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 and Economic Development on the key aspects of their portfolios.

5.2     The Cabinet Member for Finance and Corporate Services provided the following verbal update:

·       That it was expected that a the 2015/16 budget would be underspent once period 10 monitoring was complete.

·       In respect of the revenue budget, in order to take advantage of the four-year finance settlement offer the Council will need to prepare a forward-looking Efficiency Plan.  The papers for this will need to be submitted by 14 October.  This will be progressed once the Council’s accounts have been audited.  No guidance had been provided on what such a plan should consist of.  The earlier that the Council submits its plan the more likely it will be able to influence what it should contain.

·       In light of the Efficiency Plan, the Council may change the way in which it approves the annual budget and Council tax.  Rather than agreeing both annually in March the Council may separate taxation and spending into two separate processes similarly to the Government’s Budget and Autumn Statements.

·       With regard to business rates “localisation”, he reported that he had appeared on behalf of the City Council as a witness in front of the Communities & Local Government Select Committee at the start of the week along with, among others, the leader of the London Borough of Haringey who spoke on behalf of the Local Government Association.  He highlighted to the Select Committee the problems with the current system whereby Westminster continues to be negatively impacted by business rates appeals where its effect will be to reduce the Council’s funding by £6 million per annum below governments assumed funding allocations.  He had argued that a new system would need to include some kind of formula for business rates distribution.  At present the Council only retains 4% of the business rates that it collects while it would like to retain a sum based on growth in the areas economic value and is also seeking other changes to the system.

5.3     The Cabinet Member then responded to questions from the committee on the following matters.

          Finance

5.3.1   The Cabinet Member was asked about the current level of general reserves and what it was expected to increase to.  He advised that the Council had an ambition to build up its reserves following the need to draw heavily on them following the fall in revenue arising from the recession in 2008. General reserves were currently at £36 million and the expectation was that this would rise to circa £40 million before the end of the financial year.

5.3.2   The Cabinet Member was asked whether there had been any notable response to the Council’s decision to increase Council Tax by 2% for Adult Social Care along with a 1.99% general increase.  He stated that there had not. The only press coverage he was aware of had been in the West End Extra. He pointed to the fact that most local authorities had increased council tax this year. He considered that it would have more likely have been reported upon if the council had done the opposite and continued to freeze Council Tax.

5.3.3   The Committee asked whether there was a clear expectation from government of what it would require of the Council in return for a four-year finance settlement.  He stated that no information had been provided but that it was likely that the Council would have to offer something in return.  He explained that the settlement would not provide total financial certainty for the Council as it also receives funding from other government departments.  Steve Mair, City Treasurer, commented that while the settlement would provide certainty to a degree this would be affected in the event of changing circumstances such as another recession.

          Revenue and Benefits

5.3.4   In relation to business rates reform, concern was expressed that the current system was a tax on commercial property. Members asked whether the reforms would be broader than simply looking at the distribution of rates so that it is a much fairer and relevant system.  The Cabinet Member acknowledged that it was challenging that other types of businesses such as online enterprises do not have to pay equivalent sums.  He advised that the Council had lobbied government with a request that any additional requirements placed upon it to retain a greater proportion of the rates it collects relate to services that it already provides such as employment projects.

          ICT

5.3.5   The Cabinet Member was asked why the council was assessing options around the renewal and implementation of a new network and telephone solution.  He explained that this was because of current contract was coming up for renewal.  The Council would draw upon a framework contract that had been established for this service.

Corporate Property

5.3.6   The Cabinet Member was asked about the parameters of the review of the Corporate Property portfolio, whether it would include properties in the CityWest Homes portfolio and whether it was for a set period.  He explained that the purpose of the review was to analyse the occupancy and use of each property that the Council occupies to deliver its services to ensure that it was using buildings efficiently and at reasonable cost. The target is to reduce the Council’s property footprint to reduce running costs.  He advised that the contract with property consultants BNP Paribas Real Estate was for a fixed term.  It was possible that the commercial properties in Church Street managed by Corporate Property that are held in the Housing Revenue Account could be included.  He undertook to ask the Director of Property, Investment and Estates to confirm.

          Human Resources

5.3.7   With regard to Westminster’s Apprenticeship Scheme, disappointment was expressed that only 12 apprenticeships had been created with contractors since April 2015 given the number of contractors that the Council has.  Greg Ward, Director of Economy and Infrastructure, stated that the Council was aware that it could do better in this respect.  A new strategy had been developed in relation to contractors which had been agreed by the Cabinet Member for Housing, Regeneration, Business & Economic Development.  One of the requests of businesses is to commit to provide more apprenticeship opportunities.

5.4     RESOLVED:  That the written updates from Cabinet Members be noted.

5.5     ACTION:

1.   Clarify whether the review of the Corporate Property portfolio includes any CityWest Homes properties that fall within the HRA.  (Action for: Guy Slocombe, Director of Property, Investment and Estates)

2.   Clarify how many of the 103 apprenticeship opportunities which have been created since April 2015 have gone to Westminster residents.  (Action for: Greg Ward, Director of Economy and Infrastructure)