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Agenda and minutes

Agenda and minutes

Venue: Main Conference Room, Service Headquarters, Fulwood. View directions

Contact: Diane Brooks,  Principal Member Services Officer

Items
No. Item

1/17

Apologies for Absence

Minutes:

Apologies were received from County Councillors L Beavers and G Wilkins and Councillors F Jackson and T Williams.

2/17

Disclosure of Pecuniary and Non-Pecuniary Interests

Members are asked to consider any pecuniary and non-pecuniary interests they may have to disclose to the meeting in relation to matters under consideration on the agenda.

Minutes:

None received.

3/17

Minutes of Previous Meeting pdf icon PDF 75 KB

Minutes:

RESOLVED: - That the Minutes of the last meeting held on 29 March 2017 be confirmed as a correct record and signed by the Chairman.

4/17

External Audit - Understanding How the Committee Gains Assurance from Management pdf icon PDF 47 KB

Additional documents:

Minutes:

In order to comply with International Auditing Standards, the External Auditors, Grant Thornton was required to obtain an assurance as to how those charged with governance discharged their responsibilities in connection with oversight of the annual accounts process and financial reporting.  The letter requesting this was considered by Members.  A draft response prepared by the Chairman of the Resources Committee was also considered by Members.  It was noted that the Audit Committee had provided a similar response in connection with the risk of fraud and breaches of internal controls.

 

In response to Member queries the Director of Corporate Services provided reassurance that it was usual practice for the response letter to the external auditors to be prepared as a draft for consideration by Members at this meeting.  Any changes approved by the Committee would then be incorporated into the letter before signing by the Committee Chairman.

 

RESOLVED: - That the Committee approve and endorse the submission of the response.

5/17

Year End Treasury Management Outturn 2016/17 pdf icon PDF 134 KB

Minutes:

The report set out the Authority’s borrowing and lending activities during 2016/17.

 

All borrowing and investment activities undertaken throughout the year were in accordance with the Treasury Management Strategy 2016/17, and were based on anticipated spending and interest rates prevailing at the time. 

 

In accordance with the updated CIPFA Treasury Management code of practice and to strengthen Members’ oversight of the Authority’s treasury management activities, the Resources Committee received regular updates on treasury management issues including a mid-year report and a final outturn report. Reports on treasury activity were discussed on a quarterly basis with Lancashire County Council Treasury Management Team and the Director of Corporate Services and the content of these reports was used as a basis for this report to the Committee.

 

The Director of Corporate Services confirmed that the economic situation in the year was largely dominated by the uncertainty about the short and medium term implications of the decision in June 2016 to leave the European Union.  In response to the risk of reduced economic growth, the Bank of England Monetary Policy Committee initiated a cut in bank rate to 0.25%, further gilt and corporate bond purchases and cheap funding for banks to maintain supply of credit to the economy.

 

The year had seen steady economic growth.  Inflation remained low in the first half of 2016 but there had been signs of this increasing towards the end of the year with inflation measured at 2.3% at March 2017.  Since the referendum vote the value of sterling had fallen and this was a significant factor behind the increase in inflation. 

 

The year had seen significant volatility in the financial markets as a result of both the UK vote to leave the European Union (EU) and the election of the President of the USA.  As a consequence of the uncertainty gilt yields fell, the UK’s sovereign rated was downgraded to AA and the value of sterling fell.  The impact of the negotiations to leave the EU would be a source of ongoing uncertainty.

 

Short term interest rates continued at historically very low levels.  In response to a potential reduction in economic growth the Bank of England reduced the base rate from 0.5% to 0.25% in August 2016; a level it remained at throughout the rest of the year.  The expectation during the year was that interest rates would remain low for the rest of the financial year and beyond.

 

Cash flow and interest rates continued to be monitored by the Director of Corporate Services and the County Council’s Treasury Management team in order to inform future decisions on borrowing and investments.

 

There had been no new borrowing undertaken in the year in line with the continuation of the policy of using cash balances to fund capital expenditure which had resulted in no new borrowing being undertaken since 2007.  In addition, the Authority had a policy to set aside monies in the form of statutory and voluntary minimum revenue provisions to reduce borrowing requirements end enable the repayment of  ...  view the full minutes text for item 5/17

6/17

Year End Capital Outturn 2016/17 pdf icon PDF 95 KB

Minutes:

The report presented the year end position for the Authority’s capital programme including how this had been financed, which showed total expenditure in year of £3.508m compared with a total budget of £8.823m with a slippage requirement of £5.354m which resulted in an overall overspend of £0.039m.  The slippage was a timing issue dependent on the progress of capital schemes and not an indication of future underspends.

 

The year end capital outturn position, set out in appendix 1 also showed how the programme had been financed in year, from a combination of capital grant (£2.0m) and revenue contributions (£1.5m). Over the next five years the capital reserves, available to fund future capital programmes outlined in the report now presented, would leave a balance of £3.0m in capital reserves as at 31/3/22.

 

Under the prudential framework, the Authority was required to identify various indicators to determine whether the approved capital programme was affordable, prudent and sustainable.  The revised indicators, after allowing for the various changes to the capital programme, which were set out in the report confirmed that performance had been within approved limits.

 

The estimated impact on band D council tax of the revised capital programme compared to the actual outturn figures was considered by Members and it was noted that the net impact was zero.

 

The original approved capital programme for 2017/18 was £8.179m which excluded any estimated slippage from 2016/17.  This had been amended to reflect the final level of slippage of £5.354m therefore, the final proposed capital programme for 2017/18 was £13.534m which was funded from capital grant, revenue contributions, capital reserves and earmarked reserves.  Full details of the programme and its funding were set out in Appendix 2 and considered by Members. 

 

Revised prudential indicators for 2017/18 to 2019/20 showed that the revised programme remained affordable, prudent and sustainable.

 

The estimated impact of slippage on band D council tax was considered by Members and noted that there was no net impact in each of the 3 years.

 

RESOLVED: -  That the Committee: -

 

 i.       Note the capital  outturn position, the financing of capital expenditure 2016/17 and the prudential indicators, and

ii.       Approve the revised capital programme, and the financing of this, for 2017/18. 

 

7/17

Year End Revenue Outturn 2016/17 pdf icon PDF 102 KB

Minutes:

The report set out the revenue outturn position, which fed into the Income and Expenditure Statement within the main Statement of Accounts and the impact of the revenue outturn position on the Authority’s reserves.

 

The annual budget for the year had been amended to reflect a slight increase in the Section 31 grant due in respect of localised business rates for the preceding financial year, which had been subject to reconciliation by CLG.  This had resulted in an additional £0.012m of Section 31 grant being received in 2016/17. The outturn position showed a net expenditure of £55.556m against an updated budget of £55.623m giving a total underspend for the financial year of £0.067m. 

 

As reported throughout the year, the Service had identified savings at the earliest possible opportunity following the completion of reviews.  The final position within individual departments was set out in Appendix 1 with major variances summarised in the report.

 

The report identified total in-year efficiency savings of £2.502m compared with a target of £3.971m, performance exceeded the efficiency target, largely as a result of staffing savings made and procurement savings in respect of contracts let during the year.

 

The Authority held 3 specific revenue reserves: Devolved Financial Management, PFI Equalisation and Other Earmarked Reserves.  The impact of the year end position on the reserves was set out in a table, as now presented and the following was noted: -

 

   Devolved Financial Management (DFM) reserves enabled budget holders to carry forward any surplus or deficit from one financial year to the next, giving greater flexibility in managing budgets thereby optimising the use of available financial resources and facilitating better value for money.

 

     The principles of DFM were that any overspends and 50% of any underspends were carried forward into the new financial year, subject to a £25k maximum, other than where a specific business case could be made.  The remaining 50% of any underspend was transferred to the Authority’s general reserve.  The total DFM balance stood at £426k; full details by department were set out in Appendix 2;

 

   The PFI Equalisation Reserve was used to smooth out the annual net cost to the Authority of both PFI schemes and would be required to meet future contract payments.  The level of reserves required was reviewed each year to ensure it was sufficient given changes in forecast inflation and interest rates.  The reserves had been updated during the year, resulting in a revised balance of £3.5m;

 

   Other Earmarked Reserves were to fund a specific purpose. The overall reserves level had increased from  £5.7m to £3.5m.

 

In addition, the General Reserve carried forward all surpluses and deficits that arose in year and was designed to cover uncertainties in future years’ budgets; to meet short-term loss of funding and to provide flexibility in terms of medium-term financial planning.  As a precepting Authority any surpluses or deficits were transferred into/out of reserves in order to meet future potential commitments, and as such the balance of the surplus on the  ...  view the full minutes text for item 7/17

8/17

Statement of Accounts 2016/17 pdf icon PDF 121 KB

Additional documents:

Minutes:

The report presented the Authority’s Statement of Accounts and whilst the Statement took account of the information presented in the Year End Capital Outturn, Year End Treasury Management Outturn and Year End Revenue Outturn as previously presented on the agenda, the Statement of Accounts itself was prepared in line with recommended accounting practice.  It was noted that this was not accounted for on the same basis as council tax and hence did not tie into the actual revenue position as set out in the Year End Revenue Outturn report.  Furthermore this was a very complicated document.

 

The Statement of Accounts was subject to review by the Authority’s external auditors, Grant Thornton.  The review was scheduled to take place in June and July and a further report would be presented to the Audit Committee once this had been completed with the final Statement of Accounts re-presented to the Resources Committee for information.

 

The Statement had been signed by the Treasurer to certify that it presented a true and fair view of the financial position of the Authority as at 31 March 2017.

 

Under existing regulations the Chairman of the Committee approving the accounts had responsibility for signing and dating these. The aim of this requirement was to encourage audited bodies to produce timely accounts of a good quality and promote the concept of corporate governance.

 

The Statement of Accounts would be placed on deposit for public inspection in from Monday 19 June to Friday 21 July 2017.

 

The content and format of the accounts was as prescribed in the Code of Practice on Local Authority Accounting issued by the Chartered Institute of Public Finance and Accountancy (CIPFA).  The Authority’s Statement of Accounts set out: -

 

Narrative Report

This sets out the financial context in which the Combined Fire Authority operated, and provides an overview of the financial year 2016/17 as well as details of future plans.

 

Annual Governance Statement

This reflected the position the Authority had reached in connection with corporate governance, including internal controls and risk management, including a review of the effectiveness of these arrangements, as reported at the Audit Committee in June.

 

Auditors Report and Opinion

This set out the Auditors opinion on the Statement of Accounts, and was subject to the results of the outstanding audit work which would commence in June.

 

Statement of Responsibilities

This set out the responsibilities of the Authority and the Treasurer in terms the overall management of the Authority’s finances and in terms of the production of the annual accounts.

 

Comprehensive Income & Expenditure Account

This statement showed the accounting cost in the year of providing services. It was a summary of the resources that had been generated and consumed in providing services and managing the Authority during the last year. It included all day-to-day expenses and related income on an accruals basis, as well as transactions measuring the value of fixed assets actually consumed and the real projected value of retirement benefits earned by employees in the year.   The format of this  ...  view the full minutes text for item 8/17

9/17

Financial Monitoring 2017/18 pdf icon PDF 98 KB

Minutes:

The report set out the current budget position in respect of the 2017/18 revenue and capital budgets and performance against efficiency targets. 

 

Revenue Budget

 

The overall position as at the end of May showed an underspend of £0.097m. It was noted that it was too early in the financial year for any trends in expenditure to be evident and that the situation would be closely monitored as the year progressed.  The Committee was provided with detailed information regarding the position within individual departments with major variances related to non-pay spend and variances on the pay budget summarised as follows: -

 

 

Area

Overspend/ (Under spend)

Reason

 

£’000

 

Service Delivery

43

The overspend related to various headings, such as uniforms, training props for stations, and furniture,  the majority of which were timing related and were expected to even out as the year progressed.

Training & Operational Review

55

The overspend related to the timing of committed spend for training courses taking place later in the financial year, and was therefore a timing issue, rather than an anticipated outturn position.

Pay

(172)

In terms of the underspend to date, this was broken down as follows:

  • Wholetime pay (£50k underspend) this partly related to the number of early leavers in the year, whereby 4 personnel had left earlier than anticipated, whereas the budget allowed for just 2. With the balance of the underspend relating to the timing of costs of ad hoc payments such as overtime and public holidays.
  • Retained pay (£70k underspend) reflected the two month delay in implementing the new RDS pay scheme, as previously reported.
  • Support staff pay (£50k underspend) related to several vacant posts across various departments, which were in excess of the vacancy factor built into the budget. Recruitment for the majority of these vacancies was currently underway, however it was likely that this underspend would increase, albeit at a slower rate, as the year progressed until such time as we return to full establishment.

 

Capital Budget

 

The Capital Programme for 2017/18 stood at £13.533m, after allowing for slippage of £5.354m, as reported elsewhere on the agenda.

 

A review of the programme had been undertaken to identify progress against the schemes as set out in the report.  Appendix 2 set out the capital programme and the expenditure position against this, as reflected in the report.  The costs to date would be met by both capital grant and revenue contributions.  Members also noted that during May the surplus land at Valley Road, Penwortham was sold, bringing a capital receipt of £0.070m which could be used to fund future capital programmes.

 

Delivery against savings targets

 

The annual target stood at £1.55m. To date £0.5m of savings had been delivered.  The performance to date was slightly ahead of target, a combination of the underspend on salaries for the first two months, plus savings in respect of procurement activities during the same period.  It was anticipated that the efficiency target would be met for the financial year.

 

RESOLVED: - That the Committee note  ...  view the full minutes text for item 9/17

10/17

Workforce Planning pdf icon PDF 78 KB

Minutes:

The Director of People and Development tabled a report which updated Members on the current position in respect of recruitment activity and the measures being taken to improve the process to assist in meeting: ongoing positive action campaign requirements; the nurturing of candidates; the amendment of processes whilst maintaining appropriate standards and the ongoing consideration of the role of apprentices.  Members considered the report in detail.

 

The workforce currently stood at an establishment of 1,242 with slight increases in both BME, female and disabled employees since 2010; but the Service work profile remained unrepresentative of Lancashire’s community.  On occasions when undertaking previous recruitment campaigns the Service had been able to reflect the community, for example the 50 Community Fire Service Practitioners was totally representative. However, when aggregated within the whole establishment, this only reflected a slight overall improvement. Of necessity the Retained Duty System (RDS) recruitment reflected the RDS catchment area which was not representative of Lancashire, and the Service had not undertaken any significant wholetime firefighter recruitment for many years prior to this year due to the demands imposed by the austerity measures.

 

The current recruitment activity was predicated on an ongoing desire to maintain our current operational strength and this meant the Service originally envisaged a recruitment of a further circa 60 firefighters to maintain this level with recruitment in June (36) and January 2018 (24). Further recruitment programmes would be run on an annual basis.  This followed a recruitment exercise focused purely on RDS which resulted in 27 new recruits for the wholetime in November 2016.  The actual numbers to be recruited would be adjusted through the campaigns to reflect altered demand, retirement and other leavers to meet the overall requirement in the long term.

 

This recruitment activity would be supplemented by an apprenticeship programme following the imposition on all public bodies of an apprenticeship target of a minimum of 2.3% of headcount annually which equated to a target of 29 apprentices; with a requirement to report on achievement against the target annually from September 2018.  Steps had been taken in respect of support staff to consider the role that apprentices could undertake and an opportunistic approach was currently being adopted with all positions under grade 4 being considered for possible apprenticeships as they fell vacant with identification of specific areas of additional need such as in ICT.

 

The associated Apprenticeship levy was implemented with effect from 6 April 2017 which, based on our current pay bill, equated to £150k.  The Service was currently continuing to determine the best way of drawing down from this levy, but the approach would be a combination of support staff apprentices,  coupled with higher level apprenticeship training for existing staff and recruiting firefighter apprentices once the issues around the framework to be utilised were clarified.  An allocation of £180k had been identified in the budget and more detailed proposals would be brought to a later meeting of the Resources Committee about the utilisation of these funds.  Due to uncertainty around the  ...  view the full minutes text for item 10/17

11/17

Date of Next Meeting

The next scheduled meeting of the Committee has been agreed for 10:00 hours on 27 September 2017 in the Main Conference Room, at Lancashire Fire & Rescue Service Headquarters, Fulwood.

 

Further meetings are:           scheduled for 29 November 2017

                                                proposed for  21 March 2018 and 13 June 2018

Minutes:

The next meeting of the Committee would be held on Wednesday 27 September 2017 at 1000 hours in the Main Conference Room at Lancashire Fire and Rescue Service Headquarters, Fulwood.

 

Further meeting dates were noted for 29 November 2017 and 21 March 2018 and agreed for 13 June 2018.

12/17

Exclusion of Press and Public

The Committee is asked to consider whether, under Section 100A(4) of the Local Government Act 1972, they consider that the public should be excluded from the meeting during consideration of the following items of business on the grounds that there would be a likely disclosure of exempt information as defined in the appropriate paragraph of Part 1 of Schedule 12A to the Local Government Act 1972, indicated under the heading to the item.

Minutes:

RESOLVED: - That the press and members of the public be excluded from the meeting during consideration of the following items of business on the grounds that there would be a likely disclosure of exempt information as defined in the appropriate paragraph of Part 1 of Schedule 12A to the Local Government Act 1972, indicated under the heading to the item.

13/17

High Value Procurement Projects

Minutes:

(Paragraph 3)

 

Members considered a report that provided an update on all contracts for one-off purchases valued in excess of £50,000 and high value procurement projects in excess of £100,000 including: new contract awards, progress of ongoing projects and details of new projects with an anticipated value exceeding £100,000.

 

RESOLVED:-  That the Committee note the recommendations as outlined in the report.

14/17

Urgent Business (Part 2)

An item of business may only be considered under this heading where, by reason of special circumstances to be recorded in the Minutes, the Chairman of the meeting is of the opinion that the item should be considered as a matter of urgency.  Wherever possible, the Clerk should be given advance warning of any Member’s intention to raise a matter under this heading.

Minutes:

Development of Preston Fire Station

(Paragraph 3)

 

RESOLVED:- Members approved the capital investment proposed by the Director of Corporate Services to support the development of joint premises with NWAS at Preston.