Agenda and minutes

Any Member who is substituting for another Member should so indicate, together with the name of the relevant absent Member.

There were no substitutes declared. 

Apologies for absence were received from Councillors Betty Mclatchy and David Roach.

Councillor Beccy Hopfensperger was also unable to attend.

To confirm the minutes of the meeting held on 29 November 2017 (copy attached).

The minutes of the meeting held on 29 November 2017 were unanimously accepted by the Committee as an accurate record of the meeting and signed by the Chairman.

Members of the public who live or work in Forest Heath are invited to put one question/statement of not more than 3 minutes duration relating to items to be discussed in Part 1 of the agenda only.  If a question is asked and answered within 3 minutes, the person who asked the question may ask a supplementary question that arises from the reply.

A person who wishes to speak must register at least 15 minutes before the time the meeting is scheduled to start.

There is an overall limit of 15 minutes for public speaking, which may be extended at the Chairman’s discretion.

Public participation had been undertaken within the previous informal discussions and there had been no questions/statements from members of the public.

Report No: PAS/SE/18/001

(For reference purposes, Forest Heath District Council’s Report Number is PAS/FH/18/001)

Further to the joint informal discussions held prior to the meeting with Forest Heath District Council’s Performance and Audit Scrutiny Committee, the Committee formally considered Report No: PAS/SE/18/001.

Members had scrutinised the report in detail and asked questions, to which responses were provided. With there being no decision required, the Committee noted the Council’s performance using the Balanced Scorecards for Quarter 3, 2017-2018.

Report No: PAS/SE/18/002

(For reference purposes, Forest Heath District Council’s Report Number is PAS/FH/18/002)

Further to the joint informal discussions held prior to the meeting with Forest Heath District Council’s Performance and Audit Scrutiny Committee, the Committee formally considered Report No: PAS/SE/18/002.

Members had considered the report and with there being no decision required, noted the contents of the Quarter 3 West Suffolk Strategic Risk Monitoring Report.

Report No: PAS/SE/18/003

(For reference purposes, Forest Heath District Council’s Report Number is PAS/FH/18/003)

Further to the joint informal discussions held prior to the meeting with Forest Heath District Council’s Performance and Audit Scrutiny Committee, the Committee formally considered Report No: PAS/SE/18/003.

Members considered the report and with their being no decision required noted the contents of the report subject to the inclusion of the following reports to its forward work programme:

1)   Accounting Policies – 31 May 2018; and

2)   Building Control – Improvement Plan (Follow-Up) - November 2018.

Report No: PAS/SE/18/004

The Committee received Report No: PAS/SE/18/004, which set out the financial performance for the third quarter of 2017-2018 and forecasted outturn positon for 2017-2018.

Attached at Appendix A and B to the report was details of the Council’s revenue performance and year end forecasted outturn position.  The current forecast position for the year end was expected to be a benefit of  £174,000 to the council’s General Fund, which equated to just 0.23% of the council’s gross expenditure. Explanations of the main year end forecast over / (under) spends was set out in the report at paragraph 1.2.3. 

Appendix C to the report set out the Council’s capital financial position for the first nine months of 2017-2018, which showed expenditure of £12,785,000.  Finally, a summary of earmarked reserves was attached at Appendix D, along with the forecast year end position for 2017-2018.

The Resources Team would continue to work with Budget Holders to monitor capital spend and project progress closely for the reminder of the financial year and an updated position would be presented to the Committee on a quarterly basis.

The Committee scrutinised the report in detail and asked questions to which comprehensive responses were provided. Discussions were held on Appendix C, in particular clarification was sought on a number of items listed in the capital budget, and questioned whether it was exclusive to assets owned by the council, to which responses were provided. 

There being no decision required, the Committee noted the Quarter 3 financial performance and the 2017-2018 year end forecast financial position.

Report No: PAS/SE/18/005

[Councillor Karen Richardson arrived at 5.56pm during the consideration of this item and subsequent vote]

The Committee received Report No: PAS/SE/18/005, which updated members on progress made towards delivering a balanced budget for 2018-2019 and sustainable budget in the medium term.

St Edmundsbury continued to face considerable financial challenges as a

result of increased cost and demand pressures and constraints on public sector spending (Revenue Support Grant) from central government, as evidenced by the proposed four year government settlement. It was clear that even without the proposed reductions in RSG, the council had underlying net cost pressures. This included costs rising faster than income inflation.

The Medium Term Financial Strategy (MTFS) 2017-2021 was approved by Council on 21 February 2017, which set out the current and future financial pressures and challenges facing St Edmundsbury. 

Attached at Appendix A to the report was the current budget assumptions for 2018-2019 and across the MTFS. 

The report also included information on the methodology for securing a balanced budget 2018-2021 and garden waste subscriptions following a motion raised at Council in December 2017.  The motion proposed a change to the current charging schedule for residents subscribing to the service from 1 April 2018, moving from a single annual charge of £40 to a tiered charging system whereby the amount payable reduced monthly.

The Performance and Audit Scrutiny Committee was asked to recommend to Cabinet the inclusion of proposals as set out in Section 6 and Table 2 of the report in order to progress securing a balanced budget for 2018-2019 and sustainable budget in the medium term.

Members scrutinised the report and discussed the garden waste subscription and noted work would commence later in the year to review the scheme though a scrutiny task and finish group, which would provide an opportunity to review the garden waste collection scheme in its entirety and the charging regime proposed by Councillor Nettleton.  However, the Chairman questioned what the Committee’s role would be in reviewing the scheme alongside the Overview and Scrutiny Committee, particularly the financial element.  In response officers agreed to look further at how best to progress the review.

The Committee noted the budget assumptions outlined in Appendix A and the budget timetable, along with progress made to date on delivering a balanced budget for 2018-2019 and sustainable budget in the medium term.

Councillor Patricia Warby moved the recommendation, this was duly seconded by Councillor Andrew Smith and with the vote being unanimous, it was:

          RECOMMENDED

That the proposals, as detailed in Section 6 and Table 2 at paragraph 6.1 of Report No: PAS/SE/18/005, be included in securing a balanced budget for 2018-2019.

Report No: PAS/SE/18/006

The Committee received Report No: PAS/SE/18/006, which updated members on the outcome of the annual certification of grant claims by Ernst and Young (EY) as detailed in their Certification of Claims and Returns Annual Report 2016-2017, attached as Appendix A.

Mark Hodgson (Associate Partner), accompanied by Mark Russell from EY presented the report, which summarised the results of the certification work that had been undertaken by EY staff as part of the annual audit of grant claims to government departments and also set out the scale fee for carrying out this work. 

From 1 April 2015, the duty to make arrangements for the certification of relevant claims and returns, and to prescribe scales of fees for this work, was delegated to the Public Sector Audit Appointments Ltd (PSAA) by the Secretary of State for Communities and Local Government.  For 2016-2017, these arrangements required only the certification of the housing benefits subsidy claim with a total value of £28.532 million.

Mark Hodgson drew relevant details from the report to Members’ attention, and explained the certification work found errors on the claim and these errors had been corrected by officers. A qualification letter setting out further errors and uncertainties was also reported to the Department for Works and Pensions (DWP). The relevant officers of the Council and Anglia Revenues Partnership (ARP) had agreed the qualifications in respect of the 2016-2017 certification work, as detailed in Appendix A. ARP had taken action to address the issues for 2017-2018.

He also informed Members that the PSAA determined a scale fee each year for the audit of claims and returns. For 2016-2017, the indicative scale fee for the audit of the Housing benefits subsidy claim was £22,583 and the actual fee would be unchanged from this level. For 2017-2018, the indicative scale fee had been set at £24,722.

Members scrutinised the report and there being no decision required, the Committee noted the contents of the report.

Report No: PAS/SE/18/007

The Committee received Report No: PAS/SE/18/007, which set out how EY intended to carry out their responsibilities as the Council’s external auditors (Appendix A).  The purpose of the report was to provide the Committee with a basis to review EY’s proposed approach and scope for the 2017-2018 audit along with the planned fees to complete the work as set out in the Audit Plan.

Mark Hodgson (Associate Partner), accompanied by Mark Russell from EY presented this report, which summarised EY’s assessment of the key risks which drive the development of an effective audit of the Council, and outlined their planned audit strategy in response to those risks.  Officers would be working with EY over the coming months to ensure that these risks were managed and where possible, come to an agreement over the treatment prior to the new timetable in issuing the Annual Governance Report and Audit Opinion, which was now due to be issued by EY by July 2018 (previously issued by the end of September each year). 

Mark Hodgson drew member’s attention to the financial statement risks; the level of materiality set; the value for money conclusion; EY’s audit process and strategy; and the planned for fee 2017-2018 (£68,489) set out on page 29 of Appendix A. 

Finally, the Assistant Director (Resources and Performance), provided assurances to the Committee around the work the team were doing around accelerated year end and the new timetable for the signing off of the accounts.  It was agreed that a report would be circulate to summarise the areas that the finance team were working through and to provide this assurance to members of the Committee.  She also went on to confirm that a paper would be presented to the Committee on 31 May 2018, outlining the changes to the Council’s accounting policies as a result of the revised deadlines for inclusion in the draft accounts.

Members scrutinised the report and there being no decision required the Committee noted the contents of the report.

Report No: PAS/SE/18/008

The Committee received Report No: PAS/SE/18/008, which set out a complaint which had been referred to the Local Government Ombudsman in relation to the Local Planning Authority failing to notify Mr X about two planning applications and failing to keep Mr X updated on some of the actions it was taking. 

The Assistant Director (Planning and Regulatory Services) informed the Committee that to date, Mr X had not taken up the offer of the compensation payment.

The Committee asked questions in relation to the complex history of the complaint; and remedies which had been put in place, to which response were provided by the Assistant Director. 

There being no decision required, the Committee noted the action taken by the Assistant Director (Planning and Regulatory Services) to remedy the findings of the Local Government Ombudsman (LGO) and the recommended payment of £400.00 in recognition of the uncertainty and outrage caused to him and his family. 

Report No: TMS/SE/18/001 will be considered by the Treasury Management Sub-Committee on 22 January 2018.  The Chairman/Service Manager (Finance and Performance) will update the Committee verbally on any issues or recommendations arising from the consideration of this report.

The Committee received Report No: TMS/SE/18/001, which had been considered by the Treasury Management Sub-Committee on 22 January 2018.  The Assistant Director (Resources and Performance) provided a verbal update on the Sub-Committee’s consideration of the report which presented the Council’s third quarter Treasury Management Report summarising the investment activities for the period to 31 December 2017.

It was reported that the total amount of budgeted income from investments for the period 1 April to 31 December 2017 was £189,750.  Interest earned during the first nine months of the financial year totalled £226,424 an over-achievement of interest of £36,677.  The over-achievement of interest was primarily due to higher cash balances being available for investment than expected.  These increase was mainly due to timing differences in the collection and payment of local taxes and non-domestic rates (NNDR) and other revenue work streams, and underspends relating to the budgeted capital programme.  The reduced average rate of return was due to the reduction in the Bank of England base rate and resulting reduction of interest rates offered by institutions.

As at 31 December 2017, the Council held £44,750,000 in investments, and had no borrowings or temporary loans.

The Sub-Committee had scrutinised the investment activity for 1 April to 31 December 2016, and asked questions to which officers duly responded. 

The Performance and Audit Scrutiny Committee considered the report, and did not raise any issues.

Councillor Patricia Warby moved the recommendation, this was duly seconded by Councillor Karen Richardson, and with the vote being unanimous, it was

          RECOMMENDED

That subject to the approval of Council, the Treasury Management Report 2017-2018, for the period 1 April to 31 December 2017, attached at Appendix 1 to Report No: TMS/SE/18/001, be approved.

Report No: TMS/SE/18/002 will be considered by the Treasury Management Sub-Committee on 22 January 2018.  The Chairman/Service Manager (Finance and Performance) will update the Committee verbally on any issues or recommendations arising from the consideration of this report.

The Committee received Report No: TMS/SE/18/002, which had been considered by the Treasury Management Sub-Committee on 22 January 2018.  The Assistant Director (Resources and Performance) provided a verbal update on the Sub-Committee’s consideration of the report which sought approval of the Treasury Management Policy Statement and Investment Strategy 2018-2019 (including Treasury related Prudential Indicators) and Treasury Management Code of Practice.

The proposed Treasury Management Policy Statement and Investment Strategy 2018-2019 was attached as Appendix 1 to Report No: TMS/SE/18/002, along with the Treasury Management Code of Practice 2018-2019 at Appendix 2.

In December 2017, CIPFA issued an updated Treasury Management in the Public Services Code of Practice and Cross-Sectional Guidance Note, and consequently the new 2018-2019 Strategy and the Code of Practice had been updated in line with these changes.  The main changes made to the Strategy were:

·         The four clauses to be formally adopted had been update; and

·         An additional section had been added for “investments that are not part of treasury management activity”.

The report also included information on interest rate projections and counterparty ratings and advised that the final prudential indicators would be updated as part of the Medium Term Financial Strategy, and approved by Council in February 2018.

The Sub-Committee scrutinised the report in detail and asked a number of questions to which comprehensive responses were provided.

The Committee considered the report and in particular discussed the interest rate projections and the Bank of England’s forecasted rate of 1%.  In responses officers advised that they were comfortable with the revised rates projected in the new Strategy.

It was proposed by Councillor Andrew Smith, seconded by Councillor Karen Richardson and with the vote being unanimous, it was

          RECOMMENDED

          That:

1)      The updated (December 2017) Treasury Management in the Public Services Code of Practice and Cross-Sectional Guidance Notes, be adopted.

2)      The Treasury Management Policy Statement and Investment Strategy 2018-2019, attached as Appendix 1 to Report No: TMS/SE/18/002, be approved.

3)      The Treasury Management Code of Practice 2018-2019, attached as Appendix 2 to Report No: TMS/SE/18/002, be approved.