Agenda item

The Committee considered a report on the Review of Apportionment of Costs.

The Executive Director, Finance and Resources reminded the Committee that officers had been working on a revised cost allocation methodology for the past 12 months which had included the consideration of a number of different approaches.  The aim of the review was to reallocate the costs associated with the delivery of regulatory services functions using a demand led rationale of resources deployed to each partner.  The legal agreement as approved by all participating Councils stated the requirement for this revised approach to be in place for April 2013.  At the Joint Committee meeting in June 2013, officers had requested a delay in the final presentation of the review to ensure that an appropriate method of allocation was identified. 

The budget would be more “activity based” and per capita per establishment using the matrix and in conjunction with the acknowledgement that significant savings needed to be made.  To ensure that no authority had an increase in contribution due to the revised resource allocation an adjustment had been made across all Districts to offset any additional cost allocation, which was shown as “dampening costs”.   Members discussed the following areas is more detail:

·         The methodology used, including the “dampening costs” and any future savings (including a per capita approach).

·         The percentage of savings made and the need to reach a fair and equitable solution for all 7 authorities.

·         The need by each authority to make savings and the acceptance that it was not possible to have a service where “one size” fitted the needs of all partners.

The Executive Director, Finance and Resources provided detailed information in respect of the £157,000 identified as “Health and Well Being”.  Officers had discussed this at Management Board and it had been evident that much of the work undertaken was already covered across the County by both District and County funded officers.  It had therefore been proposed that this service was no longer provided by Worcestershire Regulatory Services and that each partner should receive an equal share of the saving this produced.  The Committee discussed in detail the work that was covered by Health and Well Being in order to ensure that it was satisfied that the work would continue to be covered by each partner.  The Head of WRS confirmed that where separate funding was provided, WRS would continue to support specific projects.

RESOLVED:

a)    that  the new basis of cost allocation as presented in Appendix 1 & 2 to the report be approved;

b)    that within the Statement of Partner Requirements the functional activity of “Health and Well Being” no longer be provided by Worcestershire Regulatory Services with effect from 1st April 2014 be approved. This will mean that the functions, as detailed in Appendix 3 to the report, will no longer be undertaken by Worcestershire Regulatory Services. These will have to be presented to the participating partners;

c)    that the net savings of £157, 000 made from the removal of the above activity be refunded back equally to the 7 partner Councils (£22,000 per Council) with effect from 1st April 2014 be approved;

d)    that the base level of 2014/2015 budget, as detailed in Appendix 1 to the report, of £4,979,689 to include the reduction in budget of £646,000 in order for partner Councils to identify any additional savings that are required over the period 2014/2015 – 2016/2017 be approved;

e)    that the outcome of the cost allocation and the revised cash allocation for  2014/2015 to the partner authorities as detailed below, be approved:

f)     that the revised basis of allocation be effective from 1st April 2014;

g)    that the percentage share to be used for allocation of savings, severance, transformation and any other ad hoc costs to be shared on the following percentage basis be approved and be effective from 1st April 2014. This reflects the demand and data allocation:

h)   that Bromsgrove District Council legal department, as host, make the relevant amendments to the legal agreement on behalf on the participating partners.