Agenda item

Report of the Corporate Director of Resources.

The Sub-Committee received a report of the Corporate Director of Resources, which had been previously considered at Cabinet on 13 December 2012.   The report set out the Council’s revenue and capital monitoring position for Quarter 2 as at 30 September 2012.

A Member stated that the Sub-committee had requested documents relating to the implementation of the SAP system three months ago and queried why this had not yet been circulated to the Committee and when these would be circulated.  The Corporate Director clarified that the request was not made by the Sub-Committee but individually by the Vice-Chairman at a Chairman’s Briefing Meeting. The Corporate Director stated that she had sought advice from the Monitoring Officer regarding disclosure of these documents.  The Member expressed concern that it had been necessary to seek advice from the Monitoring Officer and that this was contrary to the openness and transparency required by the scrutiny function.  The Corporate Director stated that she believed she had valid concerns about the sharing of these particular documents and that she would contact the Vice-Chairman of the Sub?Committee about this once she had fully considered the advice from the Monitoring Officer.

The Corporate Director stated that much of the data in the Quarter 2 report had been superseded by the Quarter 3 report, which was due to be considered at Cabinet in two weeks’ time.  With regard to the Quarter 2 report, the Corporate Director stated that there had been a forecast overspend and spending protocols had been put in place to address this.  Strategic targeting had resulted in an under spend now forecast at just under £2m, and she expected this figure to improve further.  This had been due in part to the favourable results of treasury management and increased income from parking enforcement.  However, the ongoing PCT debt remained an area of concern and this issue featured in the Quarter 3 monitoring report.

A Member asked for an update about the costs of homelessness and also about the costs relating to the transfer of Public Health services to the Council.  The Chair left the room during discussion of the transfer of Public Health services to the Council.  In the absence of the Chair, the Vice-Chairman acted as Chair.

The Corporate Director responded that:

·                    the transfer of Public Health services to the Council would take place in April 2013;

·                    the funding allocation from the Department of Health (DOH) was not expected to cover the anticipated costs associated with the transfer. The Council was in negotiations with the PCT for additional contributions to finance the transition costs which entailed a number of risks, and these had been included in the Corporate Risk Register;

·                    homelessness spend was known to be difficult to forecast, however, the Housing Needs costs had levelled off since the end of Quarter 2. 

A Member requested that figures relating to the costs of public health transition and expected running costs be circulated to the Sub-Committee.  The Corporate Director undertook to arrange for the Project Manager to circulate the relevant information to the Sub-Committee. 

The Chair returned to the room at the conclusion of the discussion regarding discussion of the transfer of Public Health services to the Council.

A Member asked whether there had been any calls on the £1.184m earmarked for the Transformation and Priority Initiatives Fund (TPIF).  The Corporate Director advised that there had been a bid of £50k to research and implement a Harrow Card and a second bid was in the pipeline which had received approval by the Portfolio Holder for Finance and was being considered by the Leader.  She added that no further bids had been received at the end of Quarter 3.  The Member asked how the remainder of the ring fenced TPIF monies would be used.  The Corporate Director stated that the current strategy was to hold back on utilising further TPIF monies until after the year-end position was clarified, as a considerable underspend was needed this year to fund the costs of change, including redundancy costs.  This strategy had been agreed by both the Leader and the Finance Portfolio Holder.

A Member stated that, in his view, this was another ring fenced reserve account. He added that his question submitted to December Cabinet meeting had not been answered and asked to know how much of the £850k savings had been realised in the current financial year.  The Portfolio Holder for Finance stated that this question had not been answered due to insufficient time at the Cabinet meeting and undertook to provide the Member with a written response.

A Member asked what measures were being taken to recover the PCT debt and ensure that this situation did not recur in the future.  The Chair left the room during discussion of the PCT debt.  In the absence of the Chair, the Vice-Chairman acted as Chair.

The Corporate Director advised that the largest item within the PCT debt was just under £2.5m and formed part of a Section 256 agreement.  The Council was vigorously pursuing payment and the Finance Director of the PCT had given assurances that this would be paid by 6 February 2013.  The Corporate Director provided a confidential verbal update on the various other components of the debts outstanding from the PCT and the status/concerns in relation to each of them.  The closure of the PCT on 31 March and the establishment of the new Clinical Commissioning Group (CCG) which would be taking over from the PCT added additional complexity and risk.  These issues were reflected in the corporate risk register. 

A Member, who was not a Member of the Sub-Committee, expressed concern about carrying the PCT debt over to the new CCG and asked what contingency plans were in place to mitigate against the risk of non-payment.  The Corporate Director advised that the debts were being chased vigorously.  In the event the PCT failed to pay the debts, then the Council would have the option of taking legal action.  However, the PCT/CCG was one of the Council’s partner organisations and it was important to maintain a good relationship with it.

The Chair returned to the room at the conclusion of the discussion regarding the PCT debt.

A Member stated that the report did not specify what proportion of the gross Capital Programme Spend of £61.7m was funded by Harrow and what proportion was grant funded and therefore what the financing cost impact was for Harrow.  The Corporate Director undertook to try to include this level of information in monitoring reports in the new financial year, as part of the planned reporting improvements within the Finance Transformation Project.  The Member questioned whether Harrow was getting a better deal on interest or was it spending less overall.  The Corporate Director responded that it was both and added that the Council had benefited from a favourable variance with respect to Treasury Management.

The Member sought clarification regarding schools Capital funding and requested that a detailed report regarding the school expansion programme be provided to the Sub-Committee at a future meeting.  The Corporate Director advised that the Children and Families Directorate were awaiting a DfE decision regarding the schools funding allocation for 2013/14 and that this information had been included in the Quarter 3 report.

A Member asked whether the £446k forecast overspend in the Community, Health and Wellbeing Directorate had come to pass.  The Corporate Director stated that the report was out of date and had been superseded by the Quarter 3 report, and that several of these forecast overspends were in fact significantly lower than previously predicted, or were now in an underspend situation.  In response, a Member stated that as the Quarter 2 report contained out of date information, the Corporate Director should provide a detailed verbal update of Quarter 3 report to the Sub-Committee and the room be cleared of press and public for reasons of confidentiality, if necessary.  The Corporate Director stated that there were clearly set out reporting and monitoring structures and processes which she was obliged to follow.  The quarterly monitoring reports were considered by Cabinet in the first instance and it was Cabinet’s responsibility to decide what action, if any, was required if they were not satisfied with the actions management were already taking.  Therefore, it would not be appropriate that the contents of the report be revealed to the Sub-Committee prior to its consideration by Cabinet, even if the room was cleared of press and public.

The Chair stated that the long gap between publication of the quarterly monitoring reports and their submission to the Sub-Committee had been a long standing issue and future Sub-Committee meeting dates should be reviewed to take this into consideration and in order to ensure that the Sub?Committee considered these reports as soon as possible after publication.

RESOLVED:  That the report be noted.