Agenda item

The report was introduced by Cllr Johnson, Cabinet Member for Resources and the Director of Finance, who then invited questions from Councillors on the report.

 

Cllr Bolshaw said that as the issuer of loans the Council would be the owner of risk, and questioned how the Council will go about negating this and ensuring minimal risk.

 

Cllr Johnson informed the panel that voluntary groups sometimes own property and one way the Council can minimise the risk is to secure the grants or loans against property or other assets. The panel was also informed that treasury management officers would advise and liaise with external financial services for independent advice.

 

Cllr Johnson explained the Council benefits from relatively low borrowing rates through the Public Works Loans Board. By making this money available for loans, there is a tangible benefit to the community and a small financial advantage to the Council due to interest rate margins.

 

Cllr Potter asked for more information regarding the risks of this strategy.

The Director of Finance advised the panel that the Council will manage any risk to the best of its ability, though loans cannot be risk free. There is a structure of internal and external support and credit assessments prior to any loan being approved. Any proposed loans will be subject to approval by Cabinet (Resources) Panel.

 

Cllr Siarkiewicz stated that grants and loans to community and voluntary groups are worthwhile, however there may be some groups who are looking for loans or grants but may have a poor credit reference, and requested more information about the criteria.

 

Cllr Johnson stated that the criteria are there to minimise risk to the Council and not to exclude anyone from applying for a grant or loan, and the Council would look to minimise risk by securing against assets.

Cllr Photay asked whether additional employees would be needed to manage these applications.

 

Cllr Johnson stated that current employees would be utilised and in certain cases credit reference agencies would be used.

 

The Director of Finance added that if the activity could not be managed within existing resources, additional employees would only be appointed if there was a business case demonstrating cost recovery. The Council will look how it can achieve the aims with the least cost.

 

Sharing Services across the Black Country

Cllr Bolshaw enquired as to whether the saving proposed could be increased.

Cllr Johnson responded by informing the panel that at present the Council cannot enter a wholesale sharing service with other councils in the Black Country due to respective contracts terminating at different times. Cllr Johnson said that waste management shared across the Black Country has the potential to make a saving for the Council, however he did make the panel aware that all councils in the Black Country including Wolverhampton are committed to existing waste management contracts. Moreover the Council already shares its Head of Audit and VAT advisor with Sandwell Council and is looking at the possibility of sharing more Audit services across the two Councils. Further to this the Council is also looking at the possibility of sharing other financial services.

 

Advertising Income Generation

Cllr Photay welcomed the inclusion of the advertising proposal stating that it would help improve the City’s image, whilst also providing an opportunity to generate revenue and commercial land opportunities on land that is currently derelict.

Cllr Johnson advised the panel that advertising is extremely important and is something the Council has done well historically, however over recent years this had dropped off. The Council is now trying to proactively advertise on its physical assets and website. The provisional revenue estimate is stated as £50,000 although it may be possible to realise more.

Cllr Collingswood stated that it was worth noting that all Directors and the Managing Director had forgone their increments.

 

Employee car parking fees

Cllr Collingswood queried whether the car parking fees saving figure was correct and also noted his concern that this may penalise those employees with essential car allowances.

Cllr Johnson stated that at present the Council internally recharges parking fees to departments; the proposal is to now charge this out directly to employees.

Cllr Collingswood raised concern that this move could hinder employee morale and motivation and could generate a mood of negativity. Cllr Potter suggested that this did appear as if it would negatively impact employees.

The Managing Director responded by informing the panel that essential car users will not be affected.

 

The Managing Director also told the panel that people who park underneath the Civic Centre are already charged £800 per annum and park there by choice. The charges will affect the Council owned car parks around the City. It is proposed that prices will start from around £20 a month, and rise according to how close to the city centre the car park is located.

 

The Managing Director stated that this was the second phase of a car park review, the first having been completed successfully. 

Some Councillors asked whether this move was fair or if it raised any equality issues.

 

The Managing Director explained that there are already criteria in place to enable people who need to park close to the building for reasons of disability or other issues.  These will still remain, but access will be reviewed more regularly to ensure fairness.  Employees who do not meet the criteria can choose to pay to park or use alternative means of transport. This proposal has been in the medium term financial strategy for some time and implementing it has helped the Council to avoid pay increment freezes or a reduced working week for employees.

 

Cllr Milkinder Jaspal stated this proposal has been on the agenda for some time, and also highlighted other authorities, such as Walsall MBC, where similar changes have been successfully implemented.

 

Reduction in the number of payment cards issued

Cllr Potter enquired why residents were still paying via payment cards and whether there were any incentives to pay via direct debit.

The Director of Finance stated that this proposal is to change the practice of setting up payment arrangements so that payment cards are set up by exception rather than default. He explained there are currently no incentives to pay by direct debit, but there is currently a review on debt collection and so this point will be fed in to that review.

Cllr Johnson also informed the panel that the Council’s performance on debt was slightly better than the average of other Metropolitan Borough Councils, but that it is an area that is being looked at carefully.

Cllr Potter suggested that universal credit could make debt collection more difficult; Cllr Johnson replied that universal credit was still in its infancy and so there is likely to be little impact on Wolverhampton in the near future.

 

Acceleration of Existing Savings both from efficiencies and the restructuring of senior management in order to deliver the Council wide target, of a minimum of £350,000, approved by Full Council on 17 September 2014.

Cllr Milkinder Jaspal asked how many posts had been deleted under this savings proposal.

The Managing Director informed the panel that the saving in the proposal had been surpassed and stands at £502,000.

The posts that have been deleted are the Chief Executive; Strategic Director – Delivery; Head of Property; Assistant Director Business Change; and two Heads of Service.

Cllr Jaspal enquired whether the savings took into account redundancy pay and the panel was advised that the figure does not include redundancy pay as this is funded corporately from the general reserve, details of which will be published in June 2015.

 

Review frequency and the support for meetings.

Cllr Bolshaw asked whether there had been any feedback on this proposal.

Cllr Johnson informed the panel that Cllr Sweet and himself had been asked by Cabinet to look at this issue. Cllr Johnson highlighted potential risks to the democratic process, and added that it was important that scrutiny work such as pre-decision scrutiny and scrutiny reviews are not reduced to a level which risks accountability and transparency.

It was suggested that a report detailing any findings or proposed changes should come back to Confident Capable Council Scrutiny Panel so it can scrutinise any proposals that could impact on the democratic process.

Cllr Johnson added that if no savings can be sufficiently identified through reducing meetings then alternative savings will have to be found.

Cllr Potter stated a preference for a smaller scrutiny agenda to enable focussed scrutiny work, rather than fewer meetings with large agendas that did not enable any detailed scrutiny.

 

Refocusing legal services

Cllr Wynne requested further detail of the options being considered for the refocusing of Legal Services.

Cllr Johnson informed the panel that the Chief Legal Officer has been looking at ways of making Legal Services more efficient, including considering shared services with other councils.

 

Technical change to the Council's policy for Minimum Revenue Provision

Cllr Johnson informed the panel that the Council was being prudent with its revenue provision debt, and was moving from a straight line to an annuity method. This means there will be savings in the short to medium term as repayments are broadly lower in early years and higher in later years. Based on the current provision the Council stands to benefit over the next 25 years. External auditors have been involved in this process and it has also been adopted by other councils such as Shropshire, Stoke-on-Trent, Sandwell and Birmingham.

Cllr Johnson stated this was another measure that aided the prevention of proposing a reduced working week for employees. 

 

Reduction in West Midlands Integrated Transport Authority Levy

Cllr Siarkiewicz asked for more detail around the reduction in the transport levy.

Cllr Johnson responded by stating this has the agreement of all the West Midlands authorities and equated to a reduction of about 5%. This reduction would mean Centro making savings and mirrors the savings having to be made by each of the seven West Midlands councils.

 

Occupational Health External Clients

Cllr Potter enquired whether this savings proposal was around bringing those employees on long term sick leave back to work.

Cllr Johnson clarified that this savings proposal was not to do with employees on long term sick leave but was about offering occupational health services out to other external organisations for a small charge.  It is proposed that this would create a modest income for the Council.

There was a general consensus that it was important that with any commercial development, the Council does not lose its identity for high quality service provision. Some Councillors stated that the Council should promote itself more. Other Councillors also argued that this was an ideal time for the Council to take advantage of such opportunities, and be dynamic and forward thinking.

Councillors also praised the work that has gone into revitalising and developing the City’s leisure offer, moving the framework from service provider to a commercial model that also provided communities with great facilities. Councillors also commented on how the proposed closure of Central Baths was reversed, as the leisure offer takes less resource from the Council and puts more emphasis onto partners.

 

Resolved:

1.    To provide feedback to Scrutiny Board for consolidation and onward response to Cabinet on the draft budget and medium term financial strategy 2015/16 to 2018/19, in particular those elements that are relevant to this Scrutiny Panel.

 

2.    To approve that the Scrutiny Panel response be finalised by the Chair and Vice-Chair and forwarded to Scrutiny Board for consideration.

 

3.    To receive an update on the management of financial risks in relation to making community loans.