Agenda item

The Chair introduced Item 7.

Cllr Elliot introduced the second quarter of this financial year report and highlighted an underachievement of investment income due to base rate cuts; he hoped this would rectify itself over the next year next year as in light of Bank of England base rates.  Cllr Elliot reported that investment property income continued to increase.  He also advised that Parking income had increased, adding that this was not from parking fines, but from people using DBC car parks.

Cllr Tindall raised concern regarding the numbers in Item 5.1 of the report (pg 7 of the Agenda pack); He said it stated £102k over budget, but went on to state a pressure of £120k and a pressure of £44k; Cllr Tindall that either means a pressure of £164k; or a pressure of £76k, but it is not £102k as stated.

D Skinner responded, saying that what was identified through the narrative of the main items, did not always add up exactly to the sub totals in bold within item 5.1.  He said that the £120k was the relevant item and £44k was in the reserve approved draw down’s which would not be reported, as the assumption would be that draw down would be happening.  He said that £120k was balanced against £102k, and there are then a number of minor items that would offset it, so the £120k was the main pressure within the employees’ budget.

Cllr Tindall referred to there being over 300 budget lines; he said that a small variance over 300 lines, 300 small variances could add up to quite a considerable amount of money. D Skinner said it was a balance to try and strike; when preparing the report for the Committee, the aim was to draw Members’ attention to the major items.  He said where there was a recurring theme, in terms of minor items that were accumulatively adding through, these would then be reported on as a corporate figure rather than on individual line items. 

Cllr Tindall highlighted other examples of inconsistencies within this part of the report. He said that there were a considerable number of other examples like these, and asked the Chair if perhaps they can looked at. The Chair asked Councillor Tindall to send him a list, also copying to J Doyle.  The Chair advised they would ensure they are picked up prior to the next meeting.

Action Point: Cllr Tindall to provide list of inconsistencies within item 7 of agenda to Cllr Douris, for officers to address

D Skinner drew the Members’ attention to a topic which had arisen on a number of occasions; this was the ‘under-achievement of income on commercial waste’. He offered his apologies to the Committee as an officer from the Waste Service was currently unavailable to attend the meeting.  D Skinner had discussed this with Craig Thorpe, and felt he had provided the best answer. D Skinner said that the under-achievement of income was £90k; this was in the context of an income of just over a million pounds, therefore DBC were actually collecting just under a million pounds.  Measures had also been implemented that had been requested by Councillors; the ground structures had been reviewed and optimised to ensure a reduction in cost, to try to minimise the income loss.  D Skinner explained the main driver for the reduction in customers was the costs of the service did not meet customers’ expectations; first for commercial reasons and also in terms of the mix of services that DBC could offer in terms of the different waste streams that then get separated out. He hoped this answered the Committee’s questions. The Chair said it did, but Members would keep a watchful eye on this particular item.

Cllr Mclean asked if DBC were not able to offer this service at a competitive price; he asked why DBC were so expensive in comparison. D Skinner said he did not think DBC were expensive but thought companies such as Biffa, had more economies of scale that they can achieve, which DBC could not. He said that they also offered discounts and free trial periods which were increased later in the contract.  D Skinner said that DBC were not able to compete with all these practices.

Cllr Silwal referred to pg 5 of the agenda pack, regarding the Brownfield Register cost – he asked if this is a new or existing employee.  D Skinner advised it is an existing employee seconded on to the project with some additional resource as well to back fill some of the existing work.  He advised the Brownfield Land Register was a new requirement from Central Government. The Chair said possibly the word missing there is “Land” which puts it into context.  It is the Land Registry item. 

Cllr Silwal referred item 5.1 of the report (pg 7 of the Agenda pack) He noted the issue with recruitment of qualified people in Building Control and Planning, and asked if this was because DBC were not offering an attractive package.  He noted that trainees had been recruited instead, and asked what was the guarantee that they, when qualified, would not leave for a more attractive salary.

D Skinner said that DBC was required to work within approved pay scales and approved pay points. There was currently a pressure within Building Control; one of the side effects of deregulation had seen a movement of staff from the public sector to the private sector for significantly more attractive salaries.  He said there was some risk in terms of trying to retain staff, however DBC had tried to introduce measures to reduce this; e.g., when new staff start, there is a requirement that once people have qualified they have to stay for a certain time period afterwards, otherwise they have to repay the training fees associated with the cost.  DBC also try to provide these staff with other career development opportunities.  M Rawdon further explained the “handcuff” element of the procedure, saying that people sign up to an agreement with the training fees in that the Council pay for their training but if they leave they have to repay the money spent on the course fees.  He confirmed that there had been occasions in the past when DBC had pursued individuals and received this repayment. 

The Chair highlighted that the construction and building market was currently very buoyant across the whole of the south of England.  He added that other projects in the pipeline, such as CrossRail 2 has meant that there is a deficit of this particular industry. 

Cllr Silwal referred to item 5.2 of the report (pg 7 of the Agenda pack) regarding the conversion of The Bury to a Museum, at a cost of £75,000.  He asked if support could be obtained from the National Government or the Lottery Fund to assist with the costs.  D Skinner said it was in the process of being submitted to the Heritage Lottery Fund.  He said, if successful, some significant sums of money could be received, however he explained that this could not happen before the initial feasibility work.  He said that if successful, DBC may get a third of the total cost from the HLF in terms of grant received.  Until then the work was undertaken at the Council’s risk.

Cllr Silwal stated he was unaware of the background of the feasibility study and the people employed to carry it out and he asked if this information could be divulged. D Skinner said the firm that carrying out the work was a specialist company with experience of converting heritage assets into modern workable buildings for the provision of museums.  He added that they have done work in Hertfordshire and for other authorities.

The Chair advised that the Committee was potentially straying into commercial confidentiality so the matter was left there. Cllr Tindall also highlighted that the details of The Bury are in the last Cabinet Minutes.

Cllr Tindall referred to item 8.3, line 191 of the report (pg 11 of the Agenda pack), specifically slippage of £1.1 million; this was now expected to be incurred later than expected because of ongoing issues.  Cllr Tindall read a list including utilities, bore holes, repairs, drainage and rights of way.  He said his concern this: was how many of those issues were known at the start? How many of those were identified by the professionals who prepared the project plans and how many of these came as a surprise to them to warrant expenditure of an extra £1.1 million?

N Brown responded, saying that Stationers Place was a particularly challenging scheme, given the location and environment.  He said the initial feasibility works and outlying planning discussions suggested the work would be possible based on a suitable budget.  He stated the Environment Agency (EA) had proven slightly more difficult to persuade of the rectification works required, which was causing slippage in the programme and also causing more costs.  D Skinner said the New Build team was currently calculating the cost to complete the work.  He said some of the issues mentioned by Cllr Tindall were known, but not the extent, until the detailed investigative work had been undertaken.  N Brown reported different messages have been received from the EA in terms of the work that is expected and required.  He said it was a work in progress. 

Cllr Tindall suggested that on completion of the scheme, there should be a detailed analysis of the issues that had arisen; what should have been anticipated, how efficient were the professional staff, as well as what lessons can be learned for the future.  The Chair said that on a project of this size, there should be a review and analysis to see how it went and what could be learned, including how pitfalls can be avoided in future.  He stated significant variations and overruns were to be avoided. R Smyth said that, as part of the closure of any project, a project team evaluation was undertaken, as well as an additional process where more detailed reviews could be undertaken. The Chair asked if this project fell within that category and R Smyth confirmed that it would. Cllr Tindall asked if the report could come back to this Committee.  The Chair said that he would take that back and discuss with the Officers where this review should land, possibly to Housing.  Cllr Tindall said he did not mind if it was Part 2, his concern was that measures should be taken to prevent the same from happening again.  This was agreed.

The Chair referred to item 4.1 and 4.2 of the report (pg 6 of the Agenda pack) saying he was intrigued by these items; he asked if DBC were doing well on parking, was an opportunity being missed for revenue in parking. B Hosier responded. He said that over the last couple of years, this service has divided into two, and the Parking Enforcement Contract had been outsourced to Watford.  He said that as part of the budget setting process for the last two years and into next year, DBC were offering £50k based on a report commissioned in 2014/15 at reducing costs. He said that the savings have been taken out of the Parking Enforcement Contract. He also said that the Employee costs were within the client side function, with no impact on either performance or income generated.  B Hosier highlighted that income was increasing without increasing parking charges which reflects well on the regeneration work in the Borough.  He said availability of data from the existing machines would be addressed in the new contract being let before the end of this month. 

The Chair added that the levy charged on the Penalty Charge Notices by the Traffic Penalty Tribunal has been reduced from 40 pence to 35 pence per ticket.

The Chair noted item 7.4 of the report (pg 9 of the Agenda pack), specifically “Tenants’ Charges - £100k under budget (18.9%) A deficit is expected in relation to the newly de-pooled service charges. Detailed calculations for setting rent and de-pooled charges have now been performed, and a shortfall is anticipated”. D Skinner said that when Central Government imposed a 1% reduction, part of the amount previously charged as rent covered some service charge elements; he said that one of the ways to mitigate the 1% rent reduction was to separate out the service charge element.

The Chair thanked D Skinner for his explanation and asked a question relating to item 7.6 of the report (pg 9 of the Agenda pack), the Osborne pension liability, following the triennial pensions review. He asked if this was DBC’s liability as Osborne was a commercial company employing their own people.  DS advised it is DBC’s liability as part of the contract terms were that their liability was capped; this was an additional cost, ultimately passed through DBC.

The Chair asked for any further questions. Cllr Armitage referred to 8.3, line 195 of the report (pg 11 of the Agenda pack), regarding the Swing Gate Lane development; he asked for a more specific explanation as to the reasons for the slippage.  D Skinner responded, saying it was his understanding that additional planning requirements had been imposed which had not been foreseen. This had meant that additional ground work would be required.

The Chair asked Cllr Elliot if he had anything to add, which he did not. 

Outcome: At the invitation of the Chairman, the Committee agreed the contents and recommendations of Budget Monitoring report for Quarter two 2017/2018.