- O&S 1 -

HERTSMERE BOROUGH COUNCIL

JOINT MEETING OF THE OVERVIEW & PERFORMANCE AND SCRUTINY COMMITTEES

Minutes of the meeting held in Committee Rooms A, B and C, Civic Offices, Elstree Way, Borehamwood

28 January 2013

Present: Councillors Morris, Calcutt, Choudhury, Griffin, P Hodgson-Jones, Hoeksma, Wayne, E Butler, Ricks, R Butler, S Hodgson-Jones and Legate Executive Members: Councillors Bright, Goldstein, Graham, Heywood. Also Present: Councillor Harrison Officers: Director of Resources Head of Finance 588. MEMBERSHIP

There were no changes to the membership.

589. COMMUNICATIONS AND APOLOGIES Apologies received from Councillors Batten, Strack, Swallow and Winters.

590. DECLARATIONS OF INTERESTS (IF ANY) There were none.

591. MINUTES OF THE PREVIOUS MEETING RESOLVED that the minutes of the meeting held on 23 January 2012 be approved and signed as a correct record.

- O&S 2 -

592. CONSULTATION ON BUDGET PROPOSALS FOR 2013/14 At the suggestion of the Chairman, the Committee agreed that the reports on Capital, Revenue and Investment Income Budgets items be considered together. The Director of Resources and the Portfolioholder for Finance and Property took Members through the detailed proposals in a presentation (attached as Appendix A) on all three components of the budget. The relevant Portfolioholder and Officer responded to questions raised during the presentation. RESOLVED that the presentation and reports be noted.

592.1 CONSULTATION ON SETTING THE REVENUE BUDGET FOR 2013/14 See above minute.

592.2 CONSULTATION ON THE REPORT: INVESTMENT INCOME BUDGET 2013/14 AND ITS APPLICATION See above minute.

592.3 CONSULTATION ON THE CAPITAL BUDGET FOR 2013/14 See above minute.

593. DATES OF THE NEXT MEETINGS The next ordinary meetings of Scrutiny Committees were scheduled to take place at the Civic Offices at 7.30pm as follows: Environment Scrutiny Committee – 30 January 2013 Resources Scrutiny Committee – 5 February 2013 Overview and Performance Scrutiny Committee – 13 March 2013. Appendix A - copy of presentation Appendix B - updated summary sheet for Revenue Budget

CLOSURE: 8.30 pm

CHAIRMAN

DRAFT R

EVEN

UE B

UD

GET

2013-1

4

Overview & Perform

ance and Scrutiny Committees:

28 January 2013

1

3

20

13

-14

Bu

dg

et

Pre

sen

tati

on

•Revenue Budget

Background to Revenue Budget

Budget Highlights

Key Highlights

Net Budget Requirement

Revenue Budget –Key Factors

General Fund Budget Summary

Budget Requirements 2013-14 (by department)

•Investment Income Budget

•Capital Budget

Capital Budget Overview

Capital Budget 2013-14

•Risks & Uncertainties

2

4

Ba

ckg

rou

nd

an

d A

ssu

mp

tio

ns

to t

he

20

13

-14

Re

ve

nu

e B

ud

ge

t•

The provisional grant settlement for 2013/14 is £5.18M a 10.56% reduction of £612k

compared to 2012/13. Included is funding of £66,326,equivalent to a council tax rise of

1%. The total grant reduction over 3 years being 38%.

•C Tax is frozen for 2013/14 and New Homes Bonus grant for 2013/14 of £940,129, has

now been fully allocated as revenue budget funding.

•In light of uncertainties with the changes to business rate retention and the financial

risk transferred to local authorities, it is proposed that a business rates equalisation

account is set up. Therefore £229,203 of the NNDR grant, received as part of the

finance settlement to be utilised in 2013-14, will be transferred into the equalisation

account.

•Inflation is well above Bank of England target of 2%. RPI @ Dec 2012 3.1%

•Key changes with significant impact -Localism Act, Localisation of Council Tax

Benefits, Retention of Business Rates & the W

elfare Reform

.

3

5

4

Gra

nt

Se

ttle

me

nt

2011/12

2012/13

2013/14

£’000

£’000

£’000

GrantSettlement2011/12

6,330

CouncilTaxFreezeGrant

164

Tota

lG

rantS

ettle

ment2011/1

26,4

94

GrantSettlement2012/13

5,463

CouncilTaxFreezeGrant

329

Tota

lG

rantS

ettle

ment2012/1

35,7

92

Reduction on 2011/12 Base -10.8%

(702)

GrantSettlement2013/14(pro

visional)

4,949

CouncilTaxFreezeGrant

231

Tota

lG

rantS

ettle

ment2013/1

45,1

80

Reductionon2012/13Base–10.56%

(612)

Netincreaseinbudgetaryrequirement

(99)

Netfu

ndin

gre

quir

em

ent

(711)

Funded

by:

CumulativeNewHomesBonus2010-2013

940

TransfertoBusinessratesequalisationAccount

(229)

(711)

The 2013/14 reduction in grant settlement compared to 2012/13 is 10.56%

in cash terms although the Chancellor announced it to be 8.8% based on

readjusted figures.

The tota

l re

duction o

ver

the 3

years

bein

g 3

8%

. M

ost of th

e s

avin

gs w

ere

achie

ved b

y the C

ouncil thro

ugh a

pro

gra

mm

e o

f effic

iencie

s that m

ain

tain

ed s

erv

ice levels

.

6

Bu

dg

et

Hig

hli

gh

ts

5

Fav/(Adv)

£'000

Reduced -Housing Benefit Admin Grant

(50)

Decrease in income/reserves –non use of NewHomes Bonus £100K,

recycling income £45.

(200)

Transfers from reserves

(45)

Service Improvements inc homelessness £200K

(388)

Tota

l in

cre

ase in b

udget re

quir

em

ent

(683)

Budget savin

gs a

nd initia

tive to b

ala

nce b

udget:

Employee savings resulting from restructuring

156

Transfers to reserves

11

Budget savings & efficiencies

187

Increase in income -fees and charges

230

Net increase in Government grant

99

Tota

l savin

gs a

nd e

ffic

iencie

s683

7

6

Fu

nd

ing

of

Ne

t B

ud

ge

t R

eq

uir

em

en

t

Actu

al

Actu

al

Actu

al

Estim

ate

NO

TE

S

DE

SC

RIP

TIO

N2010/1

12011/1

22012/1

32013/1

4

£m

£m

£m

£m

Est reduction of

£1.826m (12.8%)

Net Budget Requirement

(NBR)

14.259

13.126

12.424

12.433

Est reduction of

£3.153m (39.9%)

Government Grant (GG)

7.908

6.330

5.463

4.755

Council Tax Freeze Grant

0.000

0.164

0.329

0.230

Council Tax

6.633

6.633

6.633

6.633 No increase

Est 38.2% of

NBR is funded

by GG

Gearing % (GG as a % of

NBR)

55.5%

48.2%

44.0%

38.2%

Change in Council Tax

0%

0%

0%

0%

8

Ne

t B

ud

ge

t R

eq

uir

em

en

t

20

12

/13

Ne

t B

ud

ge

t R

eq

uir

em

en

t£

12

,42

4,4

40

Fu

nd

ed

By

:

Exte

rna

l F

ina

nce

£

5,7

91

,86

0 (

46

.62

%)

(Ce

ntr

al

Go

ve

rnm

en

t F

un

din

g)

Co

un

cil

Ta

x

£6

,63

2,5

80

(5

3.3

8%

)

(De

cr)

/In

cr

20

13

/14

Ne

t B

ud

ge

t R

eq

uir

em

en

t£

12

,52

3,5

10

£9

8,7

10

Fu

nd

ed

By

:

Exte

rna

l F

ina

nce

(in

clu

din

g n

ew

ho

me

s b

on

us)

£5

,89

0,5

70

(4

7.0

4%

)£

98

,71

01

.70

%

(Ce

ntr

al

Go

ve

rnm

en

t F

un

din

g)

Co

un

cil

Ta

x£

6,6

32

,58

0 (

52

.96

%)

£0

0

.0%

7

9

8

2011/12

2012/13

2013/14

ACTUAL

APPROVED

DRAFT

BUDGET

BUDGET

FAV(AD V)

££

££

1,133,900

PLANNING & BUILDING CONTROL

1,168,150

1,072,970

95,180

703,460

HOUSING SERVICES

638,240

953,110

(314,870 )

742,058

ENVIRONMENTAL HEALTH

829,440

817,210

12,230

4,462,524

STREET SCENE SERVICES

4,526,180

4,432,170

94,010

14,994

ENGINEERING SERVICES

(36,660)

(5,120)

(31,540)

(2,311,993)

ASSET MANAGEMENT

(2,677,520)

(2,758,170)

80,650

2,352,044

CORPORATE SUPPORT

2,193,310

2,185,860

7,450

2,078,139

FINANCE AND BUSINESS SERVICES

1,947,140

2,042,640

(95,500)

1,298,801

LEGAL & DEMOCRATIC SERVICES

1,377,540

1,323,780

53,760

1,017,936

HUMAN RESOURCES & CUSTOMER SERVICES

1,120,280

1,124,800

(4,520)

598,373

EXECUTIVE DIRECTORS

620,530

629,810

(9,280)

198,329

AUDIT & ASSURANCE

96,000

106,000

(10,000)

50,000

PAY STRATEGY

50,000

50,000

0

50,000

STRATEGIC TRAINING

50,000

30,000

20,000

100,000

CENTRAL CONTINGENCY

286,280

321,280

(35,000)

123,876

GENERAL EXPENSES

133,880

133,880

0

169,984

AUDIT FEES, BANK CHARGES NOT RECHARGED

183,430

183,430

0

25,000

PAY AWARD

00

0

0ECONOMIC DEVELOPMENT AND REGENERATION

050,000

(50,000)

0ORGANISATIONAL REVIEW SAVINGS

0(133,500)

133,500

12,807,425

GROSS REQUIREMENT

12,506,220

12,560,150

(53,930)

Ge

ne

ral

Fu

nd

Bu

dg

et

Su

mm

ary

10

9

Ge

ne

ral

Fu

nd

Bu

dg

et

Su

mm

ary

2011/12

2012/13

2013/14

ACTUAL

APPROVED

DRAFT

BUDGET

BUDGET

FAV(AD V)

££

££

12,807,425

GROSS REQUIREMENT

12,506,220

12,560,150

(53,930)

LESS :-

0

333,275

ADJ/TRANSFER TO/FROM RESERVES

81,780

37,000

(44,780)

12,474,150

TOTAL NET REQUIREMENT

12,424,440

12,523,150

(98,710)

FINANCED EXTERNALLY BY:-

6,329,570

RSG/NNDR GRANT UTILISED

5,462,820

4,949,318

(513,502)

0

TRANSFER TO BUSINESS RATE EQUALISATION

ACCT

0(229,203)

(229,203)

6,632,580

COUNCIL TAX LEVY

6,632,580

6,632,580

0

164,000

COUNCIL TAX FREEZE GRANT Original

329,040

164,000

(165,040)

0COUNCIL TAX FREEZE GRANT 2013/14

066,326

66,326

0NEW HOMES BONUS

0940,129

940,129

13,126,150

TOTAL FUNDING

12,424,440

12,523,150

98,710

11

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

E A

RE

A

10

PLANNING & BUILDING CONTROL

FAV/(ADV)

£NOTES

PLANNING FEES

65,000

SUBJECT TO NEW LEGISLATION -15% INCR EXPECTED

PLANNING FEES

(30,000)

INCR IN PERMITTED DELVELOPMENTS NOT CHARGEABLE

OTHER PLANNING INCOME

(2,000)

REDUCTION OF SALE OF PUBLICATIONS ETC

EMPLOYEE EXPENSES -DC & POLICY

(7,970)

CONTRACTUAL PAY INCREMENTS

EMPLOYEE EXPENSES -BUILDNG CONTROL

16,150

REDUCED CONTRACTED HOURS

ADVERTISING COSTS

(10,000)

INCREASED COST BASED ON ACTUALS OVER LAST 2 YEARS

PLANNING SYSTEM SAVINGS

64,000

ESTIMATED BUDGET SAVINGS (SALARIES & MAINTENANCE)

TOTAL

95,180

12

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

E A

RE

A

11

HOUSING

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES

(13,870)

REGRADE & MID POINT SALARY INCREASES

BED & BREAFAST NET COSTS

(201,000)

BASED ON CURRENT TRENDS

NEW HOMES BONUS FUNDING

(100,000)

ONE OFF FUNDING IN 2012-13

TOTAL

(314,870)

ENVIRONMENTAL HEALTH

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES

18,730

PROPOSED RESTRUCTURE

EMERGENCY PLANNING

(20,000)

NOW TO COVER BUSINESS CONTINUITY

LICENSING INCOME

15,000

IN LINE W

ITH CURRENT INCOME LEVELS

OTHER MINOR ADJUSTMENTS

(1,500)

TOTAL

12,230

13

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

E A

RE

A

12

STREET SCENE SERVICES

FAV/(ADV)

£NOTES

GROUNDS MAINTENANCE

70,000

CONTRACT –PROCUREMENT EFFICIENCY SAVINGS

PARKING INCOME

66,280

ESTIMATED INCREASE BASED ON CURRENT TRENDS

RECYCLING INCOME

(39,600)

REDUCTION KERBSIDE COLLECTION INCOME

EMPLOYEE EXPENSES

24,270

SAVINGS PRIMARILY DUE TO DEPOT STAFFING RESTRUCTURE

TRANSPORT RELATED -FLEET

(24,030)

FUEL AND CONTRACT MAINTENANCE

INCREASED INSURANCE COSTS

(12,190)

EMPLOYEE , VEHICLE & PREMISES

PREMISES RELATED

6,850

NNDR REVALUATIONS

OTHER MINOR ADJUSTMENTS

2,430

TOTAL

94,010

14

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

E A

RE

A

13

ENGINEERING SERVICES

FAV/(ADV)

£NOTES

MARKET INCOME

2,230

EST RPI INCREASE

EMPLOYEE EXPENSES

(33,770)

MANAGER’S SALARY CHARGE TO REVENUE PREVIOUSLY FUNDED

FROM DRAINAGE RESERVE

TOTAL

(31,540)

ASSET MANAGEMENT

FAV/(ADV)

£NOTES

GARAGES

25,000

INCREASED INCOME

CIVIC OFFICES

4,560

RPI ON RENTAL INCOME

CIVIC OFFICES

(4,060)

RUBBISH REMOVAL

RESIDUAL RESIDENTIAL PROPERTIES

12,480

INCREASED INCOME

COMMERCIAL PROPERTIES

56,340

INCREASED INCOME

SUNDRY LEASES

8,830

INCREASED INCOME

CRANBORNE IND EST

(7,500)

REDUCED INC BASED ON 2012/13

5% COMMISSION ON ASSET SALES

(15,000)

LESS DISPOSAL OF COUNCIL LAND AS

MORE PROPERTIES BEING DEVELOPED IN HOUSE

TOTAL

80,650

15

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

E A

RE

A

14

PARTNERSHIPS & COMMUNITY

ENGAGEMENT

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES

(2,270)

END OF ARSENAL S106 POST FUNDING

CORP COMMS RESERVE FUNDING

11,200

REDUCED BASED ON CURRENT SPEND

COVALENT

(470)

RPI INCREASE

CCTV

(1,010)

MAINTENANCE COSTS OFFSET BY CONTRACT SAVINGS

TOTAL

7,450

FINANCE & BUSINESS SERVICES

FAV/(ADV)

£NOTES

COUNCIL TAX

(30,000)

REDUCED COURT COSTS INCOME

NNDR RELIEFS

(11,000)

DISCRETIONARY RATE RELIEF

FINANCE & BUSINESS SERVICES

(5,290)

INFLATION INCREASE TO LICENCES

FINANCE & BUSINESS SERVICES

(6,710)

SALARY ADJUSTMENTS, NEW TERMS & CONDITIONS

BENEFIT ADMINISTRATION GRANT

(50,000)

REDUCED GRANT FROM GOVERNMENT

INFORMATION SERVICES

7,500

CIVIC OFICE TELEPHONE SAVINGS

TOTAL

(95,500)

16

20

13

-14

BU

DG

ET

ES

TIM

AT

E B

Y S

ER

VIC

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RE

A

15

LEGAL & DEMOCRATIC SERVICES

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES -LEGAL UNIT

36,170

RESTRUCTURE

LAND CHARGES INCOME

15,000

LAND CHARGES EMPLOYEE EXPENSES

(5,110)

REVISED SERVICE DELIVERY

MEMBERS ALLOWANCES

7,590

BUDGET REALIGNMENT

MINOR ADJUSTMENTS

110

TOTAL

53,760

HR & CUSTOMER SERVICES

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES -HR

(4,430)

CHANGE OF HOURS/REGRADINGS

HEALTH & SAFETY

3,750

RECHARGE TO ELSTREE FILM STUDIOS

EMPLOYEE EXPENSES -CUSTOMER

SERVICES

(3,840)

MID POINT INCREASES

TOTAL

(4,520)

17

20

13

-14

BU

DG

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ES

TIM

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ER

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RE

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16

EXECUTIVE DIRECTORS

FAV/(ADV)

£NOTES

EMPLOYEE EXPENSES

(10,360)

CONTRACTUAL INCREASES

MINOR ADJUSTMENTS

1,080

BUDGET REALIGNMENT

TOTAL

(9,280)

AUDIT & ASSURANCE

FAV/(ADV)

£NOTES

RISK MANAGEMENT

(10,000)

SHARED SERVICE

TOTAL

(10,000)

GENERAL EXPENSES

FAV/(ADV)

£NOTES

LICENCES

2,500

CORPORATE BOOKING SYSTEM

(2,500)

BANK CHARGES

(15,600)

REFLECTS CURRENT SPEND

EXTERNAL AUDIT FEES

15,000

REDUCED CHARGES FROM AUDITORS

MINOR ADJUSTMENTS

600

TOTAL

0

18

Inv

est

me

nt

Inco

me

Bu

dg

et

20

13

/14

17

££

Average investment £19M @ 0.66% interest

125,000

Tota

l125,0

00

Transfer: income earned on revenue generated assets portfolio

(69,000)

PR

OP

OS

ED

ALLO

CATIO

NS

:

Disabled Facilities Grant

140,000

(140,000)

BA

LA

NC

E:to be funded from prior year project allocations

84,0

00

written back and from the investment income equalisation

account

19

Ca

pit

al

Bu

dg

et

20

13

-14

Ov

erv

iew

18

• The proposed capital budget for 2013/14 is £280,000

• Projects approved by the Asset Management Panel (AMP) on 4 December 2012

• Capital projects is split into 3 key areas:

Revenue generating projects

£50k

Health & safety related expenditure £80k

Planned m

aintenance –

energy efficiency

£150k

• Feedback from AMP:

"All the proposed items are urgent and vital and highlight that the Council is

being careful on what it spends its money"

20

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pit

al

Bu

dg

et

20

13

-14

19

New Capital Projects for 2013/14:

Bid Title

£'000

Garage refurbishment

50

Shops -external staircases

80

Civic Offices windows

150

Total new bids

280

Funding

£'000

Usable capital receipts

280

Total funding

280

21

Ris

ks

& U

nce

rta

inti

es

•In

com

e b

udgets

are

subje

ct to e

xte

rnal fa

ctors

•Eco

nom

ic reco

very

fra

gile

:

–st

rain

on C

ouncil’s

reso

urc

es and a

bility

to g

enera

te fees and

charg

es

–poor perform

ance

of st

ock

mark

et: incr

ease

in p

ension fund d

eficit

•In

flationary

pre

ssure

s (c

ontract

ual) R

PI Dec

2012 3

.1%

•Fin

ancial se

ctor st

ill fra

gile

: risk

on invest

ment and retu

rn

•Tim

e d

elay in im

plem

enting initiatives

and realis

ing b

enefits

•Loca

l Govern

ment ch

anges:

Rete

ntion o

f Business

Rate

s & L

oca

lisin

g

Support for Council Tax, Loca

lism

Act

•Perform

ance

of partners

hip

s and subsidiaries

•Hom

eless

ness

dem

and

20

22

Any Q

uest

ions?

21

23

24

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25

26

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