Agenda and minutes

To receive apologies for absence and note any substitutions.

Members who are unable to attend this meeting must submit apologies by the end of Tuesday 9 Janaury 2024 to enable a substitute to be arranged, if applicable.

None were received.

To confirm the Minutes of the Meeting held on 14 November 2023 and published on the Council’s website as a correct record.

The minutes of the previous meeting of 14 November 2023 as published on the website were agreed as a correct record.

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 received.

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

The deadline for receipt of written questions is 5pm on Monday 8 January 2024.

None were received.

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

The deadline for receipt of written questions is 5pm on Monday 8 January 2024.

None were received.

(Report and Annexes to follow)

This report sets out the draft General Fund Budget for 2024/25 and Medium-Term Financial Plan (MTFP) ending 2027/28. The MTFP sets out the key work streams for the Council to focus on over this period which, collectively, aim to address the significant shortfall in annual budget projected.

The Overview & Scrutiny Committee - Resources is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

66.1     The Financial Services Manager highlighted the following details from the report:

·        The proposed 2.99% Council Tax increase; and

·        A Fees and Charges Review that has resulted in a proposed general inflationary increase of an average of roughly 4.5% (excepting the ‘break-even areas’ of licensing, land charges and building control). Car parking will also see an inflationary increase.

66.2     The Chair noted an error in the figure for the proposed car parking charges increase, which is 18%, not the stated 15%. The Financial Services Manager clarified that Annexe 1 contains the correct figure and this would be rectified.

Cllr Nicholson noted a reduction in the Baseline Net Service Cost compared to 2022-23, the saving from reducing the number of Waverley councillors, and stated that he felt car parking costs changes were proportionate.

66.3     Cllr Weldon queried whether the proposed 2.99% council tax increase could be insufficient and asked if undertaking a referendum to facilitate a larger increase was considered. The Chair queried the use of the 4.5% inflation assumption for 2024/25 given that inflation currently sits below 2%.  Officers clarified that they would reexamine the latest CPI figure, though this was unavailable at the time the report was written.

66.4     The Chair asked how the MTFP assumption that government funding would decrease through to 2028/29 could be made given that the bar chart at paragraph 10.5 seems to show an increase in government funding from 2021/22. The Financial Services Manager clarified that future estimates are necessarily projections and that the Fair Funding Guarantee means there can be no certainty as to future rates of funding. It was noted that the bar chart does not account for inflationary cost increases.

The Portfolio Holder for Finance, Assets and Property noted that the recent increases in direct Government funding were responses to significant macroeconomic conditions - specifically the pandemic and cost-of-living crisis - and that Finance officers model what is indicated by central government.

66.5     The Chair asked if the New Homes Bonus had been expected, how it was spent and what the consequences would have been had it not been allocated. The Financial Services Manager stated that the reserve top-ups made in additional revenue contributions to capital is likely drawn from these grants, and that these and additions to the Property Maintenance Fund would not have been achievable without them. It was stated that the 2024/25 Capital Programme would have undergone necessary review without the receipt of the grant, and clarified that using one-off grant monies to alleviate other increases in service costs would create an issue in the base for future years’ budgets.

66.6     Non-voting visiting member Cllr Austin stated that she felt the 4.5% CPI inflation rate is too high given the current rate, queried the graph at paragraph 10.5, and stated that she felt certain passages of the report are subjective or misleading.

66.7     Cllr Davidson stated that he felt MTFPs regularly only cover the following year with shortfall then forecast for subsequent years - he asked what plans  ...  view the full minutes text for item 66.

(Report and Annexes to follow)

This report sets out the proposed Housing Revenue Account (HRA) Business Plan, Revenue Budget, and Capital Programme for 2024/25.

The Overview & Scrutiny - Resources Committee is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

67.1     The Senior Accountant introduced the report, highlighting the additional costs in Annexe 3, showing growth items amounting to £2 million. It was also noted that the borrowing requirement for 2024/25-2029/30 of £23 million to meet the Decent Homes Standard was another key driving factor for the proposed 7.7% increase.

The increase in service charges to the Senior Living Scheme facilities was also discussed, acknowledging that costs are higher than monies recovered. An error was noted at the table in paragraph 10.1 that displays under/over recovery of costs, though the figure of £388,000 found in the commentary is correct.

67.2     It was clarified that 4.6% is the assumed inflation rate for rent increases as with the General Fund, but acknowledged the need to revisit this figure given the latest CPI figure due to be released on 17 January. The Senior Accountant confirmed that the 30% of HRA tenants that are in receipt of full or partial Universal Credit and that potential tenant hardship due to the 53-week rent year is concerning. She confirmed that the Housing Support team are working toward publicising the discretionary housing payments, Household Support Fund and HRA Hardship Fund to tenants.

The Committee noted the increase of the Hardship Fund from £30k to £200k in 2024/25, intended to help support tenants in receipt of Universal Credit and mitigate the impact of the 53-week rent year. It was agreed that the Hardship Fund should be closely monitored.

67.3     The Senior Accountant confirmed that Waverley Borough Council conducts buy-backs on properties purchased by private owners under the Right-to-Buy scheme and that the council has first refusal here. She also confirmed that some open market purchases are currently underway to help provide housing for the homeless and refugees. These use the Local Authority Housing Fund, with central government providing 40% of the necessary funding.

67.4     Several members queried the rationale behind the rent increase rising from a capped 4% in 2023/24 to a proposed 7.7% for 2024/25, as well as the £2.1m in growth bids. It was noted that the decision to increase rent was influenced by this year’s growth bids and the need to balance financial demands caused by the debt profile and additional borrowing, while last year’s decision to cap the increase at 4% was primarily influenced by the cost-of-living crisis.

67.5     The Committee sought more clarity around the £2.1m in growth bids, particularly the proposal for 15 new positions under the HRA, asked how many staff presently work on the HRA and where the target collaboration savings are in this area. It was confirmed that there are around 100 staff members working on HRA and that some of the resources would be for longer-term projects. It was noted that the two Service Improvement Officers and one Complaints Officer posts were intended to address shortfalls in service delivery as evidenced in some of the key performance indicators that have come before this committee.

67.6     It was clarified that a higher spend around compliance is intended to secure  ...  view the full minutes text for item 67.

(Report and annexes to follow)

The Overview & Scrutiny - Resources Committee is asked to consider the report and agree any comments or recommendations to be passed to the Executive on the proposed recommendations to Executive and Council as set out in the report.

68.1     The Senior Account addressed the Committee and introduced the Capital Strategy, Treasury Management Strategy, Asset Investment Strategy, and an infographic on the Capital Strategy. Notable changes to the strategies included:

·        A section about interest t be charged on internal borrowing incorporated into the Treasury Management Strategy 2024-25 due to increased internal borrowing as a result of mixed use schemes and housing development schemes, and;

·        The introduction of a new annexe to the Asset Investment Strategy 2024-29 outlining principles of appraisals and viability assessments.

68.2     Cllr Davidson noted an error in the ‘Prioritisation of capital projects’ table on page 5 of the Capital Strategy 2024-29, suggesting a reversal of the risk scoring such that a risk of greater than a £500,000 negative impact is displayed as score 1. Officers acknowledged this and confirmed that the correction would be made.

68.3     Cllr Atkins asked if standing asset investment appraisals will be revisited for current investments given the changes made to referred to in the principles of financial appraisals and viability assessments in annexe 2. The Senior Accountant clarified that this report does not propose reducing these period: maximum 50-year assessments are used for the General Fund and determined by the Minimum Reserve Provision (MRP) policy, while 60 year assessment periods have only been employed under the Housing Revenue Account as it is governed by different regulations.

68.4     The Chair asked if it were possible to achieve greater returns from investments over shorter payback periods, voiced concern over value for money and asked if the costs of pursuing non-monetary investment approaches could be more clearly communicated. The Senior Accountant clarified the differences between assessment periods and pay back periods, and ensured that full Value for Money reports, written by external consultants and which provide the costs of alternative options, will be provided to members in future. Officers agreed to return to members with a response regarding monetary and non-monetary options analyses at a future meeting.

68.5     Non-voting visiting member Cllr Austin noted information regarding the cost of alternative options was provided for the Cranleigh Leisure Centre, though only upon request. She also stated that she would like to see these provided as a matter of course in future.

68.6     Cllr Atkins raised a question regarding the use of asset register land values in land transfers between the HRA and General Fund. The Senior Accountant clarified that there is no planned change to including existing use value for HRA land within the viability assessment – this has been the procedure for some time. A ‘Do nothing’ option will be included in future reports to identify the existing value and revenue.

68.7     Cllr Atkins also queried the valuation methodology and the Council’s adherence to Royal Institute for Chartered Surveyors (RICS) standards and practices. The Portfolio Holder for Finance, Assets & Property clarified that RICS best practices and chartered surveyors are used in valuations, however the Council primarily uses the funding analyses and other comparables more suited to the strategic priorities of Local Authorities.

68.8     The  ...  view the full minutes text for item 68.

The Committee is referred to the report published on the agenda for the Executive meeting on 9 January 2024 for comment and to make any recommendations to the Executive.

69.1     The Housing Delivery Manager introduced the report, noting that planning approval for four sustainable, affordable homes was obtained in September 2021. The report seeks approval for the demolition of the existing building, a former community centre that also included some staff accommodation, to keep the consent in force before submitting a full business case. Additionally, approval was sought for a £120k budget allocation to commission consultants and a demolition contractor for conditions discharge.

69.2     The Housing Delivery Manager noted that the demolition would remove current council tax, business rates, and utility liabilities for the vacant building, and clarified that that long-term plans involve combining the Parkers Fields site with the neighbouring Crossway Close site to provide greater value for money given the larger scale of delivering two developments together. This is subject to approval of business cases for both sites.

69.3     Members inquired about the scheme's implementation and whether the density had been considered. It was clarified that planning officers had been clear on the density and massing of the site during the consent process, and noted that the local ward member supported the scheme during the Executive presentation.

The Committee RESOLVED to support the recommendations set out in the report.

Executive Head of Organisational Development to provide an update on the Transformation and Collaboration Programme with Guildford Borough Council.

Overview and Scrutiny Committee – Resources to receive and note the Transformation and Collaboration Programme report (and appendices) which was approved by the Executive on 28 November 2023.

70.1     The  Business Transformation Manager presented the report alongside the Joint Strategic Director for Transformation and Governance and gave the attached presentation.

70.2     Members queried the potential complexities and costs around integrating IT systems and altering staff terms and conditions. There were further queries about the integration of services and the knock-on impact on service areas in both Councils. The Joint Strategic Director for Transformation and Governance informed members that the business cases would provide further clarity but there were no figures regarding IT integration and staff terms and conditions are available at present, though agreed that financial prudence is paramount.

70.3     Cllr Davidson questioned if the greatest savings would be made through staff reductions, urged significant staff involvement from the outset, and raised concerns about staff morale. The Committee also asked if there is a projection on potential loss of staff as a direct impact of the Programme. The Joint Strategic Director for Transformation and Governance noted the recent staff engagement at staff briefings he delivered at both Guildford and Waverley Borough Councils.

70.4     Cllr Wicks queried whether there would be any compulsory or voluntary staff redundancies due to the Transformation & Collaboration Programme, specifically amongst long serving staff and whether there is provision in the budget for the associated payments. Joint Strategic Director for Transformation and Governance stated that he could not answer any questions about staffing at this stage, though options are being considered and the discussion will be sensitively handled.

70.4     Cllr MacLeod noted that Guildford and Waverley are collaborating and not merging, and so some usage of different systems may be desirable. Joint Strategic Director for Transformation and Governance felt that there may be some such cases, in his view.

70.5     Non-voting visiting member Cllr Austin emphasized the importance of a detailed financial justification and suggested that a breakdown of direct and indirect costs and benefits be submitted to the Committee, including loss of staff listed as an indirect cost. She also stated that she felt it should not be a priority of Waverley to help Guildford Borough Council out of financial distress.

70.6     Cllr Davidson reiterated that the collaboration was at a project initiation stage at present, and so it is reasonable that these numbers have not been finalised.

70.7     The Chair also requested greater clarity on historical and projected financial numbers, requesting that the Committee is supplied with a full breakdown of costs and savings, both net and gross over the elapsed 2 years of the programme to present. He commented on the charges mentioned in Appendix 4 to the report and requested a breakdown of all projected costs, charges and savings associated with the Transformation & Collaboration Programme that details how the costs will be shared between the two authorities and the period over which the payments will be made.

The Joint Strategic Director for Transformation and Governance noted that savings already realised will be analysed to help understand their source, as well as the source of further costs.

The Committee RESOLVED to broadly  ...  view the full minutes text for item 70.

The Resources Overview & Scrutiny Committee is responsible for managing its work programme.

A Scrutiny Tracker has been produced to assist the Committee in monitoring the recommendations that have been agreed at its meetings. The Tracker details the latest position on the implementation of these recommendations and is attached as Part 1 of the work programme.

The Executive Forward Plan is attached at item 2 for the Committee’s reference.

70.1     The Committee noted the Work Programme. Cllr Weldon stated that he was glad to see the Fairground Development Project included on the work programme, and noted that it may require substantial discussion.

To consider the following recommendation of the motion of the Chairman:

Recommendation

That, pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the Committee agrees:

(1)  that the public be excluded from the meeting during consideration of the following matter 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 item, 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 the revised Part 1 of Schedule 12A to the Local Government Act 1972; and

(2)  that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The Committee RESOLVED to approve the following recommendation of the motion of the Chairman:

That, pursuant to Procedure Rule 20 and in accordance with Section 100A(4) of the Local Government Act 1972, the Committee agrees:

(1)  that the public be excluded from the meeting during consideration of the following matter 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 item, 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 the revised Part 1 of Schedule 12A to the Local Government Act 1972; and

(2)  that the public interest in maintaining the exemption outweighs the public interest in disclosing the information

The Committee voted unanimously in favour.

Overview and Scrutiny – Resources Committee to scrutinise the performance of the Council’s property portfolio and make any observations or recommendations to the Portfolio Holder and/or Executive as appropriate..