Agendas, reports and minutes

Corporate Resources Committee

Date: Wednesday, 29 August 2018

Minutes: Read the Minutes

Minutes of Meeting of the Corporate Resources Committee held in the Council Chamber, Council Headquarters, Glenurquhart Road, Inverness on Wednesday 29 August 2018 at 10.30 am.
 
Present:
Mr G Adam
Mr R Bremner (by Video Conference)
Mr J Bruce
Mrs C Caddick
Mrs G Campbell-Sinclair
Mrs H Carmichael
Dr I Cockburn
Mrs M Davidson
Mr L Fraser
Mr R Gale
Mr A Jarvie
Mr R Laird
Mr B Lobban
Mr D Louden
Mr R MacDonald (by Video Conference)
Mrs D Mackay
Mr G MacKenzie
Mr S MacKie (by Video Conference)
Mr A Mackinnon
Mrs M Paterson
Mr M Reiss
Mr D Rixson
Mr P Saggers
Mr B Thompson
 
Non Members also Present:
Mrs J Barclay
Mr B Boyd
Mr A Christie
Mr K Gowans
Mr J Gray 
Mr D Mackay
Mrs T Robertson
 
Officials in attendance:
Mr S Barron, Chief Executive
Mr D Yule, Depute Chief Executive and Director of Corporate Resources
Mr E Foster, Head of Corporate Finance and Commercialism, Corporate Resources Service
Mr A Gunn, Head of Revenues and Customer Services, Corporate Resources Service
Mr S Walsh, Head of People and ICT, Corporate Resources Service
Mr C Innes, Head of Commercial and Procurement Shared Services, Corporate Resources Service
Mr J Shepherd, ICT Operations Manager, Corporate Resources Service
Mr M Bailey, Principal Project Manager, Commercial & Efficiency Team, Corporate Resources Service
Mr M Kelly, Project Manager, Commercial & Efficiency Team, Corporate Resources Service
Mr M Fraser, Finance Manager, Corporate Resources Service
Mrs L Dunn, Principal Administrator, Chief Executive’s Office
Ms A Macrae, Committee Administrator, Chief Executive’s Office
Mr A MacInnes, Administrative Assistant, Chief Executive’s Office
 
An asterisk in the margin denotes a recommendation to the Council.  All decisions with no marking in the margin are delegated to the Committee.
 
Mr A Mackinnon in the Chair
 
Business
 
1.Apologies for Absence
Leisgeulan
 
There were no apologies for absence.
 
2. Declarations of Interest
Foillseachaidhean Com-pàirt
 
There were no declarations of interest.
 
3. Recess Powers
Cumhachdan Fosaidh
 
The Chairman explained that delegated powers had been granted at the previous meeting of the Committee in regard to Alness Academy (Item 12 of the agenda). 
 
Consequently, the Committee NOTED that the Recess Powers granted by the Council at its meeting on 28 June 2018 had not been used.  
 
4. Good News Stories
Naidheachdan Matha
 
The Committee NOTED that Rachel MacDonald, trainee accountant within the Corporate Finance service, had been admitted to the Chartered Institute of Public Finance and Accountancy (CIPFA) following the successful completion of her exams and submission of her practical experience portfolio.
 
FINANCIAL MONITORING
SGRÙDADH IONMHASAIL
 
5. Corporate Revenue Monitoring Report to 30 June 2018     
Aithisg Sgrùdaidh Teachd-a-steach Corporra gu 30 Ògmhios 2018
 
There had been circulated Report No RES/36/18 dated 16 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
In discussion, the following main points were raised by Members:-
 
  • As at end June 2018 the projected overspend in the annual revenue budget was £5.1m which had showed the impact of successive budget reductions.  It was therefore extremely challenging to manage significant pressures on demand led services. The Administration’s Budget Team had done all it could to protect front line services and jobs, and they were focused on finding ways the Council could increase income and maximise efficiency savings in areas where the Council did not have statutory responsibilities.  The Council’s budget would remain challenging in years to come, meaning that Members would have difficult decisions to make in order that the Council had a balanced budget as was legally required;
  • The Administration Budget Team had taken the decision to take urgent action to address the projected overspend by introducing enhanced expenditure control measures on recruitment, overtime, review of agency workers and travel.  There would also be robust monthly monitoring to ensure savings were being met and progress reports would be submitted to Strategic Committees;
  • It was confirmed that there were no job losses predicted at this time, and the Council had a good record of staff redeployment in cases where staff were at risk of redundancy;
  • Services had to deliver services according to the resources that had been allocated to them by Council. However a point was made that the budget that had been allocated could not reasonably be implemented by Services and they were now having to deliver services on a reduced budget given the level of savings needing to be made;
  • The Administration Budget Team welcomed views from other political groups on ideas for savings and assurance was given that they would continue to be consulted throughout the budget process;
  • The budget deficit was at around 1% of the Council’s total Revenue budget, and while this was a concern and would be addressed, the important issue was restoring reserves to a more appropriate level and this would form part of the budget strategy for 2019-2022.  Currently the reserves were at around £8m and well below the minimum level recommended by Audit Scotland, who had recommended that public sector bodies should have a minimum of 2% of their annual revenue budget in reserve.  Reserves at such a low level exposed the Council to address any cost pressures that might arise during the year, e.g. a particularly bad winter;
  • the overspend in Care and Learning was largely due to the high cost placements for Looked after Children. The Council was looking at providing accommodation for this Service in its own area which would considerably reduce expenditure in this budget, as long as accommodating them in this area was in the best interests of the Children;
  • The Redesign process was continuing to identify new areas for review and good progress was being made in meeting the savings target.  Some of these potential savings would need investment as early as this financial year as they would require a change in the business activity of the Council.  Concern was expressed at the level of redesign savings, how these would be achieved and whether the position at the end of the financial year would be known; 
  • All public sector organisations were facing financial challenges in light of less funding being given to the public sector but it was felt that Local Government was not being treated equitably with its public sector partners in terms of funding.  However, the view was also expressed that the budgetary problems currently being faced were down to the decisions made by this Council;
  • The level of savings required would have a significant impact on the delivery of services and there was a need to know what the implications for service delivery would be and how the budget gap would be closed and this should be reported to full Council;
  • Difficult decisions would have to be made in order to achieve the required savings and there was a need to consult with Members and communities before these decisions were made to explain the reasons for them; and
  • A point was made that loan charges were increasing and much of the financial problems facing the Council related to capital expenditure and this could get worse if borrowing rates increased which would put a cost pressure on the revenue budget.  It was advised that the Capital programme that was approved by Council this year would have no overall impact on the loan charges budget and it was affordable.  Assumptions on future increases to interest rates had been factored in when calculating the affordability of loans charges.   In this respect, the work of the Treasury Management Team in the Finance Service was commended as they had saved the Council considerable amounts of money over the years by arranging loans at preferential rates.  
In responding to a number of points, the Depute Chief Executive/Director of Corporate Resources stated that a report would be submitted to the full Council meeting on 6 September 2018 on an update to the preparation for the budget strategy for 2019-2022.  As part of this process the Council’s reserves needed to be rebuilt and this could no longer be optional.  The measures that Directors were taking to address the budget pressures in their Services were proportionate to the budgetary challenges facing them and actions would be taken now.  There was a direct link between Capital and Revenue expenditure and this was the reason why the Council had reduced by half the Council’s capital programme in the last budget, so that borrowing did not increase any further. A Workforce Strategy was also currently being developed in order that Services could plan for the future based on its priorities and this would be linked closely with the financial strategy.  Members in setting the budget took an element of risk in order to balance the budget e.g. with the level of savings that could be achieved from the Redesign process.  If Members had chosen not to accept an element of risk in savings being made, then further cuts to the budget and ultimately services would have been necessary to set a balanced budget.  Therefore, the key was in managing this element of risk and ensuring that savings were made from the Redesign process and other areas of service delivery.  It was challenging to maintain a balanced budget but the Council had to keep within the resources that had been allocated to it and action to do this was underway. 
 
Thereafter, the Committee NOTED the:-
 
i. financial position of the General Fund and HRA revenue budgets as at 30 June 2018 and the estimated year end forecast;
ii. actions proposed to restore a balanced position for 2018/19 as outlined in section 4 of the report; and
iii. status of budgeted savings in the year.
 
6. Corporate Capital Monitoring Report to 30 June 2018
Aithisg Sgrùdaidh Calpa Corporra gu 30 Ògmhios 2019
 
There had been circulated Report No RES/37/18 dated 17 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
It was requested that clarification be provided to Councillor I Cockburn on delays in statutory consents and high tender returns in relation to slippage on the Council house building element of the Capital programme and whether funding from the Scottish Government would be lost as a result of those delays.
 
The Committee AGREED the financial position of the General Fund and HRA Capital Programmes as at 30 June 2018.
 
7. Corporate Resources Service and Welfare Budget Monitoring to 30 June 2018                    
Sgrùdadh Teachd-a-steach Seirbheis nan Goireasan Corporra agus Buidseat nan Sochairean gu 30 Ògmhios 2018
 
There had been circulated Report No RES/38/18 dated 13 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
In particular it was noted that Highland Council had used in full the Scottish Government’s new funding to local authorities to support School Clothing Grand award levels.  The level of grant award was now £140 in Highland which was the highest School Clothing Grant award of all local authorities in Scotland.
 
The Committee AGREED the financial position of the Corporate Resources Service and Welfare budget as at 30 June 2018.
 
8. Corporate Resources Service Capital Monitoring Report to 30 June 2018
Aithisg Sgrùdaidh Calpa Seirbheis nan Goireasan Corporra gu 30 Ògmhios 2018
 
There had been circulated Report No RES/39/18  dated 13 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
The Committee AGREED the financial position of the Corporate Resources Service capital budget as at 30 June 2018. 
 
9.  Chief Executive’s Office and Members’ Revenue Monitoring Report to 30 June 2018                                  Aithisg Sgrùdaidh Teachd-a-steach Oifis an Àrd-Oifigeir agus nam Ball gu 30 Ògmhios 2018
 
There had been circulated Report No RES/40/18 dated 13 August 2018 by the Chief Executive.
 
The Chairman advised that Member expenses forms were not be submitted timeously for processing and that this was resulting in administrative and significant budgetary difficulties.  He therefore proposed that Members be required to submit their expenses for processing during the quarter that those expenses were incurred, otherwise they would lose those expenses.  Although supportive of the proposal, it was recommended that confirmation be sought that this was legally permissible and if introduced Members be given adequate notice of the implementation date in order to adjust to the new policy.
 
Responding to a question, it was confirmed that following a meeting of Political Group Party Leaders, it had been agreed that due to the ongoing IT problems the format in which committee papers should be distributed, i.e. electronic or hard copy, would be reviewed in December 2018.
 
Also, it was highlighted that the IT problems affecting the Council’s video conferencing facilities and the lack of a reliable system had a direct impact on Members travel and expenses.  This point was acknowledged and it was confirmed that work was ongoing to resolve the IT problems. 
 
Thereafter, the Committee:-
 
i. AGREED the financial position of the Chief Executive’s Office and Members’ budget as at 30 June 2018 and NOTED the status of budgeted savings in the year; and
* ii. AGREED to Recommend to Council that, subject to it being legally clarified that it was permissible, Members be required to submit their expenses for processing during the quarter that those expenses were incurred, otherwise they would lose those expenses.  Members would be informed of the date when this new arrangement would be effective from.
 
CORPORATE RESOURCES SERVICE
SEIRBHEIS NAN GOIREASAN CORPORRA
 
10.Treasury Management  
Rianachd Ionmhais
 
(a) Summary of Transactions
Geàrr-chunntas Ghnothaichean
 
There had been circulated Report No RES/41/18 dated 17 August 2018 by the Director of Finance.
 
During discussion comments included that in relation to the proposal to provide a loan to Albyn Housing Society it was important to be aware of the implications for Scottish Government funding when developing the business case.
 
In addition, it would be helpful for an update to be provided on the potential implications of rising base rates and associated risks to the Council. The Chair confirmed this would be provided in the next quarterly report.
 
The Committee:-
 
i. NOTED the Treasury Management Summary of Transactions report; and
ii. APPROVED, in principle, a loan to Albyn Housing society subject to a business case and detailed loan terms to be brought back to a future meeting of this Committee for approval; and
iii. AGREED that the next quarterly report would include an update on the potential implications of rising base rates and associated risks.
 
(b) Annual Treasury Management Report 2017/18
Aithisg Stiùiridh Bhliadhnail an Ionmhais 2017/18
 
There had been circulated Report No RES/42/18 dated 13 August 2018 by the Director of Finance.
 
In discussion, it was suggested that the advice received from the Council’s Treasury Advisor mainly related to the past and it would be helpful if more detailed information on projections going forward could be provided. The Head of Corporate Finance and Commercialism undertook to ensure more comprehensive information was provided in future reports.    
 
The Committee NOTED the Annual Treasury Management report for 2017/18.
 
11. Corporate Resources Service Quarterly Performance Report  
Aithisg Choileanaidh Ràitheil Seirbheis nan Goireasan Corporra
 
There had been circulated Report No RES/43/18 dated 13 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
During discussion, Members raised the following issues:-
 
  • the Head of Revenues and Customer Services and staff be commended on their excellent work and in particular on significantly reducing the overall costs of the service areas identified in section 4 of the report and on Highland being ranked 1st for both new claims and change in circumstances in respect of housing benefit;
  • the Team be congratulated on being selected as a finalist for the 2018 UK’s Institute of Revenues Rating & Valuation (IRRV) Benefits & Welfare Reform Team of Year and it was hoped they would be successful at the awards ceremony to be held in October 2018;
  • the Service was also commended on its performance in relation to attendance management and in particular the figures shown for the average number of days lost per employee; and   
  • issues with Council Tax billing which had been experienced by some tenants. The Head of Revenues and Customer Services advised Councillor R Laird that he would investigate the specific cases which had been highlighted.
 
The Committee NOTED the statutory and key performance indicators as outlined in the report.
 
12.Alness Academy  
Acadamaidh Alanais
 
There will follow Report No RES/44/18 by the Depute Chief Executive and Director of Corporate Resources.
 
In discussion, it was suggested there were fundamental issues with the current approach involving Scottish Futures Trust and Hub North of Scotland Limited on the basis that the process was too complex, time consuming and prone to delays. The Leader undertook to write to both organisations expressing the Committee’s disappointment with the process, particularly in regard to the risks to the Council.
  
Further comments included that, as soon as they were known, it was important the Committee be informed of the final project costs. There was also a need to move away from bespoke designs for such projects. 
 
The Depute Chief Executive and Director of Corporate Services reported he had raised his concerns with the Scottish Futures Trust and Hubco about the process and the delays it appeared this was causing in the Highlands in comparison to other areas of Scotland and that he would be pursuing this matter further. He advised that the purpose of seeking approval for advanced works was to ensure every effort was being made to deliver the project on schedule, and that once the Council had signed off on the final contract value, the risk transferred in full to the contractor.
 
The Committee:-
 
i. AGREED to homologate the actions taken under the Delegated Authority arrangements namely to sign two Letters of Intent (LoI) to cover two tranches of Advanced Works which in total amounted to approximately £2.4m; 
ii. NOTED the risks of signing these two LoIs without having agreed the finalised Project cost with Hubco;
iii. NOTED the risks of not signing these two LoIs with Hubco;
iv. AGREED the delegated authority arrangements agreed in May 2018 (the “Delegated Authority arrangements”) remain in place to cover the continuing finalisation of the contractual documentation; 
v. APPROVED each of the detailed Legal requirements to be provided to Hubco as outlined in the report;
vi. AGREED that a letter be issued from the Leader of the Council to Scottish Futures Trust and Hubco expressing the Council’s disappointment with the process, particularly in regard to the risks that the Council was being exposed to; and
vii. AGREED that, as soon as they were known, the Committee be informed of the final project costs.  
 
13. Annual Procurement Strategy Report
Seirbheisean Malairteach agus Solair Co-roinnte: Aithisg Sholair Bhliadhnail
 
There had been circulated Report No RES/45/18 dated 13 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
During discussion, Members raised the following issues:-
 
  • the increased spend with local suppliers and the overall level of financial efficiencies delivered over the financial year be welcomed;
  • it would be helpful to have a breakdown of SME’s based on businesses with five employees or less and the associated levels of local spend;
  • the opportunity to provide more proactive support to the smallest businesses in the Highlands to encourage them to tender for contracts and also in relation to the pre-qualification process; and
  • the potential to extend the shared arrangement of the procurement function to include other local authorities be considered.
 
The Committee APPROVED the Annual Procurement report and AGREED that a breakdown of SME’s based on businesses with five employees or less and the associated levels of local spend be provided.
 
14.ICT Transformation and Network Refresh                                    
Cruth-atharrachadh ICT agus Ùrachadh Lìonraidh
 
There had been circulated Report No RES/46/18 dated 10 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
The Chair advised that Members had received a confidential briefing on this item and had been encouraged by the progress being made. He acknowledged there had been issues with the network over the past few days and on behalf of the Committee thanked the ICT Team for all their hard work and commitment to resolving these issues.  
 
The Committee NOTED the update on the ICT Transformation and Network Programmes.
 
MINUTES OF MEETINGS
GEÀRR-CHUNNTAS CHOINNEAMHAN
 
15. Commercial Board: Minutes of Meetings
Bòrd Malairteach: Geàrr-chunntasan Choinneamhan
 
There had been circulated Minutes of Meetings of the Commercial Board held on 20 June 2018 and 9 August 2018, the terms of which were APPROVED.
 
16. Minutes of Meetings                                                                     
Geàrr-chunntasan Choinneamhan
 
There had been circulated the following Minutes of Meetings, the terms of which were APPROVED:-
 
i. Central Safety Committee held on 3 August 2018; and 
ii. Staff Partnership Forum held on 3 August 2018.
 
17. Exclusion of the Public
Às-dùnadh a’ Phobaill
 
The Committee RESOLVED that, under Section 50A(4) of the Local Government (Scotland) Act 1973, the public be excluded from the meeting during discussion of the following item on the grounds that it involved the likely disclosure of exempt information as defined in Paragraphs 8 and 9  of Part 1 of Schedule 7A of the Act.
 
CORPORATE RESOURCES SERVICE
SEIRBHEIS NAN GOIREASAN CORPORRA
 
18. Wick Campus 
Àrainn Inbhir Ùige
 
There had been circulated to Members only Report No RES/47/18 dated 17 August 2018 by the Chief Executive.
 
Following detailed discussion, the Committee AGREED that action be implemented as per paragraph 7.9 and 7.13 of the report.
 
19. Highland Council Commercial Strategy
Ro-innleachd Mhalairteach Chomhairle na Gàidhealtachd
 
There had been circulated to Members only Report No RES/48/18 dated 7 August 2018 by the Depute Chief Executive and Director of Corporate Resources.
 
Following discussion, the Committee APPROVED the recommendations as set out in the report.
 
DEVELOPMENT AND INFRASTRUCTURE
LEASACHADH AGUS BUN-STRUCTAR
 
20.Commercial Business Case
Cùis Ghnothachais Mhalairteach
 
There had been circulated to Members only Report No RES/49/18 dated 20 August 2018 by the Director of Development and Infrastructure.
 
Following discussion, the Committee APPROVED the recommendations as set out in the report.
 
The meeting was closed at 2.40pm.