Agenda and minutes
Venue: Council Chamber, Civic Centre, Windmill Street, Gravesend DA12 1AU. View directions
Contact: Sue Hills/Christopher Wakeford/Carlie Plowman/Ben Clarke
No apologies of absence were received.
The Minutes of the meeting held on 18 November 2015 were signed by the Chair subject to the following amendment:
Item 35 (Corporate Risk Register 2015-16 Mid-Year Review) recommendation one – The Committee agreed that Risk 4 (Management of Universal Credit Implementation) has not been fully implemented yet and should remain in the risk register until a time in which it poses no further risk.
Declarations of Interest
No declarations of interest were made.
The Chair thanked Julie Gibbs, the former Assistant Director (Finance) at GBC for the hard work she put into the Committee and working with not only himself but also the previous Chair asking that they be forwarded onto her.
The Committee was updated on the changes to officer’s posts since the previous meeting:
Stuart Bobby – Director (Corporate Services)
Sarah Parfitt – Assistant Director (Corporate Services)
Katey Arrowsmith – Head of Internal Audit and Counter Fraud Shared Service for Medway and Gravesham as well the Chief Audit Executive
Andrew Barnett – Principal Accountant (General Fund)
Members were updated on actual performance against the approved Revenue and Capital budgets for 2015/16 and updated on other key areas of financial performance that may have an impact on the Council’s Medium Term Financial Strategy, the Medium Term Financial Plan and/or the HRA Business Plan or Financial Statements.
The Assistant Director (Corporate Services) summarised to the Committee the key points within the report:
· This is the third budget monitoring report of the year covering the nine month period April-December 2015
· The projected budget shortfall/underspend of the General Fund is still positive at £96,000
· This is the third budget
· Retention of business rates continues to be a volatile area
· £28,000 has been taken from the General Fund following a review of interest charges borne by the Council
· The level of Working Balances at year-end are forecast to be£5.6 million, with Usable Working Balances at £2.4 million
· The net reduction for reserves for the year is forecast to be £568,000
· The Department for Communities and Local Government (DCLG) announced on 17 December 2015 the provisional local government finance settlement for a four year period
- The level of funding assessment for the Council will reduce by 43% (£2.0m) over the four year period 2016-17 to 2019-20
- The Council will receive no RSG in 2019-20 and will effectively become ‘self-funded’
- However through the business rates tariff and top up system, GBC will be obligated to make a payment of £240,000 to the Government in 2019-20
- Government is intending to consult on local government retaining 100% of business rates, but this is expected to come with more duties to fulfil.
- The Final Settlement gives GBC the ability to raise Council tax by a maximum of £5 per annum (£5 as a percentage of Council tax represents 0.75% increase in addition to the 2% referendum threshold level)
· Central Government are looking to reform the New Home Bonus Scheme by reducing it from six to four years and as well as reforming the incentive of the scheme
· The MTFP identifies the need for £1.8 million savings within the next two years and GBC are required to deliver £3 million savings over 3-4 years
· Projections for the HRA indicate an increased transfer to reserves at the end of the year.
· The total spend against the HRA capital programme was £6.7 million at the end of quarter three.
One Member questioned that if £1.8 million is needed to find in savings what contribution to an increase in Council tax make? The Assistant Director (Corporate Services) advised that the increase of 0.75% above the 2% threshold would result in approximately £45,000 additional income in 2016-17.
Following several more questions from Members of the Committee the Director (Corporate Services) and the Assistant Director (Corporate Services) advised that:
· The £17,000 resulting from salary savings from the Supporting People Fund budget are as a result of staff turnover during the year.
· When the Government do away with the Revenue Support Grant it would entail negative revenue support ... view the full minutes text for item 44.
The Principal Accountant presented to the Committee a report on the Treasury Management Strategy, the Annual Investment Strategy and the Minimum Revenue Provision Policy.
The Principal Accountant referenced the training session delivered to Members on Treasury Management held at the end of January.
The Principal Accountant explained that a recommendation is made in the TMSS to include Property Funds on the list of non-specified investments. If agreed, then property funds would have to be identified with five million per fund and a ten million cap overall.
The Principal Accountant also set out the intention to consider Santander for investment based on advice from Capita, the council’s external treasury advisors.
A Member interjected that he approved of investing in the UK subsidiary of Santander as they abide by UK law but raised concern over the Property Funds; the two funds would be over five to seven years which is a long time but they are being chosen by officers and Members do not have a say in the matter.
It was recommended that this be referred to a working group so that Members could be actively involved in the process.
The Director (Corporate Services) advised that there are currently four property funds in the UK; only those funds can only be treated as revenue income and so GBC will be seeking professional advice from Capita about the four funds available.
Following further questions from the Committee the Director (Corporate Services) explained that:
Resolved that Council be recommended to:-
(1) agree the Treasury Management Strategy for 2016/17;
(2) agree the Authority’s Prudential & Treasury Indicators as set out in the report;
(3) give delegated authority to the Director (Corporate Services), in consultation with the Chair of the Finance & Audit Committee, to amend the Prudential and Treasury Indicators as necessary as a result of the budget approved by Full Council on 23 February;
(4) agree the Annual Investment Strategy (AIS) ... view the full minutes text for item 45.
The Principal Accountant presented to the Committee a report on the Corporate Risk Register and Risk Management Strategy 2016-17 highlighting that Members of the Committee had had training on this matter at the end of January 2016.
The Principal Accountant directed Members to Pages 68 & 69 which contained a summary of all of the changes made to the draft Risk Register 2016-17.
The Principal Accountant advised that, following assessment, Risk 4 (Management of Universal Credit Implementation) has had its risk reduced from 15 to 4 meaning it is now below the Council’s strategic risk tolerance level and is proposed to be removed from Corporate Risk Register for 2016-17.
The new Risk proposed to the inclusion of the Corporate Risk Register for 2016-17 is Risk 5 (Housing Revenue Account Service) which was formally proposed first by the F&A Committee 18 November 2015.
A Member raised concern over the fact that there was no explanation as to why the Universal Credit risk scoring had been reduced from 12 to 4 for Risk 4.
The Director (Corporate Services) apologised and advised that an explanation should have been provided and clarified a few points about Universal Credits:
· There have been 107 cases regarding Universal Credit
· It only affects single new benefit claimants a this point in time
· Only 20 cases had ties to existing benefits paid by GBC
· The next phase of rollout will occur within the next two years and will include couples and families
· Local authorities will continue to administer pensioner’s housing benefit instead of Universal Credit
· As a result of Universal Credit only applying to those of Working Age, around 60% of the existing caseload will be rolled out by 2024/25
It was suggested by a Member that officers should revert to what was agreed in the last F&A Committee and keep Risk 4 on the register and then give an explanation at Cabinet as to why it should be removed.
Another Member flagged up the point of officer’s workload and advised that a risk should be put on there for organizational stress/support for staff to monitor them.
Members also proposed that the risk relating to Changes in Refuse and Recycling could be removed from the register.
The Director (Corporate Services) and Assistant Director (Corporate Services) advised that the three amendments proposed would be included in the Corporate Risk Register 2016-17 report as recommended to Cabinet.
The Committee agreed to the recommendations of the report subject to the three amendments above being included in the Corporate Risk Register 2016-17.
The Head of Internal Audit & Counter Fraud presented to the Committee a report for the approval of the revision of the internal audit plan 2015-16.
The Head of Internal Audit & Counter Fraud explained that the team are forecasted to deliver fewer resources than planned in the current financial year as detailed by section 2 of the report. As a result it will be necessary to revise the audit plan for the remainder of the year. The Head of Internal Audit & Counter Fraud explained that the team will deliver the highest risk work, with any work not completed in the year will be considered for inclusion in the Plan for the 2016-17 year.
Following several questions from Members the Head of Internal Audit & Counter Fraud advised the Committee that:
Members approved the revision of internal audit plan for 2015-16 as set out in Appendix Two of this report.
Update on Audit and Counter Fraud Shared Service
The Head of Internal Audit & Counter Fraud highlighted the following points to the Committee:
Following several questions from Members the Head of Internal Audit & Counter Fraud explained that:
· The team is required to have an external assessment against the professional standards every five years, the results of which will be reported to the Committee. The team will also look to ask another authority team to do a peer review on a more regular basis.
· Since the council’s counter-fraud team is part of audit, it will no longer be possible to carry out audit reviews of the fraud service as the team are not independent.
The Director (Corporate Services) clarified to Members that if a benefit claimant commits fraud then this is currently met through government funds rather than the Council’s own funds; GBC would only carry a cost if there is local authority error.
The Chair thanked the officers for the informative update.