Agenda and minutes

To approve the record of the meeting held on 26 August 2014.

The record of the meeting held on 26 August 2014 was agreed and signed by the Chairman as correct. 

Apologies for absence were received from Councillors Avey, Mackness and Maple. 

The Chairman will announce any late items which do not appear on the main agenda but which he/she has agreed should be considered by reason of special circumstances to be specified in the report.

There were no urgent matters by reasons of special circumstances.

It was noted that a Supplementary Report for agenda item 9 (Council Plan – 2014/15 Quarter 1 Performance Monitoring) had been tabled at the meeting. The report set out details of the performance discussions by the other Overview and Scrutiny Committees. 

(A)              Disclosable pecuniary interests and other interests

A member need only disclose at any meeting the existence of a disclosable pecuniary interest (DPI) in a matter to be considered at that meeting if that DPI has not been entered on the disclosable pecuniary interests register maintained by the Monitoring Officer.

A member disclosing a DPI at a meeting must thereafter notify the Monitoring Officer in writing of that interest within 28 days from the date of disclosure at the meeting.

A member may not participate in a discussion of or vote on any matter in which he or she has a DPI (both those already registered and those disclosed at the meeting) and must withdraw from the room during such discussion/vote.

Members may choose to voluntarily disclose a DPI at a meeting even if it is registered on the council’s register of disclosable pecuniary interests but there is no legal requirement to do so.

Members should also ensure they disclose any other interests which may give rise to a conflict under the council’s code of conduct.

In line with the training provided to members by the Monitoring Officer members will also need to consider bias and pre-determination in certain circumstances and whether they have a conflict of interest or should otherwise leave the room for Code reasons.

(B)            Whipping

The Council’s constitution also requires any Member of the Committee who is subject to a party whip (ie agreeing to vote in line with the majority view of a private party group meeting) to declare the existence of the whip.

Disclosable pecuniary interests

There were none.

Other interests

On reaching item no. 11 – Revenue Budget 2014/15 Monitoring – Round 1, Councillor Price declared an interest in agenda item 11 – Revenue Budget Monitoring 2014/15 – Round 1 by virtue of the fact that he is the Chairman of the Sunlight Development Trust and he left the room during the discussion.

On reaching item 12 Councillor Griffiths declared an interest during a general discussion about the Better Care Fund and NHS funding for out of area patients using NHS services in Medway as he is a non-executive director of Medway Community Healthcare.

This report details the areas covered by the Deputy Leader and Portfolio Holder for Finance which fall within the remit of this Committee. These are listed each time a Cabinet Member is invited to attend any of the Overview and Scrutiny Committees to be held to account.

Discussion:

Members received an overview of progress on the area within the terms of reference of this Committee and covered by the Deputy Leader and Portfolio Holder for Finance as set out below:

·                    Better for Less

·                    Communications and marketing (including Bluewave Communications Partnership)

·                    Council Plan

·                    Council tax and business rates

·                    Finance

·                    Housing benefit

·                    Performance and service improvement

·                    Property

·                    Risk management

·                    Category management (previously Strategic Procurement)

The Deputy Leader and Portfolio Holder for Finance, Councillor Alan Jarrett, responded to Member’s questions and comments as follows:

·                    Children’s Social Care - In response to a question on the recurring impact of increases in the Children’s Social Care budget, the Portfolio Holder for Finance advised that year on year the base budget had been increased to take account of rising demand and there had also been in-year additions to the budget.  Whilst measures were in place to manage demand, such as effective gate keeping, the Portfolio Holder stated it was not clear whether or not resource levels were now sufficient. He referred to the challenges for local authorities in this important area of service provision. 

·                    Staff Pay - with reference to the projected budget gap through to 2017/18 the Portfolio Holder was asked about the impact on staff and the local economy of an ongoing assumption of a 0% pay increase for Council employees. In response the Portfolio Holder acknowledged that the management of the projected budget gap would be a challenge for the Council and stated he was acutely conscious that staff had received no pay award for four years. He stated that a 1% pay rise for staff equated to a budget pressure of £800,000. His objective was to keep people in work and to recognise the excellent job being done by many staff. He referred to his public commitment at Cabinet to endeavour to make budget provision for a pay award and/or PRP, albeit modest, but this would have to be considered in the context of the challenging financial climate.

·                    Performance Related Pay – The view was expressed that PRP can be disastrous with experience elsewhere resulting in the system being overloaded with appeals and abandoned in year three. The Portfolio Holder said he did not share that view and that he firmly supported a pay award scheme based on performance and going the extra mile.

·                    Category Management – In respect of the £3.5 million of annualised savings achieved by the team, the Portfolio Holder for Finance advised that he expected performance to continue at this level. The savings achieved in 2013/14 represented an overall 17% reduction in spend on third party contracts. The Procurement Board and Cabinet would continue to robustly monitor and oversee procurement activity through the Gateway process seeking savings at every opportunity. This included work to minimize reliance on the provision for exemptions from contract rules which was usually attributable to poor planning for contract renewals and work to review the Council’s spend on minor contracts which amounted to £10 million.

·                    Napier Primary School - The Committee  ...  view the full minutes text for item 411.

This report reviews quarter 2 of Medway Norse’s trading in its second year of operation. 

Discussion:

The Assistant Director Legal and Corporate Services introduced Mr Ian Price, Operations Director, Medway Norse and Mr Clive Ivil, the Managing Director of Quadron. Mr Ivil had been invited at the request of the Committee at its meeting on 3 July 2014 because Quadron was the grounds maintenance subsidiary of Medway Norse.

It was reported that there had been an excellent turnout at the opening of the new depot facility at Pier Approach Road, Rochester, to which Committee members had been invited, on 25 September 2014.  Medway Norse was thanked for a useful and informative Open Day.

Members raised a number of points and questions including:

·                    Facilities Management – In response to a question about the correct telephone number to call when reporting problems and the failure of reported problems being acted upon, the Operations Director of Medway Norse undertook to furnish Councillors with a direct dial contact number.

·                    Grounds Maintenance – There was some Member dissent with the statement in paragraph 3.18 of the report that the grounds maintenance service had been consistent during the past quarter. Reference was made to the development of a particular meadow and the fact that whilst it was being managed effectively initial concerns raised by residents could have been mitigated much earlier by more effective communication. In relation to this matter, Medway Norse was recommended to contact the Green Space Forum.

·                    Grounds Maintenance - The Managing Director of Quadron reported that there had been a difficult start to the season caused by inclement weather, staff adjusting to the new arrangements and the introduction of new equipment with regard to grass cutting and weed spraying. Lessons had been learned and there was now a good platform to take the service forward with an ongoing commitment to delivery of high standards. With regard to grass verges the Committee was advised that collection of grass cuttings and litter picking was not included in the contract specification. It was a “cut and fly “ contract. However, it was the responsibility of the operatives to pick up litter disturbed or shredded by grass cutting activities. The Managing Director of Quadron accepted there needed to be better co-ordination between the grass cutting and litter picking contracts and he undertook to look into the matter and report back to the Committee.

·                    Special Educational Needs (SEN) Transport – Members stated they had been impressed by the new vehicles for the SEN transport service on display at the depot open day and asked if Norse had plans to expand their transport activities. Particular reference was made to transport for children and bidding for the transport contract at Medway Maritime Hospital. The Committee was advised that the SEN transport service had to be non-profit making. A different type of approach would have to be used for a commercial transport contract. In addition, it was pointed out the vehicles used for SEN transport service were governed by school hours.

·                    Finance and Business Development – Further to a question regarding gaining external contracts, the  ...  view the full minutes text for item 412.

This report provides further details of the Government’s new rent setting guidance for Social Housing that will be effective from April 2015. It sets out further information about the options open to the Council to increase rents for council tenants in households with taxable income of more than £60,000 per year. This follows Member consideration of the recent guidance at the Business Support Overview and Scrutiny Committee on 26 August 2014 at which further clarity was requested.

The report sets out the potential impact on the income stream of the Housing Revenue Account and proposals for defining bedrooms when these are on the ground floor in houses.

Discussion: 

Further to the meeting of the Committee on 26 August 2014, the Head of Housing Management advised that further research had been undertaken with regard to the options for rent setting for those households where there is taxable income of £60,000 or more as set out in the report. The Committee noted it was estimated there were 10 families currently on the housing register that might potentially fall within this category. The recommendation to Cabinet was that where properties are let to new households with a yearly earned taxable income of £60,000 or more, the rent payable would be based on “affordable” rents from April 2015.

At the last meeting of the Committee further information was also requested on proposals for defining bedrooms when these are on the ground floor in houses. Officers had reconsidered the potential impact and recommended that from April 2015 bedrooms will only be counted as bedrooms if they are not on the ground floor of a property, with the exception of those listed in Appendix A to the report.

Members raised a number of points and questions including:

Affordable Rent and Households with Taxable Incomes exceeding £60,000 – in response to a question about the possibility of the cost of administering the proposed policy in relation to households with income of £60,000 or more outweighing the financial return to the Council, officers advised that the cost of capturing and regularly reviewing the income levels of the small number of families affected would be negligible. Officers offered to provide more information to one member of the Committee on the particular circumstances qualifying the addition to the housing register of the ten families with Assets  exceeding £50,000. 

Reference was made to concerns previously raised by the Committee about households who receive a one off compensation payment such as redundancy or an accident and injury settlements and the Committee noted and supported the proposal that Cabinet should agree that discretion be applied to those households who receive compensation or a one off redundancy payment which exceeds £60,000.

Bedroom Size – In response to a proposal that where rooms have been internally subdivided these should not be classed as bedrooms Officers asked for time to consider the implications of adopting this as a principle with a report back to the Committee. 

Decision:

(a)       The Committee recommended Cabinet to agree that:

(i)   Where properties are let to new households with a yearly earned/salaried taxable income of £60,000 or more, the rent payable will be based on “affordable” rents from April 2015;

(ii)   To agree that from April 2015 bedrooms will only be counted as bedrooms if they are not on the ground floor of a property, with the exception of these properties listed in Appendix A of the report; and

(iii)   Discretion be applied to those households who receive compensation or a one off redundancy payment which exceeds £60,000.

(b)       The Committee requested that further investigation be undertaken regarding the adoption of a principle whereby internally sub-divided rooms will  ...  view the full minutes text for item 413.

In accordance with paragraph 4.1 of the Council’s Risk Management Strategy, this report is to discuss both the annual review of the Risk Management Strategy and the 6 monthly review of the Council’s Corporate Business Risk Register. 

Discussion:

The Chairman welcomed the Performance and Intelligence Manager to her first meeting of the Committee.

The Performance and Intelligence Manager explained that officers had undertaken an annual review of the Risk Management Strategy and it had been agreed that no significant changes needed to be made at that time.

The six month review of the Corporate Risk Register had been completed and was set out in the report. Proposed changes were set out in paragraphs 3.2.1 to 3.2.4 for consideration.

Decision:

The Committee noted:

(a)       the Risk Management Strategy, as set out in Appendix A to the report;

(b)       the Management Team’s recommendations on amendments to the Council’s Risk Register as detailed in section 3 of the report;

(c)        the progress on the three medium priority recommendations from the Risk Management Audit 2013/2014 as detailed at paragraph 3.3 of the report; and

(d)       that the Risk Management Strategy and the revised Risk Register will be submitted to Cabinet on 28 October 2014 for final approval.

This report summarised the performance of the Council’s Key Measures of Success for April – June (Quarter 1) 2014/15 as set out in the Council Plan 2013-15. 

Discussion:

The report summarised the performance of the Council’s Key Measures of Success for April to June (Quarter 1) 2014/15 as set out in the Council Plan 2013-15.

A Supplementary Report (Appendix 2 to the report) was tabled at the meeting and set out details of the Quarter 1 2014/15 performance discussions that had taken place at recent meetings of the three other Overview and Scrutiny Committees.

Members raised a number of points and questions including:

Homelessness – Reference was made to rising levels of homelessness and the cost to the General Fund. Members asked for clarity about the actual costs involved and were referred by the Chief Finance Officer to the item later on the agenda on Revenue Budget Monitoring 2014/15 – Round 1 which highlighted (on page 131) that an overspend of £585,000 was being forecast by Housing Solutions due to higher than average costs of temporary accommodation.

 It was suggested that officers should revisit the findings of the 2009 Task Group on Support for People in Temporary Accommodation which had, visited Southampton where an early intervention initiative, involving a dedicated assessment centre, had driven down costs associated with homelessness by 25%.  The view was expressed that a similar dedicated unit in Medway could achieve similar results and send important messages about the Council’s homelessness policies.

The Chairman reminded members that a briefing note had been requested by the Committee on the migration of homeless people into Medway and the support provided for street homeless, including contact details for lead officers. It was expected this briefing note would be issued towards the end of November after completion of a street homeless survey on 11 November. The Committee asked that this note should include an update on the homelessness assessment centre in Southampton, which it was believed might have now closed. The Assistant Director Housing and Regeneration offered to also include the outcome of research undertaken in the context of future year projections on homelessness which demonstrated that Medway compares well in relation to the rest of Kent.

Members raised concerns about a proposal in the Revenue Budget Monitoring report to reduce Homelessness Prevention expenditure by £200,000. The report (on page 131 of the agenda) highlighted that this management action may increase the risk of homelessness. Members asked for the rationale for this action in the context of rising levels of homelessness and the Council Plan target to reduce the number of people living in temporary accommodation. . The Assistant Director Housing and Regeneration advised that there was a proposal in the Medium Term Financial Plan to increase the budget to deal with temporary accommodation. The prevention budget was more difficult to spend. As an example he referred to the use of this budget to pay deposits to enable tenants to access properties. However, this was becoming increasingly difficult as many private sector landlords were unwilling to accept tenants who had been homeless. The Assistant Director Housing and Regeneration agreed to provide further clarification on the likely impact of  ...  view the full minutes text for item 415.

This report presents the capital monitoring for the period to July 2014, with an outturn forecast for 2014/15. 

Discussion:

The Head of Finance Strategy presented round one of capital budget monitoring for the period to July 2014 with an outturn forecast for 2014/15 and advised that that there was a projected overspend of £800,000 which equated to 1% of the overall capital programme. The report proposed virements from the Basic Need Programme to meet these additional costs.

The Chairman highlighted a discrepancy between the figures reported in paragraph 4.2.6 of the report which indicated a total overspend of £212,000 on the Wainscott and Napier Primary School projects and the figure in paragraph 10.1(a) proposing a virement of only £202,000 to cover these additional costs. . The Chief Finance Officer undertook to correct this error.

Members raised a number of points and questions including:

Member Priority Fund – it was confirmed that Member Priority bids were still being accepted for consideration.

Children and Adults (Appendix 3) – Following a question regarding the transfer £451,000 from the Basic Need Programme to the Academies Programme to part fund the cost of asbestos removal, the Committee was advised that this £451,000 pressure represented 25% of the total cost of removing the asbestos; the balance to be met by BAM as an outcome of arbitration and represented a successful outcome.

Children and Adults (Appendix 3) – Members were advised that the Napier Primary Project was being managed by the Council’s Building Design Services Team. The Head of Finance Strategy agreed to provide information to Councillor Juby on the detail of the £35,000 overspend in relation to this project.

Decision:

The Committee:

(a)        noted the spending forecasts summarised at Table 1 of the report and the following virements, in accordance with the Council’s delegated financial limits:

·                    the transfer £212,000 from the Basic Need Programme to fund the forecast overspends against the Wainscott Primary and Napier Primary schemes;

·                    the transfer of £451,000 from the Basic Need Programme to the Academies Programme to part fund the cost of asbestos removal;

·                    the transfer £165,000 from the Basic Needs Programme (funded from the Targeted Basic Needs Grant) to fund the overspend on the New Horizons project.

(b)        noted the recommendation to Council that the following additions to the capital programme, both of which are to be funded through virements from the Adult Social Care Transformation budget:

·                    the transfer £400,000 from Adult Social Care Transformation to fund the Smarter Working @ Gun Wharf project;

·                    the transfer £120,000 from Adult Social Care Transformation to fund the construction of additional provision on the Old Vicarage site

(c)            agreed that information be provided to Councillor Juby with regard to the £35,000 overspend in relation to Napier Primary project.

This report details the revenue budget forecasts as at the end of July 2014. The report also highlights the major financial risks remaining in respect of the 2014/15 General Fund revenue budget. 

Discussion:

The Head of Finance Strategy presented the revenue budget forecast as at the end of July 2014, highlighting that after agreed management action, the forecast outturn for 2014/15 was estimated at £4.2 million.

Members raised a number of points and questions including:

Children and Adult Services – Following a question regarding the reduction of £156,000 to the Inclusion and School Improvement forecast, the Head of Finance Strategy confirmed that costs associated with increasing numbers of permanently excluded pupils were eligible to be met from an underspend in the high needs block of the Dedicated Schools Grant and that this did represent a real saving as the DSG was ring fenced and any underspend would otherwise have to be held in DSG reserves.

Public Health – With reference to the Public Health Grant members referred to a report considered by the Health and Adult Social Care Overview and Scrutiny Committee on 30^th September which advised members of the forthcoming expiry of the Health and Lifestyle Trainers (HALT) contract with Sunlight Development Trust and a proposal to suspend procurement of this service whilst budget deliberations for 2015/16 were underway. Members asked if cessation of this service would represent a real saving given that the public health grant was ring fenced. Concern was also expressed about the possibility of the HALT service being discontinued given its contribution to a reduction in health inequalities. Members felt there were governance issues arising from the absence of detailed information, an impact assessment and any analysis of the effect of the contract cessation on the financial position of the Sunlight Development Trust in the report to the HASC Overview and Scrutiny Committee.

In response the Chief Finance Officer referred members to the timetable for the 2014/15 budget process as set out in the report on the Medium Term Financial Plan 2014/18 report at page 146 on the agenda. He confirmed that no decisions had yet been taken about the 2014/15 budget. Portfolio holders were currently identifying possible savings and as the HALT Contract was due to end at the end of November there was a rationale to suspend procurement of the service whilst wider synergies across the organisation were examined.

The Monitoring Officer confirmed that the timing of the report on the HALT contract to HASC Overview and Scrutiny Committee outside of the normal budget reporting timetable was a consequence of the expiry of the HALT contract at the end of November and acknowledged concerns raised about the lack of detailed information available to the Committee.

Members expressed the view that Public Health should be testing the efficacy of the HALT service and possible alternatives before proposing cessation of the contract. Questions were also raised about the cost of the service and whether value for money was being achieved.

Members sought assurances that funding legally ring fenced for public health would not be redirected to address unrelated pressures in other service areas. The Chief Finance Officer advised there was a high level of variation up  ...  view the full minutes text for item 417.

This report reviews the major financial issues facing the Council during this and the next three years. It also provides a framework for the more detailed preparation of the draft Revenue Budget for 2015/16. 

Discussion:

The Chief Finance Officer introduced the report, which reviewed the major financial issues facing the Council during this and the next three years. 

Members raised a number of points and questions including:

Better Care Fund (BCF) and cost of out of area patients  – the Committee was assured that NHS funding followed the patient so the NHS Medway Clinical Commissioning Group would not be meeting the cost of treatment for out of area patients using NHS services in Medway. With regard to the Better Care Fund (BCF), the Committee was advised that close partnership working with CCG colleagues had ensured that Social Care budgets had been protected within the BCF. It was acknowledged there was risk around the performance element of the fund and noted that mitigating measures had been agreed with the CCG in the event of targets not being achieved; resources had been earmarked for that possibility. The Chairman of the Health and Adult Social Care Overview and Scrutiny Committee reported that a CCG representative attended every meeting of the HASC Overview and Scrutiny Committee.

Decision:

The Committee noted:

(a)       the underlying aims of the Medium Term Financial Plan; and

(b)       the forecast level of overall funding outlined in Section 4; spending priorities in Section 5 and the consequent funding shortfall identified in Table 3.

This item advises Members of the current work programme and allows the Committee to adjust it in the light of latest priorities, issues and circumstances. It gives Members the opportunity to shape and direct the Committee’s activities over the year. 

Discussion:

The Democratic Services Officer introduced the report advising the Committee of the current work programme which allowed them to adjust it in light of the latest priorities, issues and circumstances.

The report gave details of the items listed on the Cabinet Forward Plan that fell within the remit of this Committee and Appendix 2 to the report set out the work programmes of the other three Overview and Scrutiny Committees.

With reference to paragraph 3.2.1 It was noted that the following changes had been agreed to the Committee’s work programme at the meeting of the Committee on 26 August 2014 rather than at the pre-agenda meeting for this meeting as inadvertently stated in the report.

• Housing Revenue Account (HRA) Business Plan – this item was moved to the meeting on 3 February 2015.
• Communications Shared Service – this item was moved to “date to be determined” on the Work Programme.
• Six Month Update on Implementation of Procurement Strategy – this was moved from 4 December 2014 and programmed for October 2015 on the anniversary of the creation of the Strategy.

In relation to the outstanding actions from previous meetings it was noted that Briefing Notes on alternative measures to control the Council’s small spends and information regarding Empty Homes had been provided to the Committee since the publication of the agenda.

Decision:

The Committee noted:

a)     the additions to the Committee’s Work Programme; and

b)     the work programmes of all overview and scrutiny committees (set out in Appendix 2 of the report.