HOMES AND SAFE COMMUNITIES SCRUTINY COMMITTEE
Minutes of a meeting held on 6th December, 2017.
Present: Councillor Mrs. M.R. Wilkinson (Chairman); Councillor M.R. Wilson (Vice-Chairman); Councillors Ms. B.E. Brooks, Mrs. C.A. Cave, Mrs. S.M. Hanks and Mrs. R. Nugent-Finn.
Also present: Mrs. G. Doyle, Mr. D. Dutch and Mr. A. Raybould (Tenant Working Group Representatives).
513 APOLOGIES FOR ABSENCE –
These were received from Councillors Ms. A.M. Collins, B.T. Gray and M.J.G. Morgan; and Ms. H. Smith (Tenant Working Group Representative).
514 MINUTES –
RECOMMENDED – T H A T the minutes of the meeting held on 8th November, 2017 be approved as a correct record.
515 DECLARATIONS OF INTEREST –
No declarations were received.
516 YOUTH OFFENDING SERVICE – REPORT RE IMPACT OF VALE OF GLAMORGAN COURT CLOSURE (DSS) –
The Youth Offending Service (YOS) Manager presented the report, the purpose of which was to provide the Committee with a qualitative report regarding the impact of the Vale of Glamorgan Magistrates Court closure on the YOS and its service users, following a request for the report from Committee in September 2017.
The Ministry of Justice announced its decision to merge the Vale of Glamorgan and Cardiff Local Justice Areas on 14th December, 2010 and to close the Vale of Glamorgan Magistrates Court. The Court closed in December 2011 and all cases transferred to Cardiff Magistrates Court with effect from January 2012.
The officer advised that prior to the closure, the Court operated a single Youth Court day where the majority of cases were listed for consideration, with the exception of remand hearings or trials. The YOS was not required to provide a presence when trails were being heard and would be informed of the outcome by the Court.
Cardiff Magistrates Court operated Youth Court on three of the five working days and remand Courts on the remaining two working days and on a Saturday.
Her Majesty’s Courts and Tribunals Services (HMCTS) did not provide an option for cases from individual Local Authority areas to be heard separately as part of an area listing as their aim was to merge the benches into a single Cardiff and Vale of Glamorgan Youth Bench. Bridgend Youth Court had also joined the court listing.
As a result, cases from the Vale of Glamorgan would be listed at any time over the three days that the Youth Court Bench was sitting. There was also a requirement to cover remand hearings which may also take place on the remaining three days, including Saturday.
The officer drew the Committee’s attention to the table below which outlined the numbers of children and young people listed at Court between 2012 to 31st October, 2017. This demonstrated the level of demand.
|
|
Monday
|
Tuesday
|
Wednesday
|
Thursday
|
Friday
|
Weekend
|
|
2012
|
20
|
167
|
42
|
132
|
16
|
8
|
|
2013
|
15
|
132
|
55
|
120
|
22
|
8
|
|
2014
|
13
|
122
|
26
|
47
|
10
|
2
|
|
2015
|
13
|
138
|
39
|
28
|
6
|
0
|
|
2016
|
6
|
127
|
16
|
22
|
5
|
0
|
|
2017 – to 31/10/2017
|
17
|
96
|
13
|
27
|
8
|
2
|
The officer further advised that in order to mitigate against the requirement for a YOS officer to be in attendance on all three Youth Court days, the YOS had agreed a Protocol with Cardiff YOS to provide cover for first hearings, sentencing outcomes where custody was not a consideration or any listings of revocation of Orders.
Cases where sentencing required the input of the YOS officer with more detailed knowledge of the child or young person, or where custody or remand was an option both on working days or on Saturday, or breach of an Order, required a Vale YOS officer to be in attendance.
The YOS Manager was pleased to advise that despite an anticipation that there would be an increase in the numbers of children failing to attend Court, evidence from YOS records indicated that during the period since 2012, there had been limited failures to attend with the number of warrants issued with or without bail as outlined below:
2012 = 8
2013 = 13
2014 = 5
2015 = 2
2016 = 8
2017 = 1.
The Court merger had however increased the requirement for a YOS officer to be present from a single day up to three days per week, an increase in travel and parking costs for YOS officers, additional travel and waiting time and financial costs for service users. The officer stated that this was the biggest impact for the YOS.
The YOS had quantified the cost to the service which equated to £16,500 per annum based on additional staffing, travel and parking costs. However, no additional resources were available to the YOS, therefore the YOS had needed to redirect existing resources, this meant that whilst practitioners were undertaking cover at Court, they were not able to undertake other job role activities.
The Court merger had also introduced delays in the listing of cases in relation to breaches, which would previously be listed within one week in the Vale of Glamorgan Magistrates Court, but could now take approximately three to four weeks to list.
In conclusion, the YOS Manager advised that residents of the Vale of Glamorgan had also been put to increased expense with train / bus fare costs ranging from £3 to £7 per person attending. Children were required to attend with a parent and the YOS had provided some families, who were reliant on benefits, with travel warrants to enable their attendance at Court.
A Member referred to the increased breach listing delays and asked the officer if there were any possible actions the Local Authority could take to reduce the current three to four week period. The officer advised that since the merging of Cardiff, Bridgend and Vale of Glamorgan benches, the demand on the now single service had subsequently increased and had therefore slowed the process.
A Member highlighted the fact that the £16,500 per annum quantified cost was almost the equivalent of a staff salary and it was crucial to recognise the cost being incurred by the Council. The Member also shared her concern over the travel cost incurred by Vale residents using the service and highlighted the fact that the financial obligation could be significant and distressing for individuals. In light of these points, the Member suggested that the report be referred to Cabinet with a polite request that Cabinet write to the Ministry of Justice to express the Council’s concerns.
In response, the officer advised that the Council had made robust representations to the Ministry of Justice on closure in 2011 and a Judicial Review was requested in March 2011. Also, in response to a Member’s question on whether there was any consideration given in 2011 to the quantative costs going forward, the officer advised that costs following the Court closure were taken into account by individual departments, but there was no central funding made available and this was still the case.
In summary, the Chairman thanked the officer for bringing the report to Committee and recognised that it was important for Cabinet to have sight of the report and for views to be shared with the Ministry of Justice. The Committee agreed with the Member’s recommendation.
RECOMMENDED –
(1) T H A T the content of the report be noted.
(2) T H A T the report and Scrutiny Committee’s concerns be referred to Cabinet.
(3) T H A T a request be made of Cabinet for a letter to be sent to the Ministry of Justice outlining the concerns of the impact of the Vale of Glamorgan Court closure for service users.
Reasons for recommendations
(1) In acknowledgement of the contents contained therein.
(2) To provide Cabinet with information regarding the implications of the Court closure for both service users and the Youth Offending Service and the Scrutiny Committee’s concerns.
(3) To ensure that the Council’s concerns are raised with the Ministry of Justice.
517 PRESENTATION – ANTI-SOCIAL BEHAVIOUR –
The Principal Community Safety Officer introduced Gethin Robinson, the Community Safety Manager for the Eastern Areas of the Vale of Glamorgan. She advised that Mr. Robinson worked in close partnership with Stacey Evans, who was also a Community Safety Manager for the Western Areas of the Vale. Both Managers were vital members of the Community Safety Team (CST) located at Barry Police Station. The officers were also a vital link between all Council services and had the benefit of being able to access the Police system to assist them in their work.
The Community Safety Manager introduced the presentation on anti-social behaviour (ASB) by referring to the Crime and Disorder Act which put a duty on the Local Authority “to exercise its various functions with due regard to the likely effect of the exercise of those functions on, and the need to do all that it reasonably can to prevent, crime and disorder in its area”.
The officer apprised the Committee on the various areas of work undertaken by the CST as well as ASB, which were:
- domestic abuse;
- substance misuse;
- licensing;
- community cohesion;
- CONTEST;
- crime prevention;
- community engagement;
- hate crime;
- rogue traders;
- neighbourhood watch;
- rural watch;
- support for victims; and
- CCTV.
Also, of the various agencies the CST met with monthly to maintain an open dialogue and build good working relationships:
- housing association;
- education;
- health;
- social services;
- Police;
- Youth Offending Service;
- Third Sector;
- Fire Service;
- victim support;
- FACT; and
- Child and Adolescent Mental Health Service (CAMHS).
There were various powers available to the above agencies to help tackle ASB, such as:
- Premises Closure Order (PCO);
- Police Disbursal Power (PDP);
- Public Spaces Protection Order (PSPO);
- Community Protection Notice (CPN);
- Community Trigger (CT);
- Civil Injunctions (CI); and
- Criminal Behaviour Order (CBO).
The primary focus of the CST was “prevention rather than prosecution” as prevention was a key part of reducing crime and ASB. It was a new approach to look at every case individually and identify what needed addressing to offer holistic solutions instead of pursuing directly through the ASB process. The officer highlighted the fact that the right support on matters such as housing or mental health, provided at an earlier stage, would prove crucial to the individual and be most effective.
The officer went on to describe the four stage process that the CST operated when dealing with incidents of ASB:
- Stage 1 – warning letter;
- Stage 2 – multi agency visit;
- Stage 3 – ASB contract; and
- Stage 4 – consideration for legal proceedings.
A Member queried whether the four stage process differed based on the age of the perpetrator, to which, the officer advised that the only different was found at Stage 3 when the CST would need to engage with young people out of school hours and / or evenings to encourage parental participation. The YOS would also be more heavily involved when dealing with a young person. In addition, the officer advised that when reaching Stage 4 it would be necessary for a Local Authority to evidence that all steps had been taken before referring the incident to Court.
Whilst still on the topic of younger people, the officer described an additional prevention process called a “Neighbourhood Resolution Panel” (NRP). An NRP would be conducted by one partnership officer, one YOS officer and a YOS volunteer as well as the parent(s) and young person. An NRP would often highlight wider areas of support the young person required and would result in the young person writing and agreeing their own ASB contract.
The officer advised that all Vale Housing and Registered Social Landlords (RSLs) related ASB was now met with a joint response from the CST and the housing providers. A joint visit would take place where further support and information would be offered on how the behaviours could affect tenancy.
A Member referred to the recent CBOs taken in Llantwit Major and shared her concern on the length of time taken to finalise the process for individuals aged between 16 and 18. As a supplementary question, the Member also queried the difference between criminal behaviour and ASB which, in her experience, had been difficult to distinguish between.
The Community Safety Manager advised that a lot of prevention work was taking place with the individuals privately. The Principal Community Safety Officer also added that the incidents in Llantwit Major were related to criminal rather than ASB. Therefore, evidence was required to establish a criminal defence and the Local Authority was relying on multiple external agencies to provide this.
The Member then asked what the consequences would be if a CBO was breached. The Principal Community Safety Officer confirmed that the individual could be arrested and the matter would go directly to Court. The outcome of the case and any subsequent punishment would then be the Courts decision.
In response to the Member’s subsequent question on whether there would then be a delay/period of processing time before the case would be heard in the Court, the officer advised yes, unless the crime was of a more serious nature.
The Member thanked the officer for answering her questions and wished to inform the Committee that the CCTV in operation within Llantwit Major had been very helpful in tackling the ASB.
A Member asked how the officer would define ASB and what would justify a Stage 1 warning letter being raised. The Community Safety Manager advised that ASB was defined as any behaviour that was deemed as “unreasonable” and a warning letter would be generated following notification to an agency such as the Police.
A Member asked what qualifications, if any, a YOS volunteer would need to have in order to participate in an NRP. The officer advised that all volunteers would have taken part in a week long course and this was essential as the NRP environment could be difficult.
A Tenant Working Group Representative referred to his own personal experience of ASB and asked what the timeframe should be from first reporting to result as he felt the process was currently too lengthy. The Head of Housing and Building Services advised that it would be beneficial if a private meeting could be arranged between the Representative and the CST, following the Committee meeting, to establish any lessons to be learned and manage future expectations.
The Chairman thanked the Community Safety Manager for his presentation and noted that two further presentations from the CST were due to come to Committee in the New Year.
518 INITIAL REVENUE BUDGET PROPOSALS 2018/19 (DEH) –
The Scrutiny Committee was consulted on the Initial Revenue Budget Proposals for 2018/19 and was advised of the Amended Original Budget for 2017/18 for services which formed part of the Committee’s remit.
The Council’s budget was determined largely by the Revenue Support Grant (RSG) settlement set by the Welsh Government (WG). The provisional RSG settlement was received from WG on 10th October, 2017. The final settlement was likely to be received in December 2017.
The Finance Support Manager began by advising that the Council was required under statute to fix the level of Council Tax for 2018/19 by 11th March, 2018 and in order to do so, had to agree a balanced revenue budget by the same date. To be in a position to meet the statutory deadlines and the requirements for consultation set out in the Council’s Constitution, much of the work on quantifying the resource requirements of individual services needed to be carried out before the final RSG settlement was notified to the Council.
Appendix 1 to the report set out the Amended Budget for 2017/18 for the Committee, together with the necessary adjustments to be made to the original budget.
The officer advised that the adjustments to Asset Rents, International Accounting Standard (IAS) 19, Transfers and Recharges had no overall effect on the net budget of the Council. These were accounting adjustments largely outside the control of services. They reflected charges for the use of capital assets, changes to inter-service recharges and transfers and pensions adjustments to comply with accounting standards.
The following table compared the amended budget with the projected outturn for 2017/18.
|
2017/18
|
2017/18
|
Variance
|
|
|
Amended
|
Projected
|
(+)Favourable
|
|
Directorate/Service
|
Budget
|
Outturn
|
(-) Adverse
|
|
|
£’000
|
£’000
|
£’000
|
|
Youth Offending Service
|
697
|
697
|
0
|
|
Regulatory Services
|
2,169
|
2,169
|
0
|
|
Council Fund Housing
|
1,257
|
1,257
|
0
|
|
Private Housing
|
11,038
|
10,468
|
+570
|
|
Grand Total
|
15,161
|
14,591
|
+570
|
Youth Offending Service – It was anticipated that this service would outturn within budget at year end.
Regulatory Services – The allocation of £2.169m represented the Vale of Glamorgan's budget for its share of the Shared Regulatory Service (SRS). A separate set of accounts was maintained for the SRS and periodically reported to the Shared Regulatory Service Joint Committee. At this stage in the year it was anticipated that the SRS would outturn on target.
Council Fund Housing – It was anticipated that this budget would also outturn on target, however, this was after a planned transfer from reserves of £85k to fund specific posts and issues arising as a result of the introduction of the Housing Act.
Private Housing – At present, there was a projected underspend on the Council Tax Reduction Scheme of £570k due to a lower than anticipated take up. This sum would be transferred into the Council Fund and its use would be considered by the Budget Working Group when it was taking into account all factors in formulating a balanced revenue and capital budget for the final proposals which would be presented to Cabinet and Council in February 2018.
As part of the Final Revenue Budget Proposals for 2017/18, no savings target was set for the Committee.
Moving on to the Budget Strategy, the Finance Support Manager advised that Cabinet approved the Budget Strategy for 2018/19 on 31st July, 2017. The Budget Strategy for 2018/19 outlined that in order to establish a baseline, services would be required to prepare Initial Revenue Budgets based on the cost of providing the current level of service, approved policy decisions; including the existing savings target. This meant that the cost of price increases and any allowable pay awards would be included as advised by the Head of Finance.
Increases to budgets approved during the course of a financial year would restrict the freedom the Council had to allocate its resources to priorities during the following budget cycle when it was aware of all the competing demands. Consequently:
- Supplementary estimates would only increase the base budget if Council had given specific approval to this effect. Increases met by virement within a year would not be treated as committed growth.
- Directors were required to find the cost of increments and staff changes from their base budget unless relevant specific approval had been given for additional funding.
- The effect of replacing grant from outside bodies that had discontinued would not be treated as committed growth. In addition, before any project or initiative that was to be met either wholly or partly by way of grant may proceed, the exit strategy would be approved.
- Certain items of unavoidable committed growth would continue and these included the effect of interest changes and the financing cost of the Capital Programme, increases in taxes, increases in levies and precepts charged by outside bodies and changes to housing benefits net expenditure.
- Services would be expected to achieve savings already approved by Cabinet as part of the 2017/18 final budget proposals and Directors were asked to continue work on achieving their Reshaping Services savings targets.
- It was envisaged that the costs of service development would need to be met from within the respective Directorates.
Having regard to the above, the officer added that it was therefore proposed in respect of the 2018/19 Budget Process that Directors be instructed to prepare Initial Revenue Budgets in accordance with a timetable agreed by the Head of Finance. Preparation would be on the following basis:
- Capital charges, central accommodation costs and central support costs to be estimated centrally;
- Services to prepare baseline budgets on current service levels as set out in the 2017/18 Final Revenue Budget report;
- Budgets to be broken down subjectively and objectively in as much detail as deemed appropriate by the Head of Finance;
- Budget reports to include revised estimates for 2017/18;
- Full account to be taken of the revenue costs, other than debt charges, of new capital schemes coming into use;
- Minimum savings targets to be met initially as detailed in the 2017/18 Final Revenue Budget report. Any savings made directly by services over and above individual service targets to count towards future saving targets or to meet unavoidable service cost pressures;
- Directors would continue to draw up Service Plans that set out the aims and objectives for the service and any possible future developments and efficiencies;
- As stated previously, it was expected that the revenue costs of service development would need to be met from within the respective services (in particular from the savings made). As such, no revenue bids were initially to be made. However, services would still be asked to identify and prioritise any burgeoning revenue cost pressures for consideration.
The Medium Term Financial Plan (MTFP) 2017/18 to 2020/21 was presented to Cabinet on 18th September, 2017. It assumed a reduction in WG funding of 3% for the years 2018/19, 2019/20 and 2020/21. This resulted in the requirement to find savings of £20.941m over this period, with £9.326m currently having been identified. There were therefore further savings to be identified of £11.615m over the three year period.
The officer highlighted the fact that the latest MTFP factored in a managed level of cost pressures, a notional increase in Council Tax of 2.6% each year, price inflation of 0.5% and annual pay awards of 1.6% each year from 2018/19.
The Council's provisional settlement was announced by WG on 10th October, 2017. WG advised the Council that its provisional Standard Spending Assessment (SSA) for 2018/19 was £221.296m. SSA represented WG's view of the relative resources needed to provide a standard level of service in each Local Authority in Wales and its primary use was to allocate RSG to these Authorities.
On this matter, the officer advised that the Council would receive, from WG, an RSG of £111.174m and a share of the Non-Domestic Rates (NDR) of £40.822m. Together these figures constituted the Council’s provisional Aggregate External Finance (AEF) of £151.996m. WG reported that this represented a cash reduction of 0.4% (£670k) for 2018/19. However, when taking into account new responsibilities, this actually represented a cash reduction of 0.56% (£859k). This was a smaller reduction than the 3% (£4.486m) projected in the MTFP.
Additional funding of £189k was provided through the RSG as a new responsibility for Homelessness Prevention.
As part of the settlement, WG had also provided an indicative figure for the change in AEF for 2019/20 which was a further reduction of 1.5%.
As part of the initial proposals, it had been necessary to revisit the cost pressures facing services in order to build up a complete and up to date picture of the financial position and an updated list for the Committee was shown in Appendix 2 to the report. There were no proposed savings for 2018/19 to 2019/20 specifically relating to the services within the Committee's remit.
A summary of the overall base budget for 2018/19 for the Committee was attached at Appendix 3 to the report. The officer advised that the summary had been derived by adjusting the 2017/18 budget. Inflation had yet to be allocated to services pending the final agreement of pay inflation and the level and approach for allocating general price inflation. Adjustments shown in the summary included the following:
- Asset Rents, International Accounting Standard (IAS) 19 – Related to accounting items outside the control of services. They reflected charges to services for the use of capital assets and adjustments in respect of pensions to comply with accounting standards;
- Recharges / Transfers – Related to changes in inter-service and inter Directorate recharges;
- Committed Growth – This related to the £189k new responsibility for Homelessness Prevention.
Once the base budget for 2018/19 had been established, it must then be compared to the funding available to identify the extent of any shortfall. With a projected AEF of £151.996m and Council Tax at a current level of £66.166m the total available funding would be £218.162m. When compared to a base budget of £221.748m, this resulted in a funding deficit for 2018/19 of £3.586m.
The officer advised that if all identified cost pressures were funded, this would increase the shortfall to £10.636m. If all proposed savings were achieved, the shortfall would be reduced to £3.910m. As WG had provided an indicative reduction for 2019/20 of 1.5% the officer drew the Committee’s attention to the table below demonstrating the impact of this.
|
Projected Budget Shortfall
|
2018/19
|
2019/20
|
|
|
£000
|
£000
|
|
Funding Available
|
|
|
|
Provisional AEF
|
151,996
|
149,716
|
|
Council Tax (Assumes no increase)
|
66,166
|
66,166
|
|
Projected Funding Available
|
218,162
|
215,882
|
|
|
|
|
|
Base Budget
|
221,748
|
220,201
|
|
|
|
|
|
Projected Shortfall Against Base Budget
|
3,586
|
4,319
|
|
|
|
|
|
Assume all Cost Pressures Funded
|
7,050
|
4,483
|
|
|
|
|
|
Projected Shortfall with Cost Pressures funded
|
10,636
|
8,802
|
|
|
|
|
|
Assume all Savings Achieved
|
(6,726)
|
(2,600)
|
|
|
|
|
|
Projected Shortfall
|
3,910
|
6,202
|
The projected shortfall as presented by the officer was based on the assumption that the savings target of £6.726m set for 2018/19 would be achieved in full. However, a high proportion of the savings related to Reshaping Services schemes which reflected a new way of working and therefore required a lengthy period of time to implement. Whilst all services were working towards achieving their 2018/19 targets, not all savings would be achieved in full from 1st April, 2018 and therefore the potential for reprofiling savings would need to be assessed when setting the budget for 2018/19.
The above tabled projections also included an assumed pay award for 2018/19 and the possible impact of the National Living Wage which averaged an increase of 1.6%. The current assumptions would be assessed as part of the Final Budget Proposals report when further information was available.
Further work would be undertaken by the Budget Working Group (BWG) in order to achieve a balanced budget for the Final Budget Proposals for 2018/19. The BWG would consider the results of the budget engagement process in determining priorities for future savings and service delivery. The BWG would ensure that budget proposals considered the requirements of the Well-being of Future Generations Act and the Council's four well-being outcomes as detailed in the Corporate Plan. It would also ensure that the budget proposals reflected the five ways of working which were:
- Looking to the long term: The budget proposals were a means of planning for the future and took a strategic approach to ensure services were sustainable and that future need and demand for services was understood;
- Taking an integrated approach: The budget proposals would consider and encourage ways of working with partners;
- Involving the population in decisions: As part of the budget proposal process there would be engagement with residents, customers and partners.
- Working in a collaborative way: The budget proposals would recognise that there was more to be achieved and better services could be provided by collaboration and this way of working in the future would be encouraged;
- Understanding the root cause of issues and preventing them: The budget process was proactive and would allow an understanding of the financial position so that issues would be tackled at the source during the process.
The officer apprised the Committee on the BWG meetings held in November 2017 between the relevant Cabinet Members and officers to consider the budget proposals. Their aim was to submit their recommendations so that the Cabinet may make its Final Budget Proposal. Before making its recommendation, the BWG would consider the comments made by Scrutiny, together with the results of consultation. The final proposals to Cabinet would include a review of the financial strategies required to achieve a balanced budget, which was sustainable in future years. Currently, the approved timetable required Cabinet to approve the final budget proposals by no later than 19th February, 2018. Cabinet’s Final Budget Proposals would be considered by Council at a meeting to be held on 28th February, 2018 to enable the Council Tax to be set by 11th March, 2018.
In presenting the report, the Financial Support Manager advised that based on the assumption that all cost pressures would be funded in full, the estimated funding shortfall for 2018/19 would be £3.910m and £6.202m in 2019/20, assuming no increase in Council Tax.
The Council had always taken a prudent approach with regard to specific reserves and used them to mitigate known risks (finance and service) and contingent items, e.g. Insurance Fund. Other reserves had been established to fund Council priorities, in particular the Capital Programme. This was important as the Council had limited capacity to realise sufficient sums from the sale of assets for capital investment. Sums had also been set aside to assist in budget management, e.g. Early Retirement Fund.
The Council Fund Reserve as at 31st March, 2018 was projected to stand at £10.609m. The Section 151 Officer currently believed that the minimum balance on the Council Fund Reserve should be no less than £7m. This was considered sufficient to cover unforeseen expenditure whilst, in the short term, maintaining a working balance. Unforeseen expenditure could be substantial and several instances could occur in a year. The Housing Revenue Account Reserve was ringfenced to Housing and would be used to fund improvements to the Council’s housing stock.
The officer addressed the point that the Council presently benefitted from a reasonable level of reserves, however, they were not inexhaustible and had taken years of careful financial management to develop to their current level. Appendix 4 to the report set out the actual reserves as at 31st March, 2017 for the Committee and showed the estimated reserves balance for each year up to 31st March, 2021.
In conclusion, the Finance Support Manager advised that the Council was planning to use a considerable amount of its specific reserves over the coming years, however, as reserves were a non-recurring means of funding, they could only be used as part of a specific financial strategy.
RECOMMENDED –
(1) T H A T the Amended Revenue Budget for 2017/18 be noted.
(2) T H A T the Initial Revenue Budget Proposals for 2018/19 be noted.
Reasons for recommendations
(1) To advise Committee of amendments to the 2017/18 budget.
(2) To advise Committee of the proposals for the 2018/19 budget.
519 INITIAL CAPITAL PROGRAMME PROPOSALS 2018/19 (DEH) –
The Committee was provided with an update on the Capital Programme for 2017/18 and was requested to consider the Initial Capital Programme Proposals for 2018/19. Appendix 1 to the report detailed financial progress on the Capital Programme as at 30th September, 2017.
The Finance Support Manager highlighted the single change as detailed below, which was reflected in Appendix 2 to the report:
- WHQS Environmental Improvements – Work on the Buttrills Environmental Scheme started in July 2017 and it was estimated to take 18 months to complete. The scheme was to be completed in three phases: roofing, walls and internal / external communal areas, with the communal areas unlikely to be completed until the 2018/19 financial year. It had therefore been requested that £373k be carried forward into the 2018/19 Capital Programme.
The Welsh Government (WG) announced the provisional 2018/19 General Capital Funding on 10th October, 2017. The 2018/19 Capital Settlement was a flatlined capital settlement which for the Vale of Glamorgan Council equated to General Capital Funding of £5.505m which was made up of £2.083m General Capital Grant and £3.422m Supported Borrowing.
The officer further advised that there was no indication of the level of funding likely beyond 2018/19 and therefore in line with the approach adopted in the Medium Term Financial Plan the proposals assumed a reduction of 5% for each year of the programme from 2019/20. Appendix 2 to the report set out the Initial Proposals for the Capital Programme between 2018/19 and 2022/23 for the Committee.
The Council would seek to mitigate the projected deteriorating funding situation by looking to progress only those schemes which were deemed to be a key Corporate Priority and make a clear impact to the Wellbeing and Future Generation priorities. The Council would seek assurances that schemes included in the Capital Programme could be delivered on time and within budget.
The Major Repairs Allowance (MRA), which was the grant that provided capital funding to the Housing Revenue Account (HRA), had not yet been announced by WG for 2018/19. Cabinet would be advised once the announcement was made. The officer highlighted the assumption which had been made in Appendix 2 that the grant would continue at the 2017/18 allocation of £2.779m in 2018/19 and throughout the period of the Capital Programme.
In addition to external funding, the Council would finance part of the Capital Programme from its own resources, e.g. capital receipts and reserves.
The officer drew the Committee’s attention to the table below which detailed the General Capital Funding and internal resources required to fund the proposed schemes for the Council as a whole:
|
Analysis of Net Funding Required for the Indicative 2018/19 Capital Programme
|
|
|
|
GENERAL FUND
|
£’000
|
£’000
|
|
Welsh Government Resources
|
|
|
|
Supported Borrowing
|
3,422
|
|
|
General Capital Grant
|
2,083
|
|
|
Total Welsh Government Resources
|
|
5,505
|
|
|
|
|
|
Council Resources
|
|
|
|
General Capital Receipts
|
3,633
|
|
|
Reserves
|
4,869
|
|
|
Total Council Resources
|
|
8,502
|
|
|
|
|
|
Net Capital Resources
|
|
|
|
|
|
|
|
HOUSING REVENUE ACCOUNT
|
|
|
|
Housing Reserves
|
4,566
|
|
|
Housing Unsupported Borrowing
|
5,420
|
|
|
Net Capital Resources
|
|
9,986
|
|
|
|
|
|
Total Net Capital Resources
|
|
23,993
|
New capital bids were invited for return by 30th September, 2017 and the number of bids received was in line with previous years since the five year Capital Programme was introduced (1 from Learning and Skills, 10 from Environment and Housing and 4 from Managing Director and Resources). Departments were requested to rank and assess their own bids in order of importance before submission and bids from each Department were forwarded to the Insight Group for evaluation.
The Insight Group used a number of criteria to assess the Capital Bids. The first criteria used was to classify the nature of the bids as set out below:
|
Priority Level
|
Criteria
|
|
A
|
Health and Safety legislation
|
|
B
|
Other Legislation / Statutory Requirement
|
|
Ci
|
Economic Sense / Invest to Save
|
|
Cii
|
Corporate Plan
|
|
Ciii
|
Sufficiency
|
|
D
|
Condition / Suitability
|
|
E
|
Welsh Government Requirements
|
|
F
|
Low Priority
|
Where bids were rated an A or B from the criteria listed above there would clearly be a legal obligation to ensure that works were progressed in a timely manner within the confines of the funding available. Schemes that represented an invest to save opportunity or support the achievement of corporate priorities should also be prioritised.
In addition, in accordance with the criteria set out in the Budget Strategy, the bids were prioritised in terms of their corporate priority and the risk they posed to the Council if they were not pursued. The risk assessment element was undertaken in line with the Council's Corporate Risk Management Strategy, detailed within the report.
The officer advised that the bids were also reviewed for the contribution that they made to the Wellbeing and Future Generations criteria as set out below:
- Long Term
- Integration
- Collaboration
- Prevention
- Involvement.
Each scheme was awarded one point for every one of the outcomes that it met to a maximum of 5. Only those schemes assessed as corporate priority 1 or higher and medium risk or higher were included in these proposals. In addition the schemes put forward needed to contribute to at least three Wellbeing and Future Generations outcomes and have a scheme priority factor of either A/B/Ci/Cii/Ciii. The bids that did not meet these criteria were excluded from consideration as there was insufficient funding available, however, there were no such bids relating to this Committee.
The following table set out the single bid that had been proposed to be funded by this Committee:
|
Successful Bids
|
2018/19
|
2019/20
|
2020/21
|
2021/21
|
2022/23
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Disabled Facility Grants
|
150
|
150
|
150
|
150
|
150
|
750
|
|
Total
|
150
|
150
|
150
|
150
|
150
|
750
|
Moving on to the matter of the 2017/18 Housing Improvement Programme, the officer advised that the budget currently totalled £21.353m. It had been requested that £373k be carried forward into 2018/19. The funding of the 2017/18 programme had been amended as set out in the table below:
|
Funding
|
Current
2017/18
£'000
|
Amended
2017/18
£'000
|
|
Major Repairs Allowance Grant
|
2,770
|
2,779
|
|
Other Grant
|
166
|
166
|
|
CERA
|
5,148
|
6,481
|
|
Unsupported Borrowing
|
13,269
|
9,767
|
|
HRA Capital Receipts
|
0
|
1,787
|
|
Total
|
21,353
|
20,980
|
RECOMMENDED –
(1) T H A T the changes to the 2017/18 Capital Programme be noted.
(2) T H A T the Initial Capital Budget Proposals for 2018/19 be noted.
Reasons for recommendations
(1) To ensure that Members are aware of the position with regard to the 2017/18 Capital Programme.
(2) To ensure that Members are aware of the proposals with regard to the 2018/19 Capital Budget.
520 INITIAL HOUSING REVENUE ACCOUNT BUDGET PROPOSALS 2018/19 (DEH) –
The Committee was consulted on the Initial Housing Revenue Account (HRA) Budget Proposals for 2018/19 and informed of the amended original budget for 2017/18. Each Local Housing Authority was required under Section 74, of the 1989 Local Government and Housing Act to keep a Housing Revenue Account. Section 76 of the Act required Local Authorities to set a budget for their HRA on an annual basis. The budget had to be set so that the sum held in the HRA reserve at year end was not in a deficit position.
The Finance Support Manager presented the report, which set out the fact that during the course of the year, Local Authorities must review their HRA expenditure and income. If on the basis of the information available, the balance of the HRA reserve was heading for a deficit, then steps needed to be taken as were reasonably practical to prevent the deficit. A Local Authority was not prohibited from being in deficit but would need to demonstrate that the deficit had arisen through exceptional circumstances and that it had revised its original proposals so far as reasonably practical to avoid the deficit. Such a deficit would be carried forward and must be made good the following year. Each Local Authority should therefore endeavour to have a working balance on the HRA reserve, for any exceptional circumstances that may arise.
The level of rent increase was based on a rent policy introduced by WG. The officer confirmed that at the time of writing this report, an announcement had not yet been made, therefore, an average rent increase of 3% had been included in the 2018/19 Initial Budget Proposals, which was in line with the Housing Business Plan – February 2017.
The officer drew the Committee’s attention to the table below which compared the original budget with the proposed amended budget.
|
|
2017/18
Original
Budget
|
2017/18 Proposed Amended
Budget
|
Variance
Favourable (-)
Adverse (+)
|
|
|
|
£'000
|
£'000
|
£'000
|
|
|
Housing Revenue Account
(Surplus) / Deficit
|
(131)
|
127
|
+258
|
|
|
|
|
|
|
The net operational budget for 2017/18 had changed from a surplus of £131k to a deficit of £127k. A review of the current budget had found a potential net saving this year of £2.684m. The main reasons for this was that the estimated increase in the provision for bad and doubtful debts had been reduced by £1.014m as the Universal Credit and its effects would not have the full impact until April 2019.
There had been little increase in the actual level of rent arrears in this financial year and it was not anticipated that the provision would need to be substantially increased. In addition, there had been a reduction in the Repairs and Maintenance budget of £600k which partly related to an external painting programme which would continue in to 2018/19 following the completion of a pilot scheme and the WHQS external works programme.
A reduction in Capital Financing Costs of £589k was anticipated and Premises costs were expected to be £143k less than budgeted, largely due to reductions in utilities and cleaning costs. Staffing costs were estimated to be £88k less than anticipated due to vacant posts and staff budgets being originally included at top of scale.
Other budgets that were expected to outturn with an underspend were: survey costs £58k, compliance costs £24k, Incentive to Move £39k, leaflets and publications £44k, computer hardware and software costs £54k and bank charges of £12k. There was also expected to be a reduction in void costs of £73k. There were various other savings of £87k. These savings had been offset by an adjustment in Service Charge income of £141k, mainly due to Supporting People funding for warden support ceasing from October 2017.
The balance on the HRA reserve brought forward as at 1st April, 2017 was £958k and was higher than required. In order to minimise the amount of unsupported borrowing required in year to fund the Housing Improvement Programme, it was prudent to use HRA revenue reserves up to a minimum balance. The level of Capital Expenditure funded from the Revenue Account (CERA), had been recalculated at £6.481m, which was an increase of £2.942m. This would leave a balance on the HRA reserve at year end of £831k, which was in line with the minimum amount required as per the Business Plan.
The officer further advised that the Budget Strategy for 2018/19 outlined that, in order to establish a baseline, services should prepare revenue budgets for next year based on the cost of providing the current level of service and approved policy decisions. This meant that the cost of price increases and pay awards should be included.
The HRA was a ring fenced account and therefore any growth had to be funded from its available funds.
The proposed 2018/19 budget was set out at Appendix 1 to the report and was identified over the following areas.
- Supervision and Management (General)
- Supervision and Management (Special)
- Repairs and Maintenance
- Capital Financing Costs
- Rents, Rates, Taxes and Other Charges
- Increase in Provision for Bad Debts
- Capital Expenditure from Revenue Account (CERA)
- Dwelling Rents
- Non Dwelling Rents
- Interest
- Charges for Services and Facilities.
The officer wished to remind Members that the charges for rent and other services provided by the Housing Service were reviewed annually. These would be subject to a future report once the guidance had been received from WG regarding the setting of rents for 2018/19. The officer addressed the table below which summarised the original budget for 2017/18 with the proposed budget for 2018/19.
|
2017/18
Original
Budget
|
Inflation /
Pay Award
|
Committed
Growth /
(Savings)
|
Estimated Rent
Increase
|
Increase/ (Decrease) in CERA
|
2018/19
Proposed
Budget
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
(131)
|
133
|
(368)
|
(559)
|
904
|
(21)
|
A provision for general inflation included an allowance for pay awards in 2017/18.
The net saving of £368k was due to a number of factors:
- A decrease in Capital Financing charges of £104k in relation to unsupported borrowing to be raised in 2017/18 to fund the Housing Improvement Programme;
- A decrease in staff costs for vacant posts and staff changes of £64k;
- An increase of £43k in central recharges;
- A reduction in Premises costs of £123k;
- A reduction in Supplies and Services of £175k;
- A reduction in income of £60k due to the cessation of Supporting People funding from October 17;
- Various other minor savings of £5k.
In conclusion, the officer advised that an increase in CERA to finance the Housing Improvement Programme of £904k had been assumed. The amount of revenue contribution required was dictated by available revenue balances and the value of the Housing Improvement Programme. Adjusting the level of CERA by this amount would leave a balance on the HRA Reserve of £852k, which was in line with the Business Plan.
RECOMMENDED –
(1) T H A T the amended Housing Revenue Account Budget for 2017/18 be noted.
(2) T H A T the Initial Housing Revenue Account Budget Proposals for 2018/19 be noted.
Reasons for recommendations
(1) To facilitate monitoring of the amended Housing Revenue Account budget.
(2) To ensure that Members are aware of the proposals with regard to the 2018/19 Housing Revenue Account Budget.