Agenda item

An update from the Cabinet Members on key areas within their portfolios are attached.

The Cabinet Member for Finance & Corporate Services will be in attendance to answer questions from the Committee.

5.1     The Committee received written updates from the Cabinet Member for Finance and Corporate Services and the Cabinet Member for Housing, Regeneration, Business & Economic Development on the key aspects of their portfolios. 

5.2     In the absence of the Cabinet Member for Finance & Corporate Services officers responded to questions from committee members.

          Finance

5.3     Steve Mair, City Treasurer, summarised the key updates on the finance element of the portfolio as set out in the report.

5.4     The City Treasurer was asked about the current revenue underspend relating to the Council’s budget for 2015/16 and what this was likely to be at year end.  He reported that there was currently a circa £2 million underspend and that there was likely to be a slightly increased underspend at the year end.  He was unable to provide an exact figure as we are only part way through the year

5.5     The City Treasurer was referred to the fact that the Council had used some of its reserves in the current financial year to fund discretionary housing payments and he was asked whether the Council was likely to draw on its reserves to support Council services in the coming financial year.  He stated that while it was extremely unlikely that the Council would do so he could not provide a definitive answer as the budget proposals for 2016/17 were still being finalised.  He explained that the use of the reserves in the current financial year to fund discretionary housing payments was made on an exceptional basis.  The Council had ameliorated the need to draw on the reserves to fund such payments in future years by revising the policy on determining claims for discretionary housing payments

5.6     Having noted that the average return of the investment portfolio for the first half of 2015/16 was circa 0.62% Mr Mair was asked about options to improve the Council’s investment return.  The City Treasurer recognised that the Council has a considerable sum of working capital and capital receipts and these could be invested more productively.  He advised that alternative investment opportunities will be explored as part of the Council’s medium term planning and budget process to help deliver additional revenue to meet required savings over the next few years.  This could include using available capital to minimise the deficit in the Council’s pension fund.  He undertook to bring a paper on this subject to the committee in the coming months.

5.7     The City Treasurer was referred to the powers available to the Council to raise Council tax by an additional 2% to help meet the shortfall in social care funding. He was asked whether the money raised could be used for general council spending.  He advised that government guidance has indicated that any money raised would be ring-fenced for use on Adult Social Care and that this would have to be in addition to the agreed budget.

          Corporate Services

5.8     Nick Dawe, Interim Bi-Borough Director of Corporate Services, provided an operational update on the Managed Services Programme.  He explained that key activities on resolving outstanding issues had been programmed for the period from Christmas into early January and to the end of this month.  Whilst there had been some progress in delivering the activities this had not been as good as expected. BT was deploying additional resources to deliver the programme and to help officers with the year-end finance audit activity.  From a user and customer perspective, as many of the improvements to processes would need to be consolidated and introduced en masse a more responsive service would not be evident for another 2 to 3 weeks.

5.9     Mr Dawe was asked about the most challenging target that needed to be delivered in January.  He explained that service improvements are focused on 5 major pieces of work - reconciling the organisational structure into the Agresso system and indexing, performing accurate payroll runs and reconciliations and resolving unallocated income.  He indicated that there was a high degree of inter- connectivity between the pieces of work.

5.10   Mr Dawe stated that his major concern was BT’s ability to recruit and retain additional resources on an on-going basis to deliver the programme.  In response to questions on recruitment he reported that BT had recruited 80% of the required additional resources for the Shared Service Centre (SSC). A further two recruitment cycles were planned in January with the aim of filling all requirements by the end of the month.  However he reported there continues to be a lack of experienced and appropriately skilled senior managers and specialists within BT to support the BT Shared Service Centre.

5.11   Committee Members asked whether the previously reported problem of issuing invoices to social care clients for residential care and home care services had been resolved.  Mr Dawe advised that this had been addressed.  Social Care Clients had been invoiced in accordance with the agreed timescales set out in the action plan. The executive director of the service had confirmed that the plan had been successfully delivered.  He advised that additional costs had been accrued by the Council in resolving the problem and providing the necessary support to clients.

5.12   The Committee asked about the contract’s performance over the last couple of months and in particular whether the performance targets set for delivery in November had been met.  Mr Dawe advised that whilst BT had technically failed in delivering the agreed/defined outputs there was evidence of momentum and progress.  It had performed well in a number of key areas including clearing the bulk of historical incidents attending to 8,000 issues in a 6 week period.  He agreed to provide the committee with a written update on progress in delivering the programme including outstanding recruitment matters.

          Corporate Property

5.13    Guy Slocombe, Director of Property, Investment and Estates, provided an update on corporate property as set out in the Cabinet Member’s update.  At the committee’s request he provided a breakdown of the £150 million of assets that had been sold this year or which were under offer to be sold. This figure included revenue obtained through overage and selling rights to lights.  He advised that the property investment portfolio had delivered its highest ever income receipt of £24 million per annum.  The portfolio had a void rate of 1.6% which equated to 12 units, most of which were subject to refurbishment prior to being offered for re-letting.  Unpaid debt was currently £380,000.  He further advised that a request had been submitted to 3 consultants for proposals to rationalise the property portfolio.

5.14    Mr Slocombe was asked whether the corporate property service ever undertook a post-mortem of how assets that the Council had sold had been redeveloped and the opportunities that the Council could have embarked upon.  He stated that this was not ever truly possible.  He advised that the service provides the Council with a degree of protection in such respects by incorporating overage payments as a clause in contracts when selling property assets.

5.15    Barbara Brownlee, Director of Housing and Regeneration responded to questions in the absence of Cabinet Member for Housing, Regeneration, Business and Economic Development. She advised that the reference to the number of affordable housing units delivered since 1 April 2015 did not include the provision of housing delivered outside of the borough.  She stated that this information would be included in future updates to the committee.

5.16    RESOLVED: That the update from Cabinet Members be noted.

5.17    ACTION:

1.     Provide the committee with an operational update on the Managed Services Programme including details of BT’s recruitment of required resources.  (Action for: Nick Dawe, Interim Bi-Borough Executive Director of Corporate Services)

2.     Submit a paper to a future committee meeting on alternative options for maximising the council’s rate of return on its investments.  (Action for: Steve Mair, City Treasurer)

3.     Discuss with the Cabinet Member For Housing, Regeneration, Business & Economic Development the possibility of submitting a report to the next meeting on WAES, Skills & Area Reviews.  (Action for: Greg Ward, Director of Economy and Infrastructure)