Agenda item - Worcestershire Regulatory Services Business Plan 2018/2021

Agenda item

Worcestershire Regulatory Services Business Plan 2018/2021

Minutes:

(It was noted that the Worcestershire Regulatory Services (WRS) Business Plan was for 2018/2020 and not 2017/2020 as shown on page 13 of the main agenda pack).

 

The Board was asked to consider and approve the updated approach outlined in the Worcestershire Regulatory Services (WRS) Business Plan 2018/2020.

 

The Head of Regulatory Services, WRS, introduced the report and in doing so informed Members that the Business Plan was initially developed in 2015 following on from the strategic procurement exercise.  During the leadership training undertaken by the management team, it was determined that WRS required a plan to ensure both the viability of the service and its ability to operate within the budgets available from its partner authorities.

 

The plan, as attached, had become the high level document that would inform the development of the service for the foreseeable future. 

 

The Business Plan was updated in 2017 following on from the changes made to the partnership arrangement and, given the development and experiences during the last year, it had been updated again with the new timescale taking the service through to just beyond the next general election.

 

The Business Plan showed how WRS would:

 

·         Seek to provide a viable service within the projected partner budget allocations.

·         Understand what a base level of service would look like for partners.

·         Support other partners to maintain service levels above this, where this was desired.

·         Provide details of plans to “Grow the Business” and increase income to maintain resilience in the face of continued austerity.

·         Identify the risks and potential costs if the income generation strategy at the core of the plan began to fail to deliver the requisite levels of income in order to maintain the service.

 

Local government finance remained difficult.  There was an on-going lack of certainty about what the business rates retention, seen by local government as the key source of local government income going forward, would deliver for the partners in Worcestershire.

 

The Municipal Journal headline of 12th January 2017, had read “Breaking Point”, which highlighted the difficulties faced by the sector and little if anything had changed during the following year to give comfort to local authorities.

 

Currently partners were not looking for further savings from WRS and the service was clear that significant efficiencies had been delivered.

 

Income generation would remain the key factor in the service’s business strategy.  It was possible that authorities might be encouraged to engage more with WRS and look more widely at contracting services to those who could offer expertise and resilience in service delivery.  This would make the plan’s challenging income targets more deliverable.

 

However, there was growing evidence that our current clients might be unwilling to engage with the service beyond their current commitments and some authorities were now focusing on the kind of income generation activities that WRS had chosen to follow some years’ previously. 

 

As we see more authorities adopting this strategy, we could see others entering into the market that WRS currently occupied, albeit they would be unlikely to be able to match WRS’s scale individually.  Support from partners at all levels, but particularly Director, Chief Executive and Leader level would be necessary in selling WRS in what remained a significantly more competitive environment.

 

The Head of Regulatory Services, WRS, continued and further informed the Board that the demise of Shropshire’s outsourced regulatory team had meant that there were fewer serious competitors for WRS’s services.  However, the creation of Publica, a similar TECKEL company, seemed likely to emerge in the future as a serious potential key competitor.

 

By understanding WRS costs and with good support from the Host’s (Bromsgrove District Council) Finance Team, it had enabled the service to forecast income needs going forward, even beyond this period of the plan; taking us up to the next general election.

 

On the assumption of cash standstill from partner authorities, the service would need to generate the best part of £500,000 in income by 2021, to continue to be able to offer the current service levels to partner authorities and clients.  This would be challenging and there were growing concerns that going beyond the current levels of £300,000 to £350,000 per annum might be difficult.

 

If this was to be achieved, WRS would need to continue to build on income streams such as Primary Authority and work for other local authorities.  WRS would need to maintain the levels of grant income currently achieved and would need to tap into new income streams such as pre-application advice, if the forecast income requirements were to be anywhere near achieved.

 

This could only be achieved if the service retained its current flexibility to re-invest income in resources where necessary.  The service would need to retain the current flexible and well qualified staff cohort and build on it where possible.

 

The Head of Regulatory Services, WRS, highlighted that adding functions to the WRS structure could provide one way of offering savings in overall cost by rationalising the management and delivery of these activities.

 

The revised Business Plan identified a number of areas where partner authorities currently had in-house or slightly different shared arrangements where there could be some benefit in considering adding these to the WRS platform.  This was something that WRS Managers would need to discuss with officer members of the Board in the coming months as it was likely that business cases would have to be produced to demonstrate the potential benefits before partner authorities could make such decisions

 

Tables in the Business Plan outlined the levels of income required to achieve the budget allocated by partner authorities and also outlined the potential liabilities for partner authorities should it not be possible to achieve the required levels of income during the next three years.  Calculations were based on the current contribution rates for each partner authority.

 

In February 2017, partner authorities agreed to cover initial shortfalls in income should they occur and, beyond this, there was a reserve of £173,000 maintained from the exit of Worcestershire County Council from the partnership; that Members could authorise to be used to cover overspends. 

 

This should give Members confidence that monies were available to protect partner authorities from the need to cover large overspends in the near future should they arise and, if the income generation model was unable to continue too fully cover costs.  It would allow time for the WRS Management Team and the officer members of the Board to identify potential alternatives for each partner authority to consider going forward.

 

The Head of Regulatory Services, WRS responded to questions from Members and agreed with the positive comments made, that WRS was a leader and therefore needed to stay in front of any potential competitors. 

 

The Head of Regulatory Services, WRS explained that, in relation to some of the services that could be considered for addition to WRS, the approach that would be considered would be to look at the potential impact of pooling together the existing partner workforce in the same way as had been done for Environmental Health and Licensing functions; to create economies of scale that may offer greater efficiencies.  He added that whilst this may not be something that the partners may wish to explore in depth, in the current financial circumstances it was worth at least some initial consideration.

 

The Head of Regulatory Services, WRS, took Members comments on board with regard to the ‘Savings’ information, as detailed on page 37 in the report, and agreed to take the comments back to the Host Authority’s Finance Team for future reports.

 

The Chairman took the opportunity to thank officers for a comprehensive and informative Business Plan.

 

RESOLVED that the updated approach outlined in the Worcestershire Regulatory Services Business Plan 2018/2020, be approved.

Supporting documents: