Agenda and draft minutes

Apologies for absence were received from Councillors Bonds, Chesters, Roome and Webber.

RESOLVED, that the minutes of the meetings held on 10^th January and 15^th January 2019 (circulated previously) be approved as a correct record and signed by the Chairman.

The Chairman advised that he was currently involved in the trial for the new modern.gov system and would be navigating the agenda via an IPad.

(Please telephone the Corporate and Community Services team to prepare a form for your signature before the meeting. Interests must be re-declared when the item is called, and Councillors must leave the room if necessary).

There were no declarations of interest announced.

Report by the Leader and Executive Team to Executive on 4th February 2019 (attached) together with minute extract of the Executive on 4th February 2019 (to follow).

The Committee considered a report to the Executive on 4th February 2019 by the Leader and Executive Team together with a minute extract (circulated previously) regarding the Performance and Financial Management Quarter 3 of 2018/19.

The Head of Resources highlighted the following:

·         As at 31st December 2018, the latest forecast net expenditure was £12.239m, which was £0.019m over budget.  Details were shown in Appendix 1 and it was anticipated that the small variance could be reduced further throughout the remainder of the financial year.

·         The original budget for 2018/19 included a forecast to achieve £0.200m worth of salary vacancy savings. The current position forecasts this would be exceeded and vacancy savings of £0.225m would be achieved.

·         The “Recycle more” service changes were introduced on the 5^th June 2017; the take up of the new garden waste service had exceeded expectations, 2017/18 saw a total sign up of 17,320. This year’s income was expected to exceed last year’s total by 570 properties.

·         Within the overall £0.019m net budget deficit there were various cost pressures and one-off savings.  The budget pressures seen within waste and recycling service had not increased any further at the quarter 3 forecast. There had been a significant reduction in the forecast planning fee income of £0.159m due to a reduction in the larger applications received, which was in line with other authorities experiencing the same pressure. However it was forecast there would be additional Business Rates Retention income of £0.200m over and above the budgeted £1.252m Business Rates growth which had resulted in maintaining the net budget deficit at a similar level reported at quarter 2.

·         The Business Rate retention scheme was introduced in April 2013 which sees Billing authorities receive a ‘baseline’ funding but in addition they are exposed to the risks and rewards of retaining a proportion of the income collected.  This exposure was mitigated by participation in the Devon-wide pool that collates all of the Business Rate growth and decline and returns a share of the impact to each local authority. There had been an estimated one-off additional income from the 100% Business Rates Retention pilot for 2018/19 of £0.750m; this additional income had been earmarked into reserves as detailed in paragraph 4.1.6 of the report to help fund future projects.

·         At the 31^st December 2018 the total external borrowing was £1.250m.

·         The recommended level of general fund balance is 5%-10% of the council’s net revenue budget (£0.611m to £1.222m). The forecast general fund reserve at 31 March 2019 is £1.161m, which is a level of 9.5%.

·         “Appendix-2 Movement in Reserves & Balances” detailed the movements to and from earmarked reserves in 2018/19.

·         “Appendix-3 Executive Contingency Reserve” detailed the Executive Contingency Reserve movements and commitments. 

·         “Appendix-4 Capital Programme” detailed the 2018/19 to 2020/21 Capital Programme.  The Programme of £12.842m was funded by Capital Receipts (£2.349m), External Grants and Contributions (£8.964m) and Reserves (£1.529m).

·         Variations of (£2.254m) proposed to the 2018/19 Capital Programme as detailed in paragraph 4.4.3 of the report.

·         The revised  ...  view the full minutes text for item 70.

Report by the Leader and the Executive Team to Executive on 4th February 2019 (attached) together with minute extract of Executive of 4th February 2019 (to follow).

The Committee considered a report to the Executive on 4th February 2019 by the Leader and Executive Team together with a minute extract (circulated previously) regarding the review of Charges and Fees for services 2019/20.

·         This year the guidance was to increase some fees and charges by 3%, although some fees are set by statute and these will be set nationally.

·         Other variations to the 3% increase were set out in paragraphs 5.3 to 5.8 in the report.

·         Trade Waste charges have been reviewed and simplified to aid the customer’s understanding of the charging structure. Zones 1 and 2 have now been combined with a minimum increase of 5%, with schedule 2 and Recycling charges increasing by 10%. The Head of Operational Services had confirmed that with these price increases the service was still commercially competitive. (Appendix 3)

·         Land Charges fees have been set to recoup the cost of providing the service, without changing the current fees the land charges service was still budgeted to recover all the costs and break even. (Appendix 4)

·         There were minimal changes to the Environment Health fees, as the majority of these were set by statute or set to recover costs. The changes include, amendments to the animal licence fees. With Zoos and Dangerous Wild Animal Licences being under review. (Appendix 5)

·         Single Sports pitch hire increased by 14.2%. The significant increase was due to current charges for grass pitch hire being relatively cheap. Block hire had also been introduced but kept at the 18-19 prices to encourage customers to lock themselves into a block booking of at least 11 games. (Appendix 7)

·         The Pannier Market fees have been recommended to be increased by 3%.  It was proposed that the additional £6,000 received be earmarked to be spent on the Pannier Market.  (Appendix 8)

·         Garden Waste charges have not been increased for 2 years and it was proposed not to increase the fees for the third year running.  This would be reviewed in 2020/21. (Appendix 10).

·         The net changes in the charges were expected to result in £88,400 of additional income which have been included within the draft 2019/20 budget.

In response to questions from the Committee, the Head of Resources confirmed that:

·         The charges for the Crematorium were managed and considered separately by the North Devon Crematorium Joint Committee.

·         The charges for bulky collections were competitive but had been unchanged for some time. He added that if charges were to be increased the Council would still be competitive with the market. The budgets were regularly monitored to ensure that there was no cost to the Council.

·         There was a standard gate fee payable by all operators who disposed of bulky waste and the disposal of waste was charged at an amount per ton.

·         The Head of Operational Services had been requested to remodel the commercial waste rounds to ensure efficiency to grow the business and generate further income to the Council.

·         Flytipping of vehicles added an additional cost to the Council for the  ...  view the full minutes text for item 71.

Report by the Leader and the Executive Team to Executive on 4th February 2019 (attached) together with minute extract of Executive of 4th February 2019 (to follow).

The Committee considered a report to the Executive on 4th February 2019 by the Leader and Executive Team together with a minute extract (circulated previously) regarding the Revenue Budget 2019/20, Capital Programme and Medium Term Financial Strategy 2019-2023.

The Head of Resources highlighted the following:

·         Government settlement December 2018.  The provisional 2019-20 settlement (including the Rural Services Delivery Grant) was £3.269m (Year 4).  In cash terms this was £363,000 less than 2018-19 (10% reduction) in line with the Medium Term Financial Plan.  75% Business Rate Pilot bid for Devon had been unsuccessful.  There were no new changes announced for the New Homes Bonus for 2019/20, however potential changes for 2020/21.   The Rural Services Delivery Grant matched the 2018/19 level.  Council Tax levels for District Councils could be increased by up to 3% or £5 whichever was higher.  The referendum in relation to Council Tax levels for Town and Parish Councils had been deferred.  The Government had awarded one off funding for Brexit over a 2 year period of £17,500 for 2018/19 and £17,500 for 2019/20.  This grant would be placed in an earmarked reserve.

·         Government settlement change in funding by class of Authority.  The Shire Districts and County Councils had received the largest reduction in funding from 2015/16 to 2019/20.

·         Medium Term Financial Plan (2018-22) approved by Council in February 2018 was based on a number of financial assumptions about the future which included funding from Central Government, retained Business Rates income and future Council Tax levels, cost pressures and savings plans and contributions to and from reserves (e.g. vehicle replacement).  The forecast budget gap from 2019/20 to 2021/22, as at February 2018 was outlined.

·         New Homes Bonus changes introduced in 2017. 

·         New Homes Bonus provisional level of funding to 2019/20.  The level of funding for 2018/19 was £1,313,520.  The Medium Term Financial Plan assumed £1.3m for 2019/20 therefore there was an additional £146,000.  £100,000 from the New Homes Bonus would be placed into a reserve for one off capital projects.

·         Business Rates Retention.  100% Business Rate Pilot had been accepted for Devon for 2018/19.  The pilot programme was for one year.  The estimated additional one-off business rates gain was £0.750m.  This gain had been placed into earmarked reserves 2018/19 for future year projects.  The Government had invited bids for 2019/20 pilots, however Devon had been unsuccessful and would revert back to the Devon Pool (50% scheme).

·         The 2019/20 Business Rate retention forecast was £1.690m.  The 2019/20 draft budget (above baseline funding) was £1.502m. 

·         Local Government Finance funding reforms which included: Spending Review for the period 2020/21; a review of relative needs and resources; Business Rates Retentions pilots, business rates baseline reset, Fair Funding review, New Homes Bonus review, Reforms to Local Government funding would change the level of resources available and have an impact on revenue budget; indicative allocations would be announced during the Autumn 2019.

·         Council Tax levels for 2018/19 Band D properties had been increased by £5.16 (equivalent to 2.99%).  Rural Councils could increase levels by up  ...  view the full minutes text for item 72.

Report by the Leader and the Executive Team to Executive on 4th February 2019 (attached) together with minute extract of Executive of 4th February 2019 (to follow).

The Committee considered a report to the Executive on 4th February 2019 by the Leader and Executive Team together with a minute extract (circulated previously) regarding the Treasury Management Strategy Statement 2019/20.

The Chairman questioned whether there was a better way to engage Members within the treasury management process.

The Head of Resources agreed that it was more important moving forward but added that the reports did contain a lot of technical detail, which was set by regulation. He added that training in relation to the financial process would be delivered to all Members as part of the Member training programme following the elections in May 2019.

The Head of Resources highlighted the following:

·         The Council was required to receive and approve three reports each year which included: Prudential and treasury indicators and treasury strategy (first report), Mid Year Treasury Management report (second report) and an Annual Treasury report (third report).

·         The Council’s investment priorities were security of funds first, portfolio liquidity second and then yield, (return).

·         Proposed changes to the Treasury Management Strategy for 2019/20 as detailed in paragraph 5.1 of the report.

·         The Council had not engaged in any material commercial investments or non-treasury investments.

·         Capital expenditure and net financing need of capital expenditure for 2019/20.

·         The Council’s underlying need to borrowing as detailed in paragraph 6.2 of the report.

·         Borrowing requirements as detailed in paragraph 7 of the report.  The underlying need to borrow was increasing in 2019/20 year.

·         Investment and borrowing rates.  Borrowing rates would continue to be reviewed to avoid incurring higher borrowing costs in the future.  It was more cost effective to borrowing internally.  Investments were only made on a short term basis. 

·         The criteria for risk management was largely unchanged from last year.

·         The Council would adopt a low risk, immaterial, approach to non-treasury (commercial) investments in line with the investment categories and authorised limits set out in Appendix 2.

In response to questions from the Committee, the Head of Resources confirmed that:

·         The sale of the original housing stock generated a capital receipt and allowed the Council to move to a better financial position and be debt free.

RESOLVED that the decisions and recommendations of the Executive be endorsed.

Report by the Leader and Executive Team to Executive on 4th February 2019 (attached) together with minute extract of the Executive of 4th February 2019 (to follow).

The Committee considered a report to the Executive on 4th February 2019 by the Leader and Executive Team together with a minute extract (circulated previously) regarding the 10 year Capital Strategy 2019-2029.

The Head of Resources highlighted the following:

·         In December 2017, the Chartered Institute of Public Finance and Accountancy, (CIPFA), issued revised Prudential and Treasury Management Codes stating that from 2019/20, all local authorities would be required to prepare a Capital Strategy.

·         The Strategy was required to provide a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services, an overview of how the associated risk is managed and the implications for future financial sustainability.

·         This capital strategy document covers the ten year period from 2019/20 to 2028/29 and will be reviewed annually by Full Council prior to each financial year.

·         The Strategy did not include the financial impact of the potential new Leisure Centre or potential addition spend on the Watersports Centre projects.

·         Capital Governance arrangements as detailed in paragraph 5.3 of the report.

·         The current Medium Term Financial Plan included borrowing costs for the Capital Programme approved earlier on agenda.

·         The Capital Strategy for years 2019/20 to 2022/23 (Medium Term) as detailed in paragraph 5.4 of the report.

·         The Capital Strategy for years 2023/24 to 2028/29 (Long Term) as detailed in paragraph 5.5 of the report.

·         Following the District Council elections in May 2019, there would be a need to undertake a review of the service spend and identify savings to reduce the budget gap (both Revenue and Capital).

·         Capital funding and affordability.  Projected external borrowing.  There was a need to challenge the future projects within the long-term capital expenditure to identify whether they were required or could be delayed.  If additional capital receipts were received, there would be a need to use the receipts to reduce the level of borrowing need.

·         Risks with the Capital Strategy as detailed in paragraph 5.6 of the report.

In response to a question from the Committee, the Head of Resources confirmed that the strategy would be reviewed on an annual basis.

The Committee welcomed the approach moving forward.

RESOLVED that the decisions and recommendations of the Executive be endorsed.

Vice Chairman to report.

The Vice Chairman addressed the Committee regarding the latest information from the Police and Crime Panel (PCP). 

The Vice Chairman advised the Committee of the following:

·         At its most recent meeting, the Panel agreed to increase the figure per household by £24.00 for the Council Tax on band D properties, which would allow them to fund an additional 85 Police Officers on the beat.

·         Police Officers had also been issued with spit and bite guards.

RESOLVED:

(a)   that the report be noted; and

(b)   that the recorded crime in Devon and Cornwall – ONS Figures be circulated via email to the Committee.

Chairman to report.

The Chairman addressed the Committee and advised that discussions were ongoing between the North Devon District Hospital and the Royal Devon and Exeter Hospital in relation to the continuation of joint working arrangements

RESOLVED that the update be noted.

To consider the Overview and Scrutiny Committee work programme/forward plan 2018/19.

The Committee considered the Work Programme / Forward Plan (circulated previously).

The Chairman reminded the Committee that a special meeting to consider the “Monitoring of Noise levels at Batsworthy Cross” had been arranged and would be held on Thursday 7^th March 2019 at 10.00am on the Barum Room and requested that the correct formalities be utilised at the meeting.

RESOLVED that the Work Programme be noted.