Agenda and minutes

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

The following substitution was declared:

Councillor Pat Hanlon substituting for Councillor Cliff Waterman.

Apologies for absence were received from Councillors John Augustine and Cliff Waterman.

To confirm the minutes of the meeting held on 27 May 2021 (copy attached.)

The minutes of the meeting held on 27 May 2021 were confirmed as a correct record and signed by the Chair.

Taking into account the ‘minded to’ decisions made during the non-decision making virtual meeting of the Performance and Audit Scrutiny Committee held on 27 May 2021, the Committee is required to formally resolve the following matters:

1.       Minutes of the meeting held on 28 January 2021.

2.       Outline Internal Audit Plan 2021-2022

3.       Appointments to the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee:

a.            Financial Resilience Sub-Committee:

Councillor Ian Houlder (Conservative Group)

Councillor Elaine McManus (Conservative Group)

Councillor Victor Lukaniuk (The Independent Group)

Councillor Robert Nobbs (Conservative Group – Substitute)

b.            Health and Safety Sub-Committee:

Councillor Nick Clarke (Conservative Group)

Councillor Ian Houlder (Conservative Group)

Councillor Elaine McManus (Conservative Group)

Councillor Robert Nobbs (Conservative Group)

Councillor Andy Neal (The Independent Group)

Councillor Cliff Waterman (Labour Group)

Councillor James Lay (Conservative Group – Substitute)

Councillor Phil Wittam (The Independent Group – Substitute)

Taking into account the ‘minded to’ decisions made during the non-decision-making virtual meeting of the Performance and Audit Scrutiny Committee held on 27 May 2021, the Committee was required to formally resolve the following matters:

1.       Minutes of the meeting held on 28 January 2021.

2.       Outline Internal Audit Plan 2021-2022

3.       Appointments to the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee:

a.            Financial Resilience Sub-Committee:

Councillor Ian Houlder (Conservative Group)

Councillor Elaine McManus (Conservative Group)

Councillor Victor Lukaniuk (The Independent Group)

Councillor Robert Nobbs (Conservative Group – Substitute)

b.            Health and Safety Sub-Committee:

Councillor Nick Clarke (Conservative Group)

Councillor Ian Houlder (Conservative Group)

Councillor Elaine McManus (Conservative Group)

Councillor Robert Nobbs (Conservative Group)

Councillor Andy Neal (The Independent Group)

Councillor Cliff Waterman (Labour Group)

Councillor James Lay (Conservative Group – Substitute)

Councillor Phil Wittam (The Independent Group – Substitute)

It was then proposed by Councillor Elaine McManus, seconded by Councillor Robert Nobbs, and with the vote being unanimous it was:

          RESOLVED:

That:

1)   The minutes of the meeting held on 28 January 2021, be confirmed as a correct record, and signed by the chair.

2)   The Outline Internal Audit Plan 2021-2022 be approved.

3)   The appointments to the Financial Resilience Sub-Committee and the Health and Safety Sub-Committee, be approved.

Members are reminded of their responsibility to declare any pecuniary or local non pecuniary interest which they have in any item of business on the agenda no later than when that item is reached and, when appropriate, to leave the meeting prior to discussion and voting on the item.

Members’ declarations of interest are recorded under the item to which the declaration relates.

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

In accordance with government guidance, the Council has developed general protocols on operating buildings safely in order to reduce the risk of the spread of coronavirus and will apply to members of the public registered to speak.  We would therefore strongly urge anyone who wishes to register to speak to notify Democratic Services by 9am on the day of the meeting so that advice can be given on the arrangements in place.  There is an overall limit of 15 minutes for public speaking, which may be extended at the Chair’s discretion.

There were no members of the public in attendance on this occasion.

Report number: PAS/WS/21/012

The Service Manager (Resources and Performance) presented report number: PAS/WS/21/012, which set out the impact of Covid-19 and the Quarter 1 performance and forecast year-end financial position for 2021 to 2022. 

The Service Manager (Resources and Performance) referred to page 13 of the report, setting out the key headlines for the current revenue outturn position, which showed a balanced forecast year end position.  This position took into account the £2m provision for the effects of Covid-19 in the 2021 to 2022 approved budget, based on £1.1m anticipated pressures and utilisation of the £0.9m local authority Covid-19 support grant. 

Whilst the overall level of the council’s General Fund and reserve would be reassessed in light of the pandemic, a small amount of the General Fund (£3,000) was proposed to be utilised in order to fund the remaining forecast deficit.  The council’s financial position and ability to reduce the impact where possible had been helped by previous financial planning and the creation of the West Suffolk Council as well as quick and effective action to reduce costs as guidance and infection rates changed.

The Service Manager (Resources and Performance) then referred to page 14 of the report, which set out a graphical representation on how Covid-19 had impacted the council over the year.  The first graph showed the financial impact of Covid-19 and the second graph showed how the impact had been mitigated.

Attached to the Quarter 1 performance report were a number of appendices which set out the performance and financial position for 2021-2022, as follows:  

-      Appendix A: Performance Indicators – Commentary

-      Appendix B: Performance Indicators – Growth

-      Appendix C: Performance Indicators – Families and Communities

-      Appendix D: Performance Indicators – Housing

-      Appendix E: Performance Indicators – Day to Day

-      Appendix F: Income and Expenditure Report

-      Appendix G: Capital Programme

-      Appendix H: Earmarked Reserves

-      Appendix I: Strategic Risk Register

The Service Manager (Resources and Performance) then referred to page 19 of the report, which set out the financial summary and the key performance indicators which showed pressure in finding temporary accommodation.  There was also an impact on the council’s income drivers, for example on car parking income and the Apex, and the debt position was still over 90 days, which related to small number of historic property related debts.  However, there were green indicators relating to income from trade waste and street scene services.

Members considered the report in detail and asked questions to which responses were provided. 

In particular discussions were held on the following:

-      Total amount of debt over 90 days – Officers explained that the bad debt provision for 2021-2022 had increased by £100k. Out of the £903,803 debt over 90 days, £650k related to previous years debt.

-      Appendix E (Performance Indicators – day-to-day) - “Percentage of collection of business rates” and the National Health Service (NHS) trusts claim for charitable rate relief.  Officers explained the NHS trusts had lodged an appeal with the High Court, which  ...  view the full minutes text for item 65.

Report number: FRS/WS/21/003 was considered by the Financial Resilience Sub-Committee on 12 July 2021.

The 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: FRS/WS/21/003, which had been considered by the Financial Resilience Sub-Committee on 12 July 2021.  The Service Manager (Finance and Performance) provided a verbal update on the Sub-Committee’s consideration of the report, which summarised the Annual Treasury Management and Financial Resilience Report (2020 to 2021).

The report included tables which summarised the interest earned, and the average rate of return achieved; treasury management investment activity during the year; investments held as at 31 March 2021; capital borrowing budget 2020 to 2021; borrowings and temporary loans.

The budget for investments income in 2020 - 2021 was £131,000 which was based on a 0.65% target average rate of return on investments.  At the end of March 20210 interest actually earned during the financial year totalled £96,767 (average rate of return of 0.354%), against a budget for the year of £131,000, a budgetary deficit of £34,233.  The deficit related to the continued low interest rates as a result of the Covid-19 pandemic which started in mid-March 2020.  The deficit formed part of the financial outturn report presented to the Committee on 27 May 2021 (report number: PAS/WS/21/008). 

The report also included assumptions on borrowing costs for the capital projects included within it and was based around four main projects:

-      West Suffolk Operational Hub;

-      Mildenhall Hub;

-      West Suffolk Operational Hub; and

-      Investing in our Growth Fund.

During the financial year there had been no requirement to borrow externally, due to the Authority’s cash balances, over and above the long-standing £4m loan relating to the Newmarket Leisure Centre.  Therefore, the only interest payable for the year was £169,600 relating to this loan. The total borrowing (expressed as the Authority’s capital financing requirements) between both internal and external (£4m) total £49.4m at 31 March 2021.

The report also included at Appendix A the CIPFA Financial Resilience Index 2021.  The index showed a Council’s position on a range of measures associated with financial risk.  The graphs showed West Suffolk Council within the context of neighbouring Councils within Suffolk.

The Sub-Committee had scrutinised the Annual Treasury Management and Financial Resilience Report (2020 to 2021), and asked questions to which responses were provided.  Discussions were held on the Councils asset base and rental income; and the merits of currently borrowing internally verses externally to fund capital projects.

The Performance and Audit Scrutiny Committee considered the report and asked questions to which responses were provided.  In particular discussions were held on external borrowing, low interest rates and the true cost of borrowing internally verses forgone interest.

In response to a question raised asking why the council had not yet borrowed externally whilst the interest rates were low to fund large projects, officers explained the council was in constant contact with its treasury advisors, Arlingclose about future borrowing.  At present, there was no immediate urgency to borrow externally as internal cash balances were available and the advisors felt current rates available would continue for some time, but the situation was actively being monitored.  ...  view the full minutes text for item 66.

Report number: FRS/WS/21/004 was considered by the Financial Resilience Sub-Committee on 12 July 2021.

The 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: FRS/WS/21/004, which had been considered by the Financial Resilience Sub-Committee on 12 July 2021.  The Service Manager (Finance and Performance) provided a verbal update on the Sub-Committee’s consideration of the report, which provided a summary of investment activity for the first three months of the 2021-2022 financial year.

The 2020-2021 Annual Treasury Management and Investment Strategy sets out the Council’s projections for the current financial year.  The budget for investment income for 2021 to 2022 was £45,000, which was based on a 0.25% target interest rate of return on investments.

At the end of June 2021, interest earned during the first quarter of the financial year amounted to £16,517 against a profiled budget for the period of £11,250, a budget surplus of £5,267. 

External borrowing as at 30 June 2021 remained at £4m with the council’s level of internal borrowing increasing slightly to £46,712,000 as at 30 June 2021.  Overall borrowing, both external and internal was expected to increase over the full financial year, but not by as much as was originally budget for. 

Attached at Appendix 1 to the report was Arlingclose economic and interest rate forecast. 

The Service Manager (Finance and Performance) referred the committee to a graph set out in paragraph 5.3 of the report, which showed historic Public Works Loan Board (PWLB) interest rates over the previous two years for different durations based on borrowing using the annuity method.  The PWLB rates fluctuated on a daily basis as they were linked to the UK Gilt rates.  Currently PWLB rates were at 1% above the relevant UK Gilt rate.   

The council, along with Arlingclose, the council’s treasury advisor would continue to explore alternative sources of borrowing to ensure the council would be ready to borrow externally in the most advantageous way when it needed to.   

The Sub-Committee had scrutinised the investment activity for 1 April 2021 to 30 June 2021, and asked questions to which responses were provided.

The Performance and Audit Scrutiny Committee considered the report and asked questions to which responses were provided.  In particular discussions were held on external borrowing and the historically low interest rates and the borrowing strategy for the Western Way Development.

In response to a question raised as to what the external borrowing trigger was for the council, officers explained that Arlingclose had offered a trigger of £70m.  The council was currently holding back on borrowing externally as it had a cash balance of over £30m in the bank.  Whilst interest rates remained low in the short to medium term, and the Council held significant cash balances, Arlingclose’s advice was to continue to use cash reserves and short-term borrowing where necessary.  The council was currently developing a business case on a number of options with Arlingclose on external borrowing for the Cabinet Member (Resources and Performance) consideration, which would provide certainty.  For example, the Western Way Development would have a fixed interest rate to provide certainty when borrowing was necessary for that project. 

Members did  ...  view the full minutes text for item 67.

Report number: PAS/WS/21/013

[Councillor Andy Neal left the meeting at 6.10pm during the consideration of this item.]

The Committee received report number: PAS/WS/21/013, which updated members on the current status of its rolling work programme of items for scrutiny during 2020-2021 (Appendix 1).

The Director (Resources and Property) informed the Committee that the council had issued the Draft Statement of Accounts (2020 to 2021) prior to the deadline of 31 July 2021.  The Draft Statement of Accounts (2020 to 2021) were currently scheduled to be considered by the Committee at its November 2021 meeting. The Chair of the Committee would be kept up to date on the audit process of the Accounts by Ernst and Young.

There being no decision required, the Committee noted the update.