Agenda item

Recommendations from the Cabinet

To consider the recommendations from the meeting(s) of the Cabinet held on 7^th March, 30^th May and 27^th June 2018.

Minutes:

Air Quality Management Area – Kidderminster Road, Hagley

The recommendation from Cabinet in respect of the Air Quality Management Area (AQMA) in Hagley was proposed by Councillor P. Whittaker and seconded by Councillor G. Denaro.

In proposing the recommendation Councillor Whittaker noted that the item had been considered by Council on a number of occasions. The AQMA on Kidderminster Road in Hagley had been declared in February 2010. Since then the Nitrogen Dioxide (NO₂) levels had been monitored and Worcestershire Regulatory Services (WRS) had observed that average levels of NO₂ had fallen below the national objectives that required the adoption of an AQMA. Members were advised that WRS would continue to monitor air pollution in the location, should the AQMA be revoked, and this would focus on a number of areas that had been highlighted by Councillor S. Colella. Council had previously agreed to postpone making a decision on this subject to provide time for the Overview and Scrutiny Board to consider figures arising from the monitoring process in 2017. The Board had considered this information at a recent meeting and therefore it was suggested that a decision could now be taken.

Whilst discussing this item Members debated a number of areas in more detail:

· The work of the Overview and Scrutiny Board to review this matter. Councillor Colella raised concerns that limited information about meaningful cost options or about the potential to use mobile NO₂ monitoring equipment had been provided for the consideration of the Board.

· The impact that the recent period of sustained hot weather might have on air quality in Hagley.

· The potential for WRS to undertake a detailed survey of air quality using mobile monitoring equipment.

· The need for WRS to engage constructively with Worcestershire Highways Department in relation to air pollution.

· The congestion on the main roads in Hagley and the impact that this had on air pollution.

· The extent to which the figures that had been provided during monitoring of the air quality by WRS could be considered to have scientifically proved there was a trend towards an improvement in air quality in the area.

· The impact that poor air quality could have on the health and wellbeing of residents living in Hagley and the responsibility of the Council in relation to public health.

· The recent announcement by the Government of a new Clear Energy Strategy which would require local authorities to make numerous changes, and the investment to address this that might be available for AQMAs.

During consideration of this item Councillor S. Colella proposed an amendment to the recommendation. This proposal was seconded by Councillor K. Van Der Plank.

The amendment proposed the following:

Bromsgrove District Council should not revoke the Hagley AQMA but instead should do the following:

a) procure mobile NO₂ monitoring equipment to monitor air quality;

b) carry out regular surveys of air quality across the district; and

c) WRS should engage regularly with Worcestershire Highways Department.

Members discussed the proposed amendment in some detail and in so doing considered the following:

· The choice made by other Councils to invest in electric vehicles. A question was raised about when the Council would invest in such vehicles and Councillor Whittaker advised that a considered opinion would be provided in response to this question at a later date.

· The concerns amongst residents about the public health implications of poor air quality.

· The increase in traffic in recent years and the impact that this was having on air pollution levels.

· The extent to which high polluting vehicles and the causes of this had been highlighted by car manufacturers with consumers.

· The national standards set by the Department of Environment, Food and Rural Affairs (DEFRA) in respect of arrangements for monitoring air quality. Council was advised that the mobile NO₂ monitoring equipment did not meet those standards.

· The length of time that the DEFRA standards had been in place. Councillor Colella commented that these had been the national standards for 17 years.

· The times when air quality had been monitored in Hagley. Councillor Colella suggested that it was important for air quality to be monitored at peak times.

· The potential to utilise mobile NO₂ equipment throughout the district, not just in Hagley.

On being put to the vote the amendment was lost.

Following consideration of this amendment the recommendation was put to the vote.

RESOLVED that Kidderminster Road, Hagley AQMA be revoked.

Bromsgrove Sport and Leisure Centre – Sports Hall Appraisal

The recommendation from Cabinet in respect of the sports hall was proposed by Councillor B. Cooper and seconded by Councillor P. Whittaker.

In proposing the recommendation Councillor Cooper noted that the item had been debated at the meeting of Council in June but the matter was deferred because there was misleading information on the potential revenue from the new sports hall. Two paragraphs about the estimated income from and running costs of a new sports hall had been included in the report tabled for Members’ consideration. A new table had also been included to clarify that the maximum revenue projection figure was £70k per annum.

Councillor Cooper noted that at the previous Council meeting Councillor Whittaker had outlined the history of the sports hall project and how the Council arrived at the current position. As Finance Portfolio Holder Councillor Cooper had looked at the Sports Hall project from the point of view of whether it was in the interests of the Council Tax payers of Bromsgrove District to fund a sports hall. The maximum revenue projection from the sports hall of £70k per annum would allow borrowing of up to £1.9 million from the Public Works Loans Board (PWLB) towards the Sports Hall project at a favourable rate of interest. This would leave a funding shortfall of £1.95 to £2.835m depending on the type of building selected.

Members were asked to note that up to £1.8m might be realised from the sale of land on School Drive. This sale was included in the business case for the new Leisure Centre and when the money was received, would go towards paying off the loan on the Leisure Centre and so reduce the borrowing costs, therefore was not available for building a sports hall.

Councillor Cooper advised that at the end of the financial year 2017/2018, the Council had £4.7m in balances. The Council was required to maintain balances of at least £1.1 million as a contingency. On the face of it, it seemed that the Council might be able to make up the funding shortfall from balances. However, Councillor Cooper reminded Members of the considerable uncertainty surrounding the finances of the Council and all other local authorities over the medium term, which had been discussed at Council in February. Members were asked to note that in the Medium Term Financial Plan that was passed by Council in February, it was proposed that to balance the budget and to maintain services, it would be necessary to take money from balances to a total of £2.11m for the three years 2019/20 to 2021/22, which would leave no more than £1.49m available in balances; not enough to make up the short fall on the sports hall project.

Members were informed that the Council could not be confident that the finances of local government would improve after 2022, so it was possible that the Council would have to take more money from balances to balance the budget and maintain services in the years after 2022. Whilst there was increasing optimism that the negative revenue support grant or tariff adjustment might be reduced after a review in 2018, Members were advised that it would be naïve to assume that the Treasury would remove the negative grant completely.

In this context the Cabinet had concluded that it would be financially irresponsible for the Council to spend up to £2.8 million of the Council’s balances on a sports hall at this time. Members needed to consider the impact that this could have in the long-term, including the potential that spending this money on a sports hall could result in a reduction in services provided by the Council in the years to come.

Councillor Cooper concluded by noting that should the Council decide not to build the Sports Hall, the Council would need to demolish the old buildings and finish off the site. Consequently the Cabinet was asking Council to approve capital funding of £600,000 to be released from balances.

Council then proceeded to debate the subject and raised the following points:

· The different views of the Council and the governors of NBHS in respect of the length of time it had been agreed that people would have access to the school’s sports hall.

· The reasons why an application for the sports hall to become an asset of community value had been turned down.

· Recent reports that a fire had broken out at the new leisure centre in Bromsgrove, during which a group of people with disabilities had struggle to be evacuated from the building.

· The impact that the loss of the sports hall at the former Dolphin Centre had had on community groups and vulnerable people.

· An approach that had been received from My Time Active about the potential to take over the sports hall.

During consideration of this item Councillor M. Thompson proposed an amendment. This proposal was seconded by Councillor L. Mallett.

The amendment proposed the following:

A decision about the sports hall should be postponed for three months whilst a working group considers the proposal received from My Time Active.

Members discussed this proposal in detail and in so doing considered a range of issues:

· The Council’s commitment in the Local District Plan to helping residents to become and remain healthy and the contribution that the sports hall could make to this objective.

· The one month extension that had been offered at the previous meeting of Council to enable interested parties to come forward to express an interest in managing the sports hall and the extent to which one month was an adequate length of time for this purpose.

· The offer that had been made by My Time Active. Councillor L. Mallett questioned whether the Portfolio Holder for Leisure, Councillor Whittaker, had met with representatives of the organisation, whether he was aware of their model and whether due diligence had been undertaken in respect of this.

· The importance of the sports hall to residents living across the district as a leisure facility.

· The contribution of concerns about the impact of the negative support grant on the Council’s finances to the proposal to complete phases 2 and 3 of the works at the former Dolphin Centre.

· The work of MACE to undertake the options appraisal in respect of the sports hall and the extent to which other organisations were considered in respect of undertaking this work on behalf of the Council.

In accordance with Council Procedure Rule 18.3 a recorded vote was taken on this amendment and the voting was as follows:

For the amendment: Councillors Buxton, Colella, Mallett, C. McDonald, P. McDonald, Shannon, Thompson and Van der Plank. (8)

Against the amendment: Councillors Allen-Jones, Cooper, Deeming, Denaro, Dent, Glass, Jones, Laight, May, Sherrey, Taylor, Thomas, S. Webb and Whittaker. (14)

The Vice Chairman declared the amendment to be lost.

Following the defeat of the proposed amendment a number of Members expressed disappointment that further time would not be allocated to exploring an additional option that was available in respect of the long-term management of the sports hall. In particular a number of Members noted that this represented a final chance to save the sports hall from demolition.

In this context Councillor M. Thompson proposed a further amendment. This proposal was seconded by Councillor P. McDonald.

The amendment proposed the following:

The Council should postpone a decision in respect of the sports hall for 2 months and 20 days to provide time to consider My Time Active’s offer.

In proposing the amendment Councillor M. Thompson called for an adjournment to provide time for him to meet with the Leader of the Council and a representative of the Independent Alliance in the absence of that group’s leader to consider this matter further.

In seconding the proposal Councillor P. McDonald commented that Members had been in favour of upgrading the Council’s leisure centre but had expected this replacement to be on a like-for-like basis. Members were asked to consider that 2 months was not a lengthy period of time to wait and there was a need to explore all available options to ensure that Council funds were spent in accordance with residents’ needs.

On being put to the vote the amendment was lost.

Following the vote on the second amendment Councillor Whittaker spoke on the proposals in his capacity as the relevant Portfolio Holder for Leisure Services. He assured Members that NBHS had decided to change the timeframes in which residents could access the school’s hall from 48 to 38 weeks. Councillor Whittaker had not been aware of the fire at the new leisure centre. The decision had been taken in 2014 not to proceed with having a sports hall. The sports hall in the Dolphin Centre would not meet the requirements of Sport England and a significant amount of refurbishment work would be required to bring it up to standard. Councillor Whittaker had not yet spoken to representatives of My Time Active, though he had received written correspondence from a representative of the organisation before the start of the meeting.

A number of points of order were subsequently raised by Members. In the first place Councillor S Colella questioned the legality of proceeding with the proposal in the report in light of an alternative course of action having been identified. Officers advised that given the existing budgetary commitments that needed to be met by the Council and that the project was already part way through there was nothing to stop the Council from proceeding with the proposals in the report. The offer from My Time Active did not impact on this.

The second point of order was raised by Councillor K. Van Der Plank who questioned whether an equality impact assessment had been carried out in respect of this matter, given the recent experience of the group with physical disabilities during the fire at the new leisure centre. Members were advised that this had already been addressed at the report stage.

At the end of these deliberations in accordance with Council Procedure Rule 18.3 a recorded vote was taken and the voting was as follows:

For the recommendation: Councillors Allen-Jones, Cooper, Denaro, Deeming, Dent, Glass, Laight, May, Sherrey, Taylor, Thomas, S. Webb and Whittaker. (13)

Against the recommendation: Councillors Buxton, Colella, Jenkins, Mallett, C. McDonald, P. McDonald, Shannon, Thompson and Van der Plank. (9)

Abstentions: Councillor Jones. (1)

The Vice Chairman declared the recommendation to be carried.

RESOLVED that capital funding of £600,000 be released from balances in 2018/19 to complete phase 2 and 3 works associated with the project.

Finance Monitoring Outturn 2017/18

The recommendations from Cabinet in respect of the Finance Monitoring Outturn report for 2017/18 was proposed by Councillor B. Cooper and seconded by Councillor G. Denaro.

In proposing the recommendations Councillor Cooper explained that the figures provided in the agenda papers were available prior to the audit but no material differences had been found by the auditors since the audit of the Council’s accounts had been completed and would be presented to Council by the Chairman of the Audit, Standards and Governance Committee during the meeting.

The Council’s revenue budget showed performance for each of the strategic purposes. The first column showed the budget set at the beginning of the year, the second column showed the revised budget. These budget figures were compared with actual performance in the third column.

The main incoming resources were £7.43m from Council Tax, £1.917 million from the New Homes Bonus, £962,000 from business rates growth, and £114,000 in revenue support grant. The Council also received £1.105m for Section 31 business rate relief grants and paid £268,000 in borrowing costs.

Members were asked to note that the corporate finance spend included transfers of money to the reserves.

There was an underspend of £728,000 (i.e. 5.6%), against budget. However when corporate financing was considered, the underspend fell to £303,000 (2.3% of the budget) and this was the sum which would be transferred to balances. These stood at £4.789 million on 31st March 2018, which was £475,000 higher than on 1st April 2017.

The variances and the overall underspend raised concerns about the budgeting process, which was discussed by Members at Council in July 2017. The Council had tightened the budget setting procedures at the end of the previous year for the 2018/19 budget and the departmental budget performances were scrutinised more thoroughly, especially those which had significant variances. In total 2 departments were now setting a zero base for their departmental budgets. All departments would be encouraged to do this in the coming budget process. Consequently the budgeting process would be more challenging to departmental heads in 2018/19. The new integrated financial system would, if approved, make a major contribution to better budgeting in time.

Councillor Cooper was pleased to announce that savings had been made during the year. In the budget for 2017/ 2018, £659,000 was reallocated to the efficiency plan. During the year, the Council made efficiency savings of £1.29 million made up of £263,000 additional income and £1.03 million savings and budget resetting including the £659,000 mentioned earlier.

Members were asked to note that some funds allocated for vehicles and for the new leisure centre were being carried over to the current financial year. There was a desire to carry forward £1.215 million to the capital programme for 2018/19. The Cabinet asked Council to approve an increase in the 2018/19 capital programme of £66,000. This entailed more money received from government for disability facilities grants, which would increase the available budget to £846k.

The first column of the financial reserves position showed the position at 1^st April 2017. The second column showed monies transferred to existing reserves in 2017/ 2018, which totalled £700,000, of which £600,000 were grants received. The third column showed the monies that had been moved out of reserves in the last financial year; this total was £956,000. At year end, the total reserves of the Council stood at £3.405 million. Councillor Cooper requested Council’s approval for the movements of £257,000 in existing reserves and approval of the addition of new reserves of £55,000.

Cabinet was aware that the reserves information in the report was opaque. It was not clear what the reserves were for, why some funds were in reserves and not in balances, and why some reserves were not being used. Therefore it might be that some monies in reserves could be transferred to balances so that the money was available for delivering Council’s strategic purposes. The Cabinet was therefore recommending to Council that there should be a comprehensive review of the Council’s reserves policy.

Councillor Cooper congratulated all the Council’s officers for the financial performance of the Council in what were increasingly difficult and uncertain financial times. The Council had, in effect, generated a surplus and Councillor Cooper expressed the view that in this day and age, it was a minor triumph to deliver a surplus in local government with no reduction in services and with no use of money from balances.

The financial results for 2017/18 showed that the Council was currently solvent and it could approach the difficult financial years ahead with concern rather than dread.

The medium term financial position for the Council was uncertain. The Council would be losing the revenue support grant in 2018/19 and from 2019/20, would have to pay a negative grant or tariff adjustment of £740,000 per year. Councillor Cooper explained that he was hopeful that this sum would be reduced as a result of the review of the tariff adjustment, which would be announced in the Chancellor’s autumn statement. The New Homes Bonus (NHB), which generated £1.9m in 2017/18, was going to be reduced; it was predicted that as a result the Council might lose as much as £400,000 a year. There were uncertainties about the government plans for business rates, inflation was predicted to increase and there were the general financial uncertainties related to Brexit. Councillor Cooper also noted that some of the Council’s capital spending (e.g. on vehicles and the leisure centre replacement) was being deferred.

In the Medium Term Financial Plan, the Council was proposing to use a total of £2.1m from balances to balance the budgets in the three years 2019/20 to 2021/22. Councillor Cooper expressed the view that this was unsustainable in the long-term despite the Council’s current healthy financial situation. Therefore the balances and reserves could not be used to ride out the severe financial challenges and the government was expecting Councils to be more self-sufficient financially. Councillor Cooper suggested that the Council had to review its strategic priorities and continue to drive down costs. Members would also have to consider using the Council’s balances and reserves to generate income in order to maintain good quality services for residents. Senior officers and the Cabinet were considering ways that the Council might use the reserves, balances or borrowing for income generation.

Therefore Councillor Cooper noted that whilst the Council could be reassured by its financial performance in 2017/18, with the end of year underspend and good balances and reserves, the Council had to be sanguine about the future.

Councillor Cooper concluded by thanking the Executive Director of Finance and Corporate Resources and the Council’s Finance Team for all their excellent work.

Following the presentation from Councillor Cooper Members discussed the Financial Monitoring Outturn report for 2017/18 in further detail and raised the following matters:

· The surplus that had been generated during the year and the extent to which this corresponded with concerns about the budget that had been raised in February 2018.

· Savings that had been achieved in respect of CCTV earlier in the year and the response that had been provided by Councillor Cooper in his capacity as the relevant Portfolio Holder for finance at that stage.

· The criticisms of the Council raised in previous audits with regard to the use of savings from vacant costs to help balance the budget.

· The causes of the £200,000 overspend in relation to the strategic purpose ‘keep my place safe and looking good’. Councillor Cooper explained that this overspend had largely arisen due to a shortfall in income from Building Control and in relation to planning applications.

· The different figures recorded as savings in the capital programme and the figure that had been carried forward in that programme. The Section 151 Officer explained that whilst the Council had achieved savings of £1.5 million in the capital programme Officers were only proposing to carry forward £1.2 million.

RESOLVED:

(1) that a transfer to balances of £303,000 is actioned as a result of revenue outturn savings 2017/18;

(2) approval of the movements of £257,000 in existing reserves as included in Appendix 1 which reflects the approval required for 2017/18;

(3) approval of the addition of new reserves of £55,000 as included in Appendix 1. This reflects the approval required for 2017/18;

(4) approval of an increase in the 2018-19 Capital Programme of £66,000 for the Disabled Facilities Grants. This is due to the budget allocations now being announced by the Ministry of Housing, Communities and Local Government. This will increase the available budget to £846,000;

(5) approval of the carry forward to the 2018/19 capital programme of £1.215 million as detailed at Appendix 3; and

(6) that a full and detailed review of reserves be carried out.

Future Provision of the Council’s Core HR and Finance System

As a public and private version of the report in respect of the Council’s Core HR and Finance system were due to be considered by Members the Vice Chairman proposed that the report and the recommendations arising should be considered together towards the end of the meeting.

Supporting documents:

Recommendations from Cabinet, item 8\18 PDF 129 KB