Agenda and minutes

Finance Scrutiny Sub-Committee
Thursday 16 December 2010 7.00 pm

Venue: Room 8, Lambeth Town Hall, Brixton Hill, SW2 1RW. View directions

Contact: Nigel Harvey Tel: 020 7926 3136, Email: nharvey1@lambeth.gov.uk 

Items
No. Item

1.

Declarations of Interest

Minutes:

Councillor Matt Parr declared a personal interest under Item 5 (Income and Debt Strategy) as a Member of Loughborough Estate Management Board but did not consider this to be prejudicial. 

2.

Minutes of Previous Meeting pdf icon PDF 83 KB

To agree the minutes from the meeting of 24 November 2010 as a correct record of proceedings.

 

Minutes:

RESOLVED: The minutes of the meeting held on 24 November 2010 be approved and signed by the Chair as an accurate record of the meeting subject to the following amendment:

 

Item 4 – Housing, Regeneration and Environment General Fund In-Year Budget Management

 

Delete final bullet point and insert

 

  • As regards the parking service the department was negotiating with NSL regarding the contract and as part of this was discussing the use of the vehicle removal service. There was a cost to ending this part of the contract and it was hoped that it could be negotiated at a reduced cost to the Council.

3.

Update on Home Ownership Services Commission pdf icon PDF 84 KB

(Report no: 171/10-11)

 

Contact for Information: Tom Barrett, Scrutiny Manager.  Tel: 020 7926 2235 tpbarrett@lambeth.gov.uk

 

Additional documents:

Minutes:

Tom Barrett, Scrutiny Manager, introduced the report.  He explained that the Commission had been established by Finance and Housing Scrutiny Sub-Committees in 2009 but had not been able to report back before the end of the 2009/10 Municipal Year.  The Commission had not been recommissioned and there had been some outstanding matters to be dealt with. 

 

Councillor Diana Morris, Chair of the Commission, had attended the meeting of the Leaseholders’ Council on 21 October to answer some of their concerns. The item had been deferred at the previous meeting of the Finance Scrutiny Sub-Committee due to the fact that the minutes of the 21 October meeting had not been published at that time.

 

The Leaseholders’ Council had asked that the work of the commission continue and that it report to this Sub-Committee.  However as noted above the commission no longer existed.  Members considered that their points could be progressed by Councillor Christopher Wellbelove, Deputy Cabinet Member.  One of the main concerns was that accurate bills were not sent to leaseholders as the system did not have the correct details regarding what serviced charges were payable.  Councillor Diana Morris stated that it was important that a computer based system was in place to ensure that all the correct charges were shown on a particular property and that it was properly resourced.

 

RESOLVED:

 

That the outstanding matters be referred to Housing Scrutiny Sub-Committee for any further scrutiny work and that the committee and Leaseholder’s concerns also be referred to Councillor Christopher Wellbelove for progressing.

4.

Presentation from Executive Director for Finance & Resources pdf icon PDF 47 KB

Contact for information: Tom Barrett, Scrutiny Manager, 020 7926 2235 tpbarrett@lambeth.gov.uk

Minutes:

Frank Higgins, Chief Accountant, gave a presentation covering the following points:

 

         The Government had announced the provisional grant settlement for local authorities on 13 December 2010 and asked for responses by 17 January 2011.

         Lambeth’s formula grant (excluding the “rolling in” grants) would reduce in 2011/12 by £20.17million in cash terms. Taking into account the “rolling in” grants this equated to a total reduction of 11.3%.

         Lambeth’s formula grant (excluding the “rolling in” grants) would reduce further in 2012/13 by £16.97million in cash terms. Taking into account the “rolling in” grants this equated to a total reduction of 7.4%.

         The Year 1 previous savings target was £42.378million, against a revised estimate of £37.446million giving a positive variance of £4.932million.

         The final two years of the spending review period remained uncertain but there was no indication that the Government intended to reduce the overall Savings Target.

 

The following statistics were provided:

 

October Spending Review Savings Targets

 

Original Savings Targets

2011/12 (£million)

2012/13 (£million)

2013/14 (£million)

TOTAL (£million)

ACS

14.5

10.0

2.5

27.0

CYPS

11.8

8.1

2.1

22.0

FR

5.2

3.6

1.0

9.8

HRE

9.9

6.8

1.6

18.3

OCE

1.0

0.7

0.2

1.9

TOTALS

42.4

29.2

7.4

79.0

 

Revised Savings Targets following the 13 December announcement

 

 

2011/12 (£million)

2012/13 (£million)

2013/14 (£million)

TOTAL (£million)

Original Savings Target for Council

42.4

29.2

7.4

79.0

Revised Savings Target for Council

37.5

TBC

TBC

79.0

(Increase)/Decrease in Council Savings Target

4.9

TBC

TBC

0

 

He concluded by pointing out that:

 

         The final settlement was due in January 2011.

         The detail around schools and the interplay on the Early Intervention Grant was still being worked on. This would be critical to the “trading relationship” between the authority and the schools.

         Additional funding to the NHS of approximately £1billion, nationally, had been announced and it was anticipated that some of this would be available to support social care provision but no further information was known at the time of the meeting.    

         He expected other Government communications and details to emerge in the next few days. However, there was some evidence that lobbying on front loading had had some impact.

         Further steps to take would be progressed through the Council’s Service and Financial Planning process.

 

Councillor Paul McGlone, Cabinet Member for Finance and Resources addressed the meeting.  He stated that the Council was being asked to make an unprecedented cut of £37million.  In addition the full details of which grants were to be ring fenced was not known at the time of the meeting as not all of the announcements had been made. It was expected that the final details would be published on 19January in advance of the next meeting of the Sub-Committee.

 

In response to questions from Members it was explained that:

 

·        There were over 135 grants where details had not been released.  Details of these would be forwarded to members of the Sub-Committee. The biggest component was the Dedicated Schools Grant.

·        As  ...  view the full minutes text for item 4.

5.

Update on the Council's Financial Position pdf icon PDF 69 KB

(Report no: 186/10-11)

 

Contact for Information:  Frank Higgins, Chief Accountant.  Tel: 020 7926 9316; frankhiggins@lambeth.gov.uk

 

Additional documents:

Minutes:

Frank Higgins, Chief Accountant, introduced the report and explained that this was to be a regular item on the agenda for this Sub-Committee.

 

He explained that as at the end of September 2010 the Council was forecast to overspend the General Fund Budget by £13.7million.  The Housing Revenue Account (HRA) had a surplus of just under £2million and the capital budget was performing reasonably well. 

 

Councillor Paul McGlone, Cabinet Member for Finance and Resources, referred to the forecast deficit and stated that he did not consider it acceptable for there to be an overspend at the end of the year.

 

In response to Members it was explained that:

 

  • Efforts were being made to speed up the time lag between the end of the financial period and the publication of the Monitor.  The committee requested that it always be provided with the most up-to-date version of the monitor at its meetings.
  • Although the list of Lambeth partners with outstanding debt had not changed over time the sums involved were less than previously. There was an expectation that 100% of the monies owing would be recovered.
  • As regards the 2010/11 Capital Disposal Programme members expressed concern that it took a long time after properties had been agreed for disposal before they were sold.  In future these details would be presented in a more understandable format and the capital programme would be fully financed.
  • Officers were concerned about the level of the overspend as at present the General Fund Balance was healthy and it was hoped that this would be the position in the future. Action Plans were being implemented and the Strategic Leadership Board had commissioned reports on the 6 biggest areas of overspend.  The Sub-Committee would be kept informed of developments.
  • Since September the overspend had got less but was not moving fast enough.
  • The Customer Services Division overspend reported at the previous meeting was on track to be eliminated by the end of 2010/11.
  • Action needed to be taken to improve reconciliations in the Finance and Resources Department.
  • The findings of the Asset Disposal Commission would be reported to the Sub-Committee at its next meeting.

 

In conclusion the Chair confirmed that the following areas were of concern:

 

  • Budget Overspend to be taken seriously and need for assurance that overspend will be eliminated by the end of 2010/11.
  • Risks in Capital Spending.

 

RESOLVED:

 

That the report be noted and that the concerns of the Sub-Committee be conveyed to officers.

6.

Income and Debt Strategy pdf icon PDF 71 KB

(Report no: 187/10-11)

 

Contact for Information: David Ashmore, Divisional Director, Revenue, Benefits and Customer Service.  Tel: 020 7926 0949.

dashmore@lambeth.gov.uk

Additional documents:

Minutes:

Guillotine

 

During the discussion of this item, the guillotine fell at 9.00 pm.

 

MOVED by the Chair, and:

 

RESOLVED: That in accordance with Standing Orders 9.5 – 9.7, the meeting continue for a further period of up to fifteen minutes.

 

David Ashmore, Divisional Director, Revenue Benefits and Customer Service, introduced the report.  He explained that this was the first draft of the strategy which would be consulted upon before finalisation.  As regards Income Collection, performance had improved and Lambeth was now one of the highest performing authorities in London.  This was reviewed on an annual basis.

 

In response to questions from Members it was explained that:

 

  • There was an improvement in collection for Penalty Charge Notices in relation to Parking Charges and there was a lower level of appeals being upheld.
  • The collection rate for Section 20 debt was significantly higher than in the past and there was a decrease in the amount of historic debt.  A breakdown could be provided to Members of the Sub-Committee.
  • As many methods of payments as possible were accepted. It was planned that payment by cheque would be phased out by 2015.
  • A check would be made to make sure that all details of people with multiple debts were recorded in the same place.  There was also a necessity to look at those people who consistently failed to pay.  Members considered that there was a need for tougher action to be taken against debtors.
  • Officers would investigate as to whether it would be possible to publicise details of individuals and organisations that owed a lot of money to the Council.
  • Through Financial Shared Services there was an increase in working together between the various agencies involved in debt collection and that a bailiff arrangement with one part of the Council would be binding on others.
  • There was a necessity for a balance to be taken between tough action and being sympathetic to people’s situation. Some members felt that the first letter to debtors should be softer as the council would not necessarily know if it was dealing with a vulnerable person.

 

The Chair stated that there was a need to look at income maximisation.

 

RESOLVED:

 

That the report be noted.

7.

Work Programme Development and Action Monitoring pdf icon PDF 67 KB

(Report no: 188/10-11)

 

Contact for Information: Tom Barrett, Scrutiny Manager, 020 7926 2235 tpbarrett@lambeth.gov.uk

Additional documents:

Minutes:

The Sub-Committee agreed that the following items be submitted to the next meeting on 27 January 2011:

 

  • Draft 2011/12 Budget Proposals
  • Report of the Asset Disposal Strategy Commission

 

RESOLVED:

 

(1)               That the report be noted

(2)               That the work programme be updated in line with the report requests outlined above