FINANCE & ASSET MANAGEMENT SUB-COMMITTEE 7th MARCH 2000
AGENDA
PART 1 – MEMBERS, PUBLIC & PRESS
1. Apologies for absence 2. To receive the minutes of the meeting held on 30th November 1999, copy attached. 3. Disclosure of ‘Any Other Business’ or urgent items to be considered in public and private 4. Confirmation that all items marked Part 1 will be considered in public and that any items marked Part 2 will be considered in private 5. To note that no items fall within the provisions of Section 106 of the Local Government Finance Act 1992. 6. Report of the officers, copy attached
1 The Council’s Capital Maintenance Programme 1999/2000 Page 7 and 2000/2001 2 Finance & Asset Management Sub-Committee Revenue Page 32 Budget 2000/01 3 Facilities Management – Savings 2000/01 Page 41 4 Declaration of Frays Valley Local Nature Reserve – Page 46 Denham Quarry/Frays Farm Meadows, Harefield (Harefield Ward) 5 Broadwater Allotments Site B, Harefield (Harefield Ward) Page 50 6 Disposals of Small Parcels of Land Page 53 7 Council Tax and National Non-Domestic Rates – Page 56 Irrecoverable Amounts written off under delegated powers 8 Community Charge write-offs Page 58 9 Sundry Debtor Arrears Monitoring Page 62 10 National Non-Domestic Rate Recovery Plan Page 66 11 Tender for the Provision of Insurance & Risk Page 84 Management
7. Any other business or urgent items in Part 1
PART 2 – PRIVATE, MEMBERS ONLY
Report of the officers, continued 11 Appendix to Item 11 – Tender for Provision of Insurance Page 87 & Risk Management 12 The Grange, Pine Place, Hayes (Charville Ward) Page 88 13 Land at Kingsend, Ruislip (St Martins Ward) Page 94
The Appendix to Item 11 is included in Part 2 of the agenda because it contains exempt information within Schedule 12A of the Local Government Act 1972 namely:
9 ‘The information contains any terms proposed or to be proposed by or to the authority in the course of negotiations for a contract for the acquisition of property or the supply of goods or services.’
Item 12 is included in Part 2 of the agenda as it contains exempt information within Schedule 12A of the Local Government Act 1972 namely:
9 ‘Any terms proposed or to be proposed by or to the authority under any particular contract for the acquisition or disposal of property or the supply of goods or services’ and
12 Any instructions to Counsel and any opinion of Counsel (whether or not in connection with any proceedings) and any advice received, information obtained or action taken in connection with – a) any legal proceedings by or against the authority, or b) the determination of any matter affecting the authority (whether, in either case, proceedings have commenced or are in contemplation)
Item 13 is included in Part 2 of the agenda as it contains exempt information within Schedule 12A of the Local Government Act 1972 namely:
10 ‘Any terms proposed or to be proposed by or to the authority under any particular contract for the acquisition or disposal of property or the supply of goods or services’ and
8. Any items transferred from Part 1 9. Any other business or urgent items in Part 2 FINANCE AND ASSET MANAGEMENT SUB-COMMITTEE
Meeting held at the Civic Centre, Uxbridge on Tuesday 30 November 1999 at 7.30p.m.
Councillor Jonathan Bianco (Chairman) Councillor Ali Miraj (Vice Chairman)
Councillors: Steve Carey Paul Harmsworth Geoff Courtenay Iain McIntosh Parmjit Dhanda John Morse David Simmonds
______
1. MINUTES
The Minutes of the meeting held on 23 September 1999, were agreed as a correct record and signed by the Chairman.
2. CONSIDERATION OF REPORTS IN PUBLIC AND PRIVATE
The Sub-Committee agreed that the items of business marked Part 1 would be considered in public and that item 12 (Minute below) would be considered in private for the reasons stated in that minute. Members of the public and press were therefore excluded from the meeting during consideration of that item.
3. SECTION 106 OF THE LOCAL GOVERNMENT FINANCE ACT 1992
It was noted that none of the reports fell within the provisions of Section 106 of the Local Government Finance Act 1992.
RESOLUTIONS AND REPORTS
4. THE COUNCIL’S CAPITAL MAINTENANCE PROGRAMME 1999/00 – ITEM 1
The position of the 1999/00 capital maintenance programme was reported to the meeting. Authority was sought to the programme being re-phased and reallocated in the period until the next meeting of the Sub-Committee, if necessary in the light of inclement weather.
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 1 It was noted that major expenditure on replacement of the Civic Centre boilers had taken place since the last meeting and officers were requested to arrange an inspection of the new boilers for members of the Sub-Committee.
Members asked to be kept informed of progress with works at Park Lodge Farm Centre.
RESOLVED
1. That the position in regard to the programme as set down in the officers report and in the appendices for Land and Property (Appendices A1 to A2), Highways (Appendix B1) and the Contingency (Appendix C1) be noted.
2. That responsibility be delegated for re-phasing and re-allocation within the main programme to the Corporate Director (Corporate Services) between 1.12.99 and the next meeting of the Sub-Committee, as set out in paragraphs 1.2 and 1.3 of the officers report.
5. FINANCE & ASSET MANAGEMENT SUB-COMMITTEE REVENUE BUDGET – ITEM 2
The Sub-Committee was informed of the present position of the revenue budget for the current year, 1999/2000 and of action that was being taken to deliver savings in future years.
A member referred to the high charges to the Council for members of the public paying Council Tax bills at the post office and it was agreed that this be drawn to the attention of local MP’s and the Local Government Association.
There was discussion about the failure to secure Section 106 funding for the Tourism budget and it was noted that the service would cease at the end of 2000 when Konver 2 funding ended.
It was agreed that a member would be provided with additional information relating to a budget pressure of £32,000 within Legal Services.
RESOLVED
1. That the latest revenue position for 1999/2000 be noted.
2. That officers write to the local Members of Parliament and the Local Government Association, to draw attention to the abuse of the monopoly of the Post Office in the high charges levied for payment of Council Tax bills at post offices.
6. LONDON BOROUGHS GRANTS COMMITTEE 2000/2001 – ITEM 3
The Council’s contribution to the London Boroughs Grants Committee for 2000/2001 was considered.
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 2 The need to maximise the return to the Council by encouraging local organisations to seek funding from the London Boroughs Grants Committee was referred to by members.
RESOLVED - That the Council’s contribution of £997,630 be approved.
7. THE SELECT LIST OF CONTRACTORS – ITEM 4
The Council’s Select list of contractors had been reviewed by Property Consultancy and the final select list was now reported to the Sub-Committee for approval.
Details of an additional company to be added to the list were circulated at the meeting.
RESOLVED
1. That the Select List of Contractors circulated with the agenda for the meeting, and including the addition circulated at the meeting, be approved.
2. That authority be delegated to the Corporate Director, Corporate Services, to remove from or add contractors to the Select List.
8. ANNUAL TREASURY MANAGEMENT REPORT – ITEM 5
The Sub-Committee considered the annual report on Treasury Management activities carried out by the Council, in line with requirements in the Local Government Housing Act 1989 and the CIPFA Code of Practice.
The report included a review of activities in 1998/99, information about the operational policies and guidelines and the proposed strategy for 2000/01, including the implications for the revenue budget.
RESOLVED
1. That the position in respect of 1998/99 be noted.
2. That the operational policies for Treasury Management (Appendix B) be noted.
3. That the strategy for 2000/1 as set out in the officers report, paragraphs 5.15 to 5.18 i.e., to utilise internal funds for new expenditure or refinancing loans, as opposed to incurring new external borrowing, be agreed.
9. YEAR 2000 MILLENNIUM PROJECT – 4TH QUARTER REPORT – ITEM 6
An update of the present position as regards the Year 2000 Millennium Project was reported to the meeting.
It was noted that since publication of the report, a number of individual projects identified in Appendix A, had been completed.
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 3 Congratulations were recorded to the officers who had been involved in the project.
RESOLVED - That the progress to date in respect of the Year 2000 Millennium Project be noted.
10. COUNCIL TAX AND NATIONAL NON-DOMESTIC RATES – IRRECOVERABLE AMOUNTS WRITTEN-OFF UNDER DELEGATED POWERS – ITEM 7
Details of amounts of Council Tax and National Non-Domestic Rates which had been written off by officers under delegated authority, were reported to the meeting.
RESOLVED - That the amounts written off by officers under delegated authority be noted.
11. LOCAL GOVERNMENT PENSION SCHEME – INTERNAL DISPUTE RESOLUTION PROCEDURE – ITEM 8
Consideration was given to the appointment of additional members of the panel that considered pensions disputes.
It was noted that there had been 5 pension disputes in the previous 2 years and that as people became aware of the procedure, a higher number was anticipated in future years.
RESOLVED - That the Corporate Director, Corporate Services and Mr Martin Lock be nominated to the panel set up under the Internal Dispute Resolution Procedure.
12. DISPOSALS OF SMALL PARCELS OF LAND – ITEM 9
In 1995 the Finance and Property Sub-Committee had agreed a policy concerning the disposal of small parcels of land. The policy meant that there was a presumption against such disposals except in circumstances that were defined in the policy and subject to a minimum charge in appropriate cases of £1,000 to cover the Council’s costs.
The Housing Management and Maintenance Sub-Committee had recently requested that the policy be reviewed.
The Sub-Committee discussed the matter and referred to the impact of dealing with sales on other Council priorities due to the officer time that would be taken up by such sales.
An alternative recommendation was moved, seconded and on being put to the vote agreed.
RESOLVED
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 4 1. That officers be instructed to ascertain from the list in Appendix A of the report whether there is still an interest in acquiring amenity land by the applicants even if the full costs to the Council are borne by the applicant.
2. That officer report back to the next meeting of the Sub-Committee with the results of the survey and options with a view to enabling the processing of disposals. Options to include the packaging of disposals to interest an outside agent, dealing with a set number per annum in recognition of limited resources and applying Best Value principles.
13. MOUNTBATTEN HOUSE, CAREW ROAD, NORTHWOOD – ITEM 10
Mountbatten House, a former elderly persons home, had been declared surplus to the requirements of the Social Services Committee in June 1998. A decision about its sale had been deferred until the completion of a review of Social Services residential establishments and outline planning consent for residential development had been granted.
The Social Services Committee had agreed to enter into a block contract with Lifestyle Care plc for residential and nursing home beds for older people and had also agreed to enter into negotiations with the company over the sale or lease of Mountbatten House, in view of the flexibility it might offer them in meeting the contract.
It was noted that a final decision on the disposal would not be taken until any tenders had been fully evaluated.
RESOLVED - That officers be authorised to market Mountbatten House, Carew Road, Northwood on the open market by tender or negotiation.
14. REVENUES, BENEFITS AND CASHIERING SERVICES CONTRACT – ITEM 11
It had been previously agreed to award the Revenues, Benefits and Cashiering Services contract to Capita for a 7 year period starting on 15 November 1999.
The Sub-Committee was informed of the progress in agreeing the conditions of the contract, and that discussions were continuing. It was reported that it was now unlikely that the contract would commence before 1.1.2000.
It was noted that the Department of the Environment, Transport and the Regions would need to be advised of the delay in commencement of the contract.
Members asked that they be kept informed of progress with the discussions with Capita, including options and recommendations for action if it became necessary.
RESOLVED - That the report be noted.
15. LAND ADJOINING THE GRANGE, NORTHWOOD – ITEM 12
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 5 The Sub-Committee considered further information on land adjoining the Grange, Northwood, and was asked, in the light of the information, whether it wished to revoke an earlier decision to sell the land.
This report was included in Part 2 of the agenda because it contained exempt information as defined in paragraphs 9 and 12 of Schedule 12A to the Local Government (Access to Information) Act 1972. The information contained any terms proposed …….. by the authority under any particulars contract for the...... disposal of property, and also any.... advice received, information obtained...in connection with.... the determination of any matter affecting the authority.
RESOLVED
1. That the previous decision to sell the land hatched black on plan no. RUI.380/1 dated 4.11.99 be revoked.
2. That the land be included in the land leased to Lido Catering and they be encouraged to tidy it and make use of it within the terms of the covenant.
The meeting closed at 8.22 pm.
Finance & Asset Management Sub-Committee minutes 30.11.99 Page 6 FINANCE & ASSET MANAGEMENT SUB-COMMITTEE 7th MARCH 2000
THE COUNCIL’S CAPITAL MAINTENANCE PROGRAMME ITEM 1 1999/2000
CONTACT OFFICERS: Tony Butler (Corporate FinanceTelephone 01895 Ext. 2085 Gerry Edwards (Property Issues) Telephone 01895 250903 Gillian Ralphs (Highways Issues) Telephone 01895 277500
SUMMARY
This report informs Members of the current position in respect of the 1999/2000 Capital Maintenance Programme. In addition it seeks Members approval for the allocation of resources to the 2000/2001 Capital Maintenance Programme following the allocation of £2m by Policy Committee on the 15th February 2000.
RECOMMENDATIONS
It is recommended that the Sub-Committee:
1. Notes the position in regard to the 1999/2000 Capital Maintenance Programme as set down in the report and appendices for Land and Property (appendices A1 to A2), Highways (appendix B1) and the Contingency (appendix C1).
2. Allocates resources for the 2000/2001 Capital Maintenance Programme on the basis explained in the report and shown in appendices for Land and Property (appendices D1), Highways (appendix E1) and the Contingency (appendix F1).
3. Approves the reserve lists of Capital Maintenance Projects as shown in appendices for Land and Property (appendices D2) and Highways (appendix E2).
4. Delegate responsibility for the allocation of Contingency Maintenance Resources to urgent maintenance items the Corporate Director for Corporate Services.
INFORMATION
Introduction
Finance & Asset Management Sub-Committee report 7.3.2000 Page 7
PART 1 -–MEMBERS, PUBLIC AND PRESS 1.1 This report reviews the position of the current years approved Capital Maintenance Programme particularly in respect of changes to the position since the last report to Members on the 30th November 1999. The report also presents proposals for the Capital Maintenance Programme in 2000/2001 following the decisions made by Policy Committee on the 15th February 2000. The report is supported by a number of appendices as follows: q A1 – Property Maintenance Approved Programme 1999/2000 q A2 – Property Maintenance Reserve Project List 1999/2000 q B1 – Highways Maintenance Approved Programme 1999/2000 q C1 – Contingency 1999/2000 q D1 – Proposed Property Maintenance Programme 2000/2001 q D2 – Proposed Property Maintenance Reserve Project List 2000/2001 q E1 – Proposed Highways Maintenance Programme 2000/2001 q E2 – Proposed Highways Maintenance Reserve Project List 2000/2001 q F1 – Proposed Contingencies 2000/2001
1.2 For ease of reference changes within the appendices for 1999/2000 are in bold type.
The Current Years Programme
Overview
1.3 In general the current years programme, in terms of the performance of individual projects, is on target. There have been some cost variations since November and re-phasing has been required within parts of the Property Maintenance Programme. Overall the new approach that the Sub-Committee has adopted towards Capital Maintenance Programme has worked well most particularly in targeting key priority areas for expenditure, the anticipated level of spend within the year and the operation of the contingency. However as Members are aware there has been one significant variation in the programme which has led Officers to obtain Policy Committees approval on the 15th February 2000 that should it be necessary Urgent Maintenance works be funded from the Cumulative Unallocated Resources. This and the other cost variations and re-phasing within the current year’s programme are discussed in more detail below.
Civic Centre Multi Storey Car Park
Finance & Asset Management Sub-Committee report 7.3.2000 Page 8
PART 1 -–MEMBERS, PUBLIC AND PRESS 1.4 A very significant variation has arisen in respect of the projected cost of the works to the Civic Centre Multi Storey Car Park, which is now expected to exceed its approved allocation of £232k in the current year by £67k and incur up to a further £44k in 2000/2001. As Members will remember the report made to the Sub-Committee on the 22nd June 1999 requested the allocation of an additional £100k of resources to this scheme following the receipt of tenders to facilitate the works completion.
1.5 It now appears that the surveys undertaken to determine the extent of the works did not identify either the extent of or the poor condition of the first layer of construction below the tarmac surface of the car park, this layer being commonly known as screed. Neither the variable thickness nor the level of deterioration of this screed was identified until works were underway on site. The costs of removing the old screed surface preparation and replacement with a new screed account for a significant proportion of the projected additional costs. The remaining variation relates to several smaller items identified once the contractors were on site.
1.6 Whilst such a large cost variation post tender is clearly of concern, the works themselves were required if the job itself was to be successfully completed. The key concern that has arisen here however is that whilst these works were identified during August and September of 1999 the Facilities Manager who is the client for the scheme was not informed of the fact that the scheme would be overspent until the second week of December. During this period of time Engineering Consultancy who were designing and supervising the works on the clients behalf had been aware of these works and had commissioned them to be carried out. This delay in informing the client has considerably limited the ability of officers managing the overall programme to deal with this issue within the overall maintenance allocation hence the decision to report this matter in brief to Policy Committee as part of the report on the overall Capital Programme.
1.7 As a result of this situation being identified the Corporate Director of Corporate Services commissioned a detailed review of the overall programme position and the results of this are reflected within the sections on cost variations and re-phasing below. At the same time The Corporate Director of Corporate Services requested that Internal Audit review this scheme with the following objectives: q Specifically, ascertain the reasons for the contract expenditure not having been contained within the agreed budget. Ascertain the action that has or will be taken in compliance with Standing Order no. 78 (Budgetary Control – Capital). q Generally, ascertain whether any established procedure and documentation for the provision of financial information, to enable costs to be controlled and reported on a regular basis exists. Review the adequacy thereof.
Finance & Asset Management Sub-Committee report 7.3.2000 Page 9
PART 1 -–MEMBERS, PUBLIC AND PRESS q Specifically in connection with the contract in question, confirm whether the established procedure for budgetary control had been adhered to. Ensure that there were clear distinctions in officer responsibilities and clear lines of communication established for the purposes of realising and reporting upon potential/actual budget overspending at the earliest opportunity. q Generally, ascertain whether any established procedure and documentation for the commissioning and authorisation of contract variations exists. Review the adequacy thereof. q Specifically in connection with the contract in question, confirm whether the established procedure for the commissioning and authorisation of contract variations had been adhered too. q Ascertain whether the extra work/expenditure which resulted in the budget overspend was unavoidable and whether the extra work/expenditure should reasonably have been realised at the time of budget estimation/provision for the contract.
1.8 At the time of writing this report the findings of the audit are not known. Should this be available prior to the meeting of the Sub-Committee then officers will update Members on this. Otherwise it is proposed that the findings of the audit and the actions that officers propose to take in the light of them be reported to the Sub-Committee in the next report on the Capital Maintenance Programme.
Cost Variations
1.9 Cost Variations for projects are identified with appendices A1, B1 and C1. In general these have not been significant with the exception of the Civic Centre Multi Storey Car Park. Changes within the Highways Programme have shown an increase of £14k across five schemes whilst the only increase in the Property Programme apart from the Civic Centre Multi Storey Car Park has been an increase in the expenditure on the Civic Centre Boilers of £13k in the current year. This does not represent an increase in costs above the £300k budget but rather this £13k will now be incurred in the current year instead of 2000/2001.
1.10 In addition to these cost increases the review of the programme commissioned by the Corporate Director of Corporate Services following the identification of the problems with the Civic Centre Multi Storey Car Park identified a further £27.5k of potential savings across ten schemes.
Re-Phasing
1.11 The need to re-phase has occurred on a few property projects and these are identified in Appendix A1. The three most significant are: q Park Lodge Farm: The structural works cannot be progressed until Listed Building consent has been obtained. This is now expected on the 10th March. Finance & Asset Management Sub-Committee report 7.3.2000 Page 10
PART 1 -–MEMBERS, PUBLIC AND PRESS Once this has been received it will be necessary to review the cost estimates to see if they are adequate. The delay in this project is clearly related to the timescales involved in discussion with English Heritage. q The Bungalow, New Years Green Lane: The implementation of this project has been delayed due to receipt of the commissioned soil survey not being received from the contractor. Engineering Consultancy is pursuing this, but cannot undertake the works until the report has been received and its contents considered against the proposed scheme. It is understood that soil condition may be poorer than expected though currently no increase in cost is anticipated. q Bourne Farm: The major reason for the delay is due to protracted dealings with English Heritage. All work to Listed Buildings must be undertaken so as to maintain their historical features and character. The works cannot be progressed without the approval of English Heritage. Property Consultancy are currently awaiting confirmation from English Heritage that they may proceed with their proposals. Property Consultancy may need to alter their proposals when they eventually hear from English Heritage but would now hope to start on site in April 2000 should they agree to them. Again delay in this project is clearly related to the timescales involved in discussion with English Heritage.
The Contingency
1.12 The contingency is now fully allocated to schemes and it anticipated that it will be fully defrayed in year. This includes providing £67.5k against the anticipated overspend on the Civic Centre Multi Storey Car Park. At the current time it is anticipated that there will be a call on Cumulative Unallocated Capital Resources of £15k. This may increase if any urgent works need to be undertaken and cost defrayed before the year-end.
1.13 At this stage it is perhaps worth drawing Members attention to the level of resources that have actually been utilised to meet urgent maintenance items during the current year. These are summarised in the table below and represent resources that were not allocated to other schemes incorporated within the programme but rather were either earmarked to be used as a contingency or relate to savings on schemes approved in 1998/1999 from that years maintenance resources.
Contingency Resources Available and Allocated 1999/2000 Item Amount (£) Property Contingency 101,000 Central Contingency 150,000 Unallocated Resources B/Fwd from 1998/1999 160,000 Saving on Harlington Road Roof Repairs 32,000 Saving on Darren House Roof Replacement 6,000
Finance & Asset Management Sub-Committee report 7.3.2000 Page 11
PART 1 -–MEMBERS, PUBLIC AND PRESS Total 449,000
1.14 In addition the detailed review of the programme commissioned by the Corporate Director of Corporate Services following the problems with the Civic Centre Multi Storey Car Park identified a further £27k of potential savings that have been added to contingency resources. Members may wish to note that without the overspend on the Civic Centre Multi Storey Car Park the contingency would have supported £424k of expenditure on over thirty schemes and remained within budget.
The 2000/2001 Programme
Overview
1.15 At its meeting on the 15th February 2000 Policy Committee approved a five-year medium term Capital Programme based on its adoption of a Capital Investment Strategy for the Council. This programme included an allocation of £2m for Maintenance. This section of the report and its accompanying appendices present proposals for the allocation of the £2m prepared on the criteria approved by the Sub-Committee on the 10th December 1998.
1.16 This criteria was as follows: q Property
Ø Safety - Maintenance work of a health and safety nature which must be undertaken to keep a service open. This would include works required to meet the provisions of the Disability Discrimination Act.
Ø Leaseholds - Maintenance work which must be undertaken to fulfil the Council’s leasehold obligations where it either leases out buildings to other occupiers or where it leases properties for its own use.
Ø Revenue saving - Building work that could lead to future revenue savings e.g. works that are identified in energy audits. q Highways
Ø Safety - Works carried out to ensure that roads are in a safe condition for the traffic, including pedestrians, the disabled and all others who are likely to use them. This priority of work is usually referred to as Day to Day Maintenance.
Ø Fabric - Protective and repair measures designed to limit the detrimental effects of natural or imposed changes which causes serious failure of roads, footways, street lighting units and bridges. Early intervention can avoid the significant costs associated with delayed maintenance and the adverse affect upon trade and commerce of frequent emergency repairs and delays
Finance & Asset Management Sub-Committee report 7.3.2000 Page 12
PART 1 -–MEMBERS, PUBLIC AND PRESS to business traffic. This priority of work is termed Planned or Programmed Intervention Maintenance.
Ø Amenity - Maintenance of features within the street scene which enhances its appearance, this includes mowing of grass verges, tree care, tending flower beds and landscaping, upkeep of street furniture, removal of detritus, weeds and fly tipped material.
1.17 It is suggested that the initial distribution of resources is varied from the percentages previously agreed so as to allocate 20% of them to the Contingency (£400k) with the remaining 80% of resources being split as for 1999/2000 75% Property Maintenance (£1,200k) and 25% Highways Maintenance (£400k). The reason for proposing to increase the maintenance contingency is based on the level of resources that have been allocated from this source during 1999/2000 as previously explained in this report. A summary of these resources is attached at the end of the report. As with last year reserve project lists for both Property and Highways have been prepared to facilitate substitution should certain projects receive external funding or not be able to progress for some reason.
1.18 Comments on the proposals for the programme in respect of both Property and Highways are set down below, as are any specific comments from services.
Property
1.19 The proposed programme for 2000/2001 firstly takes account of those items re-phased in September 1999 when resources were transferred to other projects, notably the Civic Centre Boiler Replacement. The remaining allocation has been prioritised using the criteria agreed by the Sub-Committee. The prioritization undertaken by Property Consultancy has been made in conjunction with Service Users who have been fully consulted on both projects within their own services and the proposed programme as a whole. The proposals presented here have been discussed and agreed by representatives of each service collectively.
1.20 The most significant item is the inclusion of £100k to undertake surveys for the identification of and where necessary works to remove asbestos. This is necessary as the majority of asbestos surveys that currently exist on the majority of the Council's General Fund buildings are ten years old where they exist at all. Additionally a reactive approach has been maintained towards asbestos in recent years. However, it is now proposed that a proactive approach be introduced towards asbestos in all General Fund buildings. This parallels the approach in Housing Services. It is proposed that all General Fund buildings are surveyed for asbestos and high-risk asbestos removed or safely encapsulated. Coupled with this will be the maintenance of " an open to all " asbestos database so that all designers and building owners are made aware of what asbestos still exists in buildings and new guidelines are in the process of being prepared. It is considered that the surveys and asbestos removal or encapsulation will take place over a period of three years although Members can be assured that all Finance & Asset Management Sub-Committee report 7.3.2000 Page 13
PART 1 -–MEMBERS, PUBLIC AND PRESS high-risk buildings will be dealt with first. It is therefore likely that funding in this area will be included within proposals for future programs.
1.21 Members will note that part of the proposed 2000/2001 capital maintenance programme comprises of works to the Green Belt Estate. These works are largely required because in previous years capital maintenance resources have not been available and serious deterioration has occurred. The example of the vital replacement of the Civic Centre boilers in the current year's programme emphasizes this point. The allocations sought for these properties in respect of electrical works are a result of the surveys carried out in the current year. The costs reflected in Appendices D1 and D2 are estimates of the total cost of carrying out all works required at the farms. However with the exception of Park Lodge Farm and The Bungalow New Years Green Lane, these properties are occupied on various terms by Tenants. Officers have sought and received legal advice on these tenancies and this indicates that the liability to carry out these works is shared between both parties. In general the Council is liable to meet the costs of materials required in undertaking the works relating to buildings on the properties at the time that the tenancy was let. Officers are in the process of entering into negotiations with the Tenants in respect of the need to undertake these works and in detailing the liabilities of each party. It is expected that this process should be completed by June and that at that time the actual liability to the Council can be quantified. It is therefore likely that the actual cost of these works will reduce, however, until this is confirmed it is prudent to provide for the full cost.
1.22 Certain schemes within the proposed programme and reserve list are again subject to bids for New Deals for Schools (NDS) resources (shown in bold italics in appendices D1 & D2). These will be removed from the programme if the bids are successful and account for the large size of the reserve list where approximately 66% of the total estimated expenditure relate to such schemes.
1.23 As with last year it has been decided to retain approximately £100k of resources as an additional contingency against emergency property items that might arise during the year.
Highways
1.24 Schemes for highway maintenance have been drawn from the list of priority works in the Highways Management three-year Maintenance Programme. This represents the most urgent works against need in the various areas of highway maintenance, that is carriageway maintenance, footway maintenance and drainage maintenance. The backlog of major highway repairs now exceeds £40 million and so this list of schemes represents a small proportion of the total programme.
1.25 The residential areas of the borough have developed at different periods over the latter part of the last century and into this century. In general terms, the areas of Northwood, Ruislip, Eastcote and Ickenham have older infrastructure Finance & Asset Management Sub-Committee report 7.3.2000 Page 14
PART 1 -–MEMBERS, PUBLIC AND PRESS and lower construction specification than the more modern roads of Hayes, Yiewsley, West Drayton and Yeading.
1.26 Another factor, which leads to more problems, is the softer clay subsoil of the northern end of the borough, which tends towards greater subsidence and hence disruption than the harder gravel subsoil’s of the South.
1.27 Inspection reports show that roads and pavements in the residential areas constructed early in the development of the borough have more defects and generally need more maintenance. The priorities given to schemes listed in the maintenance programme are based on the need for maintenance and not on their geographical location within the borough.
1.28 Appendix E1 identifies those schemes recommended from the Priority list for repair during 2000/2001. Appendix E2 is a reserve list, which will be utilised, in the event that additional funds become available.
1.29 The Highways Management three-year Maintenance Programme has been developed using information collected by technical surveys on roads and pavements. Mechanical surveys of roads measure the skid resistance of the road and the evenness of the surface. If skid resistance is reduced and the surface is losing the stone chippings but the road has a sound structural base indicated by an even surface, a less expensive thin overlay treatment is appropriate. If, however the road is rutted and undulating with large and frequent potholes, recorded visually, this indicates a failed substrate layer and resurfacing or reconstruction is the only remedy. On footways, similar treatments are available in similar conditions.
1.30 The schemes listed in Appendix E1and E2 are all in the category of fabric repairs as defined in the Criteria for Prioritisation section of this report. As stated previously, the highways maintenance Revenue budget is currently adequate to cover the safety issues, which are identified by inspections and complaints from the public. It is important that resources such as this being allocated in this report are found on an ongoing basis for fabric repairs so that the overall deterioration of the highway can be halted. Where planned maintenance is minimal, the need to carry out safety repairs increase due to the continuing deterioration and it is possible that hazard repair could outstrip Revenue resources.
1.31 Officers from Highways Management Division will be present at the meeting to provide further information if required
The Contingency
1.32 It is proposed that the contingency be operated on the same basis as for 1999/2000 with responsibility for its allocation being delegated to a senior officer. For 2000/2001 it is recommended that the delegation be made to the Corporate Director for Corporate Services. This would be consistent with Policy Finance & Asset Management Sub-Committee report 7.3.2000 Page 15
PART 1 -–MEMBERS, PUBLIC AND PRESS Committee’s decision on the 15th February 2000 to delegate responsibility for the day to day management of the Capital Programme to the Corporate Director of Corporate Services within the parameters that: q Decisions are consistent with the CIS and the overall Capital Programme agreed. q In year investment expenditure is maximised to achieve investment priorities. q Any variations in the programme are managed within the resources available to support capital investment. q Any action taken is reported to Members as part of the reporting process on the progress of implementing the approved Capital Programme during the year.
Conclusion
1.33 The current years programme has performed well, with the exception of the Civic Centre Multi Story Car Park Scheme. But this alone should not detract from the success of the innovations adopted by the Sub-Committee in respect of the allocation of resources, the use of re-phasing and the operation of the contingency. The proposals in the report for the 2000/2001 Capital Maintenance Programme continue to utilise these.
1.34 As already stated the findings of Internal Audit review in respect of the Civic Centre Multi Story Car Park and the actions it is proposed to take to address these will be reported to the Sub-Committee at a later date. However it would be officers intention to ensure that this incident is not repeated and that lessons are learned from it.
LEGAL IMPLICATIONS
1.35 In considering maintenance, the Council needs to take reasonable steps to ensure that all land and property is maintained so that it is safe for all those having access to it.
FINANCIAL COMMENTS
1.36 This report was prepared with the Chief Financial Officer and her comments are included in the main body of the text.
BACKGROUND DOCUMENTS
Condition Surveys Three-Year Highways Maintenance List Monthly Capital Monitoring Information
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PART 1 -–MEMBERS, PUBLIC AND PRESS REVENUE BUDGET 2000/01 ITEM 2
CONTACT OFFICER : Paul Whaymand TELEPHONE: 01895 250111 ext 2084
SUMMARY
This report informs Members of the draft revenue budget for this Sub-Committee for 2000/01. It also updates Members on the revenue position for the current financial year.
RECOMMENDATIONS
The Committee is recommended to:
1. Note the current year’s revenue budget position for the Finance & Asset Management Sub-Committee.
2. Note the draft revenue budget for the Finance & Asset Management Sub-Committee for 2000/01.
INFORMATION
The Current Year
2.1 At the last meeting of this Sub-Committee in November it was reported that there was a projected net underspend for the current year of £178k. Since then other budget pressures and underspends have emerged. The latest projected net underspend for the Sub-Committee is £6k, £172k worse than in November.
2.2 The main items not previously reported to Members are as follows;
Self-Insurance (+£100k) – At the September Policy Committee the base budget for self-insurance costs was increased by £300k to £800k. It is now expected that the total spend in the current year will be around £970k. After applying around £70k earmarked balances brought forward at the start of the year there will now be a pressure of around £100k. This budget will be devolved to Groups for 2000/01 as part of the Council’s move towards risk management. Only a small proportion (around £25k) of self-insurance claims relate to services within this Sub-Committee.
Revenues Contract (+£100k) – Previously it was expected that the £175k savings target in the base budget for Revenues outsourcing would be under- achieved by around £75k due to slippage in the expected start date for the
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PART 1 -–MEMBERS, PUBLIC AND PRESS Capita contract. This subsequently increased to the full £175k following the failure to agree acceptable terms with Capita.
Probation Service Lease of Magistrates Court Building (-£150k) – The Council has now agreed terms with the Probation Service over their long standing occupation of the Magistrates Court building. The £150k net benefit to the budget is in addition to clearing the £420k debt in the accounts relating to their occupancy of the building in prior years.
Audit Fees (+£45k) – The District Audit service has incurred additional costs in dealing with the Council’s NNDR problems and costs associated with reports in the public interest.
Legal austerity Measures (+£18k) – Various austerity measures have been implemented by Legal Services over the last 6 months. However, these efforts have now been cancelled out by the urgent need to upgrade some of their IT equipment.
Registration of Electors Canvassing Budget (+£15k) – The Canvassing budget was cut at the start of the year by £20k as a one-off measure for the current financial year. Having taken legal advice it was decided that the measures required to achieve such a cut would result in an unacceptable reduction in the completeness of the register. Some compensating savings have been found but the budget will still overspend by around £15k.
Economic Development - Tourism Konver project S106 funding (+16k) – The pressure caused by the Council not being able to identify any suitable S106 funding for this project has now risen to an estimated £50k. Compensating underpends in Economic Development have been identified to reduce the overall pressure down to £36k.
Best Value performance management measures (+£20k) – It was previously expected that the corporate Best Value budget in relation to performance management measures would underspend by around £20k. The final costing for the production and distribution of the Best Value Performance Plan now makes this unlikely. The Best Value budget is now expected to come in on target.
The Base Budget 1999/2000
2.3 Appendices 1 to 3 to this report set out the draft revenue estimates for the Sub-Committee’s services. The estimates are based on the approved 1999/2000 budgets increased for known pay and price changes.
2.4 Appendix 1 shows the budget position for the direct services within the Sub-Committee. Appendices 2 and 3 show the budget position of support services within Corporate Services and the Chief Executive’s Office. These services are fully recharged out to front-line services within this Sub-Committee and to other Services around the Council. The property services were previously Finance & Asset Management Sub-Committee report 7.3.2000 Page 33
PART 1 -–MEMBERS, PUBLIC AND PRESS included within HDS estimates but have been transferred to Corporate Services during the current financial year. Appendix 4 pulls together all the services which feed into Corporate Management.
2.5 The development of the 2000/01 draft budget from the budget at the start of the current year can be summarised as follows:
£ 1999/2000 Original Budget 12,411,330 Inflation to November 1999 137,740 Changes to capital charges & CSC budgets 99,620 Savings already agreed & allocated for 2000/01 (1) -125,000 Pension Actuarial Provision allocated to Groups in 1999/2000 400,000 Self Insurance provision transfer to Groups -475,000 Ex-HDS trading Surpluses (Property & Building Cleaning) -119,230 Facilities Management Budget Reduction -175,000 Draft Estimate 2000/01 12,154,460
Notes–
(1) The £125k saving agreed and allocated per September Policy Committee relate to grants (£50k), General Corporation Estates rent re Probation Service lease of Magistrates court (£50k), Registration of Births, Deaths and Marriages Income (£10k) and Economic Development (£15k). The total cut to the Sub- Committee’s budgets was £200k, the balance coming from Payroll (£25k) and Best Value (£50k) – both memorandum account services recharged to front line services.
2.6 In addition to the items already incorporated in the base budget, there are a number of other items that will need to be added depending on decisions that are made at Council Tax fixing meeting on 6 March. These include the following potential pressures;
Members Allowances +£400k Best Value Inspection Fees+£150k Communications Growth +£70k Corporate Initiatives +£100k (plus potential £50k transfer from grants budget)
2.7 Any additional cuts allocated to this Sub-Committee at Council Tax setting will also need to be adjusted for.
2.8 The Committee’s budget does not contain any provision for pay and price increases that will apply after the beginning of April. The Council will budget
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PART 1 -–MEMBERS, PUBLIC AND PRESS centrally for these increases, and make allocations to Committees at the appropriate times.
2.9 The estimates include the revised costs of central support services, such as civic centre accommodation, financial services, legal and IT for 1999/2000. The revisions take into account changing use of space and any other variations to the basis of allocation of these services.
2.10 The estimates also include the effect of revised definitions of services that can be classed as ‘corporate management’ in the new CIPFA ‘Accounting for Best Value’ document. This has had the effect of charging a greater amount of support service costs to Corporate Management as opposed to front line services. External Audit, Treasury Management, Committee Services and most of bank charges are now charged to corporate Management where as previously they were charged to front line services. However, a proportion of Corporate Personnel is now charged to services where as previously it was charged wholly to Corporate Management.
2.11 The £200k cut allocated to this Sub-Committee at September Policy Committee has already been implemented. There is a separate report to this Sub-Committee outlining how the £175k budget reduction in Facilities Management will be achieved.
2.12 Within the Committee’s budget are the following levies set by external bodies. The Council has no discretion to vary these levies once they have been set. The budget for the current year and the notified levy for 2000/01 are shown below. These budgets will be corporately adjusted so there will be no net saving to this Sub-Committee.
Levying Body 1999/2000 2000/01 Chang Levy Levy e £ £ % Probation Service 468,970 449,420 -4.2 Coroners Service 127,360 126,940 -0.3 Justices of the Peace Levy 3,780 3,890 2.9 London Pension Fund Authority 303,160 312,250* 3.0 London Boroughs Grants Scheme 999,040 997,630 -0.1 ALG 59,000 60,770* 3.0 LGA 52,620 46,130 -12.3 GLEA 20,320 20,930* 3.0 LGMB 6,980 7,190* 3.0 Total 2,041,240 2,025,150 -0.8
* Denotes the 2000/01 figure is provisional at this stage. In addition to the £60,770 provision for the estimated subscriptions for the ALG a further £5,000 is being provided for to fund the potential one-off costs associated with setting up a Finance & Asset Management Sub-Committee report 7.3.2000 Page 35
PART 1 -–MEMBERS, PUBLIC AND PRESS new London wide body. At the time of writing this report no decision has been made on whether this Council will agree to become a full or partial Member of this new body.
2.13 A final approved 2000/01 budget report will be taken to the next scheduled meeting of this Sub-Committee. This will pick up the detailed implications of any decisions that are made by the Council at the Council Tax fixing meeting.
2.14 There are no further significant issues with regards the Finance and Asset Management budget for 2000/01 that at this stage need to be brought to the attention of Members.
LEGAL IMPLICATIONS
2.15 There are no legal implications arising from this report.
BACKGROUND DOCUMENTS
CIPFA ‘Accounting for Best Value’ draft proposals (final document due to be published at end of February 2000).
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PART 1 -–MEMBERS, PUBLIC AND PRESS FACILITIES MANAGEMENT – SAVINGS 2000/01 ITEM 3
CONTACT OFFICER : Amanda Kelly TEL NUMBER : 01895 250559
SUMMARY
This report advises the Sub-committee of the measures that the Corporate Director has taken to achieve the savings of £175,000 agreed by Council on 20th January.
RECOMMENDATION
To note this report
INFORMATION
3.1 Facilities Management was included in the Council’s programme for Best Value Reviews for 1999/2000. Since the Best Value legislation does not come into force until 1st April 2000 this was not a statutory review. The following services were included in the review:
Security Catering Cleaning of the Civic Centre The Post Room The Switchboard The Microfilm unit Maintenance of the Civic Centre Print and stationery Photocopying.
3.2 In the autumn of 1999, it was clear that the Council’s overall finances were such that significant savings would have to be identified to enable the Council to set a balanced budget for 2000/01. As a result, the Management Board considered all departmental budgets to identify potential savings. A potential saving of £175,000 was identified against Facilities Management and it was suggested that this might best be achieved through outsourcing some or all of the service.
3.3 This saving was included in the schedule of potential savings sent to all Members in December. The Policy Committee on 12th January agreed a package of economy measures including this saving. This decision was re- affirmed by the Council on 20th January. This effectively meant that the Best Value Review had been superseded by this decision.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 3.4 Following the Council meeting, officers have been reviewing the service to identify potential savings. Whilst a major outsourcing exercise was not immediately feasible, there were other measures which could be set in train to reduce expenditure. Some of these relate to existing external arrangements.
How the savings will be realised.
3.5 Attached to this report as Appendix A is a schedule of savings for 2000/01. They will be realised as follows:
1. Security - £50K
The Manager has left and her deputy has taken voluntary redundancy. The service will be restructured to create a specialist CCTV/Out of hours service – in house – and a patrolling service which is currently covered by external contractors anyway.
Discussions are underway with Environmental Services to establish whether the specialist CCTV service should transfer to that department.
The external service will be contract managed by a new post reporting to John Purcell.
The net effect of the restructuring proposals is no redundancies. The external service will in due course be retendered.
2. Photocopying contract - £29k
This has been re-tendered via a consortium arrangement. The new contract will yield savings from May 2000.
3. Plan printing - £4k
This service is hardly used and will cease from October.
4. Mail Service -£14k
A vacant post will be deleted.
5. Microfilm - £5k
A vacant post will be deleted but some of this saving will be needed to invest in IT etc. so the net effect is only £5K.
6. Catering - £13k
Income will be increased over 2000/01.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 7. Cleaning - £30k
Currently there are 5 separate cleaning arrangements – the DSO, one day cleaner in FM, window cleaning, car park cleaning and pigeons. These will all be consolidated under John Purcell and the FM client side will no longer be required.
8. Deletion of Management post - £30k
Telecommunications will be consolidated under the new Head of ICT. The client/contractor splits for security and cleaning are no longer needed. This means that one management post can be deleted.
FUTURE WORK
3.6 The Council set the target of £175K savings from “outsourcing” FM at its meeting on 20th January. The assumption in the report was that further savings could be expected in 2001/2002. Given the Council’s overall position it is unlikely that further savings will not be required. There are a number of ideas which flow from the Best Value process which will need to be explored further over the next year.
1. Closure of the staff restaurant and expansion of the shop
The staff restaurant is not financially viable and is in effect subsidised by other activities. The shop is extremely popular and financially viable.
2. Ceasing the banqueting service
This is not a “core” activity for the Council and the Banqueting Service needs investment. It might be possible to seek a private partner. However, both this decision and 1 above need to be seen in the context of a property review of that part of the Civic Centre. What is the best use the Council can make of the building?
3. Microfilming
The future of this unit needs to be considered in the context of the ICT Best Value Review in 2000/01.
4. Maintenance
This needs to be considered in the context of the Property Best Value Review in 2000/01. All the Council’s maintenance arrangement will be considered rather than one in isolation.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 5. Mail Room
The Mail Room has operated in the same way since the Civic Centre first opened. It is very labour intensive and the Council needs to consider more efficient ways of working.
6. Outsourcing of an FM “package”
The Council decision was predicated on the outsourcing of some or all of Facilities Management. This remains an option if it seems likely that further savings will be achieved in this way which could be channeled towards front-line services. There is an external market for FM services. However, research needs to be conducted into that market and consideration given to whether it would be financially beneficial to the Council to tender such a package. The Council would also need to decide what such a package might include. This too would have to be seen in the context of a Best Value Review of Property.
The new head of property services will be carrying out this work over the next few months but any decisions will, of course, be for Members. There will also be consultation with affected staff.
CONCLUSION
3.7 It has been possible to find the savings agreed by Council on 20th January by re-organising a number of external arrangements and deleting vacant posts. The net effect on staff is one potential redundancy. However, if further savings are to be achieved for 2001/02, more radical options will have to be considered.
3.8 In addition, the new head of property services will naturally be reviewing all his services and considering what structure is most appropriate to deliver high quality services to the Council. It is therefore likely that further changes will be proposed during the course of 2000/01.
FINANCIAL IMPLICATIONS
3.9 The report outlines how the £175k cut in the facilities management budget will be delivered in 2000/01. This cut needs to be seen in the context of the Finance & Asset Management Sub-Committee’s overall budget position for 2000/01. This is outlined in a separate report to this meeting. The cost of the redundancy outlined in the report will be met from the existing provision in the capital programme for redundancies.
LEGAL IMPLICATIONS
3.10 The report refers to one potential redundancy at the present time, and to the outsourcing of certain services at some time in the future.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 3.11 In relation to any potential redundancy, the Council`s Redundancy policy and procedure will need to be followed. In relation to outsourcing, the potential implications of TUPE and the Government Policy on staff transfers in the public sector will need to be considered.
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PART 1 -–MEMBERS, PUBLIC AND PRESS APPENDIX A
FACILITIES MANAGEMENT
PROPOSALS FOR SAVINGS 2000/01
TARGET: £175K
SAVINGS
Security 50 New photocopying contract 29 Ceasing plan printing 4 Mail Service 14 Microfilm efficiency savings 5 Catering – increase income 13 Cleaning – efficiencies from consolidation of contracts 30 Deletion of management post 30 ______TOTAL 175
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PART 1 -–MEMBERS, PUBLIC AND PRESS DECLARATION OF FRAYS VALLEY LOCAL NATURE ITEM 4 RESERVE. DENHAM QUARRY / FRAYS FARM MEADOWS, HAREFIELD
CONTACT OFFICER: Colin Eastman. TELEPHONE: 01895 250620
SUMMARY
This report updates Members on the proposed declaration of the Frays Valley area as a Local Nature Reserve.
RECOMMENDATIONS
1. That the Committee declare the Frays Valley be a Local Nature Reserve pursuant to Section 21 of the National Parks and Access to the Countryside Act 1949.
2. That Policy Committee be recommended to authorise the making of appropriate bye-laws under the powers conferred under sections 20 and 106 of the National Parks and Access to the Countryside Act 1949.
INFORMATION
4.1 Officers reported to the July 1998 meeting of this Committee on the work undertaken in order to declare the Frays Valley area as a Local Nature Reserve. At that meeting members resolved: 1. That the Committee authorises Officers, on behalf of the Council, to formally consult English Nature concerning the declaration of the Frays Valley as a Local Nature Reserve, under section 21(a) of the National Parks and Access to the Countryside Act 1949. 2. That the Committee authorises officers to consult relevant organisations on the Management Plan, and reports the outcome to a future meeting of this Committee.
4.2 This report updates Members on the outcome of those consultations.
4.3 The proposed Frays Valley Local Nature Reserve lies in the north west of the Borough. The area comprises approximately 80 ha (nearly 200 acres) of varied habitat, including two Site of Special Scientific Interest (SSSI’s) at Frays Farm Meadows and Denham Lock Wood, five wet gravel pits, Harefield Place Nature Reserve, a very small part of Harefield Golf Course, part of Denham Lock Meadow adjacent to the Frays River, and the length of the Frays River within these boundaries (See fig 1).
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PART 1 -–MEMBERS, PUBLIC AND PRESS 4.4 Section 21 of the National Parks and Access to the Countryside Act 1949, gives local authorities the power to acquire, declare and manage Local Nature Reserves (LNR’s), providing they own or have a legal interest in the site in question. Hillingdon Council owns all of the land to be included within the LNR.
4.5 Local Nature Reserve designation provides a second tier of protection to sites of nature conservation and wildlife importance which are not of national significance but are nonetheless valuable areas. There are at present four designated Local Nature Reserves in the Borough. These are; Ruislip LNR designated in 1959, Yeading Brook Meadows and Yeading Woods LNR’s, both designated in 1989, and Denham Country Park LNR, jointly designated with Bucks.C.C. in 1997. The designation of the Frays Valley area as a LNR was proposed in the adopted Hillingdon Unitary Development Plan (Sept. 1998).
4.6 The responsibility for selecting, acquiring and managing these reserves is the local authorities’. However, local authorities must consult English Nature when exercising the powers given by Section 21. Following the July 1998 meeting of this Committee, English Nature were formally consulted on the designation of the Frays Valley area as a Local Nature Reserve, and they have acknowledged that ‘the requirement for consultation contained in Section 21(6) of the Act has therefore been met’.
4.7 A comprehensive Management Plan has been prepared for the area of the LNR with the assistance of the London Wildlife Trust, Hillingdon Natural History Society, London Ecology Unit and English Nature. The Plan incorporates all the existing management plans which at present exist for individual parts of the Reserve and will co-ordinate the future management of the area for nature conservation, as well as the other leisure activities which take place within the area. A number of relevant organisations, including those who at present make use of the area for both nature conservation and leisure activities, have been consulted on two occasions (Aug/Sept 1998 and March/April 1999) concerning the contents of the Management Plan, and the Plan has since been amended to reflect the comments received.
4.8 Work has now commenced on the preparation of the legal document marking the declaration of the Reserve, and the advertisements to be placed in local newspapers. Once declared, it is proposed that a small ceremony be held to mark the event.
4.9 Once the Council has declared Frays Valley a LNR under the National Parks and Access to the Countryside Act 1949, it is possible for the Council to introduce nature reserve bye-laws (under Section 20 (1) of the 1949 Act) in order to support staff and/or the police in controlling undesirable and unacceptable activities from taking place within the Reserve. These might include, for example, bye-laws controlling the use of firearms, the use of vehicles, the removal of species, or the import of alien species. Draft bye-laws have been prepared by officers, based on model nature reserve bye-laws produced by
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PART 1 -–MEMBERS, PUBLIC AND PRESS English Nature, for possible use at Frays Valley, if approved by the Policy Committee and the DETR.
4.10 Members will be aware that over the past few years officers have reported on a number of occasions to this Committee concerning areas adjacent to the proposed Reserve. Officers reported on a proposed land swap in June 1999, in order to allow parts of the former railway embankment, which runs through the area, to be incorporated into the LNR. Officers are still negotiating with the private owners of the two sections of the embankment in order to establish a legal interest in the land. Once this has been achieved it is proposed the embankment, which is integral to the Reserve, be included in the LNR designation.
4.11 Similarly Members discussed the potential for gravel extraction from Denham Lock Meadow – an area adjacent to the Reserve, in September 1999. Members resolved ‘that officers be requested to enter into negotiations with the London Wildlife Trust for a lease of this land for nature conservation purposes, to include consideration of incorporating this land into the adjacent Nature Reserve’. Again these discussions are continuing and once complete it is proposed that this area also be added to the LNR.
RESOURCES IMPLICATIONS
4.12 There are no financial implications arising from this report.
LEGAL IMPLICATIONS
4.13 Model bye-laws have been produced by the DETR which may be adapted to fit local circumstances, subject to approval by the Secretary of State. Your officers are in the process of drafting and adapting bye-laws for use in the Frays Valley Nature Reserve. Once the wording has been agreed, DETR will give approval to advertise them. Once advertised, and after one month consultation period has expired, copies of the bye-laws will be submitted to DETR for confirmation, after which a copy of the final printed version of the bye-law will be made available to the public.
4.14 The Scheme of Delegations empowers Committees to approve bye-laws for functions under its control.
BACKGROUND DOCUMENTS
National Parks and Access to the Countryside Act 1949. Local Nature Reserves in England – A Guide to their selection and declaration. English Nature 1999. Frays Valley Local Nature Reserve Management Plan 1999.
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PART 1 -–MEMBERS, PUBLIC AND PRESS BROADWATER ALLOTMENTS SITE ‘B’ HAREFIELD ITEM 5
CONTACT OFFICER: Martin White TELEPHONE: Extn: 3936
SUMMARY
This report considers the sale of part of Council owned former allotments on the open market in order to generate a capital receipt.
RECOMMENDATIONS
1. That the Sub-Committee authorises the disposal of the above site for sale by tender or negotiation on the open market on terms to be approved by the Head of Property Services Agency.
2. That officers are authorised, if necessary, to apply for Outline Planning Consent.
INFORMATION
5.1 The site is part of an existing allotment site, part of which (site ‘A’) has been sold and developed by a Housing Association for affordable housing. Site ‘B’ is vacant having originally been earmarked for further development for affordable housing.
5.2 The site is approximately 0.2 hectares (0.5 acres) in area and is shown edged black on plan no: G510/3 dated 16.11.99. Access is available from the now completed development on site ‘A’.
5.3 This site was the subject of a report to Housing Development Sub Committee on 11th June 1998 with a recommendation to delete from the Housing Programme. The decision was requisitioned to full Council on 30th July 1998 where the decision was ratified.
5.4 It is now recommended that the disposal of this site be reconsidered and restored to the Council’s capital programme. The site would then be advertised on the open market in order to generate a capital receipt.
RESOURCES IMPLICATIONS
5.5 The disposal of this site would generate a 100% usable capital receipt that could be used to support the Council’s Capital Investment Strategy and medium term Capital programme.
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PART 1 -–MEMBERS, PUBLIC AND PRESS LEGAL IMPLICATIONS
5.6 Under section 123 of the Local Government Act 1972, the Council may dispose of this land so long as it obtains the best consideration that can reasonably be obtained for the land.
Background Documents
None
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PART 1 -–MEMBERS, PUBLIC AND PRESS DISPOSALS OF SMALL PARCELS OF LAND ITEM 6
Contact Officer : Martin White Telephone : 01895 250936
SUMMARY
To report back the results of researches regarding whether applicants are still interested to purchase council land and willingness to pay the Council’s full costs together with options.
RECOMMENDATION
That the Sub Committee agrees to amend its existing policy on disposals of small parcels of land to allow these disposals to be effected if the prospective purchaser undertakes to cover the Council’s costs of disposal.
That the Corporate Director of Corporate Services be authorised to agree disposals of small parcels of land with a value of up to and including £10,000.
INFORMATION
6.1 Arising from the decision of the Finance and Asset Management Sub Committee on 30th November 1999, a survey was carried out to ascertain whether certain applicants who had previously expressed an interest in acquiring amenity land were still interested in purchasing, and whether they were prepared to give an undertaking to cover the Council’s administration, legal and surveyors costs at a minimum charge of £1,000 prior to entering into negotiations.
6.2 Only certain applicants were sent the questionnaire, after the land had been identified as not being public open space, green belt or adopted highway. In cases where the land in question did fall into any of these three categories then the Council could not be recommended to agree the sale and enclosure of such land even if the present policy of an embargo on minor land disposals changed. Land currently part of the highway would have to be taken out of adoption by the Magistrates Court following lengthy officer time and Court costs (all to be paid by an applicant in addition to the value of the land)
The survey results to date: 40 applicants sent questionnaire, 26 replies received
· 25 still interested to purchase ä 18 willing to pay £1,000 costs ä 7 not willing to pay £1,000 costs · 1 not interested to purchase
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PART 1 -–MEMBERS, PUBLIC AND PRESS The survey indicates that the Council could potentially have 18 cases of minor land disposals with which to deal.
Fresh applications continue to be received but are being placed on hold until a decision on this policy is made.
6.4. The Committee is reminded that the policy was introduced in 1995 as it was recognised that officer time involved in dealing with these cases is not insubstantial and detracts from the time required to deal with more important work for the Council. In view of the Council’s current financial position vacant posts in Estates and Valuation have not been filled so this workload would fall on the current staff who are already committed to other work.
6.5. Negotiations of individual small transactions would tend to be handled by junior staff (there is only one member in the team at the moment) but the principle to agree disposals would need to be taken at a higher level and client side representatives. At present a report has to be referred to two Committees for authorisation for each individual transaction which will undoubtedly place extra pressures on limited resources and officers.
6.6. The Committee asked that in the light of the response could the work on such disposals be put out to external agents. It has been felt that such “minor” value work would not be attractive to such agents. On the basis of the response to the survey, if the 18 applicants were put out as a block of work, agents are likely to charge 15- 20% of the value as their fees.
The value of land for the 18 applicants is approx £23,000 Deduct agents fees at 15-20%, say £3,500 - £4,500 Add back costs reclaimed at £1,000 each £18,000 Internal costs to administer at £900 each £16,200
The net effect is that the agents only carry out the negotiations and agreement of the deals. Their return is about £200 - £250 per case overall (the internal costs would be around £100 for this element of the job) but when based on land values as low as £500 a fee rate at 15% only gives them £75 for that case. Council officers have always accepted that minor land sales work is time consuming and generates little income but with all the other major work is part and parcel of a busy valuation practice. If the work of negotiation were to be put out the only way it may be attractive as a block would perhaps be to offer higher rates of fees or a sliding scale dependent on value of the land.
6.7 However, offices advise that the options open to Members are:
1. Retain the existing policy unchanged
2. Amend the policy to include the exception that where at the outset the applicant agrees to meet the Council’s costs in full then the council will seek to negotiate a disposal of the land concerned. Finance & Asset Management Sub-Committee report 7.3.2000 Page 55
PART 1 -–MEMBERS, PUBLIC AND PRESS 3. Amend the policy such that the Council handles all applications and negotiates a disposal whether or not the applicant is prepared to meet the Council’s full costs.
6.8 Officers advice is that Committee should adopt option 2 since it is felt that these disposals should proceed provided that there is no cost to the Council.
6.9 In order to defray internal costs as much as possible, Committee is asked to authorise the Corporate Director to approve applications and disposals on land with a value up to and including £10,000 thus avoiding the additional costs associated with obtaining committee approval.
FINANCIAL COMMENTS
6.10 The potential disposals discussed above relate to the generation of very minor receipts. In the context of the Council’s overall financial position Members would be advised that from a financial viewpoint to ensure that any changes in policy do not result in the costs of disposal exceeding the receipts received.
6.11 At the same time Members are reminded that the Council’s Capital Investment Strategy and approved medium term Capital Programme are dependent on the generation of circa £6m capital receipts in 2000/2001. If such a level of receipts were not generated then it would necessary either to reduce the approved Capital Programme or finance any shortfall from General Fund Revenue Balances. Members are therefore advised to take appropriate account of the need to generate these receipts, and therefore ensure that there are sufficient valuation resources directed towards this, when considering any change in the policy on small-scale disposals.
6.12 Finally receipts from the disposal of land less than £5,000 are treated as revenue rather than capital receipts and as such would contribute to revenue balances.
LEGAL COMMENTS
6.13 A local authority may wish to ensure consistency in its decision making by establishing or revising policy rules or guidelines. These must not be applied so rigidly that the proper exercise of discretion in each case is precluded. The existing “presumption against the sale, lease or disposal” of small parcels of Council-owned land does not apply as a blanket policy which precludes the exercise of discretion, and is not therefore unreasonable, because it effectively provides for each case to be decided on its individual merits against the background of the policy guidance adopted by the original Finance & Property Sub Committee resolution in 1995.
BACKGROUND DOCUMENTS
Finance & Asset Management Sub-Committee report 7.3.2000 Page 56
PART 1 -–MEMBERS, PUBLIC AND PRESS Correspondence with individuals seeking to acquire small parcels of land.
COUNCIL TAX AND NATIONAL NON –DOMESTIC RATES - ITEM 7 IRRECOVERABLE AMOUNTS WRITTEN OFF UNDER DELEGATED POWERS
CONTACT OFFICER : Amanda Jeynes TELEPHONE :01895 250358
SUMMARY
This report contains details of irrecoverable amounts of Council Tax and National Non-Domestic Rates which have been written off by officers under delegated powers in the last quarter.
RECOMMENDATION
That the Committee note the amounts written off by officers under delegated powers.
INFORMATION
7.1 Under the scheme of delegations, officers have delegated powers to write off income due to the Council in respect of sums up to £5,000, subject to quarterly reports to the Finance and Asset Management Sub Committee summarising the action taken.
7.2 This report contains details of irrecoverable amounts of Council Tax and National Non-Domestic Rates which have been written off by officers under delegated powers in the last quarter.
COUNCIL TAX
7.3 A total of £4,426.93 has been written off in respect of Council Tax. This is made up as follows:
Range No. of Amount cases £.p Up to £100 159 2,060.53 £100.01 to £500 6 1,446.61 £500.01 to £1,000 1 919.79
Total 166 4,426.93 Finance & Asset Management Sub-Committee report 7.3.2000 Page 57
PART 1 -–MEMBERS, PUBLIC AND PRESS 7.4 The reasons that these amounts have been written off are as follows:
Reason No. of Amount cases £.p Moved away - unable to trace 92 3,806.33 Ratepayer deceased - Estate 7 134.75 insolvent Uneconomical to Collect 65 360.85 Others 2 125.00 Total 166 4,426.93
NATIONAL NON-DOMESTIC RATES
7.5 A total of £7,140.49 has been written off in respect of National Non- Domestic Rates. This is made up as follows:
Range No. of Amount cases £.p Up to £100 0 0.00 £100.01 to £500 0 0.00 £500.01 to £1,000 3 2,840.55 £1000.01 to 1 1,321.20 £2,000 £2,000.01 to 1 2,978.74 £3,000
Total 5 7,140.49
7.6 The reasons that these amounts have been written off are as follows:
Reason No. of Amount cases £.p Others 5 7,140.49
Total 5 7,140.49
LEGAL IMPLICATIONS
7.7 This report has no legal implications.
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PART 1 -–MEMBERS, PUBLIC AND PRESS BACKGROUND DOCUMENTS None
COMMUNITY CHARGE WRITE-OFFS ITEM 8
CONTACT OFFICER: Paul Whaymand TELEPHONE: 01895 250816
SUMMARY
This report contains details of the Community Charge debts that remain uncollected and those that are now being recommended for write-off.
RECOMMENDATION
That Members approve the write-off of all Community Charge accounts where there is no current collection taking place.
Information
8.1 It is now coming up to 7 years since the abolition of Community Charge and all the debt is between 7 and 10 years old. The District Auditor has expressed concern in the management letter that these debts are still in the Councils accounts after this long period of time.
8.2 No recovery action has been taken on these accounts for a number of years other than maintaining existing attachments. It is therefore now appropriate for the majority of this debt to be formally written out of the Council’s accounts as uncollectable.
8.3 The value of the individual debts are all well under £5,000 so could be written off under delegated powers. However, because they are being written off in bulk with such a large total value it was felt that Members should be formally requested to write them off.
8.4 The fall off of debt since the abolition of Community Charge in April 1993 has been as follows;
Date Gross Arrears Net Arrears Movement £000’s £000’s £000’s 31/3/93 11,895 11,611 31/3/94 7,830 7,541 -4,070 31/3/95 7,275 6,972 -569 31/3/96 6,791 6,496 -476 Finance & Asset Management Sub-Committee report 7.3.2000 Page 59
PART 1 -–MEMBERS, PUBLIC AND PRESS 31/3/97 6,557 6,252 -244 31/3/98 6,351 6,016 -236 31/3/99 6,260 5,925 -91 31/3/00 6,235 (est) 5,900 (est) -25 (est)
8.5 In the early years following the abolition of Community Charge it was possible to take recovery action because the location of debtors was known and evidence was readily available. There has been a steady fall off of in recovery over subsequent years and in the current year it is expected that the amount recovered will have fallen to around £25k. The current information available to pursue debtors is limited.
8.6 Appendix 1 shows a summary of the debt outstanding by value. There are 36,110 accounts with arrears still outstanding and 23,565 in credit. It can be seen from the value profile that a large proportion of the debt is of relatively small values. 23,967 accounts with a total value of around £1.5m are all individually under £200.
8.7 The cost of taking enforcement action against a debtor, assuming they can be easily located, including the Council’s costs is likely to be at least £200. Pursuing any debt under £200 will therefore be uneconomic. The bulk of the remaining debt is between £200 and £800.
8.8 A large proportion of the remaining debt where no recovery action has been taken will now have become statute barred. In addition, where the location of a debtor is no longer known the cost of trying to recover any sums would be prohibitive.
8.9 There are a large amount of outstanding credits on Community Charge accounts (£335k) which also need to be written off. It is likely these that these credits relate either to receipts posted to the wrong Community Charge Account or to unidentified Community Charge receipts.
8.10 Of the accounts listed in Appendix 1, some have existing attachment orders and are gradually being recovered. It is proposed that £100k of the total debt is kept on the books relating to accounts where sums are still being collected. The £100k is an estimated figure that may reduce if any of the current attachments stop or may increase if other debt becomes collectable.
8.11 The Council has a 100% provision against the gross Community Charge arrears. If the Council were to write off £6,173k of arrears (total arrears less £100k debt still deemed collectable) and the £338k of accounts in credit it would result in a net surplus of £338k. We would still maintain a 100% provision against the £100k debt left in the accounts. Under the regulations relating to the treatment of Community charge items, this credit will be used to offset the Council Tax increase in 2001/02. There will be no financial implication for the General Fund in writing off these accounts.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 8.12 If Members wish officers to pursue some of this debt then the recovery costs will be chargeable to the cost of collection in the General Fund. There is no current budget provision to pursue Community Charge unless resources are taken away from either Council Tax or NNDR following the decision of Finance & Asset Management Sub-Committee to terminate the DSO’s work on Community Charge collection with effect from April 1998.
8.13 As previously mentioned, even if enough arrears were collected, the benefit would not be felt until 2001/02 when the sums received could be used to offset Council Tax increases. There is a significant danger that the sums collected may not cover the sums spent pursuing the debt.
8.14 At some point each debt will have to be written-off in the Revenues system. This will be time-consuming and is not the main priority at present given the problems being experienced with NNDR.
8.15 Consideration has been given to outsourcing the recovery of this debt. This option was put to Capita during the Revenues contract negotiations but their proposals suggested that they were not overly interested. They did put forward a proposal that meant that they would keep 90% of any debt they recovered, plus £5 handling charges for all cases submitted for write-off or to insolvency practitioners. The Council as the client would still have been required to allocate resources in support of such an arrangement (checking the contractors claims, processing write-offs, dealing with queries the debtors will pose with the contractor etc). This level of involvement would be required even with a conventional debt-collecting agent.
8.16 It was felt at the time that the likely financial benefit to the to the Council of such an arrangement would have been minimal. Outsourcing the recovery of this debt to a contractor is therefore not likely to be of financial benefit to the Council.
8.17 In conclusion, Members are therefore requested to formally approve the writing off of all Community Charge debt where there is no current collection taking place (£6,172k gross, £5,834k net) as recommended by the District Auditor.
LEGAL IMPLICATIONS
8.18 There are no direct legal implications arising from this report.
BACKGROUND DOCUMENTS
Community Charge arrears report
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PART 1 -–MEMBERS, PUBLIC AND PRESS chart
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PART 1 -–MEMBERS, PUBLIC AND PRESS SUNDRY DEBTOR ARREARS MONITORING ITEM 9
CONTACT OFFICER: Paul Whaymand TELEPHONE: 01895 250816
SUMMARY
This report contains details of the sundry debtor arrears position for the Council analysed by Group. The report concentrates on sundry debts outstanding for over 6 months as this is an indicator the Borough Treasurer considers should be used as a measure of financial performance.
RECOMMENDATION
That Members note the current position with regard to the level of sundry debtor arrears.
INFORMATION
9.1 One of the proposed Corporate Health indicators for a Local authority under Best Value was the level of sundry debtor arrears relative to the size of the authority. The measure the Government proposed to use was the value of sundry debts that have been outstanding for greater than 6 months as a percentage of the Council’s turnover. Although this has not been included as a requirement for 2000/01, the Borough Treasurer considers that it should be used as a measure of financial performance.
9.2 The total debt outstanding at any point in time is very volatile due to the timing of when sundry debts are raised. The level of debts that have outstanding for greater than six months is a much better indicator of an authorities underlying financial health because it tends to be much more stable.
9.3 All authorities should aim to get the value of debt over six months old to as small a figure as possible. If the debt is going to be collected then it would normally be within the first 3 months but certainly within 6 months. By targeting debt within this timescale the Council will have the best possible chance of recovering it. After 6 months the Council should have either have agreed payment terms with a debtor in cases of hardship, negotiated a settlement, be pursuing the debt through legal means or have written it off.
9.4 Since April 1999 we have been corporately monitoring both the total level of debt and the level of debt over 6 months old by Group and Service within Group. These reports are being sent to each Head of Finance so that they can identify arrears where debt recovery is a problem. In addition service managers are sent reports each month detailing accounts raised, sums collected and balances outstanding.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 9.5 The Central Income Control Team regularly chase service managers regarding what they want to do with the older debt. There are still too many managers within the Council who are ignoring old debt. The profile of old debt will be raised with the introduction of this performance indicator. It is recommended that the management team for each Group receive periodic reports outlining the debt profile of their services so that more pressure is exerted on service managers to take ownership of their debt .
9.6 The provision for bad debts was devolved to Groups during 1999/2000 to encourage Groups to take a more active interest in their debt. The financial consequences of collecting or not collecting debt will now be borne by each Group.
9.7 Appendix 1 shows a summary of the total debt outstanding by Group as at 30/4/99 and 31/12/99. As already explained, the total level of debt is very volatile so the increase between these two dates is not significant. The more meaningful indicator of arrears over 6 months old has risen by £78k to £922k.
9.8 This increase is primarily due to one large debt in Social Services having become over 6 months old. This debt is £114k and relates to moneys owed by a London Borough for 2 clients it placed in Hatton Grove for the period April 1998 to March 1999. Social Services expect that this debt will be resolved by 31 March 2000.
9.9 Having taken out this exceptional item the total arrears over 6 months old has fallen slightly. However, the figures for both Education,Youth & Leisure and Housing have both increased over this period. More work will need to be done by all Groups before 31 March in order for the performance indicator to improve significantly from last year.
9.10 The Corporate Services figure for debts over 6 months old looks high at £205k, but this includes £125k in relation to Car Loans. These are where staff have left the Council’s employment still owing a balance on their car loan. The majority of this debt relates to staff who work in other Groups (mainly Social Services). Only 7% of all loans granted by the Council are in Corporate Services.
9.11 Where possible sums are deducted from their final months salary but often the loan outstanding is significantly more than this. A large proportion of this debt is being paid off via standing orders however the growth in this debt is worrying.
9.12 Of the remaining debt over 6 months old in Corporate Services (£80k), a large proportion is slowly being cleared in line with agreements reached with debtors or has been referred to legal. However, there are some accounts that will either need to be written off or cancelled. The next meeting of this Sub- Committee will receive a report on write-offs.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 9.13 Ex HDS debt is in the process of being re-categorised to reflect the new Group structure. The debt transferred from HDS to Corporate Services relating to Property Consultancy, Catering, Valuers and Building Cleaning is currently being reviewed. The work that has been done to date on this debt suggests that there should not be any significant write-offs.
9.14 Officers will continue to monitor the position with regard to this performance indicator and report to Members any significant developments. The debt position for services reporting to this Sub-Committee will continue to be reported periodically to Members.
LEGAL IMPLICATIONS
9.15 There are no legal implications arising from this report
BACKGROUND DOCUMENTS
Monthly reports produced by Income Control of sundry debtor arrears.
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PART 1 -–MEMBERS, PUBLIC AND PRESS plan
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PART 1 -–MEMBERS, PUBLIC AND PRESS NATIONAL NON-DOMESTIC RATES – SECTION 11 NOTICE ITEM 10 REPORT OF THE BOROUGH TREASURER
Contact: J. Maule Tel: 01895 250 567
SUMMARY
The District Auditor has issued a Section 11 notice in respect of the continuing difficulties experienced with the National Non-Domestic Rates (NNDR) system. The recovery plan to rectify the remaining areas of difficulty is set out for approval.
RECOMMENDATIONS
That the Sub-Committee: Ø approves the recovery plan; Ø agrees in principle that any necessary additional resources should be provided; Ø endorses the steps already put in place to demonstrate the soundness of the system; and Ø notes that Council will be required to consider this matter at its April meeting.
INFORMATION
10.1 This Sub-Committee has previously received reports on the difficulties experienced when the computer system used for NNDR purposes was changed in 1997. To recap briefly: data was corrupted on the transfer from the old, bespoke, LOLA system to the new FirstSoftware system. This was a problem in itself but also made it very difficult for staff to implement a large number of revaluations. The problems arising from this have created a heavy workload for the NNDR team and at the same time made it difficult to take recovery action on cases where there was uncertainty about the records in the system.
10,2 Once staff were confident that the system was operating properly, a programme of work to correct corrupt data was instituted. This has had to be accomplished at the same time as dealing with a backlog of revaluation work, which is itself resource-intensive and requires a degree of specialist knowledge. Much has been accomplished, to the extent that staff felt sufficiently confident to commence action to recover arrears at the end of 1999.
10.3 The nature of the corrections can involve numerous adjustments being made to a particular account, as any change to the valuation may lead to adjustments being required to transitional relief. Because staff concentrated on the practical aspects of correction, the paperwork needed to validate the Finance & Asset Management Sub-Committee report 7.3.2000 Page 67
PART 1 -–MEMBERS, PUBLIC AND PRESS adjustments has not been maintained in a readily accessible format. In addition, some reconciliations were not undertaken, or were not kept up-to-date.
10.4 District Audit were unable to certify the Council’s 1997/98 claim for reimbursement from the national pool because of the uncertain position at that time. When they came to work on the 1998/99 claim, not surprisingly, they wished to undertake a higher level of sampling and verification than they would normally apply, so that they could be satisfied that the problems had been properly addressed. However, the audit work on the system, undertaken by Internal Audit on the District Auditor’s behalf, showed that a number of key controls were either absent or ineffective. They also expressed a fundamental concern about the absence of control total validations at the point of transfer, giving rise the possibility that staff may be unaware of some errors, despite the work undertaken to correct the known ones.
10.5 Unfortunately, it was not possible to satisfy them because records of adjustments have not been maintained in a satisfactory manner. Sampling revealed a number of errors in the calculation of revaluation refunds. In addition, a substantial discrepancy between the claim form and the system output caused further concern to the auditors, even though the reason for this was quickly demonstrated. As a number of reconciliation processes were not up-to-date, it was not possible to use those to reassure the District Auditor either.
10.6 As a result of the various problems encountered, the District Auditor suspended work on the 1998/99 claim and the accounts for last year have been qualified on account of his inability to be satisfied that the system is working correctly. Given that this was the second year of accounts with the same problem, he felt it appropriate to issue a Section 11 notice.
10.7 A Section 11 notice is issued by the District Auditor when he considers that something is sufficiently important that is needs particular attention by the Council itself. It is a “recommendation requiring a public response” under Section 11 of the Audit Commission Act 1998. The recommendation is that the Council should:
· develop a recovery plan is developed to validate and correct information held on the NNDR system to ensure it is accurate and complete
· allocate sufficient resources to resolve the problems and monitor progress
10.8 Members need not be concerned that the system itself is flawed. The software is in use in other authorities, who have experienced no problems with it. Officers (and the district auditor’s staff) believe that the records for 1999/2000 are accurate. The concern lies with entries relating to 1997/98 and 1998/99. Not all aspects within the system have given rise to concern even in those years e.g. allocation of cash receipts to NNDR. The issue lies primarily with the accuracy of data transferred.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 10.9 The Head of Revenues Services and the client-side Contracts Officer have drawn up a detailed plan for NNDR work which is attached as Appendix A. It builds on the work already undertaken by Internal Audit, and the recommendations made in their report. It attempts to identify both specific issues to be resolved and areas where best practice requires changes in procedure. Appendix B lists the IT work that is needed to support the plan, as various new interrogations are the key to establishing overall reconciliations and dealing with the issues for prior years. The plans are intended to be detailed and comprehensive in content. They incorporate work needed to ensure that the implementation of the new Valuation List, effective from 1st April 2000, and the associated billing run is correctly carried out. The billing run for 2000/01 has been processed and appears to have gone very smoothly. It is being fully reconciled, to provide assurance that all sums due have been billed.
10.10 The plan has been the subject of some discussion with District Audit staff but senior management will be meeting the District Auditor to check that the plan will meet his requirements. Any amendments resulting from that meeting will be incorporated. Regular progress reports will be made to the Borough Treasurer to ensure that the momentum is maintained. Internal Audit will also be reviewing the introduction and operation of key controls as part of following up their report. Despite the need to concentrate on the new Valuation list and billing run during recent weeks, it has been possible to make some immediate progress on the recovery plan. Reports will be made to this Sub-Committee to inform Members of further progress.
10.11 Resolution of all the outstanding issues will take some time, as normal work has to continue – the plan includes the key elements of that work. Clearly a priority has to be to improve collection rates, as Hillingdon has shown the worst rates in the country due to this problem. This includes the need to ensure that we make any recoveries due from the national pool. Fortuitously, a substantial sum was received in the current year in respect of the outstanding 1997/98 claim, presumably because the Government operates on a cash accounting basis. It will be extremely important to avoid having the 1999/2000 accounts qualified for continuing failure to rectify these issues.
10.12 Members may recall that the NNDR DSO failed to make its rate of return in both 1997/98 and 1998/99 as a result of the technical problems, and a Section 13 notice under the Local Government Act 1988 was received from the DETR. The DETR decided to take no action, in view of the decision to out- source NNDR as part of the contract package. The NNDR “contract” was due to end on 31st March 2000. Members will be mindful of the outcome of that tendering exercise. No response has yet been received from the DETR to the Council’s letter giving the detail of that exercise. However, it is understood that as a general policy, the DETR expects that “failing” DSOs will be included in the first year of Best Value review programmes. Further information on this is awaited but the advice of officers is that it would be inappropriate to conduct a full Best Value review on NNDR during 2000/01.
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PART 1 -–MEMBERS, PUBLIC AND PRESS 10.13 Undoubtedly, much of the work to be carried out as part of the recovery plan will contribute to achieving Best Value in NNDR. Nevertheless, the highest priority is to address the Section 11 notice and resources will not be available to deal with aspects of Best Value that fall outside that work. Realistically, it is hard to imagine that the Council will be able to attract serious interest from external contractors (as part of the competition element) for some time. It would be preferable to deal with NNDR together with other aspects of the Revenues and Benefits services once they have been merged and have had an opportunity to bed down new ways of working, i.e. at the end of the five year programme.
Financial Implications
10.14 There will be a need for extra resources to be allocated to NNDR, at least during the period of the recovery plan. This will be used to fund additional staff and buy in IT expertise. The cost of this has not yet been quantified as some aspects as the work are not fully identified. In the current year, vacancy savings in the Revenues service can be used to offset these costs but this may not be possible in 2000/01. If the problems are not resolved, the cash flow implications arising from the inability to fully recover from the national pool and difficulties in pursuing recovery will far outweigh any extra staffing and contract costs incurred. The loss of interest in the current year is estimated to be of the order of £1m and this has been a significant factor in the erosion of the Council’s overall balances. There is also potential for additional costs, if the auditor considers that any write- offs are due to deficiencies on the part of the Council, rather than for unavoidable reasons. The budget for next year assumes that no such problems arise for 2000/01.
10.15 There may be a longer-term need for more staff in the NNDR team. Part of the problem has arisen because staffing numbers were reduced to the minimum as part of preparations for CCT. This left no scope to deal with the unusually high workload that was actually required. There is undoubtedly a need for more specialist IT support to the whole of Revenues and this is being discussed in the context of the merger with Benefits.
Legal Implications 10.16 Section 11 Audit Commission Act 1998 places a duty on the Council to consider the Auditor’s written recommendation on NNDR in accordance with the Act. This requires the matter to be considered at a meeting of the full Council with details of the meeting and the item advertised in a local paper. The Council must consider whether to accept the recommendation and what, if any, action should be taken. A summary of the decisions taken must be published in a local paper and the District Auditor must be notified of the decisions. Background Documents Internal Audit report Management Letter
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PART 1 -–MEMBERS, PUBLIC AND PRESS TENDER FOR THE PROVISION OF INSURANCE & RISK ITEM 11 MANAGEMENT
Contact: Simone Batchelor Telephone: 01895 250448
SUMMARY
This report sets out the outcome of a tendering exercise for the Council’s main insurance requirements.
RECOMMENDATIONS
1. That the Sub-Committee accepts tender submitted by Zurich Municipal (Company A) for the whole portfolio. 2. That the saving that would otherwise accrue to the General Fund be used partially to restore the Insurance Fund.
INFORMATION
History
The authority currently insures with Zurich Municipal. The long-term agreement n the Council’s insurances expires on 31.March.2000 and therefore a tender exercise has been undertaken in order to award a new contract for the provision of Insurance and Risk Management.
Financial History
11.1 For this current year the Authority paid the following:
£1,092,279 (inc. IPT) for the main classes of business. £41,200 (excluding VAT) for the provision of claims handling £300,000 approx. (inc. IPT) for stand-alone policies.
Background
11.2 The appointed Broker is Lambert Fenchurch which has assisted in the tendering process and has conducted an evaluation of the tenders received.
11.3 In order to simplify the tender process and ensure the tenders received were comparable the market was only asked to quote on the main classes of business, with the chosen supplier required to provide for the remaining stand alone policies. Stand-alone policies are the small policies, which are not incorporated within the main classes of business, those such as building
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PART 1 -–MEMBERS, PUBLIC AND PRESS insurance for leased property e.g. Council shops & Industrial Units, Plate Glass insurance, Special Perils insurance for schools, Marine, Professional Negligence insurance etc.
11.4 Nine insurance companies returned tenders for either part or all the classes of insurance. Based on the analysis of the tenders by the Broker the following options are available to the Authority:
11.5 Company A provided the lowest tender for all classes excluding liabilities. Company B provided the lowest quote for liabilities, saving £20,500 on the Company A’s quote. However if the Liabilities are excluded from the package of insurance offered by Company A, the 5% package discount which they incorporated will be withdrawn. The loss of the package discount increases Company A’s quote by £26,475.
11.6 In respect of the remaining classes of business (those other than the liabilities) no economic alternative to Company A exists until the removal of the 5% package discount. On considering comparisons with the discount withdrawn two companies are marginally less expensive than Company A in respect of Property, Personal Accident and Miscellaneous Insurances, with the greatest saving £17,511. Motor and Engineering would still be placed with Company A, as Company A provided by far the lowest prices for these insurances (savings of £21,800 and £70,888 respectively). Our broker has made the comments that the Authority should consider whether £17,511 per year is significant enough to warrant moving all our major insurances considering that the package discount will be lost on both the engineering and motor resulting in an increase of £11,039. These calculations are made on the assumption that Company A would be prepared to write part of the property package.
11.7 In addition to our brokers comments on consideration being given to splitting our insurances over several insurers we feel that the possibility of increased administrative costs involved coupled with the potential service issues result in too many unknown quantities for the Authority to pursue this option.
11.8 If this is agreed two options are left:
1.accept the package quote from Company A 2.Revert to Company A and request that they reinstate the package discount excluding liabilities. This would enable the Authority to place the liabilities with Company B and all remaining classes of business with Company A.
11.9 Clarification was sought from Company A as to whether they would reinstate the package discount excluding liabilities. They have decline to do so and have confirmed that the position concerning the package discount remains as stated in their tender submission.
FINANCIAL IMPLICATIONS
Finance & Asset Management Sub-Committee report 7.3.2000 Page 86
PART 1 -–MEMBERS, PUBLIC AND PRESS 11.10 The gross savings as a result of this re-tendering exercise will be in the region of £380k p.a. The bulk of these savings are in the property related insurance premiums with only small savings in liability premiums. However, a large proportion of the property premiums relate to either HRA properties or to schools. Responsibility for insurance premiums are delegated to schools so any savings would be a benefit of schools rather than Council’s General Fund. The net saving attributable to the General Fund is in the order of £200k p.a. However, this saving must be seen alongside the continuing pressure relating to self insurance. It would be prudent if this saving, at least in year one, was applied in support of self insurance claims.
LEGAL IMPLICATIONS
11.11 There are no legal implications arising directly from this report.
BACKGROUND DOCUMENTS
None
Finance & Asset Management Sub-Committee report 7.3.2000 Page 87
PART 1 -–MEMBERS, PUBLIC AND PRESS Finance & Asset Management Sub-Committee report 7.3.2000 Page 88
PART 2 – MEMBERS ONLY