asked questions on the following areas:

 

Staff turnover – Members asked if the rise in staff turnover was across the whole organisation or in a particular department. Officers confirmed that the higher turnover was not concentrated in one department but across the whole organisation. Turnover was continually monitored through exit interviews as staff left for new jobs, life changes following COVID-19 or took retirement. There was a competitive jobs market following the pandemic, making it difficult to recruit skilled staff in some areas.

 

Affordable housing – Members thanked officers for the breakdown in types of affordable housing that had been provided to Members which showed the affordable housing in the Borough that was for social rent which made it easier to track progress which was positive.

Deputy Leader and Portfolio Holder for Finance and Governance, Councillor Schofield, presented the Revenue and Capital Budget position for quarter 2 to 30 September 2022. On the revenue budget the projected full year outturn was £19.113m against a management budget of £20.062m resulting in an underspend for the year of £948k (4.7%). The full year Capital Programme forecast at the end of quarter 2 was £31.86m (53%) below the approved Programme for the year. The variance was a result of £35.54m slippage and a £0.24m net underspend. The reason for the forecast slippage was that while substantial budgets had previously been allocated for investment in housing developments, the related business cases had not yet been developed.

The report had been considered by the Overview and Scrutiny Committee and Chairman, Councillor Harrison, noted that a positive forecast outturn and clearly favourable variance was highly satisfactory. Areas highlighted by O&S Members included questions on inflation, energy costs and the favourable variance shown in the return of car parking income. Visiting Members welcomed the separate items set out in the budget monitoring report to show where there was funding that had been allocated for investment such as the housing strategy. They  ...  view the full minutes text for item 48.

49.

Risk management - Quarter 2 2022/23

The Executive Member for Corporate Policy and Resources.

Supporting documents:

Minutes:

Executive Members received an update report on risk management in Quarter 2 2022/23 (July to September 2022). The Portfolio Holder for Policy and Resources, Councillor Lewanski, reported that no were no new strategic risks set out in Quarter 2 and no strategic risks recommended for closure.


At the end of Quarter 2 there was one red-rated operational risk and additional detail on this was provided in Annex 2 (exempt).


The report had been considered by the Audit Committee on 7 December 2022 and no formal observations made to Executive.

 

There were no questions from Executive Members or Visiting Members.

 

RESOLVED – that the Executive:

 

1.     Note the Q2 2022/23 update on risk management provided by the report.

 

50.

Treasury Management Strategy Mid-Year Report 2022/23

The Deputy Leader and Executive Member for Finance and Governance.

Supporting documents:

Minutes:

The Deputy Leader and Executive Member for Finance and Governance, Councillor Schofield, introduced the Treasury Management Strategy Mid-Year Report which provided an update on the performance of the Council’s treasury management activities for the first half of this financial year. The report forms part of formal reporting requirements under the CIPFA Code of Practice on Treasury Management.

 

Councillor Schofield reported that treasury management performance for 2022/23 to date including performance against the Council’s Prudential and Treasury Management Indicators was on track and complied with the borrowing and investment position and limits that Members had agreed previously as part of the Strategy for 2022/23.

 

One minor non-compliance matter was highlighted in the report (funds held in an investment account for one day more than the timescale specified) and investment procedures had been reviewed as a result to improve controls.

The report had been considered by the Audit Committee at its meeting on 7 December 2022. An Addendum to the agenda had been published which set out the observations from Members in the draft Audit Committee minute on this item.

 

A Visiting Member from the Audit Committee commented that the Committee had expressed strong reservations about the information presented at Table 5: Investment Portfolio – Non-Treasury Investments (p105) in the report to the Committee. As the Chairman of the Audit Committee, Councillor J. King, could not attend this Executive meeting, a statement from him on  behalf of the Committee had been circulated to Executive Members. The Committee’s concerns were specifically about the limitations of the information provided in the report on the current and forecast value of the Council’s investments in Horley Business Park LLP, Greensand Holdings Limited and Pathway for Care Limited.

 

Deputy Leader and Portfolio Holder for Finance and Governance, Councillor Schofield, noted that the purpose of the Treasury Management report was not an appraisal of the Council’s companies. It was a brief snapshot of funds invested at a point of time and showed the cumulative value of loans and interest accrued to date. Information on the Council’s companies was provided in regular performance reports, which were reviewed by Overview and Scrutiny Committee, as well as in the annual Statement of Accounts to the Audit Committee.

 

Councillor Schofield and Portfolio Holder for Investment and Companies, Councillor Archer, invited Audit Committee Chairman, Councillor J. King, to attend future meetings of the Executive’s Partnership, Shareholder and Trustee Sub-Committee (formerly named the Commercial Ventures Executive Sub-Committee). This gave more detail about ongoing work in this area and the Chairman could thereby be aware of commercial confidential discussions and raise questions on behalf of the Audit Committee.

 

Visiting Members raised concerns that the information in Table 5 on third party loans was set out in a way that was inaccessible to a member of the public or to a lay person without a finance background. Without further background information attached to the table, it did not provide the information they were seeking on company assets and income. They asked for further clarity on the  ...  view the full minutes text for item 50.

51.

Statements

To receive any statements from the Leader of the Council, Members of the Executive or the Head of Paid Service.

Additional documents:

Minutes:

There were no statements.

52.

Exempt business

RECOMMENDED that members of the Press and public be excluded from the meeting for the following item of business under Section 100A(4) of the Local Government Act 1972 on the grounds that:

(i)            it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Act; and

(ii)          the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Additional documents:

Minutes:

There was no exempt business discussed.

53.

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:  Urgent business must be submitted in writing but may be supplemented by an oral report).

Additional documents:

Minutes:

The Observations on Budget Scrutiny – Budget Scrutiny Panel Report from was published as an Addendum following the Overview and Scrutiny Committee meeting the previous week on 8 December 2022 and was discussed at agenda item 10a.

53a

Observations on Budget Scrutiny - Budget Scrutiny Panel Report

Deputy Leader and Executive Member for Finance & Governance.

Supporting documents:

Minutes:

Executive Members received the report from the Overview and Scrutiny Committee’s Budget Scrutiny Panel which met on 29 November 2022 to consider the provisional Budget proposals for 2023/24 and to make recommendations to the Executive in line with the Council’s budget and policy procedure rules. This had been discussed at the Overview and Scrutiny Committee on 8 December 2022. The Committee’s observations and recommendations were set out below.

Councillor Harrison, Chair of the Budget Scrutiny Panel, introduced the report. It was a full report in terms of a balanced revenue budget which was an improvement from the previous year

  • There were still uncertainties about government grants so Overview and Scrutiny Committee will consider this item again at its January meeting
  • The main recommendations in the Budget report were agreed from (i) to (vii). The Panel noted the £1.5m budget for staff salary growth.
  • Recommendations (viii) to (x) set out that the budget proposals were achievement, realistic and based on sound financial practices.
  • Recommendation (xi) to (xiii) noted proposed savings would not be expected to have a significant impact on services, inflation cost pressures had been addressed and earmarked Reserves would be used, as necessary, with analysis requested on how they are used over previous years.

There had been 60 plus questions from Panel Members which all received full responses with supplementary questions asked at the Panel. He thanked the Portfolio Holder, Councillor Schofield and officers for these responses and for helpful changes in the way the information in the report was presented.

Councillor Brunt, Leader of the Council, thanked the Budget Scrutiny Panel and Overview and Scrutiny Committee members for their work on scrutinising the Budget for the coming year. Good feedback had been received through the scrutiny process and useful points had been raised which could be taken forward for the final Budget & Capital Programme 2023/24 report to Executive on 26 January 2023 and to Council on 9 February 2023.

RESOLVED that the Executive note the following observations from the Overview and Scrutiny Committee following recommendations from the Budget Scrutiny Panel in response to the Service and Financial Planning 2023/24 report:

       i.                     The national and local policy context and significant financial uncertainties at this stage in the budget-setting process were noted, along with the associated uncertainties and risks.

      ii.                     The service proposals set out in the report which seek to respond to this context and deliver corporate policies be endorsed.

    iii.                     The draft service business plans for 2023/24 to 2025/26 be approved, and that Heads of Service be authorised to finalise their plans for their service areas in consultation with the relevant Portfolio Holders.

    iv.                     The following be approved for consultation under the Council’s budget and policy framework: a) Medium Term Financial Plan Forecasts and proposed actions to address the forecast Revenue Budget gap; b) Service Revenue Budget growth proposals totalling £0.442 million, savings of (£0.828) million and additional income of (£1.186) million; c) Central Revenue Budget Savings proposals totalling (£0.897) million. The Panel noted that the £1.500 million  ...  view the full minutes text for item 53a