Agenda item

The Committee considered a report in respect of the Worcestershire Regulatory Services (WRS) Future Financial Planning Assumptions.  These assumptions had been made in order to assist with the development of the 3 year financial plan.  These needed to be agreed in order for a consistent approach to be taken across all partners.  The Head of WRS detailed the assumptions to be used for future discussions:

a)    The cost of licensing was excluded from any calculations towards savings because it was full cost recovery only (as previously agreed by Joint Committee Members).

b)    Other functions which were full cost recovery only also be excluded, other than for the purposes of efficiency saving (e.g. IPPC).

c)    All fees/charges must be on a full economic cost recovery basis as a minimum, to generate maximum legitimate surpluses (unless otherwise stated and where there was good reason for this).

d)    Any income from new sources to be used for the benefit of all partners and any surpluses apportioned in accordance with the prevailing cost sharing arrangement to incentivise income generation across the partnership.

e)    Any required savings requested following the adoption of the risk matrix and the new financial allocations model should be provided by partners on a year by year basis and citing cash amounts per annum NOT percentages.

f)     The model for financial allocations will be reviewed every two years, with a fresh demand assessment being undertaken to establish the veracity of the model going forward.

g)    Where growth in demand/activity appears to be a financial threat to the service, it should be raised with the Management Board so partners can assess the impact and work with WRS Managers to address the situation.

h)   Where costs are fixed by virtue of contract or similar reason, these will only be included in the savings process at a point in time where they can reasonably be realised.

i)     All potential service reductions are risk assessed on an individual basis.

j)     Where a proposed level of service provision is considered ‘such a high risk that it is unsafe’ in the professional opinion of senior managers, the Head of WRS will be obliged to write to the relevant Management Board representative and the Chair of the Joint Committee to inform them of this.

k)    It must be accepted that there is likely to be a need for up-front investment to realise savings and the lead-in time for the realisation of cost recovery will increase.

The following points were clarified:

·         It was confirmed that in respect of (e) and (f) as detailed above cash was to be used as this was more easily calculated.

·         In respect of (d) this referred to any income generated in respect of such things as food hygiene training courses which were provided by WRS.

·         Severance costs may be included within (k) in order to make savings in the future.

·         Financial models considered by the Management Team in order to ensure a reference point was reached for partners to receive different levels of service if required.

·         The changes which have taken place since the inception of the service and the differing financial demands on each authority and the service level provided.

The Head of WRS confirmed that it continued to look at every opportunity to reduce fixed costs, but an assumption could not be made that this would happen as in some cases, for example, the contract with the office building had some considerable time to run before it expired.

RESOLVED that the Worcestershire Regulatory Services Financial Planning Assumptions be adopted as a key supporting mechanism for the development of future financial plans.