audit and risk scrutiny committee · 3. minutes of the meeting held on 11th june 2020* (pages 5 -...
TRANSCRIPT
AUDIT AND RISK SCRUTINY COMMITTEE
AGENDA
Meeting to be held virtually through Microsoft Teams software
on Thursday 23rd July 2020 at 6:30pm
(This virtual meeting will be livestreamed to YouTube and
recorded. The video archive can be accessed on the Council’s website.)
If you are participating in this virtual meeting, please turn mobile telephones to silent during meetings to avoid interruptions.
In accordance with the Openness of Local Government Bodies Regulations 2014, audio/visual recording and photography at Council meetings is permitted
in accordance with the Council’s protocol ‘Filming of Public Meetings’.
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AUDIT AND RISK SCRUTINY COMMITTEE Membership 2019/20 Councillors D Challinor, G Clarkson, C Entwistle, G Freeman, P Nicholls, J W Ogle,
L Schuller, B Sofflet and C Troop
Substitute Members: Any Member except those appointed to the Cabinet Quorum: 3 Members Lead Officer for this Meeting D Hill Administrator for this Meeting E Hinsley
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G:\REPORTS\Audit\July 2020\FINAL\2. Index.docx
AUDIT AND RISK SCRUTINY COMMITTEE
23RD JULY 2020
INDEX OF AGENDA ITEMS
1. APOLOGIES FOR ABSENCE
2. DECLARATIONS OF INTEREST BY MEMBERS AND OFFICERS * (Members and Officers' attention is drawn to the attached notes and form)
(a) Members (b) Officers
3. MINUTES OF THE MEETING HELD ON 11TH JUNE 2020* (pages 5 - 8)
4. MINUTES FOR ACTION AND IMPLEMENTATION * (pages 9 - 10)
5. OUTSTANDING MINUTES LIST * (pages 11 - 12) SECTION A – ITEMS FOR DISCUSSION IN PUBLIC Key Decisions 6. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES *
(a) Budget Monitoring Update Report Quarter 1: Capital, Revenue and Treasury
(Key Decision No. 830) (pages 13 - 40)
Other Decisions 7. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES *
(a) Corporate Risk Management Quarter 1 (pages 41 - 50) Exempt Information Items The press and public are likely to be excluded from the meeting during the consideration of the following items in accordance with Section 100A(4) of the Local Government Act 1972. SECTION B - ITEMS FOR DISCUSSION IN PRIVATE Key Decisions None Other Decisions 8. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES *
(a) Corporate Risk Management Quarter 1 (pages 51 - 54)
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G:\REPORTS\Audit\July 2020\FINAL\2. Index.docx
9. ANY OTHER BUSINESS WHICH THE CHAIR CONSIDERS TO BE URGENT * Report attached + Verbal report NOTES: 1. The papers enclosed with this Agenda are available in large print if required. 2. Copies can be requested by contacting us on 01909-533252 or by e-mail
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DRAFT AUDIT AND RISK SCRUTINY COMMITTEE Minutes of the Virtual Meeting held on Thursday 11th June 2020 on MS Teams Present: Councillors D Challinor (Chair), G Clarkson, C Entwistle, G Freeman, P Nicholls, J
Ogle, L Schuller, B Sofflet and C Troop. Officers: J Foulger, D Hill, E Hinsley, C Hopkinson, L Turner and S Wormald. (Meeting commenced at 6.30pm.) The Chair welcomed all to the virtual Audit and Risk Scrutiny Committee and explained that councils have been enabled to hold virtual meetings in order to allow business to be conducted while maintaining social distancing due to the outbreak of Covid-19. He then introduced Members and Officers by doing a roll call. The Chair outlined that in the event of the livestream failing or Members losing connection the meeting would be adjourned to allow the connection to be re-established. He also reminded participants to take appropriate safety precautions from their place of livestreaming. 66. APOLOGIES FOR ABSENCE There were no apologies for absence. 67. DECLARATIONS OF INTEREST BY MEMBERS AND OFFICERS (a) Members There were no declarations of interest by Members. (b) Officers There were no declarations of interest by officers. 68. MINUTES OF THE MEETING HELD ON 29TH MAY 2020. RESOLVED that the Minutes of the meeting held on 29th May 2020 be approved. 69. MINUTES FOR ACTION AND IMPLEMENTATION RESOLVED that the Minutes for Action be noted.
70. OUTSTANDING MINUTES LIST RESOLVED that the Outstanding Minutes List be received. SECTION A – ITEMS FOR DISCUSSION IN PUBLIC Key Decisions 71. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES (a) Financial Outturn 2019/20 (Key Decision No.815) Members were presented with the 2019/20 financial outturn position on the Council’s revenue and capital budgets including:
General Fund Revenue;
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Housing Revenue Account; Capital Programme; Provisions and Impaired Estimates on Debtors; Usable Reserves; Collection Fund; Balance Sheet; Treasury Management.
An Elected Member asked a question on relation to an environmental health property sale. Members were informed that the property in Gringley-on-the-Hill had been compulsory purchased. The owner has been unable to be located but the remaining money had been set aside to repay the owner should they come forward. In response to a question regarding the underspend relating to vacancies and the use of agency workers Members were informed that there are a number of vacant posts across the authority that are in the process of being filled however COVID-19 has delayed recruitment. The establishment is fully funded to support the running of services. RESOLVED that the Financial Outturn 2019/20 Report be noted. Other Decisions 72. REPORT(S) OF THE DIRECTOR OF CORPORATE RESOURCES (a) Draft Statement of Accounts 2019/20 Members were presented with the Draft Statement of Accounts for the 2019/20 financial year, for consideration. The report provided a summary of the development and performance over the financial year and also outlined planned future developments in service delivery, including revenue and capital investment plans. RESOLVED that the Draft Statement of Accounts 2019/20 be received. (b) Code of Conduct – End of Year Analysis Members were presented with an overview of the Code of Conduct arrangements including an update of the Code of Conduct complaints and standards matters during the past year. From April 2019 to March 2020 a total of 7 complaints were received (including 2 individual complaints about the same subject), all regarding Parish Councillors. Of these complaints, two were rejected during the year and four are still ongoing. Members asked questions about the initial assessment procedure for complaints. The Senior Solicitor advised that the Monitoring Officer is responsible for conducting the initial assessment in consultation with the Independent Person. RESOLVED that the summary of complaints received be noted. (c) Regulation of Investigatory Powers Act 2000 (RIPA) – Review of Use of Powers and Policy Members were provided with a report on the Council’s use of RIPA powers which stated that the Council had applied for no directed surveillance authorisations in the previous year. Members were also asked to reaffirm the Council’s RIPA policy.
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Members asked questions about the process of amending the policy and suggested adding a section specific to drone use due to their increasing prevalence. The Senior Solicitor confirmed that any amendments have to be approved by the Committee and that a corporate policy for drone use is being considered. It was also noted that links to relevant documents outlined within the Policy would be useful. RESOLVED that:
1. The contents of the report be received and the number of authorisations granted in 2019 be noted.
2. The Council’s RIPA policy and procedure document, the contents of which are unchanged, be approved.
SECTION B – ITEMS FOR DISCUSSION IN PRIVATE
Key Decisions None. Other Decisions None 73. ANY OTHER BUSINESS WHICH THE CHAIR CONSIDERS TO BE URGENT None. As there was no further business to consider, the Chair thanked everyone for their attendance and conduct at the virtual meeting. He reminded Members that should they have any questions on reviewing the accounts to contact the Head of Finance and Property or the Finance Manager (L Turner). He thanked Members and officers for their input and closed the meeting. (Meeting closed at 7:35pm)
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Agenda Item No. 4
MINUTES FOR ACTION AND IMPLEMENTATION SHEET
AUDIT AND RISK SCRUTINY COMMITTEE 11/06/2020
FROM: Democratic & Electoral Services Assistant TO: HCS = Head of Corporate Services
HFP = Head of Finance and Property The following decisions are brought to your attention for action by the appropriate officers within your Service:
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Agenda Item No. 5
AUDIT AND RISK SCRUTINY COMMITTEE
23RD JULY 2020 OUTSTANDING MINUTES LIST Members please note that the updated positions are shown in bold type following each item. (DCR = Director of Corporate Resources, FM=Finance Manager, HFP=Head of Finance and Property) Min. No.
Date
Subject
Decision
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Agenda Item No. 6(a) BASSETLAW DISTRICT COUNCIL
AUDIT & RISK SCRUTINY COMMITTEE 23rd July 2020
REPORT OF THE DIRECTOR OF CORPORATE RESOURCES
BUDGET MONITORING AND CAPITAL PROGRAMME UPDATE REPORT TO 30th June 2020
Cabinet Member: Finance Contact: David Hill
1. Public Interest Test 1.1 The author of this report, David Hill, has determined that the report is not confidential. 2. Purpose of the Report 2.1 To provide the Audit and Risk Scrutiny Committee with the attached ‘Budget Monitoring
and Capital Programme Update Report to 30th June 2020’, which will be reported to Cabinet on 1st September 2020.
3. Background and Discussion 3.1 As per the attached report. 4. Implications
a) For service users
As per the attached report. b) Strategic & Policy
As per the attached report. c) Financial - Ref: 21/459
As per the attached report.
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d) Legal – Ref: 64/07/20
As per the attached report. e) Human Resources
As per the attached report. f) Community Safety, Equalities, Environmental
As per the attached report. g) General Data Protection Regulations None arising from this report
h) This is key decision number 830.
As per the attached report. 5. Options, Risks and Reasons for Recommendations 5.1 As per the attached report. 6. Recommendations 6.1 That Members note the attached ‘Budget Monitoring and Capital Programme Update
Report to 30th June 2020.
Background Papers LocationCabinet Report and associated papers Head of Finance & Property’s Office
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Agenda Item No. BASSETLAW DISTRICT COUNCIL
CABINET
1ST SEPTEMBER 2020
REPORT OF THE DIRECTOR OF CORPORATE RESOURCES
BUDGET MONITORING & CAPITAL PROGRAMME UPDATE REPORT TO 30th JUNE 2020
Cabinet Member: Finance Contact: David Hill
1. Public Interest Test 1.1 The author of this report, David Hill, has determined that the report is not confidential. 2. Purpose of the Report 2.1 To inform Members of the spending position for the period 1st April to 30th June 2020
for the Council’s General Fund, and Housing Revenue Account, and update them of any significant variances from the approved budgets.
2.2 To request approval for variations and re-profiling to the existing Capital Programme. 2.3 To provide information on the proposed resourcing of the capital programme and the
level of Council capital resources available, including capital receipts. 2.4 To update Members on Treasury Management budget issues. 2.5 To provide Members with an update on the Council’s Treasury activity and Prudential
Indicators during the period 1 April 2020 to 30 June 2020. 3. Background and Discussion 3.1 The Council’s initial budget for the 2020/21 financial year (1st April 2020 to 31st March
2021) was approved on 5th March 2020.
3.2 This report is the first quarter position, and shows the forecast outturn variance for each portfolio area against approved budgets.
3.3 Members may be aware that the Council uses Collaborative Planning (CP) to monitor
its revenue budgets. The system involves Budget Managers forecasting their outturn position for each of the cost centers they control. They are asked to pay specific attention to forecast variances against controllable budgets, which are equal to or are
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greater than £10k. Managers are asked to explain these variances in detail and to identify actions they can take to address any variances to budget.
3.4 Throughout the year, regular revenue budget review meetings are being held
between The Portfolio Holder for Finance, Head of Finance & Property Services, Heads of Service, Budget Managers and members of the Finance team. The meetings are an opportunity for all concerned to review the latest forecast outturn position as reported through the CP Budget Monitoring system.
General Fund Revenue 3.5 The Table below summarises the first quarter position analysed over the different
portfolio areas. The current projections are that an overspend of £0.337m on the overall General Fund budget is expected to occur.
3.6 The forecast variance at Quarter 1 is summarised in the table below by portfolio area.
A traffic light system is being operated:- GREEN for variances between £0-£9,999 AMBER for variances between £10,000-£19,999 RED for variances equal to or greater than £20,000
3.7 The table below represents the expected outturn for 2020/21:
Portfolio Area Annual Budget
Forecast Outturn for
the Year
Forecast Outturn Variance
£'m £'m £'m
Chief Exec 0.109 0.109 0.000
Corporate 1.312 1.329 0.017
Finance Property & Revenue Services 2.428 2.515 0.087
Human Resources 0.004 0.004 0.000
Neighbourhoods 6.850 6.883 0.033
Regeneration 2.943 2.934 (0.009)
Housing Services 0.492 0.523 0.031
Sub-Total Service Areas 14.138 14.297 0.159
Other Budgets 4.022 4.200 0.178
Reserves -1.892 -1.892 0.000
Grand Total 16.268 16.605 0.337 3.8 Members should note that the estimated overspend at quarter one is a forecast only
and may reduce or increase. Close monitoring of performance against budget must be a top priority for Managers to identify any areas that pose significant budget pressures.
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3.9 There are a number of variances that make up the forecast outturn detailed above. Appendix 1 gives a detailed analysis of the forecast outturn variances equal to or greater than £10k. A summarised analysis of the major factors are detailed below:-
Forecast Outturn Variance
£'000 Underachieved income including Fees & Charges and other income 469Employee savings (net of agency) (430)Covid-19 Grant income (973)Covid-19 Additional costs/losses Not included within Service Forecasts 821External Consultants & Private Contractors 67Various supplies & services pressures 59IT Holding Account 40Leisure Management Trust COVID19 estimated impact 135Other minor variances (29)Sub Total Service Areas 159Drainage Board Levies 15Vacancy Factor funded by employee savings held within services 163Grand total 337
3.10 If the forecast £0.337m overspend materialises the impact would be to decrease
balances at 31st March 2020 from £3.569m to £3.192m. 3.11 One of the key factors the Mazars External Audit Engagement Lead assesses the
Council on is its ‘Financial Resilience’. Bassetlaw therefore needs to demonstrate it can manage emerging issues, like those seen in this budget monitoring report, and can also maintain its declared level of minimum reserves, which are an important measure of financial management. Therefore, the Minimum Working Balance needs to be maintained at £1.0m at 31st March 2020.
Fees and Charges 3.12 The income generated by fees & charges is significant to balancing the Council’s
budget and is a key area of attention for Bassetlaw. The accurate forecasting of income for the year can be problematic especially as factors external to the Council can influence how much income is generated. The value of the fee charged is also crucial to maximising income.
3.13 Fees & Charges are reviewed annually in line with the Corporate Charging Policy.
Cabinet approved the Fees & Charges for 2020/21 on 3rd December 2019. These approved fees and charges are then used in the annual budget setting process to determine the income budget required to reflect the expected income for the year.
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3.14 The table below monitors all income streams generated from Fees & Charges for the Council. It shows the current year’s annual budget, the outturn as forecast at quarter 1 and the forecast outturn variance as at 31st March 2021. This table shows that the forecast outturn at quarter 1 for 2020/21 is for an underachievement of £0.320m, which is in the main due to the expected impact of COVID19.
Members should be aware that this is just a forecast and there is a possibility this will
change in the coming months. The impact of COVID19 on income streams has been estimated by Managers and fed into the forecast where possible. However, further losses are expected on Fees & Charges during 2020/21. At this stage it has not been possible to feed these into the table below but they have been included within the overall forecast outturn and are detailed within Appendix 1.
FEES AND CHARGES INCOME
Annual Budget
Forecast Annual Outturn
Forecast Annual Outturn Variance
£m £m £m
Building Control (0.163) (0.163) 0.000
Car Parking (incl. Season tickets) (0.780) (0.628) 0.152
Cemeteries (0.223) (0.223) 0.000
Green Waste (0.292) (0.291) 0.001
Land Charges (0.105) (0.075) 0.030
Licensing (0.218) (0.218) 0.000
Planning Development Control (0.983) (0.983) 0.000
Retford Market (0.139) (0.083) 0.056
Waste (0.475) (0.457) 0.018
Worksop Market (0.119) (0.071) 0.048
Other Fees & Charges (0.850) (0.835) 0.015
Total (4.347) (4.027) 0.320 Note: Income is shown in brackets. Variances in brackets = an overachievement of income, without a bracket = underachievement of income
Housing Revenue Account
3.15 The table below summarises the first quarter position for the Housing Revenue
Account. The current projections are that there will be an underspend of (£0.163m) on the Housing Revenue Account budget.
3.16 The forecast variance at Quarter 1 is summarised in the table below by Service area.
A traffic light system is being operated:- GREEN for variances between £0-£9,999 AMBER for variances between £10,000-£19,999 RED for variances equal to or greater than £20,000
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3.17 The table below represents the expected outturn for 2020/21:
Service Area Annual Budget
Forecast outturn for the year
Forecast Outturn Variance
£'m £'m £'m Housing Revenue Account (10.876) (10.869) 0.007 Supervision And Management 2.015 1.891 (0.124) Special Services 1.794 1.758 (0.036) Repairs And Maintenance 3.808 3.813 0.005 Holding Account 3.259 3.244 (0.015) Net Housing Revenue Account Position 0.000 (0.163) (0.163)
3.18 Members should note that the estimated underspend at quarter one is a forecast only and may reduce or increase. Performance against budget must be monitored closely throughout the year.
3.19 There are a number of variances that make up the forecast outturn variance of
(£0.163m) detailed above. Appendix 2 gives a detailed analysis of the forecast outturn variances equal to or greater than £10k. A summarised analysis of the major factors are detailed below:-
Forecast savings on employee costs of (£0.175m). This is due to a number
of vacant posts, which are expected to be recruited to during the year. Estimated COVID19 costs and losses of £0.228m off-set by Govt COVID
grant f (£0.199m)
3.20 If the forecast to budget does materialise the estimated HRA balance as at 31st March 2021 will increase from £3.107m to £3.270m. This would be above the minimum requirement of £1.3m that was set by Cabinet and full Council.
COVID19
3.21 The impacts of COVID19 on the General Fund and Housing Revenue account are yet to be fully understood. There will be additional costs incurred by the Council to deal with the pandemic and also the impact of lost income on the final outturn position. A number of costs have already been incurred and these have been included, other costs have been estimated. The value of lost income has also been factored into the outturn figures, either as an actual based on trends or an estimate of the value that will potentially be lost.
The Government has issued the Council with a number of grants to help to compensate for lost income and additional costs. Members should be aware that the estimates relating to COVID19 financial impact contained in this report may change during the course of the financial year. Estimates have been based on a number of assumption and these could change at any time. The pandemic is an evolving situation and therefore the financial estimates given must be treated with some caution.
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Performance Management 3.22 The budget monitoring process is an interactive process whereby Budget Managers
input their forecast outturn into Collaborative Planning. The information in this report is compiled from this data and is therefore dependant on data being submitted in a timely manner.
3.23 During quarter 1 there were a total of 10% of codes that were not submitted within the
specified timetable. Members should note in these circumstances data is estimated and submitted by Finance Officers based on their knowledge of the situation. They may not however, have full knowledge of all the issues and therefore non submission by the designated budget manager may affect the accuracy of some of the information in this report.
Capital Programme Expenditure 3.24 The Capital Programme changes during the year as projects are developed and
spending commitments are made. It is a requirement that the Cabinet approves all variations made to the Capital Programme.
3.25 The initial Capital budget for 2020/21 totalled £22.921m. Table 1 shows a reconciliation
of the budget movements, which have been approved in the year, increasing the consolidated capital programme to £33.552m.
Table 1
Reconciliation of 2020/21 Budget to 30th June 2020
Narrative General Fund
£'000HRA £'000
Total £'000
2020/21 Original approved budgets 3,993 18,927 22,921
Carry Forwards from 2019/20 6,112 3,452 9,564
Quarter 4 2019/20 (yearend approvals) 1,068 0 1,068
2020/21 Approved Capital Budgets 11,173 22,379 33,552
3.26 The additions and amendments to the Capital Budgets that now require approval for quarter one of 2020/21 are detailed in Appendix 3 and in summary are as follows:
Movement between two exsiting budgets due to scheme re-evaluation. Townscape Heritage project moved to capital, funding for already in place -
£1.259m Introduction of Mayflower Centre capital programme - £1.4m
3.27 If the amendments to the Capital Programme are approved the programme will be
increased by £2.659m. Funding has already been agreed for the two additional projects. If approved the total capital programme will be £35.911m.
3.28 At 30 June 2020 expenditure of £0.534m (1.59%) has been incurred against the total
budget for the year of £32.552m. The Capital expenditure for the year is forecast to
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be £32.054m. Table 2 shows how the budget and spending is split between the General Fund and the Housing Revenue Account (HRA).
Table 2 Capital Expenditure to 30 June 2020
Fund Approved
Budget £'000
Spend to 30.06.19 £'000
Spend %
Year‐end
forecast £'000
Requested Slippage
Projected Over/
Underspends
General Fund 11,173 248 2% 9,671 1,567 ‐65 Housing Revenue Account
22,379 286 1% 22,383 0 ‐4
Total 33,552 534 2% 32,054 1,567 ‐69 3.29 Appendix 4 provides an update on all the current Capital projects including spend to
30 June 2020 and the forecasts to the end of the financial year. 3.30 There are regular capital monitoring of the projects chaired by the Cabinet Member for
Finance and includes finance officers, project managers and relevant Cabinet Members. This meeting has been proactive in ensuring that existing capital projects are delivered as efficiently and quickly as possible.
Capital Programme Resourcing
3.31 The capital resources available to the Council are not static. Capital receipts are generated throughout the year, additional grants and contributions are paid to the Council and borrowing may be increased to fund some types of project.
3.32 Table 3, shows how the current budget requirement of £33.552m will be financed,
minimising the impact on the Council’s revenue budgets: Table 3
General Fund
H.R.A Total
Forecast Capital Financing 2020/21 £'000 £'000 £'000 %
Borrowing 1,708 10,866 12,574 37%
GF Capital Receipts 3,653 0 3,653 11%
H.R.A Capital Receipts 0 770 770 2%
Revenue Reserves 610 0 610 2%
Capital Grants Unapplied Reserve 0 0 0 0%
S106 & CIL 1,223 0 1,223 4%
Capital Grants 2,708 2,400 5,108 15%
Capital Contributions 0 0 0 0%
Better Care Fund 1,271 0 1,271 4%
RCCO 0 89 89 0%
MRR 0 8,254 8,254 25%
Total Capital Financing 11,173 22,379 33,552 100%
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Capital Receipts 3.33 In the last few years the Council has been successful in securing a number of capital
receipts for both General Fund and Housing land and property. However, due to the current market climate, conditions are now proving difficult and as such, Capital Receipts are currently very low. These were taken into account when developing the current Capital Programme for 2020/21 to 2024/25. The current level of capital receipts is detailed in Table 4.
Table 4 Capital Receipts
Narrative General Fund
HRA for DFGs
HRA for Housing
Retained Rights to
buy Total
£m £m £m £m £m
Balance @ 1st April 2020 1.910 0.000 0.633 2.290 4.833
Received to June 2020 (net of costs of disposal and pooling)
0.000 0.000 0.000 0.000 0.000
Used to fund schemes in 2020/21 ‐3.653 0.000 0.000 ‐0.770 ‐4.423
Current Unspent Receipts ‐1.743 0.000 0.633 1.520 0.410
Estimated Q2‐4 Capital receipts (these are yet to be realised)
1.312 0.000 0.000 ‐0.385 0.927
Funding for approved schemes in future years 2021/22 to 2024/25
‐0.491 0.000 0.000 ‐1.540 ‐2.031
Receipts to be generated in 2021/22 to 2024/25
0.922 0.000 0.000 1.540 2.462
Unallocated Receipts balance as at 30th June 2020
0.000 0.000 0.633 1.135 1.768
Note: the four individual categories are explained within the Capital Investment Strategy.
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Treasury Management
3.34 BORROWING Long-term borrowing can only be undertaken by the Council to finance capital
expenditure. The borrowing position is closely monitored, as the Council needs to ensure that any long-term borrowing is undertaken at the lowest market or PWLB interest rate. In this quarter, there has been no new long-term borrowing taken out by the Council.
3.35 Short term borrowing is occasionally required for cash flow purposes, but the objective
is to minimise such requirements in order to maximise interest returns and minimise interest costs. No short term borrowing was required by the Council to meet its cash flow needs during this quarter.
3.36 At 30 June 2020 the Council held £98.863m in loans. The amount owed by the Council
has been built up over many years, reflecting the capital investment in the past and the interest rates available at the time. The table below shows the long term borrowings outstanding at 30 June 2020. Borrowing by Maturity
Maturity: No. of Loans Value £'000
Less than 1 year 0 0
More than 1 but less than 2 years 0 0
More than 2 but less than 5 years 2 9,000
More than 5 but less than 10 years 3 15,000
More than 10 years 14 74,863
Totals 19 98,863
3.37 The budget for interest payable on borrowing is based on the projected cash flow for
the year, the borrowing need and any forecast future borrowing rates. The original budget estimate assumed that the Council would borrow £9.354m during 2020/21, which related to various capital schemes. The original estimate has since been revised to include those schemes that underspent in 2019/20; hence, it has now increased to £12.574m. However, £10.866m of this borrowing is HRA and required to fund the housing capital improvement, Radford street development.
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3.38 INVESTMENTS Due to the inherent risk involved in investing, security of capital has remained the
Council’s main investment objective. This has been maintained by following the Council’s investment policy as set out in its Treasury Management Strategy for 2020/21.
3.39 At 30 June 2020 the Council had a total of £25.520m invested. The table below shows
where these investments were placed. All of these investments are within the agreed maximum limits as set out in the annual Treasury Management Strategy for 2020/21.
Investments at 30 June 2020
Investment Type Institution Amount £'000 Interest Rate %
Money Market Fund Blackrock 3,990 0.1900
Money Market Fund DB Advisors 3,990 0.1600
Money Market Fund Fidelity 3,990 0.1800
Money Market Fund Insight 3,990 0.0600
Money Market Fund Goldman 3,990 0.0500
Money Market Fund CCLA 3,970 0.7214
Call account Handlesbanken 1,600 0.2000
25,520
3.40 In order for the Council to be able to meet its liabilities it was agreed in the Treasury
Management Strategy (approved by Cabinet 11 February 2020) that a maximum balance of £1m could be held in the Barclays current account. This limit has been maintained during this quarter.
3.41 Investment income is monitored for performance, as it is directly affected by changes
in the base rate. The Bank of England base rate is currently 0.1%. It was reduced from 0.25% to 0.1% on the 19th of March 2020 in an emergency move to help control the economic shock of the coronavirus pandemic. The Bank only recently reduced the base rate from 0.75% to 0.25% on the 11th of March 2020.
3.42 The projected outturn position to 31 March 2021 for investment income currently is
expected to be a shortfall of approximately £44k. This is due to the investment rates being higher when the budgets were original set.
3.43 PRUDENTIAL INDICATORS
It is a statutory duty for the Council to determine and keep under review the affordable borrowing limit. Underpinning the Prudential system for borrowing is the fundamental objective that any investment in assets needs to be both affordable and remain within sustainable limits.
3.44 The Council sets its own affordable borrowing limits, which it monitors against actual
performance. Two statutory borrowing limits are set, these are an Authorised Limit which should not be breached and an Operational Boundary which is based on the probable external debt during the course of the year, which should act as an indicator to ensure the Authorised Limit is not breached. The Prudential indicators are included in the Treasury Management Strategy, approved by Council on 5 March 2020.
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3.45 During the financial year to date the Council has, at all times operated within the treasury limits and prudential indicators as set out in the Councils Treasury Management Strategy.
3.46 The table below compares the approved Prudential Indicators with the position at 30
June 2020 and the projected outturn for 2020/21, which the Council is required to report and monitor. These indicators are based on estimates of expected outcomes and are key indicators of affordability. There are no issues to highlight to Members on these indicators.
PRUDENTIAL INDICATORS 2020/21 30‐Jun‐20 2020/21
Approved Operational Boundary
Approved Authorised
Limit
Actual External Debt
Projected Outturn
£'000 £'000 £'000 £'000
Borrowing 130,039 135,039 98,863 111,437
4. Implications
a) For service users
The existence of a stringent budget monitoring process ensures that resources are available to deliver the Medium Term Financial Plan, and appropriate early interventions take place if a service is forecasted to significantly overspend. The ongoing capital expenditure will ensure that existing services improve with a number of new initiatives. The bids have been developed appropriately according to legislation, national guidance, and the Council’s own objectives.
b) Strategic & Policy This report is in line with best practice, and provides confidence in the financial
management process. All of the capital projects detailed within this report are in line with the strategic
objectives of the Council, as contained within the Council Plan. c) Financial – Ref: 21/354
These are contained within the main body of the report. The following highlights areas that can have a significant impact on the current budget position: General Fund Revenue Budget:
During the 2020/21 budget setting process an amount of £1.3m was
removed from the base budget in order to set a balanced budget. This was primarily achieved through a combination of expenditure reductions including; zero based budgeting review, Contract reviews, and improved procurement; and increased income through Council tax increases and growth in the tax base, sharing of office accommodation, and retained business rates growth. The achievement of these savings is monitored as
25
part of the normal budget process highlighted within this report. A detailed analysis of variances is highlighted in Appendix 1.
The current forecast overspend is £0.337m, and if this materialises then this would require a transfer from the General Reserve at year end.
Housing Revenue Account:
The new HRA self-financing regime commenced in April 2012 which enables the Council to retain all of the rent that it collects, and utilise this to pay for the day-to-day revenue running costs, and make localised investment into the council housing stock. The detailed 30-year business plan, is updated regularly, and shows that the HRA is sustainable into the future.
The current forecast is for an underspend of (£0.163m) and and if this materialises then a transfer to reserves at year end will be actioned.
Capital Programme:
Capital expenditure is not year-specific and progress on schemes will continue to be monitored by the bi-monthly meetings. There may be changes to the way the Capital Programme is financed as further grants and capital receipts are generated. Treasury Management:
The Prudential Indicators for quarter one are within the approved limits (3.48) and present no implications for the budget.
d) Legal - Ref: 64/07/20
Budget monitoring is conducted by the Chief Financial Officer under the provisions of Section 151 of the Local Government Act 1972.
e) Human Resources None from this report. f) Community Safety, Environmental, Equalities Some of the Capital Schemes do have positive implications on community
safety, equalities, and the environment, and these have been considered at the project appraisal stage, prior to approval to the Capital Programme.
g) General Data Protection regulations None arising from this report h) This is key decision number 830.
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5. Options, Risks and Reasons for Recommendations 5.1 The budget monitoring section of this report provides Managers’ forecasts and is for
information only. There are always some risks that the actual outturn variance could be substantially different from that currently shown. The impact of the effect of COVID19 have been estimated and included within financial projections. However, due to the evolving nature of the situation Members should be aware these estimates may change over the course of the year and should be treated with caution. As always the volatility of income can also have an impact on projections. The report sets out officer’s projections, and as such the financial risks that may occur by 31st March 2021.
5.2 The Council has responsibility for delivering its Capital Programme on time and not
doing so could undermine the achievement of its objectives. The bi-monthly capital monitoring meeting will continue into the future.
6. Conclusions 6.1 This report is for the first quarter of the year. Current indications are that there will be
an overspend of £0.337m in year for General Fund and an underspend of (£0.163m) in year for HRA. However, it is important to note that this report is only highlighting that a problem may or may not arise, and draws to both officers and Members attention that these need to be closely monitored throughout the year.
6.2 The continual reduction of Bassetlaw’s grant income, and the on-going uncertainty
around the business rates retention scheme, coupled with the on-going COVID19 pandemic are putting sustained pressure on the organisation. The Financial Management of budgets by spending officers’ is crucial. This quarterly report is just one element of the robust monthly budget monitoring process that the Council operates. Spending officers’ are pivotal in this process and are required to recognise and report any forecast variances to budget as early as possible, to enable appropriate action to be taken. The financial equation is simple, any overspends in the current year will increase the savings target for all services in future years if the Council is to survive the cuts to public sector funding that the central government are implementing.
7. Recommendations 7.1 That the position with regard to revenue and capital budget monitoring is noted. 7.2 That Cabinet approves the ‘other variations’ to the 2020/21 Capital Programme as
discussed in paragraph 3.27 and detailed in Appendix 3 of this report. 7.3 That the proposed resourcing of the Capital Programme and the level of capital
receipts currently available to fund any further capital expenditure is noted (paragraphs 3.32 – 3.34).
7.3 That Members note the quarterly update on performance against the approved
Treasury Management Prudential Indicators for the period ending 30th June 2020 (Para. 3.48 refers).
Background Papers LocationBudget Reports ABS Reports Capital programme working papers Treasury Management data
Accountancy, Queen’s buildings
27
28
APPENDIX 1
Description
Estimated Outturn Variance
£'000
Explanation
IT Services (18) (£18k) Employee vacancy savings in IT Services.Front Line Services (35) (£35k) Employee vacancy savings in Front Line Services.Holding Account Corporate 40 £40k Holding Accounts, purchase of Laptops.
Land Charges 32£32k shortfall in Land Charges income, part due to Covid and some due to competition.
Policy & Communications (27) (£27k) Employee vacancy savings in Policy & Communications.Publicity & Engagement 8 £8k on GovDeliveryOther Minor Variances 17 Various underspendsTOTAL VARIANCES 17
Corporate Services
GENERAL FUND REVENUE CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000
29
APPENDIX 1
GENERAL FUND REVENUE CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000
Description
Estimated Outturn Variance
£'000
Explanation
Finance (70)Pension Strain Savings (£53k) due to paying 3 year lump sum early, plus (£76k) employee savings, offset with Agency costs £45k and Training & Advertising £6k
Covid-19 (148)
This is specific code to collate all the additional costs and losses associated with Covid-19 within General Fund. At quarter 1 not all costs/losses have been transferred here. A number are still sat within services areas, and have been reported within the relevant service area. This variance relates to the difference between the grant received for Covid-19 of (£973k) off-set by additional costs and losses of £821k (which are over an above those currently reported within service areas).
Property 195Pressures are due to lost income on Parking £153k, (offset with Savoy Refund savings (£13k) ), Property Rental £37k & Town Hall Bar & Event Hire £10k
Revenue Services 110
Pressures are due to lost income through court cost recoveries £118k and DSI Billing Costs for 19-20 £13k, offset with employee savings (£46k), offset with Agency Costs £27k
TOTAL VARIANCES 87
Finance Property & Revenues
30
APPENDIX 1
GENERAL FUND REVENUE CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000Housing
Description
Estimated Outturn Variance
£'000
Explanation
Homelessness 35 Pressure relating to housing of homeless during Covid-19.
Other Minor Variances (4)TOTAL VARIANCES 31
Neighbourhoods
Description
Estimated Outturn Variance
£'000
Explanation
Active Communities (16) Savings on employees due to reduced hoursCovid-19 135 Loss of income on Leisure Centres
Parks & Open Spaces (44) Savings due to a new post which is estimated to be filled by OctoberRefuse Collection Management (27) Savings due to a vacancy which is not expected to be filledHead of Neighbourhoods (11) Savings due to a vacancy which has now been filledEnvironmental Health Officer (18) Vacant post expected to be filled by JanuaryWaste 18 Forecast income pressure due to Covid-19
Other Minor Variances (4)
TOTAL VARIANCES 33
31
APPENDIX 1
GENERAL FUND REVENUE CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000
Description
Estimated Outturn Variance
£'000
Explanation
Planning (110)(£110k) Employee vacancy savings in Planning. This is in Planning Policy Research & Implementation and Development Team.
Economic Development 113£113k Income shortfall in Economic Development. This is mainly in Markets and Retford Enterprise Centre.
Other Minor Variances (12) Various minor underspends
TOTAL VARIANCES (9)
Description
Estimated Outturn Variance
£'000
Explanation
Corporate Contingency 163Vacancy factor funded from employee savings held within services. There are sufficient forecast savings to cover in full.
Drainage Board Levies 15 Actual costs higher than anticipated at budget setting.
TOTAL VARIANCES 178
Regeneration
Other Budgets
32
APPENDIX 2
Description Estimated
Outturn
Variance
£'000
Explanation
Covid-19 6
This is specific code to collate all the additional costs and losses associated with Covid-19 within
HRA. At quarter 1 not all costs/losses have been transferred here. A number are still sat within
services areas, and have been reported within the relevant service area. This variance relates to
the difference between the grant received for Covid-19 of (£199k) off-set by additional costs and
losses of £205k (which are over an above those currently reported within service areas).
Other Minor Variances 1
TOTAL VARIANCES 7
Description Estimated
Outturn
Variance
£'000
Explanation
Allocations (24) Saving due to vacancies & maternity which is all expected to be resolved by the end of the year
Technical & Design (95) Saving due to various vacancies which are expected to be filled towards the end of the year
Other Minor Variances (5)
TOTAL VARIANCES (124)
HOUSING REVENUE ACCOUNT CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000
Supervision & Management
Housing Revenue Account
33
APPENDIX 2
HOUSING REVENUE ACCOUNT CONTROLLABLE VARIANCES EQUAL TO OR EXCEEDING £10,000
Description Estimated
Outturn
Variance
£'000
Explanation
Warden Scheme (19) Vacancy savings expected to be filled by October
Caretakers (16) Savings on employees due to reduced hours
Other Minor Variances (1)
TOTAL VARIANCES (36)
Description Estimated
Outturn
Variance
£'000
Explanation
Covid-19 19 Loss of income on Shops
Stores Management (14) Vacancy savings expected to be filled by October
Other Minor Variances 0
TOTAL VARIANCES 5
Description Estimated
Outturn
Variance
£'000
Explanation
Planned Repairs Trading (19) Vacancy savings expected to be filled by October
Other Minor Variances 4
TOTAL VARIANCES (15)
Holding Account
Special Services
Repairs & Maintenance
34
APPENIDX 3
Appendix 3
NEW APPROVALS
FUNDED FROM CAPITAL
RECEIPTS
OTHER VARIATIONS
BUDGETSRE-PROFILING
£ £ £
Request to increase the following budgets:
1). TCTF - Shops signs and FrontagesChange of use - Direct to Middletons Project
B087 TCTF - Shops signs and Frontages -165,000
2). MiddletonsChange of use - Funding for TCTF Shop signs and frontages redirected to Middletons Project
B086 Middletons 165,000
3). Townscape HeritageProject already approved. This is purely moving funding for capital works within the project from revenue to capital 1,259,300
B120 Townscape Heritage
4). Mayflower CentrePurchase of Matflower Centre. Clear site, building demolished.Option been pursued is a car park
TBC Mayflower Centre 1,400,000
0 2,659,300 0
VARIATIONS AND ADDITIONS TO THE 2020/21 CAPITAL PROGRAMME
Quarter 1 - 1st April to 30th June 2020
GENERAL FUND:
HOUSING REVENUE ACCOUNT:
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36
APPENDIX 4 - CAPITAL MONITORING - QUARTER 1
Project description Project ManagerApproved Restated
Budget 2020/21Actuals
Total Planned (Actuals &
Commitment todate)
Variance to Total Planned
Further in year projections
Full year Projection
Variance to year end
(Over)/Underspend
Comments
Will programme complete in
year?
Will there be slippage in year
(N/A if completes in
year)
If Yes to Slippage please state estimate
amount
GENERAL FUND
NeighbourhoodsVehicles & Plant - Replacement Fleet/Transport Manager 1,027,000 0 0 1,027,000 1,027,000 1,027,000 0 Fleet Manager to be appointed Yes No 0
Community Sports Scheme Peter Clark 120,000 0 0 120,000 120,000 120,000 0 This project is now expected to support clubs affected by Covid 19 Yes No 0
Carlton F Depot Vehicle Wash Fleet/Transport Manager 20,000 0 0 20,000 20,000 20,000 0 Fleet Manager to be appointed Yes No 0
Retford Leisure Centre Carpark Peter Clark 25,000 0 0 25,000 25,000 25,000 0 Increased educational use of the site means this project is likely to complete this year. Yes No 0
Canch Masterplan John Foster 373,000 19,335 19,335 353,665 353,665 373,000 0Procurement and tendering process underway for the new Canch Toilets and Kiosk build. Anticipated site works to commence September.
Yes No 0
Play Areas Security - CCTV John Foster 0 4,000 4,000 -4,000 0 4,000 -4,000 Relates to a final invoice payment for CCTV upgrade works at Snipe Park Harworth Yes No 0
Play Areas Upgrade John Foster 54,000 2,505 2,505 51,495 51,495 54,000 -0 Replacement programme for new play equipment at various sites. New see-saw to replace trampoline at Mary Street Rhodesia £5k
Yes No 0
Heating System - Workshop Fleet/Transport Manager 70,000 0 0 70,000 70,000 70,000 0 Fleet Manager to be appointed Yes No 0Skip Compound - Carlton Forest Tim Andrew 30,000 0 0 30,000 30,000 30,000 0 Project currently been scoped by Neighbourhoods Yes No 0
Bench Project John Foster 3,000 0 0 3,000 3,000 3,000 0Remaining order of new cast iron litterbins for the Canch Park was delivered in June. Final payment of invoice to be processed.
Yes No 0
Leisure Centre Improvement Plan Peter Clark 560,000 0 0 560,000 560,000 560,000 0 New gym equipment ordered. Re-branding and decoration ordered. Yes No 0
Refurbishment of Play Areas John Foster 30,000 0 0 30,000 30,000 30,000 0 Funding to support accessible/inclusive new play equipment Yes No 0
Compliance with Energy Act TBC 25,000 0 0 25,000 25,000 25,000 0 Project currently been scoped by Neighbourhoods Yes No 0
FinanceFlood Alleviation - Small Schemes John Unstead 50,000 0 0 50,000 50,000 50,000 0 0 Yes No 0Planned Maintenance & Capital Upgrades Mark Evans 100,000 11,105 11,105 88,895 88,895 100,000 0 Works ongoing Yes No 0
Toilets & Disabled Facilties Mark Evans 8,000 17,617 17,617 -9,617 0 17,617 -9,617 Project overspent - Looking at how will address/fund Yes No 0Sewerage Replacement Pump Crea John Unstead 23,000 0 0 23,000 23,000 23,000 0 Awaiting confirmation from manager - MM Yes No 0Langold Lake Sewerage Works John Unstead 9,000 0 0 9,000 9,000 9,000 0 Awaiting confirmation from manager - MM Yes No 0
Fire Risk Assessment Works Phil Rose/John Unstead 46,000 1,506 1,506 44,494 44,000 45,506 494 FA replacement museum subject to renewed quotation CDS furloughed re covid19 Yes No 0
Clarborough Flood Alleviation Scheme John Unstead 500,000 0 0 500,000 500,000 500,000 0 Awaiting confirmation from manager - MM Yes No 0
Old Town Hall Refurbishment Mark Evans 6,000 6,459 6,459 -459 0 6,459 -459 Project overspent - Looking at how will address/fund Yes No 0Retford Beck Works John Unstead 250,000 0 0 250,000 250,000 250,000 0 Awaiting confirmation from manager - MM Yes No 0
Windows At Queens Buildings Mark Evans 150,000 0 0 150,000 0 0 150,000 Covid 19 & furloughed contractors unable to tender, possible chance may be able to do Autumn 2020 No Yes 150,000
Gateford Road Car Park John Unstead 100,000 0 0 100,000 100,000 100,000 0 Awaiting confirmation from manager - MM Yes No 0ICT Refresh Project Jon Gay 226,000 41,979 41,979 184,021 184,021 226,000 0 0 Yes No 0Land At Hannah Park Cemetery John Unstead 97,000 0 0 97,000 97,000 97,000 0 Awaiting confirmation from manager - MM Yes No 0
Mod Gov System - Committee agenda Cara Hopkinson 20,000 0 0 20,000 21,645 21,645 -1,645
System deployment meeting held with project group 6.7.20. Install of system to commence 7.7.20 with an anticipated go live date at the start of September 2020. Overspend on project due to Modern.Gov Hosting the system.
Yes No 0
Sandhill Lake - replacement outflow pipe John Unstead 30,000 0 0 30,000 30,000 30,000 0 Awaiting confirmation from manager - MM Yes No 0
RegenerationWorksop Creative Village Ph 2 Natalie Cockrell 375,000 2,250 2,250 372,750 172,750 175,000 200,000 10% completed No Yes 200,000Heritage/ Buildings at Risk Natalie Cockrell 40,000 0 0 40,000 40,000 40,000 0 Awaiting update from project manager- MM Yes No 0Prince Trust Retford Worksop Natalie Cockrell 5,000 0 0 5,000 5,000 5,000 0 99% completed Yes No 0Afordable Housing Scheme Natalie Cockrell 37,000 0 0 37,000 37,000 37,000 0 75% completed Yes No 0Retford Tc Interventions Natalie Cockrell 29,000 0 0 29,000 29,000 29,000 0 90% completed Yes No 0Middletons Match Funding Natalie Cockrell 3,988,000 23,159 23,159 3,964,841 2,964,841 2,988,000 1,000,000 50% completed No Yes 1,000,000Tctf - Shop Signs & Frontages Natalie Cockrell 165,000 0 0 165,000 115,000 115,000 50,000 0 % completed No Yes 50,000Retford Train Station Improvs Natalie Cockrell 20,000 10,846 10,846 9,154 9,154 20,000 0 99% completed Yes No 0Kings Park - CCTV Natalie Cockrell 12,500 0 0 12,500 12,500 12,500 0 0 % completed Yes No 0
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Kings Park - Splash Equipment Natalie Cockrell 80,000 0 0 80,000 80,000 80,000 0 0 % completed Yes Yes 0Kings Park - Heritage Assets Natalie Cockrell 573,125 0 0 573,125 523,125 523,125 50,000 0 % completed No No 50,000Control Room Upgrade - CCTV/Camera/Network Richard Blagg 45,000 45,000 45,000 0 0 45,000 0 80% complete finish date August Yes No 0
Mayflower Pilgrims Sandra Withington 60,000 0 0 60,000 60,000 60,000 0 Awaiting update from project manager- MM Yes No 0Industrial units at Creative Village Natalie Cockrell 120,000 0 0 120,000 120,000 120,000 0 Awaiting update from project manager- MM Yes No 0Langold Park Master Plan stage 1 Natalie Cockrell 20,000 0 0 20,000 20,000 20,000 0 0% completed Yes No 0Development of Reaching Communities Funding Application Natalie Cockrell 80,000 0 0 80,000 80,000 80,000 0 0% completed Yes No 0
Market Stall Canopy Replacement John Simmonds 30,000 0 0 30,000 30,000 30,000 0 Awaiting update from project manager- MM Yes No 0Museum Store Upgrade Sam Glasswell 20,000 0 0 20,000 20,000 20,000 0 0% completed Yes No 0Maintenance at Retford Enterprise Centre Julie Beresford 60,000 0 0 60,000 60,000 60,000 0 Awaiting update from project manager- MM Yes No 0
Internal CCTV at Retford Enterprise Centre Julie Beresford 14,850 0 0 14,850 14,850 14,850 0 Awaiting update from project manager- MM Yes No 0
CCTV Replacement at Bassetlaw Museum Sam Glasswell 10,500 0 0 10,500 10,500 10,500 0 0% completed Yes No 0
Markets Digital Booking and Payment System John Simmonds 15,000 0 0 15,000 15,000 15,000 0 Awaiting update from project manager- MM Yes No 0
Solar Panels Natalie Cockrell 50,000 0 0 50,000 50,000 50,000 0 0% completed Yes No 0
Housing (GF)
Disabled Facilities Grants Chris Staniforth 1,028,000 58,182 58,182 969,818 964,906 1,023,088 4,912I cannot predict the slippage on DFG, this is normally underspent due to the time taken to complete works. The workfow depends on the level of applications.
Yes Yes 0
Empty Homes Grant Chris Staniforth 117,000 0 0 117,000 0 0 117,000 Cabinet paper later this year to recommed a change of use for this grant. No Yes 117,000
Discretionery DFGs Chris Staniforth 0 4,912 4,912 -4,912 0 4,912 -4,912 I cannot predict the amount of overspend as this relates to work completed on discretionary adaptations; the overspend will be covered by the underspend on DFG as a whole.
Yes No 0
Warm Homes on Prescription Chris Staniforth 0 -537 -537 537 537 0 0 This project will contine as a £10K top up fund for eco-flex only. Yes No 0
Health Bus Chris Staniforth 197,000 0 0 197,000 247,000 247,000 -50,000
The contract for the building of the health bus will be finalised by procurement in the next 10 days. The completed project will be in the region of £50K more expensive due to the time lapse in the project approval.The slippage can be covered by the 20/21 allocation.
Yes No 0
Hospital Journey Planner Chris Staniforth 29,000 0 0 29,000 29,000 29,000 0 The invoice for this project has been received and passed for payment. Yes No 0
TOTAL GENERAL FUND 11,172,975 248,319 248,319 10,924,656 9,422,883 9,671,202 1,501,773 1,567,000
HOUSING
Decent Homes & Future Major Works
Waste Storage Facilities - Communual areas and dwellings Mark Edwards 96,000 0 0 96,000 96,000 96,000 0
Godfreys court - Some issues coordinating frame to locking mechanism/self closer. Can't guarantee unknown costs due to nature of work (ground works), may need more money for additional electrical works?
Yes No 0
Wall insulation Mark Edwards 320,000 0 0 320,000 320,000 320,000 0 Project gearing up to recommence work shortly Yes No 0Main Roof Cover Mark Edwards 326,000 0 0 326,000 326,000 326,000 0 Project gearing up to recommence work shortly Yes No 0Wall Repointing Mark Edwards 50,000 0 0 50,000 50,000 50,000 0 In the planning stages for works to recommence Yes No 0Render Finish Mark Edwards 50,000 0 0 50,000 50,000 50,000 0 In the planning stages for works to recommence Yes No 0Porch / Canopy Mark Edwards 50,000 0 0 50,000 50,000 50,000 0 In the planning stages for works to recommence Yes No 0
Smoke & Carbon Monoxide Detectors Mark Edwards 100,000 0 0 100,000 100,000 100,000 0 In the planning stages for works to recommence Yes No 0
Wiring & Consumer Unit Marie Bowler / Andy Norman 416,000 0 0 416,000 416,000 416,000 0 In the planning stages for works to recommence Yes No 0Bathroom (incl downstairs cloak / separate WC) Mark Edwards 523,000 0 0 523,000 523,000 523,000 0 In the planning stages for works to recommence Yes No 0
Kitchens Mark Edwards 1,000,000 63,701 63,701 936,299 936,299 1,000,000 0 Works currently undertaken in void properties, work to tenanted properties being planned to recommence. Yes No 0
Windows and External Doors Mark Edwards 173,000 0 0 173,000 173,000 173,000 0 In the planning stages for works to recommence Yes No 0
Boiler & Heating Replacement Mark Edwards / Marie Bowler 1,395,000 51,092 51,092 1,343,908 1,343,908 1,395,000 -0 Collating information to put together a programme of replacements. Yes No 0
Block Heating Mark Edwards 60,000 0 0 60,000 60,000 60,000 0 In the planning stages for works to recommence Yes No 0Block Lift Replacement Budget Mark Edwards / Marie Bowler 55,000 0 0 55,000 55,000 55,000 0 In the planning stages for works to recommence Yes No 0
Block Internal Communal Area Budgets Mark Edwards 265,000 0 0 265,000 265,000 265,000 0 In the planning stages for works to recommence Yes No 0
Contingency & Miscellaneous Major Repairs
38
Contingency Mark Edwards 100,000 1,433 1,433 98,567 98,567 100,000 -0 Minimal spend required to date Yes No 0Window Restrictor Budget Mark Edwards 60,000 0 0 60,000 60,000 60,000 0 United Living to commence works in September Yes No 0Stair Lift Replacement Chris Redfern 10,000 0 0 10,000 10,000 10,000 0 Likely to achieve full spend, but no works to date Yes No 0Asbestos Surveys Marie Bowler 33,000 0 0 33,000 33,000 33,000 0 Programme of works being collated Yes No 0Asbestos Removal Works Marie Bowler 100,000 0 0 100,000 100,000 100,000 0 Unknown at minute will be as a result of surveys Yes No 0Fire Risk Assessments Mark Edwards 50,000 0 0 50,000 50,000 50,000 0 Savills are planning to start in August Yes No 0Fire Safety Works incl Bin Stores Mark Edwards 493,000 168,424 168,424 324,576 324,576 493,000 -0 Works on site at Swallow Court Yes No 0Lightening Protection Marie Bowler 40,000 0 0 40,000 40,000 40,000 0 Programme of works being collated Yes No 0
Damp Works Chris Redfern 100,000 0 0 100,000 100,000 100,000 0No internal works on site, unlikely to achieve spend. Percentage spend subject to identifying works, non urgent visits recommencing and internal works progressing.
Yes No 0
Legionella Mark Edwards 79,000 4,890 4,890 74,110 74,110 79,000 0 Programme of works being collated Yes No 0Electrical Testing Marie Bowler / Andy Norman 265,000 27,097 27,097 237,903 237,903 265,000 -0 Programme of works being collated Yes No 0
Environmental Works and Related Assets
Roads, Footpaths and Parking Works Chris Redfern / Rebecca Cutts 183,000 0 0 183,000 183,000 183,000 0
The Green parking - Spend to date £24,560.48, awaiting invoice. Commited further 67,858.89. Future same scheme 54,460.65 (It’s a big scheme money wise due to the pavement crossings size and the 4x corner plots) Estimation total on completion 146,880.02 due to agreeance to remeasure in stages. Further schemes to be agreed at a later date.
Yes No 0
Structural Works Chris Redfern 125,000 68,366 68,366 56,634 56,634 125,000 -0 Spend to date at £68k, no further works identified. Percentage spend will depend on non urgent visits recommencing. Unlikely to achieve full spend.
Yes No 0
Major Estates Improvement Works (Carlton Forest Wimpeys) Mark Edwards 1,200,000 0 0 1,200,000 1,200,000 1,200,000 0 No progress yet due to Covid, Start date TBC Yes No 0
Major Estates Improvement Works Mark Edwards 0 0 0 0 0 0 0 0 Yes No 0
Estates Improvement Works (General) Mark Edwards 200,000 0 0 200,000 200,000 200,000 0 Start date to be confirmed Yes No 0
Balconies & handrails Mark Edwards 60,000 0 0 60,000 60,000 60,000 0 Start date to be confirmed Yes No 0External Wall Insulation (EWI) Treatment Mark Edwards 50,000 1,485 1,485 48,515 48,515 50,000 0 Project commencing in August Yes No 0
Non Dwelling Assets incl Garage Site works Mark Edwards 576,000 9,581 9,581 566,419 566,419 576,000 0 Start date to be confirmed Yes No 0
Boundary Fence / Gates Mark Edwards 75,000 0 0 75,000 75,000 75,000 0 Works currently on site Yes No 0
New Build & Refurbishment
Radford Street (New Builds) Mark Edwards 9,840,000 12,000 12,000 9,828,000 9,828,000 9,840,000 0First Site meeting held last week with site clearence due to start asap, after a flock of geese have been removed from site.
Yes No 0
Larwood House Refurbishment Mark Edwards 1,100,000 0 0 1,100,000 1,100,000 1,100,000 0 The contractor Forteum have been procured on a design and build project. Yes No 0
Sheltered Scheme Refurbishment Mark Edwards 0 0 0 0 0 0 0 No plans in place at the moment Yes No 0Ashford Court Demolition Mark Edwards 65,000 0 0 65,000 65,000 65,000 0 No plans in place at the moment Yes No 0Community Centre Refurbishment Mark Edwards 100,000 0 0 100,000 100,000 100,000 0 No plans in place at the moment Yes No 0Shop Refurbishment Mark Edwards 20,000 0 0 20,000 20,000 20,000 0 No plans in place at the moment Yes No 0
Property acquisitions Mark Edwards 400,000 0 0 400,000 400,000 400,000 0 No properties purchased at the moment, properties are earmarked for the budget this year. Yes No 0
MiscellaneousKeystone system upgrade Mark Edwards 66,000 0 0 66,000 66,000 66,000 0 No works to date Yes No 0ICT Replace/Upgrade TASK system Mark Edwards 100,000 0 0 100,000 100,000 100,000 0 No works to date Yes No 0
Stock Condition Surveys Mark Edwards 180,000 0 0 180,000 180,000 180,000 0 Savills are undertaking these, start back on site to be confirmed. Yes No 0
Replacement Vehicles TBC 590,000 0 0 590,000 590,000 590,000 0 No works to date Yes No 0Flood Prevention Works Mark Edwards 55,000 0 0 55,000 55,000 55,000 0 No works to date Yes No 0
Disabled Adaptations Chris Redfern 555,000 12,518 12,518 542,482 542,482 555,000 -0 Slow start on external works, overall spend will depend on internal works recommencing, OT referral rates and type of works required. Full spend unlikely.
Yes No 0
Employee Costs Capitalised - Apportioned at Year end
Rachel Hyland 630,200 0 0 630,200 630,200 630,200 0 Racharge to be made on a quarterly basis - Fiance currently calculating for quarter 1 Yes No 0
2019-20 Accruals & Overspend to resolve
Maintaining Decent Homes Rachel Hyland 0 -1,011 -1,011 1,011 0 -1,011 1,011 Adjustment to valuation after year end accruals completed Yes No 0
Lifetime Homes Rachel Hyland 0 250 250 -250 0 250 -250 Invoice came in slightly different to accrual Yes No 0Non Dwelling Assets Rachel Hyland 0 -9,845 -9,845 9,845 9,845 0 -0 Awaiting invoice - will chase up Yes No 0Abbey Grove Development Rachel Hyland 0 -128,623 -128,623 128,623 128,623 -0 0 Retention payment Yes No 0Demolition Common Lane Styrrup Rachel Hyland 0 5,269 5,269 -5,269 0 5,269 -5,269 Retention payment Yes No 0
39
Conway Or Larwood Lift Rachel Hyland 0 -635 -635 635 0 -635 635 Invoice came in slightly different to accrual Yes No 0
TOTAL HRA 22,379,200 285,993 285,993 22,093,207 22,097,081 22,383,074 -3,874 0
TOTAL CAPITAL PROGRAMME 33,552,175 534,311 534,311 33,017,864 31,519,964 32,054,276 1,497,899 1,567,000
40
Agenda Item No. 7(a) BASSETLAW DISTRICT COUNCIL
AUDIT & RISK SCRUTINY COMMITTEE 23 JULY 2020
REPORT OF THE DIRECTOR OF CORPORATE RESOURCES CORPORATE RISK MANAGEMENT QUARTER 1 2020/21 Cabinet Member: Finance Contact: David Hill/Linda Turner
1. Public Interest Test 1.1 The author of this report, David Hill, has determined that the report is not confidential. 2. Purpose of the Report 2.1 To update Members of the Audit & Risk Scrutiny Committee on the current level of
assurance that can be provided against each corporate risk. 3. Background and Discussion 3.1 The updated Risk Management Strategy & Framework was considered and approved
by the Audit & Risk Scrutiny Committee on 12th September 2019 and was reviewed by full Council in December 2019.
3.2 The purpose of the Strategy and Framework is to define how risks are managed by the
Council. It provides guidance on the processes, procedures, roles and responsibilities for risk, and it sets out the context on how risks are to be managed.
3.3 The Corporate Risk Register is a key enabler of the Strategy and Framework, and provides assurance on the key risks identified as Corporate Risks.
3.4 Existing risks identified within both the Council’s corporate and operational service risk registers are subject to quarterly review by senior management and on an on-going basis through the work of Internal Audit.
Corporate Risk Register 3.5 The Corporate Risk Register and supporting comments as at the end of quarter one
(June 2020) are provided below with a summary of all the control gaps currently identified.
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(i) WELFARE REFORMS CREATES SIGNIFICANT NEGATIVE COMMUNITY IMPACT : Owner: Revenue and Benefits Manager Current Risk and Direction of Travel: RED – INCREASED FROM AMBER Summary of Risk and Control Weaknesses: Planned welfare reform with the introduction of universal credits and unique Local Council Tax Reduction Scheme coupled with financial reductions. This may cause local hardship and increase tax arrears. Primary Raw Risk: Financial Impact Value: Major - £500k - £1m The Risk Category is High/Serious due to COVID19 implications which are ongoing and the impact is not yet fully known. Corporate Risk Register Outstanding Controls: Prepare for the managed migration from Housing Benefit to Universal Credit. This includes updating the website and providing additional publicity information in conjunction with the DWP. Update from previous report: Although the risk is mitigated as far as it can be at the current time, COVID19 implications are ongoing and the impact is not yet fully known, but increases the likelihood of loss of income to households. 5,200 Discretionary Council Tax grants have been paid to date, which is assisting as this reduces the Council Tax liabilities. Collection is down by 0.5% up to the end of May and will continue to be monitored. Therefore, requires monitoring and evaluating, as such, the Risk Score is to remain at D3 due to potential effect on collection and arrears. (D3 – High / Serious)
(ii) DATA LOSS AND CYBER SECURITY THIS RISK HAS NOW BEEN RE-DEFINED AS INFORMATION AND DATA LOSS Owner: Head of Corporate Services Current Risk and Direction of Travel: RED – NO CHANGE Summary of Risk and Control Weaknesses: With our increasing dependence on IT Systems to undertake business, the risk of information or data loss or external hacking of the Councils ICT systems also increases. The Council may suffer significant financial claims in respect of the loss of data and the reputation of the Council may also be harmed. Primary Raw Risk: Reputation Value: Serious – Adverse Regional publicity There is no overall change in this risk category.
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Corporate Risk Register Outstanding Controls: Further enhancements of the Office 365 operating system will ensure that data sent via email can be restricted from leaving the Bassetlaw.gov.uk domain unless users affirm that any attachments do not contain personal data. Ensure all staff have completed the online Data Protection course. Review all Data Protection representatives to ensure roles and responsibilities are understood and that they have completed the specific module on the e.learning system. A Senior information Risk Officer is to be nominated and the information risk policy is to be reviewed along with a data asset audit being completed. Security breaches are being logged and reported to CMT, these are being monitored for trends with training being provided where necessary. Update from previous report: This risk has had a full review and redefined as Information and Data Loss. The controls in place have be reassessed and further actions have been implement are ongoing as identified above. COVID19 has led to the majority of staff working from home which requires a further review of potential / new risks and will be updated for the next meeting.
(iii) LONG TERM FINANCIAL INTEGRITY OF THE COUNCIL: Owner: Head of Finance and Property Services Current Risk and Direction of Travel: RED – NO CHANGE Summary of Risk and Control Weaknesses: The uncertainty surrounding the future of Local Government Finance and the implementation plans of the business rates retention scheme by Central Government continues to give uncertainty on the future funding available to the Council. This level of financial uncertainty, coupled with relatively low levels of balances and reserves, may have a financial impact in the future, which will need to be managed proactively to secure the provision of services. Primary Raw Risk: Financial Impact Value: Major - £500k - £1m There is no overall change in this risk category. Corporate Risk Register Outstanding Controls: The MTFP identifies a £1.2m savings target to be addressed within the next 4 years. A Transformation Board has been established and work has commenced on determining potential areas for savings to address these shortfalls. Major financial issues going forward are the volatility and continuity of the New Homes Bonus grant, the impact of the housing benefit reforms on the value of the benefit subsidy administration grant and National changes being made in relation to Business Rates and retrospective appeals.
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Update from previous report: The impact of loss of income due to COVID19 remains to be monitored on a daily basis along with Council Tax and NDR collection rates. Based on April and May’s income losses, it is anticipated there will be budget pressures for 2020/21 of £905k on the General Fund and £200k on the HRA. At these levels the Councils reserves are able to cover these pressures. The position will continue to be monitored closely and a further update will be bought to the next meeting. At the moment, we are confident that we are doing everything that we can to monitor and mitigate financial risks. However, due to the unknown and uncontrollable factors, the risk Score is to remain the same.
(iv) FAILURE TO PROPERLY RISK ASSESS OUR PRACTICES AND TAKE APPROPRIATE ACTION: Owner: Safety and Resilience Manager Current Risk and Direction of Travel: AMBER – NO CHANGE Summary of Risk and Control Weaknesses: The Council is required under Health & Safety legislation to ensure that risk assessments are undertaken in all of its service areas. The assessments must identify suitable measures for controlling the risks to its employees and service users. The Safety & Resilience Manager monitors all outstanding risk assessment reviews and safety actions. These will be reported to the quarterly safety management meeting. Primary Raw Risk: Health & Safety Value: Major – Loss of life/Major illness There is no overall change in this risk category. Corporate Risk Register Outstanding Controls: IOSH - Managing Safely training courses are being run for identified Service Managers to ensure all managers have the required level of knowledge. An electronic employee protection register is being developed which will help to ensure the safety of officers, whilst complying with the new data protection regulations. Update from previous report: The planned IOSH training course has had to be cancelled due to COVID19, this will be rescheduled when possible.
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(v) FAILURE TO PROPERLY RISK ASSESS OUR TANGIBLE ASSETS: Owner: Property Manager Current Risk and Direction of Travel: AMBER – NO CHANGE Summary of Risk and Control Weaknesses: The Council is required to undertake regular physical condition surveys of its non-housing tangible assets. The outcomes should be classified into the four condition bands of urgent work, essential work, desirable work, long term work and appropriate action taken to mitigate risks. Primary Raw Risk: Health & Safety Value: Major – Loss of life/major illness There is no overall change in this risk category. Corporate Risk Register Outstanding Controls: Since the external consultant concluded his survey, officers have been identifying actions to be taken, such as opportunities to dispose of assets and improvements to certain buildings. This process is set to continue as a provisional works and costing programme is currently being established. Further capital bids will be submitted for future years. Risk assessments of Council buildings are in existence but require regular reviews and updating in conjunction with the condition surveys. Inspections regarding accessibility under Equalities legislation are undertaken as part of an ongoing rolling programme. When buildings inspections are intended to be carried out opportunities to undertake work recommended regarding accessibility are undertaken where possible. Incidents of recreational use on Council land need to be reviewed and prohibited where appropriate, by the use of Public Space Protection Orders. Update from previous report: The appointed contractor, (Gleeds) are currently working to collate all of the Councils assets from the various information sources with the aim of creating one comprehensive list. Once this has been finalised, a project group will be able to review the list to identify any potential compliance gaps and formulate a plan to address any weaknesses. Gleeds staff had been furloughed due to COVID19, but are now getting back to work and are hopeful the original timetable for this project will be adhered to. With a number of buildings being closed due to COVID-19 this has enabled works to take place that wouldn’t have normally have been done had they been occupied by operational staff. The Risk Score remains unchanged (B5 – Low / Critical). This may be subject to change depending on the outcome of the Gleeds project exercise.
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(vi) INSPECTION PROGRAMME ON TREE MANAGEMENT: Owner: Head of Neighbourhoods Current Risk and Direction of Travel: RED – NO CHANGE Summary of Risk and Control Weaknesses: All councils have statutory and legal responsibilities to provide areas of land for open space facilities. These range from play parks to cemeteries, all with very different needs in the way the Council maintains and inspects in order to minimise the risks that are present at these locations. Trees due to their natural growth patterns are susceptible to disease and damage from either natural or deliberate causes which will always demand a human resource to monitor and inspect these periodically. Primary Raw Risk: Health & Safety Value: Critical – Loss of life/Major illness There is no overall change in this risk category. Corporate Risk Register Outstanding Controls: Additional resources will need to be provided in order to complete the inspection process. Once the inspection, logging and mapping has been completed, a programme of works should be identified to address any problem trees. Update from previous report: A tree management plan is now in place for parks covering the high risk areas and that tree mapping software system has been introduced. Further work is required to include all tree assets within Housing and Estates service areas. A sub-group has been set up and have met and identified / planned the way forward for housing sites. Areas have been prioritised and will be reviewed on this basis. Management are to consider whether other hazards identified such as manholes and footpaths on Council owned land require a separate corporate risk category and will report back on this at the next meeting. Interviews are scheduled to recruit for the vacant post of Senior Technical Officer in the next few weeks. It was agreed that the inherent risks are high wherever any trees are present, hence the Risk Score would remain unchanged at present with a view to considering a reduction once the initial assessment of the wider estate has been completed.
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(vii) GDPR: Owner: Director of Corporate Resources Current Risk and Direction of Travel: see below for update on this risk item Summary of Risk and Control Weaknesses: GDPR is more extensive in scope and application than the current Data Protection Act (DPA). The Regulation extends the data rights of individuals, and requires organisations to develop clear policies and procedures to protect personal data, and adopt appropriate technical and organisational measures. Primary Raw Risk: Reputation, Litigation and significant financial penalties Update from previous report: This risk had originally been identified due to the implications arising for the Council in implementing the GDPR. The revised Data Loss Risk would refer to the Council’s legal obligations under data protection legislation and thus incorporates GDPR. It has been agreed by the Corporate Risk Management Group that this specific Risk is now superfluous and can be removed from the register.
(iix) HEALTH AND SAFETY COMPLIANCE IN COUNCIL HOUSING STOCK AND OTHER OWNED PREMISES Owner: Head of Housing Services Current Risk and Direction of Travel: AMBER Summary of Risk and Control Weaknesses: As a result of the Grenfell Tower fire disaster and consequently new legislative changes a number of potential fire safety threats to the Council’s Housing Stock have recently been identified and will require remediation works to be undertaken. Primary Raw Risk: Safety Concerns / Financial Impact Value: Major £TBC – Full costings are to be ascertained and funding to be identified Corporate Risk Register Outstanding Controls: A serious and potentially life threatening incident in a tenant’s home or other Council premise as a result of a failure to implement legislative and regulatory requirements. This could include incidents relating to Gas Safety, Electrical Safety, Fire Management, Asbestos Management, Water Safety (Legionella) and Lift Safety. Update from previous report: A number of controls have been put in place and are summarised below; All of the Compliance Management Plans and Operational Guidance is complete. Implementation meetings with key Managers have now started
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Validation of data where anomalies across systems were identified is taking place. IT upgrades are being investigated to ensure compliance data is in one place. A Data Governance Group has been established. Procurement for 3rd Party Quality Assurance is underway for Gas / Water and Electric Safety. Savills have been appointed as the new Fire Risk Assessor – FRA’s are due to commence shortly across the stock. Compliance Management Training has been arranged for 5 Senior Managers. Training for all staff will roll out over the next two years An Annual Compliance Report will be prepared for Cabinet in October 2020, providing an update on the Action Plan agreed by Members following the Compliance Review in October 2019. No guidance has been issued re the Fire Doors
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4. Implications
a) For service users The primary aim of the Risk Management Strategy is to improve the Council’s
ability to deliver on its strategic priorities and other objectives. The successful implementation of risk management principles will produce many benefits for our residents and service users.
b) Strategic & Policy
The Risk Management Strategy clearly supports the Council’s corporate governance arrangements and the strategic objective of a Viable Co-operative Council.
c) Financial – Ref: 21/116
The financial implications are considered when the Council’s corporate and service risks are identified, analysed, scored, managed and monitored.
d) Legal – Ref: 63/07/2020
There is an overriding requirement to ensure that the management of risk is treated as a priority, and the Monitoring Officer in conjunction with the Council’s Solicitor, will continue to exercise an overview of the discharge of the Council’s statutory functions.
e) Human Resources
As contained within the report. f) Community Safety, Equalities, Environmental
As contained within the report. g) General Data Protection Regulations GDPR has been identified a risk within the report
h) This is not a key decision.
5. Options, Risks and Reasons for Recommendations 5.1 This report is provided to Members for information and consideration. Members may
wish the Corporate Risk Management Group to consider other perceived risks as deemed appropriate.
6. Recommendations 6.1 That the Audit and Risk Scrutiny Committee note the progress of actions identified
within the Corporate Risk Register.
Background Papers
Location
Associated Papers
Head of Finance & Property’s Office
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