Agenda and minutes

To approve the Minutes of the Meeting held on 20 January 2020.

The Minutes of the Meeting held on 20^th January 2020 were confirmed as a correct record.

To receive apologies for absence and note any substitutions.

Members who are unable to attend this meeting must submit apologies by the end of Monday 6^th July 2020 to enable a substitute to be arranged, if applicable.

The Chairman advised that Cllr George Hesse had resigned from the committee but that at this stage a replacement had not been allocated and no substitute was available to attend.

To receive Members’ declarations of interests in relation to any items included on the agenda for this meeting, in accordance with Waverley’s Code of Local Government Conduct.

There were no declarations of interests in connection with items on the agenda.

The Chairman to respond to any written questions received from members of the public in accordance with Procedure Rule 10.

Questions should be sent to committees@waverley.gov.uk by 5pm Monday 6^th July 2020.

There were none.

The Chairman to respond to any questions received from Members in accordance with Procedure Rule 11.

Questions should be sent to committees@waverley.gov.uk by 5pm Monday 6^th July 2020.

Cllr Stephen Mulliner had submitted questions regarding the revised Budget.  These had been responded to by Peter Vickers, Head of Finance and Property and both the Questions and answers were circulated to members of the committee prior to the meeting.

The Chairman suggested that as these questions related to the next item that they be discussed as part of that item.

The COVID-19 emergency continues.  This report outlines the latest projections of income and expenditure against budget in 2020/21 and highlights the significant projected net adverse variances from budget which arise as a result of the known impacts of the COVID-19 pandemic on the Council’s services and finances. The extent of any further funding from government is currently unknown and therefore this report presents contingency proposals to address the latest projected budget shortfall on an emergency basis. These proposals have been prepared jointly by officers and the Executive and are presented to the Value For Money Overview and Scrutiny Committee for pre-decision scrutiny ahead of the Executive meeting in July and the special Council meeting in early August.

This report contains the following Annexes:

Annexe 1 – Schedule of projected variations from general fund budget in 2020/21

Annexe 2 -  Budget summary and proposed mitigation measures to address budget shortfall

Annexe 3 – Options and alternative mitigation 

Annexe 4 – Schedule of projected reserves and balances

Annexe 5 (Exempt) – Leisure Centre operator impact and proposal

Recommendation

It is recommended that the Value for Money Overview & Scrutiny Committee considers the financial position presented in this report, scrutinises the mitigation proposals set out, and passes comments and observations to the Executive to consider prior to seeking Council approval to the revised budget for 2020/21.

Prior to discussing this item the Chairman highlighted that Annexe 5 – Leisure Centre operator impact and proposals, would need to be discussed in an closed session at the end of the meeting due to the confidential nature of the content relating to the financial position of Waverley and Places Leisure.

Graeme Clarke introduced the report which outlined the latest projections of income and expenditure against budget in 2020/21 and highlighted the significant projected net adverse variances from budget which had arisen as a result of the known impacts of the COVID-19 pandemic on the Council’s services and finances. He advised that the Council was still awaiting confirmation of further funding from the Government.

Cllr Mark Merryweather, Portfolio Holder for Finance, Assets and Commercial Services then gave a presentation highlighting issues the council faces. This presentation had been given to all Members earlier in the week at an All Member Briefing.

Cllr Stephen Mulliner had submitted a number of questions in advance of the meeting, which had been circulated to Committee Members along with officers’ responses. Questions related to the impact of the actual 2020/21 deficit on General Fund reserves, the timeframe for rebuilding reserves, the timetable for the 2021/22 budget, and the impact on headcount and Transformation team costs.

The Committee had some concerns about reducing the levels of discretionary reserves, and would like a better understanding of the risk assessment of these reserves when the MTFP is reviewed in the autumn. The Committee agreed that the Government should be lobbied to get as much funding as possible to cover Covid expenses and loss of income, and that the first call on any additional funding received should be to reinstate reserves that had been drawn upon to mitigate the impact of Covid.

The Committee was disappointed that there were not more options outlined in Annexe 3 but discussed the pro’s and con’s of the options outlined. Officers advised that the extent of the shortfall meant that urgent action was needed to mitigate the impact, but some of the options required more time to establish whether they could be realised, and it would be premature to ‘bank’ the savings at this point.  

The Committee observed that out of the alternative options presented the most serious and worth consideration were widening the definition of the Council’s criteria for Better Care Fund, raising the cost of a green waste subscription for a year by £5 and cutting grass verges to the standard allowed by the funding from SCC as opposed to topping up the funding with funding from Waverley. The Committee also recommended reconsideration of the SANG reserve in order to contribute to meeting the short term financial shortfall.

The Committee noted that the cost savings of £699k included in the base budget for 2020/21 had largely been secured, and suggested that this could be made clearer in the report, to provide reassurance that the revenue cost savings proposed as mitigation were not double-counting.

The Committee agreed to forward the comments above  ...  view the full minutes text for item 6.

This Programme seeks to understand the impact of the COVID-19 pandemic on Waverley Borough Council, to acknowledge the change that has been required to respond and to identify the immediate needs of the organisation and community as they move from emergency operations to recovery and planning for the future. The recovery programme involves two main strands of activity, the organisation’s recovery and the community and economic recovery of the Waverley area.

The Emergency Budget deals with the immediate impact upon the organisation from Covid-19 and the subsequent 2020/21 budget impact from dealing with the emergency and the consequences of government legislation upon the Council’s services; and Phase 2 the RCT Programme, the medium to longer term impacts upon the organisation from Covid-19 some of which will define new working practices going forward to solidify the organisations role within its community.

Recommendation

It is recommended that the Executive approves the Recovery, Change and Transformation Programme and the medium and longer term Project Objectives of the 10 projects that form the RCT Programme.

Kelvin Mills, Head of Commercial Services, presented the report and outlined the structure and purpose of the Recovery, Change and Transformation Programme.

There were ten separate projects within the Programme, and the Overview & Scrutiny Co-ordinating Board would be looking at which of the projects each of the four O&S Committees would be responsible for scrutinising. 

The Committee appreciated that the programme was in its infancy, but was disappointed at lack of detail on the projects and identified the need for a clearer statement of the goals, deliverables and timetable for each project, along with SMART targets, in order for the Programme to inform the Medium Term Financial Plan. They looked forward to seeing the next iteration of the projects at Overview & Scrutiny when there would be more detail to scrutinise.

The Committee noted the Recovery, Change and Transformation Programme and the medium and longer term Project Objectives of the 10 projects that form the RCT Programme and recommended the Executive note the comments made.

The Corporate Performance Report provides an analysis of the Council’s performance for the fourth quarter of 2019-20 and reflection of the Council’s performance throughout the year. The report, set out at Annexe 1, is being presented to each of the Overview and Scrutiny Committees for comment and any recommendations they may wish to make to senior management or the Executive.

Recommendation

It is recommended that the Overview & Scrutiny Committee considers the performance of the service areas under its remit as set out in Annexe 1 to this report and makes any recommendations to senior management or the Executive as appropriate.

The Committee noted the Corporate Performance Report for Q4 (2019-2020) but felt that as it was now six months out of date that any comments were redundant.

To consider the following recommendation on the motion of the Chairman, if necessary:

Recommendation

That pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local government Act 1972, the press and public be excluded from the meeting during consideration of the following items on the grounds that it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during the items, there would be disclosure to them of exempt information (as defined by Section 100I of the Act) of the description specified in the appropriate paragraph(s) of the revised Part 1 of Schedule 12A to the Act (to be specified at the meeting).

On the recommendation of the Chairman, the Committee RESOLVED that pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during consideration of the following item on the grounds that it was likely, in view of the nature of the matters to be discussed that if members of the public were present during the items, there would be disclosure to them of exempt information (as defined by Section 100I of the Act) of the description specified in Paragraph 3 of Part I of Schedule 12A to the Local Government Act 1972, namely:

Information relating to the financial or business affairs of any particular person (including the authority holding that information)

The live streaming was then switched off for the Committee to go into Exempt session.

To consider any matters relating to aspects of any reports on this agenda which, it is felt, may need to be considered in exempt session.

Annexe 5 of Item 57 - Leisure Centre operator impact and proposals.

Graeme Clark advised that the details set out in the Exempt Annexe were confidential due to financial and contractual issues relating to Waverley and Places Leisure, the council’s leisure centre operator.

All leisure centres had had to close with effect from 23 March 2020 under emergency Covid regulations. The change in the law meant that the leisure centre operator had been unable to meet the expectations of the contract. Normally Waverley would receive a positive management fee in the region of £400k pa.  In addition to this Places Leisure had submitted a claim for loss of income for the first quarter. Negotiations were ongoing to reach agreement on this cost claim.

It was announced by the Government last week that leisure centres could look to open from 25 July 2020 but the legally imposed restrictions imposed would still have an impact on income generation for them and the council at least until the end of the financial year. 

The Committees noted the local competition for some leisure centres from private sector providers, and the community need for leisure centres, accepting the Council’s legal position and the costs involved, the Committee was keen to see the leisure centres open up as soon as possible but with the least exposure possible to risk for the Council.