COUNCIL SUMMONS
You are hereby summoned to attend a Meeting of the COUNCIL OF THE CITY
AND COUNTY OF SWANSEA to be held in the Council Chamber, Guildhall,
Swansea on Tuesday, 18 February 2014 at 5.00 pm
The following business is proposed to be transacted:
1.
Apologies for Absence.
2.
Disclosures of Personal and Prejudicial Interests.
1 - 2
3.
Minutes.
3 - 14
To approve and sign as a correct record the minutes of the Ordinary
meeting of Council held on 21 January 2014.
4.
Announcements of the Chair of the Council.
5.
Announcements of the Leader of the Council.
6.
Public Questions.
Questions must relate to matters on the open part of the Agenda of the
meeting and will be dealt within a 10 minute period.
7.
Public Presentation - None.
8.
Report of the Cabinet Member for Citizen, Community
Engagement and Democracy.
a
Membership of Committees.
15 - 16
9.
Report of the Cabinet Member for Place.
a
Sandfields Renewal Area Policy to Provide Assistance.
17 - 26
10. Report of the Head of Democratic Services.
a
Dispensation for Councillor Leave of Absence - Councillor WJF Davies.
27 - 28
11. Reports of the Section 151 Officer.
Note: The Section 151 Officer will introduce and give and
overview on Agenda Items 11a – 11d, 12a & b. This will be then
followed by Technical Questions, a presentation by the
Leader/Cabinet Member for Finance & Resources, Questions,
Discussions/Debate, then a decision.
a
Revenue Budget 2014/15.
29 - 95
b
Capital Budget & Programme 2014/15 - 2017/18.
96 - 113
c
Medium Term Financial Plan 2015/16 - 2017/18.
114 - 130
d
Treasury Management Strategy, Prudential Indicators, Investment
131 - 170
Strategy and Minimum Revenue Provision Policy Statement 2014/15.
12. Reports of the Section 151 Officer and Director of Place.
a
Housing Revenue Account (HRA) Revenue Budget 2014/15.
171 - 175
b
Housing Revenue Account Capital Budget and Programme 2015/16 -
176 - 194
2017/18.
13. Report of the Section 151 Officer.
a
Statutory Resolution - Resolutions to be made in accordance with the
195 - 199
Regulations in the Setting of Council Tax 2014/15.
14. Councillors' Questions under Council Procedure Rule 22.
200
15. For Information Reports. (Not For Discussion)
a
Scrutiny Dispatches.
201 - 202
b
Written Responses to Questions asked at the Last Ordinary Meeting of
203 - 205
Council.
16. Common Seal.
To authorise the affixing of the Common Seal to any document
necessary to carry into effect any resolution passed or confirmed at
this meeting.
Patrick Arran
Head of Legal, Democratic Services & Procurement
Civic Centre
Swansea
Wednesday, 12 February 2014
To: All Members of the Council
Agenda Item 2.
Disclosures of Interest
To receive Disclosures of Interest from Councillors and Officers
Councillors
Councillors Interests are made in accordance with the provisions of the
Code of Conduct adopted by the City and County of Swansea. You must
disclose orally to the meeting the existence and nature of that interest.
NOTE: You are requested to identify the Agenda Item / Minute No. / Planning
Application No. and Subject Matter to which that interest relates and to enter
all declared interests on the sheet provided for that purpose at the meeting.
1.
If you have a Personal Interest as set out in Paragraph 10 of the
Code, you MAY STAY, SPEAK AND VOTE unless it is also a
Prejudicial Interest.
2.
If you have a Personal Interest which is also a Prejudicial Interest as
set out in Paragraph 12 of the Code, then subject to point 3 below, you
MUST WITHDRAW from the meeting (unless you have obtained a
dispensation from the Authority’s Standards Committee)
3.
Where you have a Prejudicial Interest you may attend the meeting but
only for the purpose of making representations, answering questions or
giving evidence relating to the business, provided that the public are
also allowed to attend the meeting for the same purpose, whether
under a statutory right or otherwise. In such a case, you must
withdraw from the meeting immediately after the period for
making representations, answering questions, or giving evidence
relating to the business has ended, and in any event before further
consideration of the business begins, whether or not the public are
allowed to remain in attendance for such consideration (Paragraph 14
of the Code).
4.
Where you have agreement from the Monitoring Officer that the
information relating to your Personal Interest is sensitive information,
as set out in Paragraph 16 of the Code of Conduct, your obligation to
disclose such information is replaced with an obligation to disclose the
existence of a personal interest and to confirm that the Monitoring
Officer has agreed that the nature of such personal interest is sensitive
information.
5.
If you are relying on a grant of a dispensation by the Standards
Committee, you must, before the matter is under consideration:
i)
Disclose orally both the interest concerned and the existence of
the dispensation; and
ii)
Before or immediately after the close of the meeting give written
notification to the Authority containing:
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Page 1
a)
Details of the prejudicial interest;
b)
Details of the business to which the prejudicial interest
relates;
c)
Details of, and the date on which, the dispensation was
granted; and
d)
Your signature
Officers
Financial Interests
1.
If an Officer has a financial interest in any matter which arises for
decision at any meeting to which the Officer is reporting or at which the
Officer is in attendance involving any member of the Council and /or
any third party the Officer shall declare an interest in that matter and
take no part in the consideration or determination of the matter and
shall withdraw from the meeting while that matter is considered. Any
such declaration made in a meeting of a constitutional body shall be
recorded in the minutes of that meeting. No Officer shall make a report
to a meeting for a decision to be made on any matter in which s/he has
a financial interest.
2.
A “financial interest” is defined as any interest affecting the financial
position of the Officer, either to his/her benefit or to his/her detriment. It
also includes an interest on the same basis for any member of the
Officers family or a close friend and any company firm or business from
which an Officer or a member of his/her family receives any
remuneration. There is no financial interest for an Officer where a
decision on a report affects all of the Officers of the Council or all of the
officers in a Department or Service.
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Agenda Item 3.
CITY AND COUNTY OF SWANSEA
MINUTES OF THE COUNCIL
HELD AT COUNCIL CHAMBER, GUILDHALL, SWANSEA ON TUESDAY,
21 JANUARY 2014 AT 5.00 PM
PRESENT:
D W W Thomas (Chair of Council) presided
Councillor(s)
Councillor(s)
Councillor(s)
J C Bayliss
J E C Harris
C L Philpott
P M Black
T J Hennegan
J A Raynor
N S Bradley
C A Holley
T H Rees
J E Burtonshaw
P R Hood-Williams
I M Richard
M C Child
B Hopkins
N M Ronconi-Woollard
R A Clay
D H Hopkins
P Sangha
U C Clay
L James
P B Smith
A C S Colburn
Y V Jardine
R V Smith
D W Cole
M H Jones
R J Stanton
A M Cook
A J Jones
R C Stewart
S E Crouch
S M Jones
D G Sullivan
J P Curtice
J W Jones
M Theaker
N J Davies
E T Kirchner
C Thomas
A M Day
R D Lewis
C M R W D Thomas
P Downing
D J Lewis
L G Thomas
C R Doyle
P Lloyd
M Thomas
V A Evans
P M Matthews
L J Tyler-Lloyd
W Evans
P M Meara
G D Walker
E W Fitzgerald
H M Morris
L V Walton
R Francis-Davies
J Newbury
T M White
F M Gordon
G Owens
J A Hale
D Phillips
160.
APOLOGIES FOR ABSENCE.
Apologies for absence were received from Councillors W J F Davies, C E Lloyd, K
E Marsh, J C Richards and G J Tanner.
161.
DISCLOSURES OF PERSONAL AND PREJUDICIAL INTERESTS.
The Head of Legal, Democratic Services and Procurement gave advice regarding
the potential personal and prejudicial interests that Councillors may have on the
agenda.
Page 3
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
The Head of Democratic Services reminded Councillors that the “Disclosures of
Councillors Personal and Prejudicial Interests” sheet should only be completed if
the Councillor actually had an interest to declare. Nil returns were not required.
Councillors were also informed that any declarable interest must be made orally
and in writing on the sheet.
In accordance with the provisions of the Code of Conduct adopted by the City and
County of Swansea the following interests were declared:
1)
Councillors J E Burtonshaw, A C S Colburn, H M Morris, C M R W D
Thomas and T M White declared a personal interest in Minute 168
“Adoption of Council Tax Reduction Scheme”;
2)
Councillor S M Jones declared a personal interest in Minute 170
“Councillors Questions” – Part A, Question 3 and stated that she had
dispensation from the Standards Committee to remain and speak on any
item relating to general staff employment, on budget matters and any other
matters that directly affect Education, Teachers and Schools, other that
matters that directly her son by specific reference to his post.
162.
MINUTES
RESOLVED that the following Minutes be approved and signed as a correct
record:
1)
Ordinary Meeting of Council held on 19 November 2013.
163.
ANNOUNCEMENTS OF THE CHAIR OF THE COUNCIL.
1)
Condolences
a)
Mother of Councillor V Mandy Evans
The Chair of Council referred with sadness to the recent death of
May Cox, mother of Councillor V Mandy Evans.
b)
Mother of Councillor Gordon D Walker
The Chair of Council referred with sadness to the recent death of
Elizabeth Walker, mother of Councillor Gordon D Walker.
c)
Former Councillor R A (Bob) Massey-Shaw
The Chair of Council referred with sadness to the recent death of
former Councillor Bob Massey-Shaw. He had represented the
Mayals Electoral Division on West Glamorgan County Council.
All present stood in silence as a mark of sympathy and respect.
Page 4
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
2)
Councillor Clive E Lloyd
The Chair of Council wished Councillor Clive E Lloyd a speedy recovery
following his recent ill health.
3)
Welsh Housing Awards 2013
The Chair of Council congratulated the Authority’s Tenancy Support Unit
which had recently been awarded the “Outstanding Leadership by a Local
Authority” award at the Chartered Institute of Housing - Welsh Housing
Awards 2013 for their Family Intervention Partnership Project.
The Swansea Family Intervention Partnership Project (FIP) is the first Local
Authority lead project of its kind in Wales. The FIP is designed to work with
some of the most hard to reach families living throughout Swansea, who are
facing eviction or other enforcement action due to their anti-social
behaviour. The FIP not only aims to reduce Anti-Social Behaviour and
prevent homelessness, but it is designed to improve the quality of life for
both the family and wider community.
Furthermore, it aims to increase the effectiveness of partnership working
through effective coordination, communication and avoiding duplication of
services. A dedicated FIP key worker delivers a tailored and holistic
support service to all members of the family by working persistently and
intensively with them to change their lives for the better and for the long
term, by using a twin track approach that both supports identified needs and
challenges poor behaviour.
The Family Intervention Partnership Project works with some of the most
hard to reach families in Swansea who are at risk of homelessness due to
their anti-social behaviour. The project provides a support package, to help
address a number of different issues for families such as debt management,
engaging with employment and education services, poor behaviour, and
improving family relationships.
The judges stated:
“The project showed examples of outstanding partnership working, with all
partners sharing and making best use of their joint resources. The project
was able to demonstrate an impressive range of outcomes for individuals,
families and communities across the city.”
The award is a tribute not only to the Family Intervention Partnership Team,
but to the strong partnership links with colleagues elsewhere in housing,
youth offending, social services, the police, and health authorities.
Page 5
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
4)
Tir John Landfill Project – Joseph J Jacobs Performance Excellence
Award 2013
The Chair of Council congratulated the Authority’s Tir John Landfill Project
which had recently won the Joseph J Jacobs Performance Excellence
Award 2013.
The Performance Excellent Award was instigated in memory of Dr Joseph J
Jacobs to celebrate and reward projects and project teams who deliver
outstanding client value through flawless execution.
Projects are judged by a Panel of senior directors against a variety of
criteria, including:
•
Continuous improvement;
•
Outstanding safety performance;
•
Outstanding project execution;
•
Delighting our client;
•
Innovation;
•
Reinforcing our core values of people, growth and client
relationships;
•
Outstanding sustainability leadership.
Jacobs’ project team on Tir John were extremely proud of what they had
achieved together with the City and County of Swansea Council and
Swansea City Waste Disposal Company over the years that we have been
working on the project and put the project forward for consideration early in
2013. In their submission document for the award they highlighted some of
the key factors that had made the project successful for Jacobs and the
council, such as:
•
A great safety record. Almost 40,000 hours have been worked on
the project by Jacobs staff without any incident. Jacobs and
Swansea Council staff have worked together to develop a great
safety culture on the project, proactively sharing ideas and means of
driving safety standards up;
•
An open and collaborative approach to working, with very effective
early engagement with the regulator. That helped to achieve
approval from the Environment Agency for the environmental permit
variation, which avoided the need to excavate out 150,000 cubic
metres of waste.
•
Removing the need to excavate out significant volumes of waste
helped the council to generate cash savings of £2.6 million pounds
and carbon savings of 3,800 tonnes, associated with the material
transport and use of fresh aggregate that the excavation works would
have necessitated, which was a great outcome for all concerned.
Page 6
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
Other winners this year have included projects undertaken for the likes of
NASA, BP, Intel and Shell.
Wynn Lawrence (Group Leader Waste Operations), Matthew Perkins
(Landfill Manager), Ed Cole (Jacobs Director of Projects / Sustainable
Solutions) and Stuart Mollard (Jacobs Divisional Director) were present to
receive the award.
5)
Councillor David Phillips - Local Politician of the Year 2013
The Chair of Council congratulated the Leader of the Council, Councillor
David Phillips on winning an award at the recent Welsh Politician of the
Year Awards 2013.
Councillor David Phillips won the Local Politician of the Year 2013 Award.
The Wales Yearbook Welsh Political Awards were established to
acknowledge the work of Welsh politicians and to challenge the widely-held
scepticism and disaffection concerning the political process. Most
politicians work extremely hard to represent their Councils.
The Leader of the Council stated that he was gratified to win the award and
that the achievement was made possible due to the success that had been
achieved at the City and County of Swansea and thanks to his excellent
colleagues within the Authority.
The Leader of the Largest Opposition Political Group Leader also paid
tribute to the Leader of the Council’s award.
6)
Councillor Peter M Black A.M. – Assembly Member of the Year 2013
The Chair of Council congratulated Councillor Peter M Black A.M. on also
winning an award at the recent Welsh Politician of the Year Awards 2013.
Councillor Peter M Black A.M. won the Assembly Member of the Year 2013
Award. He was the first backbencher to pilot an Act of the Assembly into
Law with the Mobile Homes (Wales) Act.
The Leader of the Largest Opposition Political Group Leader and Leader of
the Council also paid tribute to Councillor P M Black A.M.’s award.
7)
Arwyn Thomas – Chief Education Officer
The Chair of Council welcomed Arwyn Thomas, the recently appointed
Chief Education Officer to the Authority.
Page 7
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
8)
Ian James - Interim Director of Education
The Chair of Council wished Ian James, former Interim Director of
Education a long and happy retirement.
9)
Pentrehafod Comprehensive School – UNICEF Children’s Rights
The Chair of Council was pleased to announce that Pentrehafod
Comprehensive School was the first secondary school in Wales to achieve
UNICEF Children’s Rights respecting School Level 1. They are now
working towards achieving level 2.
10)
New Year Honours
The Chair of Council congratulated the following citizens of the City and
County of Swansea on their recent awards in the New Year Honours. He
stated that the Lord Mayor would be writing to each of the citizens
congratulating them on their awards.
a)
Commander of the Order of the British Empire (CBE)
i)
Professor John Gordon Williams of Ffynone, Swansea.
Professor of Health Services Research, Swansea University.
For services to Medicine.
b)
Member of the Order of the British Empire (MBE)
i)
Dr Gerald Lewis of Sketty, Swansea.
Chair, Board of Governors, Swansea Metropolitan University.
For services to Education in Wales.
ii)
Christine Mary Watson of Cockett, Swansea.
Manager for Discovery, Swansea University.
For services to Student volunteering and to Education in
Swansea.
iii)
Reverend Lionel Hopkins of Tirdeunaw, Swansea.
Lately Chaplain, HMP Swansea.
For services to Prison Staff and Prisoners and to the
community in Swansea.
iv)
Carol Maureen Hyde of Murton, Swansea.
Lately Chairman, Conservative Party Disciplinary Committee.
For voluntary political service.
Page 8
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
v)
Robert Oliver of Upper Killay, Swansea.
Formerly Bill Manager, Department for Health and Social
Services, Welsh Government.
For services to the Legislative Process in the UK, particularly
Wales (Swansea).
c)
British Empire Medal (BEM)
i)
Jean Mary Andrews of Sketty, Swansea.
For charitable services to music in Swansea.
ii)
Keith Wright of Treboeth, Swansea.
Street Scene Operative, Pontypool Town Centre.
For services to the community in Pontypool, Torfaen.
11)
Amendments / Correction to the Council Summons
The Chair of Council referred to the following amendments / corrections to
the Council Summons:
a)
Item 8a – “Membership of Committees” (Minute 167)
An amended report has been circulated.
b)
Item 9a – “Adoption of Council Tax Reduction Scheme” (Minute
168)
Page 24. Paragraph 4.3.
Delete “and is contained in Appendix 3 for consideration”.
c)
Item 10a – “Amendments to the Council Constitution” (Minute
169)
Page 34. Paragraph 3.5.1.
At the start of the sentence,
Delete “The” and
Replace with “To”.
164.
ANNOUNCEMENTS OF THE LEADER OF THE COUNCIL.
The Leader of the Council had no announcements.
Page 9
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
165.
PUBLIC QUESTIONS
A number of questions were asked by members of the public. The relevant
Cabinet Member responded accordingly. Those questions requiring a written
response are listed below:
1)
Lis Davies asked the relevant Cabinet Member a question in relation to
Minute 170 “Councillors Questions” – Part B, Question 4.
“In the 2012-2013 budget £10,000 was allocated to ‘show Racism the Red
card’. The Cabinet Members response states that there had been positive
feedback from teachers and pupils. There is also a list of schools that have
been visited and are due to be visited in the future.
Could I have a copy of the list and any supporting documentation relating to
the initiative?”
The Opportunities for Children and Young People Cabinet Member stated
that a written response would be provided.
166.
PUBLIC PRESENTATION - CITY OF SANCTUARY.
Hannah Machora and Alan Thomas gave a presentation to Council on the work of
the City of Sanctuary. They stated that Swansea became the UK’s second official
City of Sanctuary in May 2010.
The City of Sanctuary is a national movement of local people, community groups,
businesses and institutions united in a common wish to turn their city into a
welcoming place for people seeking sanctuary from war or persecution. Swansea
has offered a home to people who have lost their homes and families and we wish
to celebrate the welcoming attitudes of Swansea people and organisations.
The Leader of the Council (Councillor D Phillips) thanked them for their
presentation.
167.
MEMBERSHIP OF COMMITTEES.
The Leader of the Council stated that an amended report had been circulated.
He referred to the report stating that he had made the following nomination
changes to the Authority’s Outside Bodies:
1)
Data Unit Board
Add Councillor A J Jones.
2)
Standing Advisory Council on Religious Education (SACRE)
Remove Councillors J P Curtice and P B Smith.
Add Councillors J E C Harris and Y V Jardine.
Page 10
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
3)
Swansea Council for Voluntary Service (SCVS)
Remove Councillor P Sangha.
Add Councillor G J Tanner.
RESOLVED that the membership of the Council Bodies listed below be amended
as follows:
1)
Area 1 Development Control Committee
Remove Councillor W J F Davies.
Add Councillor TJ Hennegan.
2)
Area 2 Development Control Committee
Remove Councillor J C Bayliss.
Add Councillor N M Ronconi-Woollard.
3)
Equalities Committee
Remove Councillors R A Clay and P B Smith.
Add Councillors V M Evans and G J Tanner.
4)
Licensing Committee
Remove Councillor V M Evans.
Add Councillor H M Morris.
5)
Standards Committee
Remove Councillors J A Raynor and J W Jones.
Add Councillors R A Clay and L G Thomas.
6)
Local Authority (LA) Governor Panel
Remove Councillor A S Lewis.
Add Councillor R A Clay.
168.
ADOPTION OF COUNCIL TAX REDUCTION SCHEME.
The Section 151 Officer submitted a report which provided details regarding the
changes made by the Welsh Government, which are effective from 1 April 2014, to
the Council Tax Reduction Scheme for Wales.
RESOLVED that:
1)
The making of the Council Tax Reduction Schemes and Prescribed
Requirements (Wales) Regulations 2013 (“the Prescribed Requirements
Regulations”) by the National Assembly for Wales (NAfW) on 26 November
2013 be noted;
2)
The proposed amendments to “the Prescribed Requirements Regulations”
contained in the draft Council Tax Reduction Schemes (Prescribed
Requirements and Default Scheme) (Wales) (Amendment) (Regulations)
2014, due to be approved by NAfW on 14 January 2014 be noted;
Page 11
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
3)
The outcome of the consultation exercise undertaken by the Council on the
Council Tax Support Scheme for 2015-2015 be noted;
4)
The Council adopt the scheme, the details of which are given in Section 3 of
this report.
169.
AMENDMENTS TO THE COUNCIL CONSTITUTION.
The Chair of Council, Monitoring Officer and Head of Democratic Services jointly
submitted a report which sought to make amendments in order to simplify, improve
and / or add to the Council Constitution in the relation to the following areas:
1)
Part 2 – Article 4 - The Council Meeting;
2)
Part 3 – Responsibility for Functions - Terms of Reference – Appointments
Committee and Licensing Committee;
3)
Part 4 – Joint Negotiating Committee (JNC) Officer Appointment Procedure
Rules.
RESOLVED that the changes to the Council Constitution as outlined in Paragraph
3 of the report be adopted.
170.
COUNCILLORS QUESTIONS.
1)
Part A ‘Supplementary Questions’
Four (4) Part A ‘Supplementary Questions’ were submitted. The relevant
Cabinet Member(s) responded by way of written answers contained in the
Council Summons.
The following question(s) required a written response:
a)
Question 4. Councillor E W Fitzgerald asked the following
supplementary question:
“Can Council be provided with the costs associated with the following
elements of the modernisation of the Council Chamber, Civic Centre
scheme:
i)
Improving flexibility and access for wheelchair users;
ii)
Installation of a wheelchair lift / platform into the public gallery,
and 2 wheelchair spaces, allowing access to all members of
the public.
The Finance and Resources Cabinet Member stated that a written response
would be provided.
Page 12
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
2)
Part B ‘Questions not requiring Supplementary Questions’
Five (5) Part B ‘Questions not requiring Supplementary Questions’
were submitted.
171.
SCRUTINY DISPATCHES.
The Chair of the Scrutiny Programme Committee submitted an information report
which provided Council with a progress report on various scrutiny activities.
172.
WRITTEN RESPONSES TO QUESTIONS ASKED AT THE LAST ORDINARY
MEETING OF COUNCIL.
The Head of Legal, Democratic Services and Procurement submitted an
information report setting out the written responses to questions asked at the last
Ordinary Meeting of Council.
173.
NOTICE OF MOTION FROM COUNCILLORS CR DOYLE, D PHILLIPS, JC
RICHARDS, W EVANS, M THEAKER, SE CROUCH, MC CHILD, RC STEWART,
JE BURTONSHAW AND NS BRADLEY.
The following motion was proposed by Councillor C R Doyle and seconded by
Councillor D Phillips. Prior to it being seconded Councillor D Phillips asked that a
minor amendment be made to section 5). The amendment being to delete the
words “Local Government Association and replace with “Local Government
Associations”.
Council recognises the plight of asylum seekers forced to flee their home countries
due to conflict and persecution. Many arrive in the UK after having been
threatened, detained, beaten or tortured.
An adult seeking protection in this country who has no other source of support will
receive just over £5 a day to pay for food, clothing, toiletries and travel
(accommodation and utilities are paid for separately for those who have nowhere
to live). They are not allowed to work to support themselves. If their claims are
refused by the Home Office, they lose all support and are left destitute and street
homeless.
Swansea is a welcoming and inclusive city and wants to join those local authorities
petitioning the Home Secretary to relieve the suffering of people seeking sanctuary
and especially those people who have yet to be granted leave to remain in the UK.
Page 13
Minutes of the Council (Tuesday, 21 January 2014)
Cont’d
Council approves the following actions:
1)
Write on behalf of Council to the Minister of State for Immigration deploring
Government policies that force asylum seekers into destitution; expressing
concern over the low level of support available to asylum seekers; seeking
a change of policy to allow local authorities to assist refused asylum
seekers who are in danger of falling into destitution; asking that such
asylum seekers should be able to work to support themselves if they have
been waiting for more than 6 months for their cases to be resolved; and
demanding that local authorities should be permitted to provide emergency
provision to refused asylum seekers as to other homeless people.
2)
Ask Swansea MPs to support the spirit of this motion, to raise the matter in
the House of Commons, and to support a change in current laws regarding
asylum applications by removing restrictions on local authorities in the
support they can provide to destitute asylum seekers.
3)
Council officers to produce a report summarising existing support for
asylum seekers available in City and County of Swansea including housing,
training, education, and legal advice open to Vulnerable asylum applicants.
4)
Council to join the national campaign "Still Human, Still Here" (a coalition of
60 organisations, including the Church of England and Catholic Archbishop
Conferences, Crisis, Oxfam, and the Red Cross, who are proposing
practical solutions to ending the destitution of refused asylum seekers in the
UK.)
5)
Council to seek further support for this motion and action via the Local
Government Associations, and by encouraging other Councils in the UK to
join us on this issue.
RESOLVED that the amended Notice of Motion as shown above be approved.
174.
COMMON SEAL.
RESOLVED that the Common Seal be affixed to any document necessary to bring
into effect any decisions passed or confirmed at the meeting.
The meeting ended at 6.30 pm
CHAIR
Page 14
Agenda Item 8.a
Report of the Cabinet Member for Citizen, Community Engagement &
Democracy
Council – 18 February 2014
MEMBERSHIP OF COMMITTEES
Purpose:
Council approves the nominations / amendments to the
Council Bodies.
Policy Framework:
None.
Reason for Decision:
To agree nominations for Committee Membership.
Consultation:
Political Groups.
Recommendation:
It is recommended that: -
1) Council approves the amendments to the Council Bodies listed in paragraph 2 of
the report.
Report Author:
G Borsden
Legal Officer:
P Arran
Finance Officer:
C Billingsley
1.
Introduction
1.1
The Annual Meeting of Council on 9 May 2013, agreed membership of
the various Committees/Boards as reflected in the lists submitted by
the Political Groups.
2.
Changes to Council Body Membership
2.1
The Political Groups have indicated that they have changes to Council
Bodies as indicated below.
Rota Visits
Remove Councillor JW Jones
Add Councillor CL Philpott
3.
Outside Bodies
3.1
No Amendments.
4.
Financial Implications
4.1
There are no financial implications associated with this report.
Page 15
5.
Legal Implications
5.1
There are no legal implications associated with this report.
Background Papers: Local Government & Housing Act 1989, the Local
Government (Committees & Political Groups) Regulations 1990.
Appendices: None
Page 16
Agenda Item 9.a
Report of the Cabinet Member for Place
Council – 18 February 2014
SANDFIELDS RENEWAL AREA: POLICY TO PROVIDE ASSISTANCE
Purpose:
To outline policy proposals for provision of
financial assistance in the Sandfields Renewal
Area.
Policy Framework:
Private Sector Housing Renewal and
Disabled Adaptations: Policy to Provide
Assistance 2012-2017.
Reason for Decision:
To meet the statutory requirements of the
Regulatory Reform (Housing Assistance)
(England & Wales) Order 2002 requiring the
publishing of a policy for provision of financial
assistance to improve housing conditions in the
private sector.
Consultation:
Legal, Finance, Access to Services.
Recommendation(s):
It is recommended that:
1)
Council approves the policy to provide assistance in the Sandfields
Renewal Area as an addendum to the Private Sector Housing Renewal
and Disabled Adaptations: Policy to Provide Assistance 2012-2017.
Report Author:
Mark Wade
Finance Officer:
Steve Mathews
Legal Officer:
Sandie Richards
Access to Services
Phil Couch
Officer:
1.0
Introduction
1.1
In 2012-13 a Neighbourhood Renewal Assessment (NRA) was carried
out in Sandfields. This followed a city wide house condition survey and
data analysis exercise undertaken by the Building Research
Establishment.
1.2
The NRA assessment report indicated that housing conditions and
deprivation levels in the area warranted declaration of Sandfields as a
Neighbourhood Renewal Area.
Page 17
1.3
Cabinet approved the declaration of Sandfields as Renewal Area in
January 2014.
1.4
The Private Sector Housing Renewal and Disabled Adaptations: Policy to
Provide Assistance 2012-2017 details how the City and County of
Swansea delivers assistance to help private owners and tenants to repair
maintain or adapt their homes. The Policy includes assistance to
residents in the former Hafod Renewal Area.
1.5
This report outlines the proposed policy to provide assistance in the
Sandfields Renewal Area.
2.0
Policy Principles
2.1
There are a number of key policy principles relevant to Renewal Areas
detailed in the Private Sector Housing Renewal and Disabled
Adaptations: Policy to Provide Assistance 2012-2017. These are as
follows:
• We provide a range of financial assistance to tackle identified housing
condition problems in Swansea.
• We seek to develop alternatives to grants, in particular property
improvement and maintenance loans, to create a funding source that is
sustainable in that it can be recycled back into repair and renewal of
housing in the future.
• We identify and regenerate particular geographical areas through
evidence based research and declaration of Renewal Areas, ensuring
also that specific funding for Renewal Areas available from the Welsh
Government is brought to Swansea.
• We lead on home energy efficiency services in all tenures, and seek to
maximise funding to the Council and City and County of Swansea
residents.
3.0
Changes to Existing Policy
3.1
A review of the current policy to provide assistance in Renewal Areas
has been carried out to ensure that the Council can continue to provide
financial help for home repairs and improvements to residents in
declared Renewal Areas. The proposed changes outlined below have
been influenced by the pressure on capital budgets resulting from
reduced capital grant available nationally for Renewal Areas. The
proposed changes to policy have been incorporated as an addendum to
s.4 of the Private Sector Housing Renewal and Disabled Adaptations:
Policy to Provide Assistance 2012-2017. See appendix A. There will be
an addition to the current policy to make reference to the proposed
changes that will apply to the Sandfields Renewal Area detailed in
paragraphs 3.2 to 3.9.
Page 18
Scope of Works
3.2
Works completed as part of the Hafod Renewal Area programme
included full external refurbishment of all properties via Group Repair
Schemes including chimney stacks, renewal of roof coverings, renewal of
wall finishes, window and door replacement, rainwater goods,
weatherboards and external works such as paths and steps. The scope
of works in the Sandfields Renewal area will be reduced and focused on
works to improve the energy efficiency of properties including:
• External wall insulation for all properties.
• Other energy efficiency measures including loft insulation and boiler
replacements/repairs for households defined as eligible by the Utility
Companies Energy Company Obligation (ECO) programme.
3.3
Repairs to properties, for example replacement roof coverings, will only
be carried out for owner occupiers and on blocks of properties identified
in the NRA report as requiring those repairs.
3.4
Environmental improvement works will be carried out. These will be
limited to minor street landscaping, improvement to small areas of land,
planting, provision or improvement of community facilities and highway
improvement schemes subject to available resources.
Recyclable Assistance
3.5
The development of financial assistance, repayable at the point of sale,
as a means of repairing and maintaining homes is already a key policy
principle for securing sustainable housing renewal in Swansea. The
Council have offered repayable ‘Homefix’ loans since 2009 and
introduced loans to encourage the reuse of empty homes via the Welsh
Government’s ‘Houses to Homes’ scheme in 2012. However, in declared
Renewal Areas in the past assistance has been provided in the form of a
grant. This was not repayable by the owner / occupier provided all grant
conditions were adhered to. In the context of the current financial climate,
continued provision of grants in this way is not sustainable.
3.6
Assistance provided in Sandfields will be recyclable and any funds repaid
to the Council will be reinvested in the Renewal Area programme. All
Renewal Area works will be fully funded by the Council for owner
occupiers but will be secured as a local charge and as such will be
repayable at the point the property is sold. No contribution towards the
cost of the works at installation stage will be required from the owner
occupier and the assistance provided will be interest free.
ECO Funding
3.7
ECO is the current funding programme for energy efficiency measures
administered by the Utility Companies. To ensure the maximum level of
investment possible in the Renewal Area the Council will seek to secure
ECO funding for eligible households for energy efficiency measures
installed. Any ECO funding, or funding via any successor programmes,
that the Council is able to claim from a Utility Company will be deducted
from the amount registered as local charge against each property. ECO
funding levels vary but are currently typically 50% of the cost of the
Page 19
insulation works. For consistency and equity purposes, no more than
50% of the cost of the insulation measures will be secured as a local
charge. This means 50% of the cost of the insulation measures provided
will not be repayable, and as such, will be given as a grant. For example,
where the cost of insulation measures is £7000, only £3500 will be
repayable via a local charge placed against the property. This will be
reviewed throughout the programme and will be subject to a further
report should funding levels for ECO or any successor programme
change significantly.
Assistance to Housing Associations
3.8
Housing Associations were eligible for a grant of 25% of the cost of
Renewal Area works in Hafod. Housing Association properties will
continue to be able to take part in the Renewal Area programme but, with
the exception of works funded by the Utility Companies, currently via the
ECO programme, no assistance will be payable to properties owned by
Housing Associations.
Assistance to Private Landlords
3.9
Private landlords in Hafod paid a contribution of between 10% and 25%
of the cost of works depending on circumstances. The contribution, for
any non-ECO funded works, payable by all private landlords will be
increased to 40% in the Sandfields Renewal Area programme.
4.0 Equality and Engagement Implications
4.1
The Access to Services Team has advised that an equality impact
assessment (EIA) will be required at the point the Sandfields Renewal
Area programme commences.
5.0
Financial Implications
Capital Provisional Programme
5.1
The estimated cost of the Renewal Area programme is £10.2m. The
potential funding to meet the estimated cost from various funding
sources is detailed in table 1. It should be noted the funding sources
marked with a single asterisk are subject to future funding bids and the
Renewal Area grants from 2014/15 are only indicative at this time.
Should any of these bids not be successful, without a suitable
replacement funding source, the programme and the number of
properties able to be improved as part of the programme will be reduced
accordingly. Details of the provisional programme are set out in Table 1.
Page 20
Table 1 details proposed funding sources and draft programme for 2013/14 through to 2018/19:
Table 1
Funding
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
Total
£000
£000
£000
£000
£000
£000
£000
WG Renewal Area
761
730
730
730
tbc
tbc
£2,951
funding
ECO Funding *
727
727
727
727
727
£3,635
Page 21
WG Vibrant & Viable
1,000
750
750
£2,500
Places *
Resident Contributions
104
104
104
104
104
£520
(Private Sector
Landlords)
Housing Grants fees
50
50
50
50
50
£250
(capital) **
Homefix Loans / CSS /
64
64
64
64
64
£320
MAG assistance ***
Totals
£761
£2,675
£2,425
£2,425
£945
£945
£10,176
* funding subject to future funding bids.
** A sum of £50,000 per year from housing grants surplus fees will be converted to capital budget for
investment in the Renewal Area programme.
*** Homefix loans, Comfort Safety & Security (CSS) and Minor Adaptations Grants (MAG) are available
across Swansea and will be made available to eligible households in Sandfields.
Revenue
5.2
Revenue costs for the Renewal Area are estimated at £190,000 per year
for the duration of the programme. The construction project management
elements of these will be met by fee income from capital budgets.
6.0
Legal Implications
6.1
The Regulatory Reform (Housing Assistance) (England and Wales)
Order 2002 ("the RRO") empowers local housing authorities to provide
assistance to improve living conditions in their area, and requires them to
adopt and publish a policy in accordance with which the power is to be
exercised.
6.2
The Private Sector Housing Renewal and Disabled Adaptations: Policy to
Provide Assistance 2012-2017 will need to be amended to ensure that
the Council is able to provide financial assistance to homeowners in
Sandfields. The addendum to the policy is attached as Appendix A.
6.3
Under the RRO discretionary assistance may be provided in any form,
and may be unconditional or subject to conditions, including conditions
as to the repayment of the assistance or of its value (in whole or in part),
or the making of a contribution towards the assisted work, and may
require security, including a charge on the property. As detailed in the
Policy addendum, the Renewal Area assistance provided to residents in
Sandfields will be repayable by the owner on the sale of the property.
This is in accordance with Council Policy for provision of repair
assistance to households elsewhere in Swansea.
Background Papers: Private Sector Housing Renewal and Disabled
Adaptations: Policy to Provide Assistance 2012-2017
http://www.swansea.gov.uk/media/pdfwithtranslation/s/3/Private_Sector_Housin
g_Renewal_Policy_FINAL_September_11.pdf
Appendices:
Appendix A - addendum to S.4 of the Private Sector
Housing Renewal and Disabled Adaptations: Policy to
Provide Assistance 2012-2017.
Page 22
Appendix A
Will be published as Appendix B to Private Sector Housing Renewal and Disabled Adaptations: Policy to Provide Assistance 2012
2017.
Appendix B: Sandfields Renewal Area
This Policy was amended at Council on 18th February 2014. The amendments detailed below relate to the Sandfields Renewal Area
and supersede the Policy detailed in S.4 in respect of Renewal Areas in Swansea.
The Sandfields Renewal Area is the City and Swansea’s successor to the Hafod Renewal Area, comprising 1038 properties, declared
at the beginning of 2014, for a 5 year period. The decision to declare a Renewal Area in Sandfields follows a Neighbourhood Renewal
Page 23
Assessment (NRA) study identifying housing conditions and deprivation levels in the area that warranted targeted intervention through
the declaration of a Renewal Area.
The Council will work with the Utility Companies to secure the maximum levels of funding available at the time for insulation measures
offered as part of the Renewal Area programme. The Energy Company Obligation (ECO) is the current funding programme for
insulation measures but this Policy will apply to any successor funding schemes administered by the Utilities.
Sandfields Renewal Area Assistance
4.7
Sandfields Renewal Area Assistance (SRAA) will be available in the Renewal Area for the following types of works:
- External wall insulation (EWI) and other energy efficiency measures
- Boiler repairs and replacement
- External repairs
- Environmental improvement works
Other forms of assistance already detailed within this policy will be available to residents for works identified in the proposed
Renewal Area programme.
Who is eligible?
• External Wall Insulation and other energy efficiency measures: Owner occupiers and tenants.
• Boiler Replacement: Owner occupiers and private tenants defined as being members of the ‘affordable
warmth group’ according to the Energy Company Obligation (ECO) funding programme via the Utility
Companies.
• External Repair Assistance: Owner occupiers - Property must be within a block of properties identified
as exhibiting serious disrepair problems within the Sandfields NRA Study report and must be verified at
survey stage as suffering from serious items of external disrepair. This will be at the Council’s
discretion, and subject to available funding.
• Environmental Improvement Works: Owner occupiers, private landlords, tenants with repairing
obligations, commercial landlords and community organisations for environmental improvement or
Page 24
community enhancement schemes within the Renewal Area as selected by the Council.
Eligible works/costs
•
External Wall Insulation and other energy efficiency measures: External wall insulation and
associated works to all elevations / additions of the property. Works include application of a suitable
external wall insulation render system, additional external wall architectural details, for example door
porticos and associated works including removal and refixing of fixtures and fittings, for example
rainwater goods and satellite dishes. Other insulation measures:
Loft Insulation: Renewal or top up of loft insulation, rafter insulation and / or installation
of flat roof insulation.
Draught Proofing.
Double Glazing (where existing windows are single glazed).
Hot Water Cylinder and primary pipework insulation.
To comply with ECO funding requirements, other insulation measures will only be installed in
conjunction with external wall insulation.
•
Boiler Repairs and Replacement: To provide heating improvements to persons deemed members of
the ECO ‘Affordable Warmth Group’. Works include :
Boiler installation, replacement, or repairs. All boilers are rated on a scale of A-G for
efficiency. Boiler replacement will be offered to eligible households with C rated
boilers and below. Repairs will be offered for B rated boilers and above including
provision of Heating controls.
•
External Repair Assistance: External Repair Assistance will be provided for owner occupiers to
resolve serious and urgent items of repair such as serious roof defects. This assistance will only be
available to blocks of properties identified as exhibiting serious disrepair problems within the Sandfields
Neighbourhood Renewal Assessment (NRA) Study Report.
•
Environmental Improvement works: To assist in improving the environment or improving community
facilities within the renewal area. The type of work will include minor planting / landscaping,
improvement to small areas of land, minor highway alterations, and provision or improvement of
Page 25
community facilities (where suitable funds are available).
Applicants financial
• External Wall Insulation & other energy efficiency measures / Boiler Repairs and Replacement:
contribution
Owner Occupiers: nil contribution.
Private Landlords: 40% contribution to any costs not covered by ECO funding.
Housing Associations: will be eligible to take part in external wall insulation programme but all
costs, with the exception of any funding secured by the Council via ECO, are payable by the
Housing Association.
•
External Repair Assistance: owner occupiers nil contribution.
•
Environmental improvement works: nil contribution.
Level of financial
• External Wall Insulation & other energy efficiency measures: £10,000 maximum plus fees.
assistance
• External Repair Assistance: £10,000 maximum plus fees.
• Environmental Improvement Works: no limit on level of assistance, however schemes will be targeted
to provide area / community benefits rather than specific property improvements, for example minor
highway alterations.
General Conditions
• Property must be within the Sandfields Renewal Area boundary, and selected for that particular phase
of the External Wall Insulation programme.
• Sandfields Renewal Area Assistance will be registered as a local charge and is repayable on sale or
transfer of title (or upon applicants move into long term care or sheltered accommodation). For joint
applicants, the assistance will become repayable on the death of the surviving final borrower (or the
final surviving borrower move to long term care or sheltered accommodation).
Note: Any ECO funding the Council can claim in relation to insulation measures will not be included in
the amount placed as a local charge against the property. ECO funding levels can vary but are typically
50% of the cost of the insulation works. No more than 50% of the cost of the insulation measures will be
secured as a local charge. This means 50% of the cost of the insulation measures provided will not be
repayable, and as such, will be given as a grant. For example, where the cost of insulation measures is
£7000, only £3500 will be repayable via a local charge placed against the property. This will be subject
to review throughout the Renewal Area programme. The amount registered as a local charge will be
Page 26
confirmed to the owner prior to registration.
• Disposal conditions: See above. Sandfields Renewal Area Assistance will be registered as a local
charge.
• Occupation conditions: Owner Occupiers and landlords must comply with the agreed certificate of future
occupation for 5 years following certification of works. Breach of conditions will result in the Council
claiming recovery of the assistance costs and compound interest from the date of the known breach of
conditions.
Agenda Item 10.a
Report of the Head of Democratic Services
Council – 18 February 2014
DISPENSATION FOR COUNCILLOR LEAVE OF ABSENCE –
COUNCILLOR W J F DAVIES
Purpose:
To seek dispensation in accordance with Section 85 of
the Local Government Act 1972.
Policy Framework:
None.
Reason for Decision:
To comply with the Local Government Act 1972.
Consultation:
Legal and Finance.
Recommendation:
It is recommended that:
1)
Councillor W J F Davies be granted dispensation not to attend meetings for
the period up to 1 October 2014 in accordance with Section 85 of the Local
Government Act 1972.
Report Author:
Huw Evans
Legal Officer:
Patrick Arran
Finance Officer:
Carl Billingsley
1.
Introduction
1.1
Councillor W J F Davies has notified the Authority that due to illness he
may be absent from Council meetings for some time. This could result
in him being in breach of the Local Government Act 1972 whereby
failure to attend meetings of the Authority for a period of 6 consecutive
months could result in him ceasing to be a member of the Authority.
1.2
In accordance with Section 85 of the Local Government Act 1972,
Council at its meeting on 24 September 2013, granted Councillor W J
F Davies dispensation not to attend meetings for the period up to 1
March 2014.
1.3
Councillor W J F Davies has requested that this period be extended
to 1 October 2014.
Page 27
2.
Dispensation
2.1
Such cessation would not however, apply if the Authority approves the
reason before the expiry of the period of six months since his last
attendance. Councillor W J F Davies last attended a meeting on 8
August 2013. The last meeting attended being the Local Authority (LA)
Governor Panel.
2.2
Section 85 of the Local Government Act 1972 - “Vacation of Office by
failure to attend Meetings” - allows an Authority to grant dispensation
for such absence providing the dispensation is granted before the 6
month period of absence has expired. Dispensation is therefore
sought from Council.
3.
Electoral Division Duties
3.1
Councillor W J F Davies’ Electoral Division duties will be undertaken by
his Morriston Electoral Division colleagues.
4.
Financial Implications
4.1
None.
5.
Legal Implications
5.1
None.
Background papers: None
Appendices: None.
Page 28
Agenda Item 11.a
Report of the Section 151 Officer
Council – 18 February 2014
REVENUE BUDGET 2014/15
Purpose:
This report proposes a Revenue Budget and Council
Tax levy for 2014/15
Policy framework:
Sustainable Swansea – Fit for the Future
Reason for decision:
To agree a Revenue Budget and Council Tax levy for
2014/15
Consultation:
Cabinet Members & Executive Board
Recommendations:
Council is asked to approve:
a) A Revenue Budget for 2014/15 as detailed in
Appendix ‘A’ and
b) A Budget Requirement and Council Tax levy for
2014/15 as detailed in Section 9 of this report.
Report Author:
Mike Hawes
Finance Officer:
Mike Hawes
Legal Officer:
Patrick Arran
Access to Services Officer: Euros Owen
1 Introduction and background
1.1
This report details:
Financial monitoring 2013/14
The Local Government Finance Settlement 2014/15
Budget Forecast 2014/15
Specific Savings Proposals
Outcome of Budget Consultation
Staffing Implications
Reserves and Contingency Fund requirements
The Budget Requirement and Council Tax 2014/15
Summary of funding proposals
Risks and uncertainties
Page 29
1.2
The financial assessment in relation to 2015/16 – 2017/18 is contained in the
Medium Term Financial Plan report elsewhere on the agenda.
1.3
This report builds upon and needs to be read in conjunction with -
- The budget strategy agreed by Council on 22nd October 2013 –
‘Sustainable Swansea, Fit for the Future’ focusing on the principles and
strategies to be adopted as part of the current and future budget process
- The report approved by Cabinet on 10th December 2013 setting out
specific budget proposals for public consultation.
1.4
The report sets out the outcome of the budget consultation, Cabinet has considered
the comments received from residents, community groups, partners, employees,
School Budget Forum, Trade Unions and others, in recommending the budget to
Council. The report also includes an Equality Impact Assessment statement so the
Council can be aware of any key issues..
2.
Financial Monitoring 2013/14
2.1
Cabinet considered a report on the estimated Revenue Outturn for 2013/14 on 11th
February 2014.
2.2
That report highlighted a forecast net overspend in service budgets of £1.7m.
However, the net position contained overspends specific to Social Services and
Education totalling £3m which, where appropriate, have been incorporated into the
budget proposals for 2014/15 contained within this report.
2.3
The monitoring report also detailed variations on budgets which are corporate in
nature and not linked to direct service provision.
3.
The Local Government Finance Settlement 2014/15
3.1
The Minister for Local Government & Government Business announced the Final
Settlement on 11th December 2013.
3.2
The settlement differs substantially from the indicative support levels detailed in the
final settlement figure and medium term financial plan (MTFP) for 2013/14, and
hence the assumptions made for financial planning purposes in 2014/15, as follows:-
£’000
2013/14 Medium Term Financial Plan assumption for
4,000
Welsh Government Support 2014/15
Final Settlement (after adjusting for specific grants
-12,255
and Council Tax Support Scheme Transfers)
3.3
The result is a loss of funding of -£16.255 compared to the Council’s Medium Term
Financial Planning assumptions as agreed in February 2013.
3.4
With the exception of an additional transfer of specific grant in respect of Pensioners
Council Tax Support the final settlement remained unchanged from the provisional
settlement as detailed in the report to Cabinet on 12th November 2013.
Page 30
4. Budget Forecast 2014/15
Overview
4.1
The budget proposals for 2014/15 have been dominated by the requirement to meet
the significant reductions in funding highlighted above which, combined with known
budget pressures, has resulted in a funding gap of £26.235m as detailed in Table 1
in paragraph 4.4 below.
4.2
This differs from the figure of £25m reported to Cabinet on 10th December 2013 as
follows
£’000
Increase in projected funding for current year service overspends
1,000
Removal of duplication of procurement savings targets/other
466
Reduced impact of 2014/15 debt charges
-231
4.3
The options for funding this deficit are:-.
- Savings on current service net expenditure
- Increases in Council Tax levels
- Potential reductions in contributions to the Contingency Fund
- Use of Reserves and Balances
Forecast shortfall 2014/15
4.4
The shortfall in funding identified in 4.1 above can be summarised in Table 1 below:-
Table 1 – Budget shortfall 2014/15
£’000
£’000
Reduction in external funding
12,255
Effect of 2013/14 cost increases:
- 2013/14 pay award (1%)
1,700
- Implementation of living wage
1,996
- Known contract price inflation
875
- Ongoing contingency items
1,190
- Ongoing service pressures
3,000
8,761
Predicted 2014/15 increases:
- 2014/15 pay award (1%)
1,700
- Adjustment of procurement
savings/waste costs
550
- Capital charges
769
3,019
Reversal of 2013/14 use of general
2,200
reserves
Overall shortfall
26,235
4.5 The above analysis specifically takes account of the outcome of the current Revenue
Budget outturn forecast for 2013/14 and makes appropriate provision for baseline
budget adjustments for both Education and Social Services where it is clear that
there is an inevitable ongoing revenue effect in 2014/15.
Page 31
4.6
Whilst the MTFP forecast for 2014/15 indicated the potential for additional
expenditure to arise from increases in employer pension contributions, the results of
the recent triennial valuation are such that there are no predicted increases for the
Authority for the 2014/15 financial year or indeed the two years following (2015/16 &
2016/17).
Inflation
4.7
The 2013/14 budget provided for a £2m corporate provision for inflation. As reported
within the 3rd quarter budget monitoring report considered earlier on this agenda, this
provision was allocated in 2013/14 on a needs evidenced basis. The current
assumption is that any under-utilisation of the 2013/14 provision should initially be
used to mitigate the forecast net service overspends detailed in paragraph 2.2 above.
Experience in identifying known contractual and unavoidable inflationary pressures,
together with falling inflation estimates, means that it is possible to reduce the
corporate provision for inflation for 2014/15 to a level of £1.049m, a reduction of
£951k on the current year. There is no inflation element built into specific service
budgets across the Council.
There was a national pay award for non teaching staff of 1% for 2013/14. The
funding of that award has been taken into account for 2014/15 as has provision
within service budgets for a further pay award of 1% for 2014/15.
As in previous years it is assumed that any provision for increases in School pay
budgets will be met directly from Schools’ delegated budgets.
Schools Protection
4.8
The settlement provided for a schools protection at a level of 1% above Welsh
Government funding. In Swansea this amounts to approximately £1.2m.
The settlement provided for an increase in pupil deprivation grant of some £2.6m for
2014/15. Whilst this sum, which will be entirely devolved to schools, is in excess of
the schools protection level, Welsh Government has indicated that 50% only of the
protection value can be met from this source. Within the Capital charges increase of
£0.769m which is being met by the Authority for 2014/15, a significant element of the
increase relates to additional borrowing costs in relation to the Schools’ improvement
programme. Regulation allows the Authority to include any payment of such capital
charges to score against protection levels. It is therefore proposed that, whilst there
will be full passporting of the additional pupil deprivation grant to schools, the
element of increases in Capital Charges relating to the schools improvement
programme will be sufficient to evidence compliance with the funding guarantee.
Social Care protection
4.9 There is no implied protection for Social Care budgets within the 2014/15 grant
settlement.
Capital Financing Charges
4.10 There is an increase of £769,000 to reflect increased forecast borrowing
requirements and net interest charges, including, as detailed above, elements
relating to the Schools’ improvement programme.
Page 32
Fire Authority Levy
4.11 An increase of £21,000. Although the overall Fire Authority levy on constituent Local
Authorities has reduced by some 1.56% (notionally -£180,000 for Swansea), changes
in population statistics have disproportionally affected the cost to the Council
compared to the other Constituent Authorities.
Pay & Grading Settlement and the Living Wage
4.12 It is intended to introduce a single pay and grading structure across the Authority with
effect from 1st April 2014. During 2013/14 all staff across the Authority were moved to
a pay level which, as a minimum, reflected ‘living wage’ levels as at 1st April 2013.
However, in implementing this scheme there was no commitment to review the living
wage level on an annual basis and hence there is no provision within the current
budget proposals to implement further living wage increases for 2014/15 and beyond.
The introduction of a single pay and grading scheme is welcome and in future years
will add certainty to pay estimates. However, until the Authority has fully implemented
the scheme, dealt with all outstanding equal pay claims and exhausted all appeals
which may arise from implementation, single status/equal pay remains the single
greatest financial risk outside of the significant challenges facing the delivery of
savings targets during 2014/15. Whilst the Council has set aside significant sums to
meet all known current liabilities, it remains the case that until the appeals process
has been exhausted following implementation, and all equal pay claims have been
settled, there remains an ongoing risk in respect of the overall future paybill which we
will seek to manage.
It remains the case that the Authority is setting aside an additional sum of £4.277m in
2014/15 to fund the implementation of single status. During 2014/15 this sum will be
incorporated into service budgets.
Council Tax Reduction Scheme
4.13 The Authority will receive a base grant allocation of £18.883m for 2014/15 which will
be included as part of future grant settlements. The effect of this base grant allocation
is that any future increases in Council tax levels will have to be discounted by any
potential increases in Council Tax Support costs. Where appropriate the yield will also
have to take account of any increase in Council Tax Support Costs arising from
increases in the Council Tax applied by the South Wales Police Commissioner.
The effects of funding additional Council tax support have been taken into account
when calculating the funding in respect of the overall budget shortfall highlighted in
table 1 in section 4.4 of this report.
5.
Specific Savings Proposals: Update
5.1
In determining its budget proposals, the Authority has embarked on a specific long
term strategy – ‘
Sustainable Swansea – Fit for the Future’ - as a means of setting
Council priorities, transforming services and addressing current and future deficits.
5.2
Details of that strategy, including the budget principles that the Authority has adopted
together with a description of the key elements that underpin the service savings
proposals, was presented and approved at Cabinet on 15th October and
subsequently at a meeting of Council on 22nd October 2013.
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5.3
The strategy as adopted underpinned the decision taken at the Council’s Cabinet on
10th December 2013 to recommend specific savings proposals totaling £12.2m in
2014/15 for consultation.
5.4
In addition to specific savings proposals detailed above, Cabinet also agreed
proposed savings of £7.6m in 2014/15 from the further workstreams in
Sustainable
Swansea looking at the potential for management and administration savings,
procurement savings, asset management utilisation and income generation.
5.5
With respect to workstream savings, the Council set an ambitious target of £5m in
terms of additional workforce reductions in 2014/15. Whilst options have been
proposed and considered by the Executive Board which would substantially achieve
that target, it is prudent for the purposes of setting the current Revenue Budget that a
sum of £3m be included at this stage for savings in this area. However, work will
continue during 2014/15 to develop proposals to achieve the original target which, if
successful, will assist with future year deficit reduction targets. The Executive Board
also intends to identify areas across the workstreams where savings may be realised
in year; this will be reported to Cabinet as appropriate. In addition, Cabinet will be
asked to consider options for invest to save schemes to support the New Models of
Delivery and Prevention workstreams, in particular: community capacity building and
innovative work to reduce the cost of current services
5.6
Details around the proposals for Council tax levels are shown in section 9 of this
report.
5.7
Details around use of the Council’s Reserves, contingency and inflation provisions are
shown in section 8 of this report.
6
Outcome of Budget Consultation Process
6.1 The report to Cabinet on 10th December 2013 invited comments on the forecasts,
assessments and specific options for achieving a balanced budget set out in that
report.
6.2
Phase One of the engagement plan held in September and October 2103 focused on
raising awareness of
Sustainable Swansea – fit for the future and generating
feedback from staff, public and other stakeholders.
A series of events and activities were held, including 11 staff road shows, seven
public drop-in sessions and two events for partners and stakeholder groups.
A total of more than 1,000 staff and public attended these events.
In addition, more than 4,200 budget information booklets were distributed to Council
and community venues. The Council’s dedicated website pages had 644 views and
the pages on StaffNet had 4,257 views.
Social media was used to reach audiences and there was also comprehensive media
coverage.
As a result, the Council received 326 responses and 330 budget saving suggestions.
The suggestions have been forwarded to Heads of Service to respond.
Page 34
6.3
Phase Two of the engagement plan held between 11th December, 2013 and 22nd
January, 2014 and focused on engaging the public, staff and specific groups on the
detailed budget proposals.
This included themed drop-in public events for:
• Libraries, Leisure and Tourism (24 attended);
• Communities and Transport (15 attended);
• Adult Services (190 attended);
• Education and Young People (87 attended for EMLAS and 35 for other
issues).
There were also separate events for:
• Children and Young People (78 young people and workers attended);
• Stakeholders from organisations and partners (14 attended);
• Third sector groups (35 attended);
• Equality groups (7 attended).
• Member Seminar (28 attended)
Hard-copy consultation documents were distributed to 17 libraries, 10 District
Housing Offices,7 Community Centres, 5 Communities First offices, the Phoenix
Centre and Civic Centre. The
Swansea Leader has published details and promoted
feedback.
In addition, the Council worked with the local media to promote the key issues along
with using social media to encourage feedback from the public.
As a result, there were almost 4,000 hits on the Council’s website and StaffNet pages
dedicated to the budget consultation. The Council received 123 letters, 1,137 online
and hard copy survey responses and additional comments from those attending the
above events have been recorded (Appendix F).
6.4
A summary of the Phase Two consultation responses received is shown at Appendix
F to this report. The key issues raised by respondents are set out below:
•
Pennard Library: 265 survey responses on this proposal largely against
closing the Library, also a number of letters directed to the Library Services
manager.
•
EMLAS: 193 survey responses, largely against the proposal to cut the service.
We have also received a large number of detailed letters opposing the cut
from staff and head teachers.
•
Care homes and day centres: 44 survey responses, 120 attended the drop-
in session on Adult Social care and a further 70 attended a follow-up meeting.
The large majority were against any proposal which would result in the closure
of care homes or day centres.
•
Car park/ Residents Parking charges: 170 survey responses, largely
opposed to the introduction of parking charges
.
Other proposals creating interest are:
• Home to School Transport;
• Archives.
Page 35
6.5
Cabinet Members and officers also met with School Headteachers on 18th December
2013 and there has been wide circulation of proposals to the School Budget Forum.
As a statutory consultee the response of the School Budget Forum to the budget
proposals is shown at Appendix ‘H’ to this report. This response has been considered
in formulating these budget proposals and, as in previous years, a specific response
will be provided following completion of the budget process.
6.6 Cabinet has considered the outcome of the consultation and Equality Impact
Assessment Statement (Appendix G) and has decided to adopt the changes to the
draft budget proposals as set out in Appendix D or E. Where the proposals in
appendix D differ from those detailed in the Cabinet Report of 10th December 2013
details have been included in the Appendix..
Table 2 – Cabinet decisions on the Outcome of Budget Consultation
PROPOSAL
ADVICE
Pennard Library • The Sustainable Swansea New Models of Delivery
workstream envisages that some local services, such as small
libraries, will be run by the community in the future. This
model has been adopted successfully by many local
authorities
• It is considered that, in principle, this remains the right
approach for a library such as Pennard and that there is much
to be gained and learned from such a model
• However, given the large number of responses opposed to the
closure, Cabinet considers that the proposal should be
deferred to allow a wider review of the future model for
libraries, including community transfer
• Cabinet proposes that the wider review is completed in six
months, with an additional two months for further discussions
about Pennard Library
EMLAS
• During the Budget process we have adopted the general
principle that we should reduce spending to the level of
specific grants across a number of areas. This remains the
right principle.
• However, it is clear from the responses received that it would
be prudent to undertake a wider review of the purpose of
EMLAS and the future options for service delivery models
within a reduced budget before any decisions are made
including consultation with staff and service users.
• Such a review would also allow the Council to take full
account of the views expressed by responders and to engage
further with service users, Headteachers and the staff involved
• Cabinet proposes a report to Cabinet in June following this
consultation period.
Residential
• Cabinet has agreed a strategy for Transforming Adult Social
Care Homes
Services that includes a plan over time to increase
independent supported living and decrease the provision of
residential care in line with users expectations and national
policy.
• This remains the Council’s strategy, as it provides better
outcomes for those service users
• However, responses to the consultation understandably reflect
concerns about the timing of the closure of residential homes
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and the transition to independent living
• Consequently, Cabinet proposes allowing a longer period of
time to fully understand fully the impact on users and carers
and for the development of detailed closure and transition
plans, including effective engagement with residents and their
families and to demonstrably have in place alternatives to
residential care.
• Cabinet proposes a report to Cabinet in June following this
consultation period.
Car Park
• A range of responses have been received on the current
Charges
proposals to increase charges for car parking at specific car
parks and for residents’ parking
• The Council’s Budget Principles include increased income and
full cost recovery for services. Similarly, the
Sustainable
Swansea Efficiency workstream includes the objective of
increasing income from fees and charges
• It is clearly important that we remain committed to increasing
income as part of the contribution to addressing the overall
budget shortfall and to help to minimise further cuts to
services
• Cabinet have agreed to defer the introduction of Residents
Car parking charges at this stage and review all options as
part of the wider work on fees and charges across all services
during the course of the year, bearing in mind the principle of
full cost recovery
• Cabinet proposes a report to Cabinet in September following
this consultation period
School Crossing • Whilst the response from public consultation to this proposal
Patrols
was balanced, some concerns have been raised about the
potential risks to pupils at these locations.
• Given this, and although the proposal is in accordance with
Road Safety GB guidance, Cabinet has decided to defer this
proposal to allow a further review of all school crossing
patrol locations to determine the lowest priority crossings,
taking account of the views that have been received.
6.7
Finally, Council is also asked to note that, as part of Phase 3 of the budget
consultation process:
•
A full account of the consultation responses will be placed on the Council’s
website
•
The detailed consultation responses have been sent to the relevant Head of
Service to:
o Reply to any particular responders as appropriate, for example, community
groups, Assembly Members
o Where appropriate, build the comments into the implementation of the
proposals, subject to these being agreed by Council
6.8
As previously agreed, engagement on the delivery of the objectives in
Sustainable
Swansea, fit for the future will continue during 2014.
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6.9
Scrutiny involvement in the budget
Scrutiny has taken a number of opportunities to consider the budget and discuss
details with Cabinet Members and officers.
The Schools Performance Panel investigated the implications for education at its
meeting on January 31 and discussed details with the Cabinet Members for Finance
and Resources and Learning and Skills. This will be followed-up with a Chair’s Letter
to the relevant Cabinet Members.
The Service Improvement and Finance Panel had the opportunity to consider the
budget proposals on February 10th and the Panel’s views were fed into the Cabinet
meeting on February 11th and can be addressed at Council.
7.0
Staffing Implications
7.1
An estimate of the potential impact on staff of the budget proposals and a
commentary on this was contained in the report to Cabinet on 10 December 2013. At
that time it was
estimated that, under the present proposals, approximately 687
posts would be deleted over the next three years. The estimated total for 2014/15
was 378 FTEs.
7.2
Since December, Heads of Service and Directors have reviewed the potential impact
of the budget proposals on staff in order to seek to minimise the number of
compulsory redundancies.
This has reduced the number of posts at risk of
compulsory redundancies in some areas.
7.3
The latest assessment of the staffing implications is shown in Table 3 below across
both the Service Savings Proposals and the Additional Staffing Savings outlined in
section 5 above. The assessment takes account of the changes to the budget
proposed by Cabinet in Table 2 above:
Table 3: Savings Proposals – Staffing Impact: Nature of Change
FTE
Actual Number of Staff Affected
Vacant
ER/VR Staff Reduction Termination Other Total
Posts
at
in Hours
of Agency
Risk
Staff
Savings
30.2
46
95
14
6
5
166
Proposals
Additional
25
29
78
9
5
0
121
Staffing
Savings
Total
55.2
75
173
23
11
5
287
NB: Vacant Posts are shown as Full Time Equivalents
All other figures are the actual number of staff affected by the proposals ie: a
higher figure than FTEs
Page 38
7.4
Consequently, the current estimate is that 173 staff are at risk, compared with the
December estimate of 378. The key reasons for the difference in the figures from the
Cabinet report dated 10 December are as follows:
• The 10th December estimate was high level and, since then, there has been a
significant amount of work to refine the budget proposals
• Significant work has taken place to reduce the numbers of staff at risk through the
management of vacancies, promoting ER/VR, flexible working and reducing the
use of agency staff.
Section 188 Consultation
Three written responses to the Authority’s budget proposals were received from
Unison, GMB and Unite on 4th and 5th February 2014.
In summary, the main issues raised in their responses, together with a brief comment
on the Council’s position, are as follows:
Trade Union Response
Council’s’ Position
The Authority has not met its duty
The Council’s view is that it has
required under S188 with the current
provided a list of the types of posts
level of information that the Trade
affected along with a breakdown of
Unions had been provided with, i.e.
how posts are affected and that this
not enough detail of the affected
does fulfil its obligations under S188.
posts provided.
Discussions are continuing with the
TUs to clarify the information that
they consider they have not received.
The effect the budget savings would
The background to these proposals
have on service provision and that, in has been discussed with the relevant
their view, proposals have been put
Heads of Service at the consultation
forward without any clear business
meetings.
case having been developed, i.e.
closure of Residential Homes;
removal of School Crossing Patrols;
outsourcing areas, i.e. Leisure
Centres, cleaning at the Bus Station
etc.
The
Council
should
consider The proposed budget includes the
alternatives to prevent compulsory prudent use of reserves in line with
redundancies, including:
the advice of the Section 151 Officer.
• Selling off Council assets
It would be unlawful to use borrowing
• Increase
the
general
fund and capital receipts to support
supporting borrowing
ongoing revenue expenditure.
Due to Welsh Government funding
• Greater use of reserves
restrictions there are no capitalization
• Use of outcome agreement grant
from the Welsh Government Directions currently available that
which could be put into revenue would support capitalisation of equal
spending to support and protect pay settlements which continue to fall
services
on the Revenue Budget
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Process for Managing Redundancies
7.5
Guidance has been given to Heads of Service and senior managers about the
process to be followed to manage any compulsory redundancies. This guidance is
based on the Council’s policy and previous practice and the final criteria that we will
use following the conclusion of the TU consultation process.
7.6
Heads of Service have been asked to be ready to implement the changes and to
commence formal consultation with the staff affected once decisions have been
made by the Council on 18 February 2014.
Action to Minimise Compulsory Redundancies
7.7
In line with the Council’s current policy, every effort will continue to be made to
minimise compulsory redundancies. Ongoing and new management action is set out
in Table 4 below:
Table 4: Ongoing Management Action to Minimise Compulsory Redundancies
Management Action
Current Position & Further Action
Tight management of vacancies so
• Vacancy controls have been increased
that we manage the deletion of
• All vacancies to be advertised internally
posts via natural wastage over time
only unless there is a compelling service
reason e.g.: child care social worker
The use of fixed term appointments
• Fixed term appointment will be the default
where a post needs to be covered
position, unless there is a compelling
service reason
Stopping the use of agency staff
• Services are now reducing agency spend
unless a clear business case can be • There will always be the need for some
made
agency staff, for good reason
Redeployment and retraining where • This is being given increased priority and
ever possible, including the
we will be looking for best practice and
development of an in house
innovative ideas, in partnership with the
“recruitment and redeployment
TUs, to increase redeployment
agency”
• These actions will be more successful in
some areas than others
• For example, any social care frontline staff
who may be redundant are likely to have
redeployment opportunities elsewhere in
social care; whereas, because of our very
low turnover in management and support
services, staff in these categories will find
redeployment opportunities more limited
Further encouragement of staff to
• The scheme remains open and will be
consider ER/VR options, including
publicised from time to time
bumped redundancies
• A Personnel Bulletin was issued on 30
January 2014
Encouraging staff to work flexibly
• Staff have been reminded of these
eg: reduce hours or job share
opportunities and some have come
forward as part of the current savings
proposals
Page 40
• Awareness raising will continue: a
Personnel Bulletin was issued on 30
January 2014
Flexible retirement
• The rules on flexible retirement have been
changed to remove the current time limit in
cases where there is no cost to the Council
• A Personnel Bulletin was issued on 30
January 2014
Discussions with other major
• Discussions have started on how the major
employers about working together
employers across the City can work
on redeployment
together to minimise the impact of
reduction in posts
• These will continue through the Local
Service Board
8
Reserves and Contingency Fund Requirement
Background
8.1
It is a requirement of the Local Government Finance Act 1992 that authorities have
regard to the level of reserves when calculating their Budget Requirement. Whilst
there is no prescribed statutory minimum level of reserves, account should be taken
of the strategic, operational and financial risks facing the Council.
8.2
In assessing the adequacy of reserves account needs to be taken of the following
general factors:
• treatment of inflation and interest rates
• level and timing of capital receipts
• treatment of demand led pressures
• treatment of planned efficiency savings / productivity gains
• financial risks inherent in major capital developments
• the availability of reserves, government grants and other funds
• general financial climate to which the authority is subject
In addition there are local factors to consider including the possibility of further budget
overspends, progress in achieving challenging savings targets, implementation of the
Pay and Grading Scheme and the cost of any future redundancy scheme.
Setting the level of reserves is just one of several related decisions in the formulation
of the Medium Term Financial Strategy i.e. it is more than a short term decision.
General Reserves
8.3
The General Reserve amounted to £10.834m at 1st April 2013. The 2013/14 budget
approved by Council on 14th February 2013 allowed for a transfer of £2.2m from
general reserves to fund the 2013/14 budget. The report to Cabinet on 17th
September 2013 detailing the revenue outturn position for 2012/13 recognised this
commitment and, utilising the final underspend for that year, committed to
transferring an additional sum of £2.2m into general reserves.
8.4
Following careful consideration it is proposed that for 2014/15 a sum of £2.2m be
utilised from General Reserves to support the Revenue Budget. This is entirely in line
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with the planning assumptions adopted in respect of the 2013/14 budget in terms of
General Reserve levels, but account will have to be taken to include this sum in
consideration of the Revenue Budget proposals for 2015/16 and beyond.
Contingency Fund
8.5
The 3rd quarter financial monitoring report detailed several forecast uses of the
Contingency Fund in 2013/14. At this time, it is anticipated that the £8m budgeted
contribution in 2013/14 will be fully expended. Given the overall position as forecast
in the 3rd quarter budget monitoring report for 2013/14 considered elsewhere on this
agenda, the forecast Fund balance as at 31st March 2014 is nil.
8.6
In assessing the value of the Contingency Fund requirement in 2014/15, the following
potential requirements are relevant:
(a) The risks and issues detailed in 10 below
(b) The need to provide a potential source of finance for invest to save initiatives
including any future ER/VR scheme.
(c) The poor outlook for Public Finances as set out in the Cabinet report on 10th
December and summarised in the MTFP report elsewhere on the agenda.
8.7
Bearing the above in mind, together with the proposals in respect of funding current
year service pressures within the 2014/15 base budget, which significantly reduces
risk, it is recommended that the contribution to the Contingency Fund in respect of
2014/15 is reduced to £5.4m., i.e. a reduction of £2.6m on the current year
contribution.
Earmarked Reserves
8.8
The Council retains earmarked reserves for specific purposes. The reasons for
holding these reserves are documented and are subject to ongoing review and
scrutiny. The forecast transfers to and from reserves are summarised in appendix C.
Review of Insurance Fund
8.9
A further review has been completed of the sums set aside to provide for future
claims which are not known or only partly known at this time. Such claims can be
very significant and can relate to past periods going back many years.
The review has highlighted an Insurance Fund surplus as at 31st March 2013.
8.10 Members will recall that the Budget for 2013/14 approved on 14th February 2013
allowed for:-
- A one off contribution from the insurance fund of £1m to finance high
priority highways maintenance schemes on the basis that there was an
historical link between the levels of claims and highways maintenance.
- An ongoing reduction of £700,000 in insurance charges to services for
that year and for 2014/15 and 2015/16.
The current budget proposals allow for the continuation of the £700,000 reduction in
insurance premiums, together with a further one-off contribution of £1m towards
Page 42
highways maintenance in 2014/15. There is an implicit link between effective
highways maintenance and management of insurance claims and the Prevention
workstream within
Sustainable Swansea.
Transformation/Change Fund
8.11 The Revenue Outturn report for 2012/13 agreed by Cabinet on 17th September 2013
recommended that the sum of £2.030m was set aside in order to assist in the
transformation of Council services in the light of the current and forecast budget
position of the Council. It is intended to earmark the sum of £300,000 from that fund
to assist in the development of Community based service delivery options.
Adequacy of Reserves
8.12 Whilst the proposed use of Earmarked Reserves in 2014/15 funds some recurring
expenditure, taking into account the level of General and Earmarked Reserves which
would be available should there be an overriding financial requirement, and the
arrangements in place to monitor and manage financial risk in 2014/15 and future
years, I am satisfied that the proposed management of reserves in 2014/15 will result
in a forecast level of General Reserves, Earmarked Reserves and Provisions which
is adequate, subject to the potential financial implications of the risks described in
Section 11 below and the final budget proposals recommended by Cabinet to
Council.
8.13 Given the considerable risks and uncertainties facing the Council in 2014/15 and
future years, it remains my advice as the officer designated with responsibility for the
overall finances of the Council that the above represents prudent financial
management.
9.
Budget Requirement and Council Tax 2014/15
9.1
The Council’s recommended requirement is set out in Appendix A. The City and
County of Swansea Requirement of £413.659m will be financed partly by Revenue
Support Grant of £241.788m and National Non-Domestic Rates of £76.436m. Based
on the specific savings proposals as detailed within this report, together with the
proposed movements in reserves, contingency fund and inflation provision, the
Council Tax in respect of the Council’s own requirement would be £1,079.98 for a
band ‘D’ property – a 5% increase compared to 2013/14.
9.2 Including Community Councils, the total requirement is £414.527m.
The overall Council Tax amounts, including the requirements of the South Wales
Police Authority and Community Councils will be set out in the Resolutions to be
made in accordance with the regulations for the setting of the Council Tax 2014/15.
10. Summary of Funding 2014/15
10.1 The proposals in sections 4, 5, 6, 7 and 8 above result in a forecast additional
funding of £26.235m in 2014/15 as detailed in Table 5 below
Page 43
Table 5 – Budget Proposals 2014/15
£’000
£’000
Specific
savings
proposals
–
-10,867
(Appendix ‘D’)
Workstream savings (Appendix ‘E’)
-5,600
-16,467
Net effect of Council tax base increase
-4,043
and proposed charges
Net increase in levies
26
Reduction in inflation provision
-951
Reduction in contribution to the
-2,600
Contingency Fund
Use of General Reserves
-2,200
Overall resourcing
-26,235
Summary
10.2 I am satisfied that the budget proposals detailed in this report represent a realistic and
achievable financial plan for 2014/15 subject to the potential financial implications of
the risks described in paragraph 11 below.
11. Assessment of risks and uncertainties
11.1 As in previous years, there are a number of potential costs which have been
considered in the context of the budget proposals. In particular, the following items:
(a) Implications of the 2013/14 Overspend
The 3rd quarter financial monitoring report on this agenda highlighted a number of
service overspends. The budget proposals within this report largely cater for the
ongoing effects of 2013/14 service overspends.
(b) New Unavoidable Spending Requirements
All services will need to meet a range of additional / new pressures in 2014/15. These
include the implications of new legislation; demographic changes; implementation of
single status; recession and other requirements. Whilst reasonable provision has
been made for these costs, there is a risk that some items will result in overspends.
In particular it is assumed that whilst the cost of pay protection arising out of single
status implementation can be funded centrally, any additional costs that may
potentially arise as a result of the appeals process will be met from within specific
existing Directorate budgets.
(c) Savings
The 2014/15 budget includes significant and extensive savings targets which must be
achieved. It is a requirement of the Council’s financial procedure rules that
Page 44
Responsible Officers are required to manage expenditure within approved budgets of
the Council and to that extent it is essential, should specific proposed budget savings
be delayed or postponed, alternative savings are achieved in year to meet approved
Directorate Budgets.
Given the nature and scale of the savings challenge during 2014/15, there will be
enhanced monitoring and tracking of progress in achieving budget savings which will
be reported to Executive Board, Budget Steering Group and Cabinet.
It is essential in terms of the financial challenges facing the Council beyond 2014/15
that further savings proposals are developed and implemented in 2014/15 over and
above those proposed within this budget. As noted above, further proposals will be
brought to Cabinet during the year.
(d) Inflation
As was the case in previous years, no provision has been made for price increases
within Directorate Budgets. The Corporate inflation provision recommended in this
report is likely to be sufficient only to cover known and unavoidable contract inflation
and is not available to fund general inflationary pressures.
(e) Outcome Agreement Grant
Whilst the full grant was received in 2013/14, there is an ongoing risk that the Council
will not receive the full grant in future years. The process surrounding the criteria and
evidence requirements for this grant are changing for 2014/15 and this could add
further to the risk in terms of transition to the new arrangements.
(f) Care Home Fees
Budget provision has been made for the 2013 settlement. However, it is likely that
fees will need to be further increased over and above the budget provision given that
the Council has to undertake an annual review of payments to care home providers
which must be robust and evidenced.
(g) Specific Grants
A number of specific grants are yet to be announced. In the event that the level of
specific grants awarded for 2014/15 is less that that for 2013/14, it is essential that
Directorates take action to manage such reductions within the proposed spending
limits – i.e. there is no corporate provision for meeting such shortfalls. There is a
clear expectation that expenditure will be cut to match the level of grant.
(h) Equal Pay Back Payments
There is a risk that future settlements could exceed the amount currently set aside for
outstanding claims. Until such time as the Council extinguishes its liability by settling
outstanding equal pay claims and succeeds in the implementation of single status
this remains an ongoing and significant financial risk to the Council.
(i)
Implementation of Single Status
Whilst Officers have undertaken substantial work in terms of validation and modelling
of the Councils pay and grading proposals, due to be implemented on 1st April 2014,
Page 45
there remains a potential for appeals to be made in line with any agreed process.
Where appeals are successful this will add further costs to the paybill. The appeals
process will be carefully monitored in order to assess ongoing financial implications.
(j) Council Tax Reduction Scheme
Provision has been made for the estimated costs which are now linked directly to any
proposed increases in Council Tax Levels.
(k) Capital Financing Charges
There is a risk that the funding shortfalls highlighted in the Capital Budget report
elsewhere on the agenda will result in additional charges over and above the agreed
budget provision. The Report on the Capital Programme for 2014/15-2017/18
elsewhere on this agenda highlights specific actions that need to be taken to mitigate
against future increases in revenue costs linked to increases in unsupported
borrowing.
11.2 Whilst reasonable assumptions have been made in relation to each of the above
risks it is impossible to be certain that adequate funding will be available for every
item. This re-enforces the need to have adequate reserves and balances available to
meet any unexpected costs or shortfalls.
11.3 The above risks are both substantial and potentially significant in value. Therefore
during 2014/15 specific actions are being put in place which will involve:-
- Monthly monitoring of specific savings targets against an agreed implementation
timetable in order to identify any slippage and appropriate and equivalent
compensating budget savings.
- Ensuring compliance with the Council’s Financial Procedure Rules which require
Responsible Officers to manage budgets within the limits set by Council
- Early and ongoing monitoring of the effect of pay and grading implementation and in
particular the cumulative effect of the initial appeals procedure
- The impact of any changes to specific grant funding streams
12. Equality Impact Assessment (EIA)
12.1 Budget proposals have been subject to the Council’s Equality Impact Assessment
(EIA) process. Proposals have been screened and where potential for impact has
been identified EIA reports have been opened. Appendix G contains the Equality
Impact Assessment (EIA) Statement for the Budget.
12.2 The statement, where possible, attempts an overarching assessment of the impact of
the revenue budget including a summary of the provisional outcomes of the process
by Directorate.
12.3 The statement and the majority of the EIA reports will remain open as proposals,
when agreed, are implemented and further developed. Thus, EIA reports will be
updated or completed over a period of time to take account of impact and the
outcomes of service specific engagement where required. As they are completed
each report will be published on the Council’s website here:
http://www.swansea.gov.uk/eia
Page 46
13. The Medium Term Financial Plan (MTFP) 2015/16 – 2017/18
13.1 Many of the issues identified in this report have implications for future years. The
MTFP report elsewhere on the agenda includes an assessment of likely shortfalls in
future years and outline proposals for achieving savings.
14. Legal Implications
14.1 The Authority is under a duty to make arrangements for the proper administration of
its financial affairs. Failure to do so will be a breach of that duty.
Contact officer
: Mike Hawes, Head of Financial Services
Telephone no
: 636423
Background papers
: None
Appendix ‘A’ Revenue Budget summary 2014/15
Appendix ‘B’ Net Directorate budget proposals
Appendix ‘C’ Earmarked Reserves
Appendix ‘D’ Specific savings proposals
Appendix ‘E’ Additional savings proposals
Appendix ‘F’ Summary of consultation responses
Appendix ‘G’ Equality impact assessment
Appendix ‘H’ Response of the Schools’ Budget Forum
Appendix ‘I’ Directorate Budgets
Page 47
REVENUE BUDGET SUMMARY 2014/15 Appendix A
DIRECTORATE
BUDGET
BUDGET
2013/14
2014/15
£000
£000
CORPORATE SERVICES
45,155
46,384
PEOPLE - POVERTY AND PREVENTION
3,488
3,492
PEOPLE - SOCIAL SERVICES
103,283
104,727
PEOPLE - EDUCATION
161,033
160,987
PLACE
56,036
52,711
ADDITIONAL SAVINGS STRANDS - TO BE ALLOCATED
0
-2,600
NET DIRECTORATE EXPENDITURE
368,995
365,701
CORPORATE PROVISION FOR INFLATION
2,000
1,049
OTHER ITEMS
LEVIES
SWANSEA BAY PORT HEALTH AUTHORITY
89
94
CONTRIBUTIONS
MID & WEST WALES COMBINED FIRE AUTHORITY
11,503
11,524
CAPITAL FINANCING CHARGES
PRINCIPAL REPAYMENTS
12,777
14,033
NET INTEREST CHARGES
14,138
13,651
NET REVENUE EXPENDITURE
409,502
406,052
MOVEMENT IN RESERVES
GENERAL RESERVES
-2,200
-2,200
EARMARKED RESERVES
11,840
9,432
TOTAL BUDGET REQUIREMENT
419,142
413,284
DISCRETIONARY RATE RELIEF
375
375
TOTAL CITY AND COUNTY OF SWANSEA REQUIREMENT
419,517
413,659
COMMUNITY COUNCIL PRECEPTS
847
868
TOTAL REQUIREMENT
420,364
414,527
FINANCING OF TOTAL REQUIREMENT
REVENUE SUPPORT GRANT
254,557
241,788
NATIONAL NON-DOMESTIC RATES
74,941
76,436
COUNCIL TAX - CITY AND COUNTY OF SWANSEA
90,019
95,435
COUNCIL TAX - COMMUNITY COUNCILS
847
868
TOTAL FINANCING
420,364
414,527
COUNCIL TAX BASE for the City and County of Swansea
87,519
88,367
COUNCIL TAX AT BAND 'D' (£) for the City and County of
Swansea
1,028.56 1,079.98
GENERAL RESERVES
AT 1 APRIL
10,834
10,834
AT 31 MARCH
8,634
8,634
Page 48
Appendix B
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Page 49
Appendix C
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Page 50
Appendix D - Savings Proposals
2014-15
£'000
Corporate Services
Central overheads and management and administrative savings
1,120
Reduce corporate subscriptions
33
Fully integrate contact centre
60
Reduce subsidy of providing services to Schools
0
Reduce grants to external bodies
50
Renegotiate strategic contracts with large suppliers
100
Total
1,363
2014-15
£'000
People - Education
Align the retirement and redundancy policy on a whole Council basis
945
Reduce supervision costs for school breakfasts
250
Non staffing service efficiencies
71
Central overheads and management and administrative savings
215
Increase meal charges
100
Savings in non-school Cleaning Services
188
Reduce the Council's contribution to the Welsh Language Service
100
Reduced demand/need for out of county education provision
100
Provide School improvement at the level required by Welsh Government
325
Total
2,294
Removed from 10th December proposals
2014-15
£'000
Provide Ethnic Minority Achievement Service at level of specific grant
294
2014-15
£'000
People - Poverty and Prevention
Central overheads and management and administrative savings
94
Reduce residential and outdoor centre provision to focus resources
88
Reconfigure Childcare and Early Years Support and childcare apprentice training
91
Reconfigure youth services
21
Total
294
Page 51
Appendix D (cont.)
2014-15
£'000
Place
Management and admin savings - reductions in staff numbers
401
More cost effective use of Council vehicle fleet
130
Parks costs reduction
303
Reduce planning control and design costs
30
Increase fees (for agency work) and reduce costs
9
Efficiencies in building management and additional income generation
350
Street Cleansing - reduced management costs
10
Make public convenience provision cost neutral and close Caer Street toilet
90
Reduce subsidy for Burials, Cremations, Registrars and Public Health
235
Swansea Marina - increase fees and charges
10
Increase charges for highways agreements
15
Reduce subsidy to sports facilities
131
Increase marketing income targets
250
Increased income from commercial estate
150
Introduction of parking charges in car parks.
20
Grand theatre - reduce subsidy
25
Reduce landfill costs through increased recycling
335
Traffic management
146
Reduce bus shelter maintenance
30
Archives - reduce operating costs
46
Libraries - Reduce book fund, and changes to specialist services.
113
Relocate Tourist Information Centre and review marketing activity
190
Rationalise city centre Management and indoor market
155
Grant reduction
150
Park and Ride & other bus services reductions and other efficiencies
158
Plantasia - seek alternative operating model
50
Total
3,532
Removed from 10th December proposals
2014-15
£'000
Withdraw school crossing patrols at sites with controlled crossings
22
Residents parking - increase residents' parking areas.
95
Close Pennard Library
34
Page 52
Appendix D (cont.)
2014-15
£'000
People - Social Services
Regional efficiencies re Adoption services, Youth Offending prevention, Alcohol
and Substance Misuse
290
Occupational therapists partnership working
75
Change skill mix of staff providing services for older people, community mental
health and learning disabilities
252
Social Services transport efficiencies
200
Contract changes and more effective commissioning and support for carers and
supporting people
307
Central overheads and management and administrative savings
366
Talking Books - become self funding
100
Expand telecare and remove subsidy
231
Withdraw community meal provision
290
Learning Disability Day Services - seek alternative operating model
200
Increase supported living and reduce residential care for mental health and
learning disability
450
Learning Disability - seek alternative operating model
283
Residential Long Term care for disabled - move to alternative model of provision
200
Learning Disability Special Projects - review funding arrangements
50
Review and remodel respite care for families with children with disabilities
90
Total
3,384
Removed from 10th December proposals
2014-15
£'000
Develop independent living by reinvesting money released from closure of three
residential care homes
500
Older Peoples Day Services - seek alternative operating model
300
Page 53
Appendix E
2014-15
£'000
Additional savings proposals
Paybill: reducing management layers, ER/VR and
3,000
consolidating and reducing business support
Assets: reduction in property costs
300
Third party spend: additional procurement
1,000
savings
Income: selling services and full cost recovery
1,000
Customer contact: reducing costs of call handling
300
and transactions
Total
5,600
Page 54
Appendix ‘F’
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Page 57
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Page 58
f
le
n
y o
b
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s
lia
re
a
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w
o
d
g
r
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m
rvic
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fo
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ve
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ra
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fin
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s
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b
ill h
d
s
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d
l lib
d
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lib
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n
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a
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is
ity.
c
c
u
- w
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fa
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R
Page 59
n
g
y
d
e
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a
p
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k
ve
rin
w
rvic
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c
n
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s
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a
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b
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t s
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k
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n
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id
vid
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t ta
to
lle
f fa
itio
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k
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to
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lly p
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ll, it c
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Page 63
..
r
s
ld
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tc
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In
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Page 64
e
th
d
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s
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it’s
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Page 68
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Page 69
Appendix G
Equality Impact Assessment (EIA) Statement for the City & County of Swansea
Revenue Budget 2014/15 (Open)
1. Introduction
1.1 Context:
The budget is set for the Council’s operation which covers a wide range of services
delivered to the citizens of the City & County of Swansea. This includes both providing and
commissioning of services from other organisations and agencies.
This year’s budget has been set in the context of the Minister for Local Government &
Government Business announcement of the Final Settlement on 11th December 2013,
which confirmed a reduction in grant funding of £12.255m from the Welsh Government.
Thus, the relative protection of Welsh local authorities from the scale of cuts already seen in
England has ended with the grant settlement for 2014/15 and the following 2 years. The
budget proposals for 2014/15 have therefore been dominated by the requirement to meet
significant reductions in funding which, combined with known budget pressures, has
resulted in a funding gap of £26.235m.
As reported to Cabinet in October and November 2013, the Council, in common with all
local authorities, has needed to take radical action to respond to the wide range of service
and financial pressures that it faces, including the reduction in external grant as a result of
the UK austerity measures.
1.2 Background – Sustainable Swansea – Fit for the Future
In determining its budget proposals, the Council has embarked on a specific strategy –
‘
Sustainable Swansea – Fit for the Future’ - as a means of setting Council priorities,
transforming services and addressing current and future deficits.
The ‘
Sustainable Swansea - Fit for the Future’ Strategy builds on the Council’s existing
medium term financial plan and responds to the wide range of service and financial
pressures that we face, including the reduction in external grant outlined above.
The scale of the financial, demographic and sustainability challenge requires the Council to
adopt a radically different approach to previous years. An approach that focuses on:
• The core future purpose of the Council
• The transformation of services and the model of delivery
• Greater collaboration with other Councils and local organisations, community groups
and residents
• And, above all, sustainable solutions with prevention at the heart of this
The Strategy contains:
• The financial context
• A “narrative” setting out the challenge for engagement purposes.
• A set of Budget Principles for generating and assessing options including a commitment
to make engagement central to our approach - with employees, Members, residents,
partners and other organisations
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• Questions about the Council's future core purpose
• The proposed savings programme
• Key delivery requirements.
The detail is available at www.swansea.gov.uk/sustainableswansea
In terms of this statement and equality the following aspects of the Strategy are relevant:
• A focus on the increasing imminent and long term service and demographic pressures
which all Councils face.
• Radical change is required to address these challenges both in relation to the Council
and resident behaviour and expectations.
• To support those at risk by focussing resources on the vulnerable, using Target Areas in
particular.
• Choices made based on evidence of need, value for money and whether it can be done
cheaper or in a different way.
• To consider delivering services differently, for example, by collaborating with others.
• To provide help earlier to improve outcomes for people and reduce future costs.
• To encourage more residents and communities to help themselves as part of sustainable
services.
As outlined above, the principles within
‘Sustainable Swansea’ take into account the
Council’s duties in relation to equality and diversity. Ensuring that those who are vulnerable
and most in need continue to be prioritised is imperative in meeting our legislative
requirements under the Equality Act 2010.
1.3 Service and Budget Priorities for 2014/15
A possible cut in spend of 20-30% over the next few years cannot take place without a
fundamental review of the future purpose and shape of the Council to 2017 and beyond.
This is particularly important because:
• The Council has clear aspirations and policy commitments to improve outcomes for
residents that will need to be delivered alongside savings
• We will also need to consider the requirement for further investment in prevention in
social care to reduce the projected future demand for services
• This requires a debate about innovation, service transformation, and doing things
differently
• And we must collaborate with others to achieve this
Although the Council is currently focused on a plan to save £45m over the next three years,
it is important to recognise that the gross budget is approximately £710m (including Housing
Services [HRA]) and around £1.5m a day is spent on services to residents.
Full information about the Council’s Service and Budget priorities are available in the report
to Cabinet on the 10th December 2013: http://swansea.gov.uk/index.cfm?articleid=56882
Many of the services delivered or commissioned by the Council are of particular benefit to
those protected characteristics defined within the Equality Act 2010. The Council is
Page 71
committed to protecting the vital frontline services that matter most to the people of
Swansea, tackling poverty and looking after the most vulnerable in our communities. The
Council will continue to do everything it can to meet this increasing challenging commitment
given the financial constraints that it faces. However, services may be provided in a different
way in line with
Sustainable Swansea.
2. Process for assessing the impact of the 2014/15 Budget
2.1 Equality Impact Assessment (EIA) Process
The Council has had an EIA process in place for a number of years which was reviewed
and streamlined about four years ago. The process, which has taken account of changes in
regulation, has the following steps:
• Screening form identifies whether or not a full EIA is required
• EIA report form (where required)
• Quality assurance
• Sign off at Head of Service level
• Publication on the internet
• Review.
Officers following the EIA process have access to dedicated departmental support from
members of the Access to Services Team who offer advice, guidance and support. The
arrangements for undertaking the assessment of the budget using the Council’s EIA
process have included the following:
• Briefing notes to Cabinet, Executive Board and Heads of Service on the Budget Equality
Impact Assessment process
• Proposals have been screened
• Where required, EIA reports have been opened/ drafted -the level of completion has
varied, depending on the amount of information available and on the nature of the
proposal
• All EIAs remain open throughout the budget process, in order to take account of
consultation and engagement outcomes (as well as any other changes that may occur)
• Many EIAs will remain open over the coming months as outlined in section 2.3 below.
• Regular reports on process and progress have been made to Budget Strategy Savings
Programme Board
• Summaries of the provisional content and outcomes of the EIA process have been made
available to Cabinet and Executive Board.
2.3 EIA Statement
This statement, where possible, attempts an overarching assessment of the impact of the
revenue budget. As in previous years the total or overall impact of the proposed budget is
difficult to fully assess at this stage of implementation, particularly with the EIA process
being a continuing feature as proposals are further developed following agreement. In
addition this is a three year budget programme which will need further assessment and
engagement over the next two years.
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Therefore, this statement and the majority of the EIA reports will remain open as proposals,
when agreed, are implemented and further developed. EIA reports will be updated or
completed over a period of time to take account of impact and the outcomes of service
specific engagement where required. As they are completed each report will be published
on the Council’s website at: http://www.swansea.gov.uk/eia
It is the responsibility of the Council to set the budget and the stakeholders are:
• All citizens of, and visitors to, the City & County of Swansea
• Council staff
• Partner organisations
• Council Tax Payers.
2.4 Information about service users
The Council delivers services to all the citizens of the City & County of Swansea. The
overall population profile from the 2011 Census is as follows:
The gender split of the
City & County of
Swansea is
50.6% Female (120,936
people) and
49.4% Male (118,087
people).
Children and young people
aged 0-25
years
represent
32.9%
of
the
population, or
78,697 people.
Over 50s represent
36.3% of the
population (86,800 people), of which
42,812 are over 65 (around 17.9% of the
total population).
6.0% of the total population of Swansea (
14, 300 people) came from an ethnic minority
background. In terms of religion,
8,530 people (
3.6% of the population) belonged to
non-Christian faiths with 34% (81,219 people) having no religion.
23.3% (
55,719 people) had a long term health problem or disability including 11.3% of
people of working age (26,988 people).
6.9% of those aged 16-74 (
12,146 people)
were economically inactive due to long term sickness or disability.
In 2011, there were
26,332 Welsh speakers in Swansea, or
11.4% of the population.
44,659 people had one or more skills in Welsh.
Further information about Swansea’s population can be found at
http://www.swansea.gov.uk/index.cfm?articleid=28547
Individual service areas will have considered the particular citizens, service users or groups
that they may deliver services to when completing Equality Impact Assessment screenings
and reports.
2.5 Budget: Assessment of impact on Equalityi
a). Service Savings:
At the start of the process over 100 EIA screening forms (which identify whether or not a full
EIA is required) were completed.
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i). Directorate of Place:
Number of EIA reports opened
21
Provisional EIA outcomes
1.Continue with the proposal
10
2.Adjust the proposal
4
3.Justify the proposal
5
4.Stop & remove the proposal
1
Outcomes pending
1
The Place Directorate consists of the following service areas:
• Corporate building and property services
• Highways and transportation
• Waste management
• Culture, sport, leisure and tourism
• Housing and public protection
• Economic regeneration and planning
Place: Summary Assessment of Impact:
The majority of the EIAs opened identify potential negative impacts for the community,
which is inevitable due to the nature of the service. In terms of those assessed provisionally
as Outcome 3 (justify the proposal), areas of concern include proposals in relation to
Libraries (book fund, and specialist services (children’s mobile provision and community
mobile provision)) and Parks cost reductions ( bowls greens). However, some mitigation
opportunities have been identified in these areas.
For the proposed closure of Pennard Library, mitigating actions are not possible, hence the
current provisional outcome being 4 - ‘stop and remove’.
There are also some proposals requiring further consideration in future (pending outcomes
of consultation or discussions with alternative providers), such as those for Swansea
Mobility Hire and car parking charges.
In terms of consultation and engagement:
Pennard Library
265 survey responses on this proposal largely in support of not closing the Library, also a
number of letters directed to the Library Services manager.
Car Park Charges
170 survey responses, largely opposed to the introduction of parking charges, specifically in
Gorseinon
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ii). Directorate of People:
Number of EIA reports opened
45
Provisional EIA outcomes
1.Continue with the proposal
8
2.Adjust the proposal
3
3.Justify the proposal
20
4.Stop & remove the proposal
1
Outcomes pending
13
The People Directorate consists of the following service areas:
• Poverty and prevention
• Social services
• Education
People: Summary Assessment of Impact:
Social Services
The EIAs for these proposals have been opened. The proposals are in the context of the
commissioning frameworks in relation to re-configuring and modernising services and will
remain open for updating and completion as the proposals (if agreed) are progressed. This
will include taking account of service specific engagement undertaken. The completion of
the EIAs and engagement process will be overseen by the Commissioning Group.
In terms of consultation and engagement:
Care Homes and Day Centres
44 survey responses, 120 attended the drop-in session on Adult Social Care and a further
70 attended a follow-up meeting. The large majority were against any proposal which would
result in the closure of care homes or day centres.
Education
The EIAs undertaken identify potential negative impacts for children and young people and
poverty, which is inevitable due to the nature of the service. In terms of those assessed
provisionally as Outcome 3 (justify the proposal) areas of concern include proposals in
relation to the Welsh Language Service, increasing school meal charges, non-staffing
service efficiencies and home to school transport. However, some mitigation opportunities
have been identified and (in particular for the transport proposals) further statutory
consultation will be required in future.
For EMLAS mitigating actions are not possible, hence the current provisional outcome being
4 - ‘stop and remove’.
In terms of consultation and engagement:
EMLAS (Ethnic Minority Language and Achievement Service)
193 survey responses, largely against the proposal to cut the service. We have also
received a large number of detailed letters opposing the cut from staff and head teachers.
Home to School Transport
This proposal has also received feedback with concerns raised about pupils being able to
attend their school of choice (particularly in relation to faith schools) and the potential
financial impact.
Page 75
Poverty & Prevention
The EIAs undertaken within this service do identify potential negative impacts for children
and young people (mainly due to the reconfiguration of youth services). However,
mitigation opportunities have been identified to minimise the impact here. Further work is
required in relation to a youth club within the reconfigure youth services proposal as well as
the potential reduction in residential and outdoor centre provision.
iii). Corporate Services:
Number of EIA reports opened
3
Provisional EIA outcomes
1.Continue with the proposal
1
2.Adjust the proposal
1
3.Justify the proposal
1
4.Stop & remove the proposal
-
Outcomes pending
-
The Corporate Services Directorate consists of the following service areas:
• Communication and consultation
• Delivery and information
• Legal and democratic services and procurement
• Financial services
• Human resources and organisational development
Corporate Services: Summary Assessment of Impact:
The main area of concern within this service in relation to external impact is the proposal to
reduce grants to external bodies, which would undoubtedly have an impact on the protected
characteristics contained within equality legislation, due to the nature of the work of the
Third Sector.
In terms of consultation and engagement, concerns have been raised regarding the
proposed reduction in grants to external bodies, particularly around timescales, the impact
on the Third Sector and its client groups.
b). Staffing
Whilst the overall savings package includes savings from supplies and services, reduced
operating costs and increases in income, a significant reduction in posts in 2014/15 will be
unavoidable, given that the Council spends 40% of its overall budget on employees
(significantly more in some Service Areas).
Heads of Service have been provided with the same advice as in previous years that where
an application is made for early retirement/voluntary redundancy consideration should be
given to whether there is any potential equality impact or effect and, if there is, to follow the
EIA process..
2.6 Summary of impact – additional information
Across the Council, a number of EIA reports have identified potential impacts in the
following areas:
• Foster good community relations
• Promotion of equality of opportunity
• Elimination of discrimination
• Reduction of social exclusion/poverty
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• Community cohesion
• Welsh language
Some examples include:
• The potential for opportunities to be based on ability to pay rather than the benefits of
participation/choice
• The potential impact on vulnerable people and risks to social inclusion
• The potential risk to equal treatment of both the Welsh and English languages (as
required by law)
Some examples of possible actions to mitigate impact include:
• Working with other organisations
• Promoting entitlements/discounts
• Using information to effectively target services
• Monitoring of usage, comments and complaints
• Examining alternative ways of delivering services.
The budget continues to support and promote these areas by:
• Continuing to provide a wide range of general services to all citizens and specific
provision to particular groups including vulnerable people across the City & County of
Swansea
• Continuing to prioritise issues around poverty and targeting areas with the highest levels
of need
• Continuing to work locally and regionally on the community cohesion agenda.
2.7 Third Sector/Voluntary Organisations
In partnership with Swansea Council for Voluntary Services (SCVS) and in response to
concerns raised, the following information was given to voluntary organisations in a letter
published on the SCVS website and at an engagement meeting attended by 35
organisations:
• the Third Sector is an essential partner for the City & County of Swansea to be able to
achieve its objectives, deliver services and support the Council’s role as leader of the
community.
• however, this does not mean that Third Sector organisations should not be subject to the
same challenge as local authorities, other public sector bodies and our service providers
to achieve more effective and efficient working in a time of severe budget reductions.
• it is also important that the Third Sector is involved in dialogue with the Council about
how it can:
o more effectively deliver services
o achieve the aims of greater levels of community engagement, community action
and more self-reliant communities, families and individuals
The Council is aware that a number of voluntary organisations receive funding from different
service areas in grants, contracts or service level agreements (SLAs) and that there is a
concern that Third Sector organisations could face disproportionate budget reductions,
particularly if a cross-Council approach is not taken.
Some of the steps put in place to address these issues include the following:
1. budget proposals have been initially reviewed for potential impact on Third Sector
organisations
Page 77
2. the cross authority record of Third Sector Funding will be monitored to
track the situation over the coming year
3. an advice note has been issued to Heads of Service
4. to continue the dialogue with SCVS and Third Sector organisations about
possible opportunities within ‘
Sustainable Swansea’ in relation to:
o Different models of delivery
o Community action
o Re-commissioning services
o Prevention and early intervention
Outcomes of Engagement Meeting
Key issues raised by Third Sector organisations include the following:
• delay in receiving information about funding for 2014/15 (whether grant, SLA or
contract) and timing of decisions impacts on:
o staffing, service provision and vulnerable people who receive services
o the ability to run, manage and plan Third Sector organisations effectively
• the need for clarity about the opportunities available for Third Sector organisations to
support delivering services differently and information about how to become involved
• the need for support to develop organisationally in order to respond to emerging and
new challenges both in terms of funding and different ways of working (e.g. regionally)
as well as capacity building for any potential asset transfer.
Third Sector Potential Impact
As noted the proposal to reduce grants to external bodies impact Third Sector
organisations. There are a number of other proposals that may impact the sector which, if
agreed, may require re-configuring or re-commissioning of services. In this context there
may be opportunities for Third Sector organisations to be involved in this work. There are
also a number of proposals that look to third sector/community support in the delivery of
services in different ways.
3. Consultation and Engagement
3.1 The consultation and engagement process was held in two phases:
• Phase One was held in September and October 2013 and focused on raising
awareness of
Sustainable Swansea – Fit for the Future and generating feedback
from staff, public and other stakeholders.
• Phase Two was held between December 11, 2013 and January 22, 2014 and
focused on engaging the public, staff and specific groups on the detailed budget
proposals.
3.2 The outcomes of:
• Phase 1 have been sent to Heads of Service for consideration and response
• Phase 2 will be sent to Heads of Service for consideration including, where relevant,
being taken into account within EIA reports.
3.3 Detailed outcomes of the consultation and engagement process can be
found in Section 6 and Appendix F of the Revenue Budget Report.
4. Overall assessment of impact The EIA process has shown that, as expected, and given the scale of budget reductions
those with protected characteristics are likely to be affected. In assessing the impact of the
budget proposals, we have attempted to ensure that any effect is not disproportionate and
where needed, mitigating actions have been identified to minimise negative impact. In this
context the following should be noted:
Page 78
• there has been an emphasis to support those at risk by focusing resources on
vulnerable people
• evidence of partnership working to minimise impact
• where EIAs have shown potential significant impact with no possible mitigation, these
proposals have been referred for further consideration
• for those EIAs where potential significant impact has been identified and mitigation has
been possible, the associated action plans will be monitored and reviewed over the
coming year
• the outcomes of engagement has informed the decision making process
• this is an ongoing process over the next 2 years and as noted this statement and many
EIAs will remain open
• there is a focus on the Council doing things differently in order to further deliver services
that are flexible, citizen centred, meet individual need/choice and are sustainable
• the Council continues to deliver a wide range of services for all the citizens of the City &
County of Swansea.
5. Monitoring Arrangements
As noted above and as in previous years, all EIA reports will be published as they are
finalised. Due to the nature of many of the proposals this is likely to take time as
assessment of impact continues to be undertaken as proposals, when agreed, are further
developed.
Work will be undertaken over the next year to review the impact assessment process
undertaken on the 2014/15 budget in preparation for implementing the process for the
2015/16 budget.
What are we going to
Who is going
By when?
What will be the
do?
to do it?
outcome?
Publish all EIA reports on
Access to
As
All EIA reports
completion
Services Team
completed
available on
council website
Review impact
Executive
May 2014 Process
assessment process
Board/Head of
reviewed and
undertaken for 2014/15
Finance/Access
agreed for
budget and agree &
to Services
2015/16
implement process for
Team
2015/16 budget
Review consultation &
Executive
May 2014
Process
engagement process
Board/Head of
reviewed and
undertaken for 2014/15
Finance/Access
agreed for
budget and agree &
to Services
2015/16
implement process for
Team
2015/16 budget
Monitor individual EIA
Service
Within 12
Implementation
action plans
areas/Access to months
of actions
Services Team
reviewed and
reported
Page 79
There are 4 potential outcomes to an EIA report::
Outcome 1 – continue – the proposal has no equality impact and could go ahead
Outcome 2 – adjust – the proposal has a slight impact but with some adjustments and
mitigation could go ahead
Outcome 3 – justify – the proposal has the potential for significant impact and should only
go ahead with robust mitigation and justification for doing so
Outcome 4 – stop and remove – the proposal has the potential for significant impact with no
possible mitigation – it should be removed as a proposal.
Page 80
Appendix H
13th January 2014
Councillor David Phillips
City and County of Swansea
Civic Centre
Oystermouth Road
Swansea
SA1 3SN
Dear Councillor Phillips,
School Budget Forum Response to Budget Consultation
As always, the School Budget Forum has sought to support the discussions that have
already been held and which will be held over the coming weeks.
As a statutory
consultative body, the Forum expects that the points made will be carefully
considered as part of any forthcoming corporate discussion of future revenue and
capital budgets.
The School Budget Forum recognises the continuing challenging financial context facing the
Council as well as the scale of the impact of future national funding settlements.
Nevertheless, it has a responsibility to seek to ensure that the full implications of any budget
proposals on schools and the wider education service are properly recognised by the
Council before any decisions are taken.
Swansea schools do not fare well financially. As has been stressed in previous years, they
suffer a double blow. The Council can do nothing about the fact that the settlement it
receives from the Welsh Government is relatively poor, ranking it 18th out of the 22
authorities. However, due to choices made by the Council, the education budget as a whole
ranks even lower at 20th in 2013. Other authorities do better, including the large urban
authority of Cardiff.
Schools’ funding within Swansea is significantly lower than that of all of our ERW partners,
thus putting the city’s schools at considerable disadvantage as regionalisation gathers pace.
We have appreciated the positive response in Council Budgets over recent years to some of
the recommendations previously made by the Forum, particularly:
Page 81
• The recognition of the essential contribution of the Education service to the
achievement of wider Council priorities
• The recognition of the severe financial pressures facing school delegated budgets
and other statutory Education services
Through working closely with the Authority, schools have been better able to manage the
significant pressures and increasing expectations placed upon them to mitigate the effects
of large scale redundancies on the Council.
We would suggest that the Council should take a very positive view of the outcomes
achieved by schools in Swansea against the relevant benchmarks, together with
significantly positive Estyn outcomes and school bandings. These positive outcomes have
been achieved in spite of very challenging financial settlements, nothwithstanding the Welsh
Government uplift guarantees of the past year. These outcomes should be the foundation
for future excellence and should not be jeopardised by a return to constrictions of school
delegated budgets. We will return to this point later in this letter.
The Delegated Schools Budget
The Forum views very positively the Council’s stated aims of relative protection of the
delegated schools budget and of joining up thinking in terms of the integration of services in
order to improve chances in communities and the families within them and to lessen the
impact of poverty upon achievement. It is entirely right that priority is given to early
intervention and prevention strategies so that services, including the education service,
struggle less with the repercussions of non-intervention later on.
The Forum also welcomes the clear priority given to improving educational outcomes for
children and young people and the recognition of the key role that education plays in
supporting many other wider Council priorities.
The Forum also notes the Council’s commitment to consistently prioritise the
delegated schools budget and deliver the national education funding guarantee, as
required of it by the Welsh Government.
In relation to 2014/15 the Forum understands that the Council is planning to meet the
Ministerial guarantee by a combination of the Welsh Government’s increase in the Pupil
Deprivation Grant and also a notional 0.45% cash increase, which it is planned will then be
top sliced to meet the revenue costs associated with capital borrowing for the QEd
investment programme. As the Cabinet Report recognises, this effective cash freeze does
not represent a protection of school delegated budgets which will face a significant real
terms cut as a result of the non funding of any pay and price inflationary pressures. The
Pupil Deprivation Grant has clear terms and conditions which prescribe how it may be used
and it will not be received by all schools.
The picture for later years is bleaker still with no assurance regarding the continuing delivery
of the Ministerial guarantee, the loss of the one off increase in Pupil Deprivation Grant in
2015/16 (and possibly cessation of the grant altogether in 16/17), the uncertainty regarding,
and loss of other significant grant funding streams (e.g. SEG, 14-19 & Post 16), the
significant estimated increase in the ‘top slice’ to meet the costs of capital borrowing, and
the potentially devastating impact of the Government’s proposed Universal Pension should
any cost to the Council be passed on to schools.
Page 82
The Forum is therefore extremely concerned that, given the very poor position of Swansea
schools in funding terms, it is difficult to see how further savings can be achieved.
The
Forum urges the Adminstration to recognise the importance of making proper
revenue provision for schools every year as a matter of course, not merely because it
has been required to do so by the Minister, and to continue the good start that it has made
in honouring the uplifts since 2012-13.
You will be aware that the Forum recognises the Council’s support for capital investment in
some of its schools and would once again
urge the Council to maintain its commitment
to supporting the need to generate additional capital receipts to reach its
commitment of a local contribution of 50% to minimise the inroads into school
delegated budgets in terms of ‘top slicing’ to fund additional prudential borrowing.
The Forum would seek clarification of the proposed ‘top slicing’ of delegated school budgets
in later years as a ‘contribution to capital investment’. It assumes that this is simply a broad
planning assumption at this stage since it would clearly be inappropriate to ‘top slice’ the
delegated budget in excess of the actual prudential borrowing costs incurred by the Council
to support the continued delivery of the QEd capital investment priorities. The proposed ‘top
slice’ by 2016/17 of more than £3.2m appears excessive when the total local contribution
required was understood to be around £30m by 2019, even it it was all funded by borrowing.
It would clearly be inappropriate to ‘top slice’ school budgets to meet borrowing costs in
relation to any wider Council capital programme funding shortfall. Consequently, we would
seek confirmation that any actual future ‘top slicing’ of the delegated budget would
accurately reflect the borrowing costs incurred to support the schools programme after all
other funding streams have been accounted for (particularly capital receipts and S106
developers contribution).
The Forum notes the reference in the Cabinet report to Single Status and Pay and Grading.
The Forum expects previous assurances to be honoured that, as school staff are
Council employees, the costs of Single Status and Pay and Grading will be met by the
Council from the funding set aside for this purpose, as for any other Council
employees.
Non Delegated Education Budgets
Last year, the Forum welcomed very warmly the idea that there should be a fundamental
review of base budgets during 2013/14 in order to ensure that we have the correct starting
points. The Forum felt that lessons could be learned from the One Education Budget
Strategy, both in terms of the transparency of the process and also the rigour of the the
structured challenge and review undertaken over recent years, which has then been
reflected in the Council’s Medium Term Financial Plan and delivered. This continues to
require difficult spending choices, challenging savings targets and robust management
action, moving towards a largely statutory and regulatory ‘core’ minimum provision within
the department.
As such, the Forum recognises the attempt to develop a more engaging wider corporate
budget process, although it feels that the Cabinet Report fails to provide a fully transparent
and accurate picture of the potential implications of the proposals. Consequently, it is
unlikely that the responses to the next stage of public consultation will be adequately
informed.
The Forum remains gravely concerned where the proposals would result in drastic
cuts to a wide range of services currently provided from the non-delegated Education
budget. These are not simply ‘management and administration’ but provide core support
Page 83
for statutory and regulatory duties of the Council. The Forum urges the Council to bear the
pressures on the non-delegated budget in mind when setting the quantum of the education
budget as a whole.
Whilst it is recognised that the delegated schools budget has clearly been prioritised, the
proposals appear to indicate cuts of almost 10% in non delegated Education budgets for
2014/15. The long term cuts proposed appear to be at least 16%. These figures are
against net 2013/14 budgets, however, other Council services have far more scope to
generate additional income from fees and charges. As such comparative percentages
against gross budgets would surely add to any disparity.
The Forum appreciates that no services can be protected from cuts but it does feel strongly
that the full implications of the very significant cuts proposed, which will impact severely on
front line provision for pupils through the inevitable indirect strain on delegated school
budgets, need to be recognised and fully transparent. Areas of particular concern include
the following:
Mainstream Home to School Transport
• The Forum appreciates the need to review all remaining areas of discretionary provision.
Such a review of existing Council policy would of course require a full statutory
consultation process. The current public consultation cannot pre-empt such a process of
course, and the current Cabinet Report does not provide sufficient clarity regarding the
changes that might be considered. Remaining areas of discretionary policy cover
‘eligibility’ in relation to Aided School transport, as well as financial assistance for Post
16 Transport and the current policy regarding the provision of passenger assistants on
all mainstream bus services.
• Changes in relation to Aided transport could significantly destabilise future school
intakes (not only in the Aided sector), particularly when the Council is so well placed to
more than meet national targets for reducing surplus places.
ICT – School’s Contribution
• This appears to propose that from 2015/16 schools will bear the cost of broadband rental
and network licences for schools, currently met from the non delegated education
budget as a core statutory duty of the Authority. This would be a clear cut to the
delegated schools budget and risks encouraging an incoherent future network/strategy.
Provide Ethnic Minority Achievement Service at level of specific grant
• Whilst it is understood that the Council needs to review all areas of current ‘subsidy’ to
such areas of support, this will again add to the pressures facing schools. The Forum
would wish to see further detailed discussion prior to implementation in order to ensure
that the loss of front line support for pupils is as far as possible minimised.
Reduce the Council’s contribution to the Welsh Language Service
• The need to review is again recognised but the Forum would again wish to see further
detailed discussion in view of the inter-relationship with the still developing and ‘fluid’
regional consortia model.
Provide School Improvement at the level of grant
• The Forum understands the reasoning that, unless provision is in future met from within
the regional consortia model, then it must be lost, however, the ringfenced sum for
Swansea represents a 42% increase from current costed regional model and this
additional cost will negate any saving.
Page 84
Reduce Costs for School Breakfasts
• The Forum recognises the need to work with officers to ensure the fullest possible use of
the available funding in order to to seek to deliver this efficiency savings target.
However, there will be an impact on the quality of the service in some schools.
Increase meal charges
• The Forum recognises that prices have been held constant for a number of years in spite
of increasing food costs, and that it is now necessary for a price increase to be
considered. This appears to be a reasonably balanced proposal, in line with indications
from other authorities.
Central overheads and management and administrative savings
• Whilst such areas clearly need challenge and further rationalisation, the scale of cuts
proposed, on top of progressive cuts over the last 3 years, represent far more than
efficiency savings or cuts to ‘overheads’ and ‘management and administration’. Schools
recognise the need to work increasingly collaboratively, but the loss of so many areas of
professional support will seriously exacerbate the already unmanageable pressures on
headteachers.
From the Cabinet Report, it would appear that there are some remaining discretionary areas
of current provision which are being ‘protected’ on the basis of their absence from the cuts
lists. Given the clearly endorsed principle of ‘increased control of discretionary spend’, there
needs to be greater clarity and transparency to ensure the consistent level of review of all
areas of discretionary spending across the Council. The Forum would be concerned if
areas of clear discretionary spending, however laudable, were to be protected whilst core
areas of statutory provision were being cut.
In Summary
The Forum notes the Council’s commitment to consistently prioritise the delegated schools
budget and deliver the national education funding guarantee, as required of it by the Welsh
Government. However, the Forum urges the Adminstration to recognise the importance of
making proper revenue provision for schools every year as a matter of course.
The Forum would once again urge the Council to maintain its commitment to supporting the
need to generate additional capital receipts to reach its commitment of a local contribution
of 50% to minimise the inroads into school delegated budgets in terms of ‘top slicing’ to fund
additional prudential borrowing.
The Forum expects previous assurances to be honoured that, as school staff are Council
employees, the costs of Single Status and Pay and Grading will be met by the Council from
the funding set aside for this purpose, as for any other Council employees.
The Forum remains gravely concerned where the proposals would result in drastic cuts to a
wide range of services currently provided from the non-delegated budget. In this way
additional costs would effectively be passed onto schools in the future whilst schools will
see further reductions in the quality and availability of professional support from
departmental and central services. Proposals in relation to other Council services, such as
Social Services, could further add to impact on front line Education services.
Whilst the continuing support for investment in school facilities through the QEd programme
is welcome, the vital importance of the Corporate structural Repair and Maintenance
programme cannot be exaggerated with the scale of Helath and Safety/compliance issues
affecting school premises.
Page 85
There is a continuing willingness to support and contribute constructively to the further
detailed discussion regarding the implications and implementation of budget proposals
through the appropriate Task and Finish Groups.
We trust that you will seriously consider these points as you decide future Council budget
allocations. We invite you to attend the next School Budget Forum meeting on 3rd February
to respond to the issues raised in this letter.
Yours sincerely,
Hugh Davies
Chair, School Budget Forum
Page 86
Revenue Budget 2014/2015 Appendix ‘I’
Corporate Services Directorate
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Director of Corporate Services
Corporate Services Directorate
165,300
156,100
165,300
156,100
Head of Communication and Consultancy
Communications
321,700
332,000
Corporate Marketing
334,200
319,900
Corporate Mgt Team Support
442,300
411,850
Design and Print
299,200
278,100
Overview and Scrutiny
286,800
236,100
Web Development
66,700
102,950
Corporate Telephones
372,600
290,400
2,123,500
1,971,300
Head of Delivery and Information
ICS
7,157,600
7,116,300
Research and Information
393,300
369,900
ISIS Development
322,800
325,800
Strategic Projects
1,126,500
1,014,100
Performance and Strategic Planning
1,230,700
1,136,600
Joint Resilience Unit
85,000
87,700
LRF Secretariat
0
0
10,315,900
10,050,400
Head of Financial Services
Audit
529,800
487,300
Contact Swansea
486,600
468,600
Finance DMT
-1,691,800
-1,699,700
Treasury and Technical
875,800
834,200
Financial Services
1,522,400
1,381,600
Benefits
20,754,700
22,770,600
Revenues
1,481,800
1,432,200
23,959,300
25,674,800
Page 87
Revenue Budget 2014/2015
Corporate Services Directorate
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Human Resources and OD
Human Resources
712,400
680,600
Pay and Grading Team
311,900
363,000
Payroll
734,300
626,600
Pensions
-33,600
-45,000
Health and Safety
1,073,100
993,000
Training
265,100
294,100
3,063,200
2,912,300
Head of Legal Democratic Services and Procurement
Democratic Services and Complaints
2,650,800
2,570,600
Procurement
-5,800
441,500
Legal Services
2,453,700
2,176,500
Coroners
428,600
430,500
5,527,300
5,619,100
Total Corporate Services Directorate
45,154,500
46,384,000
Page 88
Revenue Budget 2014/2015
People Directorate - Poverty and Prevention
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Poverty and Prevention
Community First
259,700
219,900
Families First
598,300
514,400
Poverty and Prevention
1,358,000
1,541,600
Youth
1,271,800
1,216,200
3,487,800
3,492,100
Total People Directorate - Poverty and Prevention
3,487,800 3,492,100
Page 89
Revenue Budget 2014/2015
People Directorate - Social Services
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Child and Family Services
Assessment and Care Mgt Child and Family
7,498,500
7,647,800
Accommodation Services-External
14,216,100
13,525,200
Accommodation Services-Internal
5,093,100
6,676,200
Residential Care-Internal Provision
498,600
512,200
Adoption Services
1,154,300
1,177,600
Aftercare-External
472,400
472,400
Aftercare-Internal
527,900
1,067,900
Family Support Services-External
1,308,400
1,706,400
Family Support Services-Internal
1,860,000
1,835,000
Other Children's Services-Internal
294,200
994,700
Preventing Youth Offending
1,074,200
759,800
Review and Quality Assurance
572,600
623,900
Mgt and Admin Child and Family
2,306,700
2,160,900
36,877,000
39,160,000
Head of Older People
Assessment and Care Management Older People
3,275,200
3,282,600
Day Services Older People
1,016,200
1,008,100
Domicillary Care Older People
11,672,300
12,749,500
Intermediate Care Older People
127,500
127,500
Occupational Therapy Older People
512,100
452,000
Older People & Disability Service Administration
759,600
493,500
Residential Long Term Older People
17,429,500
17,578,100
Residential Short Term Older People
165,200
122,200
Voluntary Agencies Contributions Older People
58,600
58,600
Assessment and Care Management Disability Services
790,400
803,100
Day Services Disability Services
521,000
436,500
Domicillary Care Disability Services
2,374,700
2,374,700
Equipment and Adaptations
569,600
625,000
Occupational Therapy Disability Services
232,600
232,600
Residential Long Term Disability Services
1,543,500
1,374,500
Voluntary Agencies Contributions Disability Serv.
17,300
13,700
Community Alarms Service
231,200
0
Community Meals External Provision
290,200
0
41,586,700
41,732,200
Page 90
Revenue Budget 2014/2015
People Directorate - Social Services
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Mental Health and Learning Disabilities
Central Management and Administration
862,400
840,100
Coastal
0
0
Community Mental Health Teams
1,018,400
1,009,800
Community Support Teams
1,108,800
1,125,600
Flexible Support Services Learning Disabilities
246,400
251,200
Learning Disability Day Services
3,660,400
3,493,900
Learning Disability Respite Services and Maesglas
1,404,600
1,161,300
Llanfair House
362,400
379,600
Mental Health Day Services
575,400
606,700
Protection of Vulnerable Adults
270,400
160,300
Residential Services-Ext Provision Learning Dis.
6,928,100
6,779,900
Residential Services-Ext Provision Mental Health
1,511,400
1,211,400
Special projects Learning Disabilities
116,800
66,800
Substance and Alcohol Abuse
142,100
92,100
Transport Depot
1,638,700
1,505,700
19,846,300
18,684,400
Directorate Services
Carers
632,500
583,500
Commissioning Support Unit
1,874,800
1,789,300
Supporting People Services
788,000
760,200
Central Services
1,492,100
1,537,100
Service Strategy and Regulation
138,200
279,900
Social Services Training Section
247,800
199,800
ER/VR Savings 2013-14
-200,000
0
4,973,400
5,149,800
Total People Directorate - Social Services
103,283,400 104,726,400
Page 91
Revenue Budget 2014/2015
People Directorate - Education
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Delegated Schools
School Cost Centres
133,490,000
138,304,100
133,490,000
138,304,100
Chief Education Officer
Ethnic Minority Language Service
293,800
329,200
Management and Admin
207,900
135,300
Miscellaneous Grants
22,600
23,800
Music Service
0
307,200
School Effectiveness Grant
653,400
653,400
School Improvement
1,013,000
1,061,700
School Intervention
480,100
87,000
Support for the Arts
156,400
86,600
Welsh Service
379,100
385,000
3,206,300
3,069,200
Head of Education Inclusion
Access to Learning Mgt and Admin
254,900
269,400
Behaviour and Learning Support
1,187,700
1,158,900
Community Education
388,900
406,300
Employment Training
668,900
760,700
EOTAS Pathways
1,018,000
1,099,200
Home Tuition Service
500,000
419,900
Management and Admin
146,700
159,600
One to One Support Primary
720,400
739,400
One to One Support Secondary
360,000
367,300
Psychology Service
683,400
708,900
Pupil Referral Units
1,865,300
1,833,500
Recoupment
680,000
580,000
School and Governor Unit
311,500
295,800
School Planning and Information From 2013/14
0
66,400
SEN Statementing and Support
3,067,300
3,155,700
Student Finance
257,600
195,600
Welfare Service
542,900
544,800
12,653,500
12,761,400
Page 92
Revenue Budget 2014/2015
People Directorate - Education
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Education Planning and Resources
Asset Management
115,400
118,100
Cleaning Service
862,500
1,287,200
Continuing Education
879,100
901,300
DfES Post 16 Grant
-6,071,600
-5,656,700
Empty Properties
165,000
15,000
Free Breakfast
1,157,900
1,027,500
Health and Safety
62,900
62,900
ICT Strategy
701,000
671,500
Management and Admin
1,008,100
869,400
Pupil Deprivation Grant
0
-5,229,000
School Cost Centres
11,760,600
11,444,400
School Funding and Information
111,000
113,200
School Meals Client
1,161,700
1,256,600
School Meals Service
-295,100
-28,900
School Planning and Information
65,000
0
11,683,500
6,852,500
Total People Directorate - Education
161,033,300
160,987,200
Page 93
Revenue Budget 2014/2015
Place Directorate
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Corporate Building and Property Services
Facilities Management
3,931,500
3,930,600
Strategic Estates Properties
-3,808,600
-3,987,200
Property Preventative Maintenance
4,408,600
4,246,700
Corporate Building Services Trading
-50,200
-125,300
4,481,300
4,064,800
Head of Highways and Transportation
Car Parking and Enforcement
-1,354,900
-1,435,100
Transportation
3,050,300
2,949,300
Traffic Management
1,402,900
1,270,800
Central Transport
-258,900
-362,300
Engineering
733,500
587,400
Highways
6,879,300
6,898,200
Neighbourhood Working
3,964,900
3,939,300
Swansea Marina
-50,600
-50,600
Directorate and Other Costs
606,300
510,600
14,972,800
14,307,600
Head of Waste Management
Household Waste Recycling Centres
900,000
895,500
Recycling
352,700
366,600
Residual Disposal/Tir John
4,356,300
4,182,700
Residual Waste Collection
3,436,600
3,405,800
Trade Refuse
-527,200
-521,800
Waste Management Strategy
226,500
228,700
Directorate and Other Costs
1,723,600
1,696,800
10,468,500
10,254,300
Director of Place
City Centre Action Plan
100,000
100,000
Place Directorate
-301,400
17,100
-201,400
117,100
Page 94
Revenue Budget 2014/2015
Place Directorate
ORIGINAL
ORIGINAL
BUDGET
BUDGET
2013/2014
2014/2015
£
£
Head of Culture, Sport, Leisure and Tourism
Archives
290,500
265,400
Arts
3,177,300
3,044,600
Community Buildings
253,200
256,200
Development and Outreach
495,900
343,900
Libraries
2,904,700
2,870,800
Parks
5,656,400
5,392,000
Sport and Recreation
2,103,000
1,935,900
Tourism, Marketing and Events
1,683,900
1,585,600
Directorate and Other Costs
591,900
476,500
17,156,800
16,170,900
Head of Economic Regeneration and Planning
Business Support
528,100
414,300
Planning Policy and Environment
203,400
206,000
Property Development
900,500
728,100
City Centre Management and Indoor Market
-80,400
-265,700
Major Projects, Design and Conservation
175,800
177,600
Planning Control
864,200
811,700
Planning Policy and Environment
1,035,600
1,004,800
Directorate and Other Costs
192,800
213,800
3,820,000
3,290,600
Head of Housing and Public Protection
Building Regulations
165,000
115,300
Burials and Cremations
-90,400
-291,000
Community Safety
575,900
515,100
Food Safety
553,800
553,600
Licensing
-124,900
-145,100
Pollution
783,300
792,100
Public Health
880,300
801,200
Registrars
61,100
42,900
Trading Standards
758,300
712,800
Housing Grants to the Independent Sector
85,500
85,500
Housing Renewals and Adaptations
314,700
160,300
Housing Strategy, Advice and Support
677,300
645,900
Other Housing Services
81,800
64,500
Directorate and Other Costs
616,300
452,600
5,338,000
4,505,700
Total Place Directorate
56,036,000
52,711,000
Page 95
Agenda Item 11.b
Report of the Section 151 Officer
Council – 18 February 2014
CAPITAL BUDGET & PROGRAMME 2014/15 – 2017/18
Purpose:
This report proposes a revised capital budget for
2013/14 and a capital budget for 2014/15 - 2017/18
Policy framework:
None
Reason for decision:
To agree a revised budget for 2013/14 and a budget
for 2014/15 – 2017/18
Consultation:
Cabinet Members & Executive Board
Recommendation:
1) The revised capital budget for 2013/14 and a
capital budget for 2014/15 – 2017/18 as detailed in
appendices A, B C, D, E and F is approved.
Report Author:
M.Hawes
Finance Officer:
M.Hawes
Legal Officer:
Patrick Arran
Access to Services Officer: Euros Owen
1.
Introduction
1.1
This report details:
• Revised capital expenditure and financing proposals in 2013/14
• Capital expenditure and financing proposals in 2014/15 – 2017/18
1.2
Capital spending and funding proposals in relation to the Housing Revenue
Account (HRA) are detailed in a separate report to be considered.
1.3
The budget proposals are detailed in appendices to this report as follows:
Appendix A Summary of General Fund Capital Expenditure and Financing
2013/14 – 2017/18
Appendix B Schools Programme Capital Expenditure
and Financing 2013/14 – 2017/18
Page 96
Appendix C Material changes to the original 2013/14 budget
Appendix D Material changes to the Capital Programme agreed in February 2013
Appendix E General Fund Capital Budget 2013/14 – 2017/18
Appendix F Education surplus land sites to be sold
1.4
The key point in this report is that the updated forecast shows a shortfall of
£28.977m. In order to address the shortfall the Council will need to consider the
following options:-
- Identify and progress significant additional Capital receipts over and
above those already identified including those listed in 3.6.
- Reduce the expenditure contained within the Capital Programme
primarily a reduction in proposed allocations as set out in 3.9
- Incur additional unsupported borrowing. This is a last resort given the
known pressures on future revenue budgets within the Council.
Whichever option(s) is pursued it is likely that there will have to be an increase in
both temporary and overall borrowing limits in the short term.
1.5
Having considered this report, Cabinet recommended that Council approves the
revised capital budget for 2013/14 and the capital budget for 2014/15 – 2017/18.
Cabinet also agreed a review of the programme and the asset disposal programme
in the early part of 2014/15.
2.
Capital Budget 2013/14
2.1
Spending in the current year will be £69.221m – an increase of £4.42m compared
to the original estimate of £64.801m.
This increase is mainly due to the addition of grant funded schemes after Council
approved the capital budget in February 2013.
Material changes to the 2013/14 budget are summarised in Appendix C.
3.
Capital Programme and Financing 2014/15 to 2017/18
3.1
The proposed programme and financing is set out below.
Paragraphs 3.2 to 3.9 detail the material changes to the General Fund Programme
and Financing.
Paragraphs 3.9 to 3.15 detail the Schools Programme and Financing.
GENERAL FUND PROGRAMME AND FINANCING
3.2
The General Fund programme is summarised in Appendix A and detailed in
appendix E. The attached proposals exclude the Housing Revenue Account capital
budget which is detailed elsewhere on the agenda.
Page 97
3.3
The Capital Budget report considered by Council on 14th February 2013 highlighted
a forecast shortfall in the four year forward programme of £31.276m for the 21st
Century Schools programme and £19.931m for the rest of the General Fund capital
programme. The report contained the following in respect of both the general fund
and Schools programme shortfalls:-
‘If required, it will be necessary to finance the
forecast shortfall in 2013/14 by temporary unsupported borrowing pending the
identification of a funding solution in relation to the four year programme’.
3.4
The updated General Fund programme is summarised in Appendix A. This
highlights expenditure of £ 141.992m; financing of £113.015m and a forecast
shortfall of
£28.977m. Appendix D provides a reconciliation between the General
Fund programme shortfall reported in February 2013 and the current proposals.
The material changes are as follows:
Addition of a further year to the programme
3.5
The addition of a further year (i.e. 2017/18) in itself causes a £2.851m increase in
the funding shortfall. This is because recurring annual commitments are no longer
offset by Welsh Government annual funding i.e.
£m
Welsh Government funding 2017/18
10.129
less 2017/18 spending requirements
Property and highways maintenance
-7.280
DFGs & Improvement Grants
-5.200
Annual Contingency Budget
-0.500
Additional shortfall 2017/18
2.851
The effect of this is that there is no provision for any additional general fund capital
expenditure in that year.
It should be noted that the core capital budget identified above is itself in excess of
the likely support available from Welsh Government (£10.129m). Given the annual
repayment of principal as detailed in 3.8 above expenditure at this level would not
increase overall levels of borrowing.
Additional capital receipts
3.6
The proposed financing of the General Fund programme as approved for 2013/14
assumed additional capital receipts of £8.39m would be included in the Disposal
Programme.
Forecast General Fund shortfall
3.7
The updated forecast shortfall of £28.977m. represents an increase of £9.046m
compared to the February 2013 position as detailed in appendix D. In order to
address the shortfall Cabinet will need to consider the following options:-
- Identify and progress significant additional Capital receipts over and
above those already identified including those listed in 3.6.
- Reduce the expenditure contained within the Capital Programme
primarily a reduction in proposed allocations as set out in 3.9
- Incur additional unsupported borrowing. This is a last resort given the
known pressures on future revenue budgets within the Council.
Page 98
Whichever option(s) is pursued it is likely that there will have to be an increase in
both temporary and overall overall borrowing limits in the short term.
3.8
It should be noted that that, whilst annually the Council repays some £12.5m in
respect of Capital Debt, the projected increase in supported borrowing over the
projected four year period means that the additional funding gap of £28.977m is
likely to remain unchanged.
3.9
It should also be noted that the projected 4 Year Capital Programme as detailed
from 2014/15 includes the following annual allocations which in total exceed the
WG capital provision by £2.851m:-
£’000
Highways capital maintenance
3,280
Buildings maintenance
4,000
Disabled Facilities Grants(private)
5,200
Contingency
500
Total
12,980
SCHOOLS PROGRAMME AND FINANCING
3.10 The Welsh Government announced its support in principle for an agreed
programme of school building improvements in early 2012. This programme –
termed the 21st Century Schools Programme - will entail the Welsh Government
providing a 50% contribution in relation to schemes costing £51m. The Council is
expected to provide the remaining 50% contribution.
3.11 Considerable work has been undertaken over the last year to progress the first
phase of the programme. The schemes included in the first phase of the
programme are detailed in Appendix B and are as follows:
£m
£m
Phase 1 schemes
Original
Revised
Burlais Primary new school
7.500
8.250
Gowerton Primary new school
5.000
6.575
YGG Lon Las rebuild and remodel
5.000
6.900
Glyncol en Primary improvements
0.750
0.750
Newton Primary improvements
0.650
0.650
Post 16 provision
2.100
2.100
Total Phase 1 schemes
21.000
25.225
Total Phase 2 schemes
30.310
26.085
Notwithstanding the difficulties faced by the Council in financing its 50%
contribution towards these schemes, the attached proposals provided that some of
the schemes could be committed in 2013/14 in order to access funding at the
earliest opportunity through the process set out by the Welsh Government.
Page 99
3.12 For completeness, the previously agreed Morriston Comprehensive School scheme
and the second phase of the 21st Century Schools Programme are also detailed in
Appendix B. This is necessary as the funding for the Morriston Scheme and the
second phase needs to be considered in the context of the wider schools
programme.
3.13 Details of the second phase schemes have not yet been finalised due to the
deteriorating financial and budget outlook.
3.14 The financing of the schools programme and current shortfall of £31.276m is set
out in Appendix B. As previously highlighted, the position remains extremely
difficult and challenging and may be summarised as follows:
a) The Welsh Government has provided a 70% grant contribution to the Morriston
Comprehensive Refurbishment Scheme. As previously reported, this means
that the Council must provide a £6.4m contribution – see (c) below.
b) The Council is required to fund a 50% contribution to the 21st Century Schools
Programme cost i.e.
£25.7m.
c) The implication of (a) and (b) is that the Council is required to fund a
contribution of £31.3m over the period to 2019. The assumption underpinning
the financing of the Council’s contribution to the programme has been that
sufficient capital receipts would be obtained through disposal of land surplus to
Schools requirements to meet the additional funding requirement.
d) The Capital Budget report considered by Council on 28th February 2011
highlighted potential parcels of land surplus to Educational requirements at a
number of listed sites. Whilst progress has been made in agreeing several
sales, only a small part of the then estimated £12m receipt has been received
to date. To date this amounts to £530k with another expected £460k this year.
Most receipts are not expected to be realized until 2015/16. A full list of the
sites is set out in Appendix F.
It is clearly important to optimise the capital receipts that can be realised from
disposals through appropriate marketing and timing of any sales. It may
therefore be appropriate to agree short term additional unsupported borrowing
in order to generate a greater capital receipt at a later date when the market
has improved. However, progress to date against projected targets is poor.
Given the scale of the potential funding deficit it is clear that a wider list of
potential disposals of land surplus to Educational requirements is required to
achieve the full funding for the 21st Century Programme.
e) At this time, as stated above, it is assumed that the above funding requirement
will be met by agreeing excess land sales. Failure to achieve this will require:
- a revision of the agreed programme and / or
- Subject to identifying a funding source to meet the resulting principal
and interest payments, the agreement of further unsupported borrowing.
Given the poor outlook for the Council’s finances, it is inevitable that,
under such circumstances, schools will have to fund the cost of
unsupported borrowing if the programme is to progress as planned.
Page 100
f) The Welsh Government has indicated that it may wish to meet part of its 50%
contribution by providing annual support for Council unsupported borrowing
rather than grants. However, there is no agreed scheme at this time and it
assumed that grant (rather than borrowing) support will be provided. If agreed,
such additional unsupported borrowing would be over and above any which the
Council may agree to fund its contribution.
3.15 Notwithstanding the uncertainties regarding the funding of the overall Schools
Programme, it is proposed that the phase 1 schemes detailed above and attached
be committed over the coming year. It should also be noted that these schemes are
high priority due to the significant risks of building failure.
If required, it will be necessary to finance the forecast schools programme shortfall
in 2013/14 by temporary unsupported borrowing pending the identification of a
funding solution in relation to the overall schools programme.
4.
Risks
4.1
There are significant risks which may require a future revision of the attached four
year capital budget. In particular:
-
additional capital costs arising from future waste disposal arrangements
-
urgent capital maintenance requirements
-
unforeseen costs e.g. failure of retaining walls
-
failing to achieve the General Fund capital receipts target and in relation to
the Schools Programme, school land sale targets.
-
Capital financing charges arising from additional unsupported borrowing
which can not be met from revenue budgets.
-
Additional costs arising from any other additions to the Capital programme.
4.2
There is a further significant risk that external grants will greatly diminish as cuts
are applied by grant providers – in particular the Welsh Government and European
Grants.
4.3
Whilst there is an annual Contingency Budget provided to deal with unexpected
spending requirements this would be insufficient if a number of the risks detailed
above were to arise.
5.
Legal implications
5.1
The Authority is under a duty to make arrangements for the proper administration of
its financial affairs. Failure to do so will be a breach of that duty.
6.
Prudential Code
6.1
Under the Local Government Act 2003 and subsequent regulations, a local
authority is required to comply with the CIPFA Prudential Code for Capital Finance
in Local Authorities when setting its budget and must determine and keep under
review how much it can afford to borrow.
Page 101
6.2
A further report on the agenda will detail what is required under the requirement of
the Code and set out in detail Prudential Borrowing Indicators for 2013/14 and
subsequent years.
7.
Equalities Implications
There are no equalities implications contained within this report but individual
projects will be subject to the EIA process where required.
Page 102
Appendix A
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Page 103
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Page 104
Appendix C
MATERIAL CHANGES TO THE 2013/14 CAPITAL BUDGET
Source
2013/14
Scheme
Of
Change
Funding
£'000
Director of Resources
LIDW Broadband Scheme
Grant
1,130
Purchase of Litho Printing Press
Revenue
50
ICT Infrast-Civic Centre LAN Upgrade
Revenue
127
Director of People
Special Teaching Facility-Trallwn, Gwyrosydd and Morriston
Revenue
150
Director of Place
Highways & Transportation
Regional Transport Programme Schemes
Grant
1,130
Road Safety Schemes
Grant
329
Safe Routes in Communities - Morriston
Grant
478
High Street and Strand Highway Improvements
Contribution
241
Gower Road Traffic Imps
Contribution
116
Carriageway Resurfacing
Revenue
1,000
River Tawe Barrage Outer Lock Gates
Revenue
50
Waste Management
Provision of Food Waste Hall
Revenue
200
Culture, Sport, Leisure & Tourism
LC2 Condensation Issues
Revenue
64
Mobile Street Sports Facility
Revenue
125
Dry Docking Helwick & Canning
Revenue
120
Morriston Library Refurbishment
Grant/Revenue
261
Child Play Project - Equipment
Grant
28
Morriston Ball Stop Fencing
Capital Receipts
15
Economic Regeneration & Planning
Boulevard - LC to Strand
Grant
1,077
BEP Grants
Grant
1,000
Swansea Vale Studies & Infrastructure Projects
Capital Receipts
267
Housing & Public Protection
Houses into Homes Loans
Grant
1,058
Hafod Renewal Area
Contribution
719
Corporate Building
Heol Y Gors Waste Transfer Station
Revenue
198
School Building Improvement Grant
Grant
445
Roofing Works Civic Centre
Revenue
70
Asbestos Removal
Revenue
60
Guildhall Ph 5 (Brangwyn Hall)
Revenue
40
Fire Precaution Work - Bishop Gore
Contribution
81
Fforestfach ATC Kitchen Refurbishment
Revenue
27
Match Funding for Schools
Contribution
305
Page 105
Delayed Spending From 2012/13 - All Portfolios
Various
8,683
Delayed Spending Into 2014/15 - All Portfolios
Various
-13,770
Other Minor Changes
Various
124
TOTAL MATERIAL CHANGES
5,998
Page 106
Appendix D
MATERIAL CHANGES TO CAPITAL PROGRAMME AGREED IN FEBRUARY
2013
£m
£m
Forecast shortfall - per Council 2013 February 2013
7.926
Add in Unsupported borrowing as per Budget book
22.355
Less Highways USB included in above
-10.350
Revised forecast shortfall for 2013/14 Budget
19.931
Less Increase in WG allocation 4 years
-0.404
Addition of a further year (2017/18) to programme
2.851
22.378
Unavoidable maintenance additional requirements
No schemes approved
Other priorities
No schemes approved
Assumed capital receipts not approved/actioned
8.390
Less minor extra capital receipts
-1.791
Amended forecast shortfall
28.977
Page 107
Appendix E
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Page 111
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Page 112
Appendix F
Education surplus buildings or land
First tranche of surplus sites
Sold
Llanmorlais Primary
KS3 pupil referral unit,Pontardulais
Sale expected
2013/14
Morriston comp site
Arfryn Primary site
To be sold
Knelston Primary site
Gors Primary site
Olchfa Comp site
Pontardulais Primary site
Penyrheol Comp site
Cwm Primary site
Parklands Primary site
Tre Uchaf Primary site
YGG Gellionen site
Clwyd Primary site
Clase Primary site
Second Tranche of surplus sites
To be determined
Page 113
Agenda Item 11.c
Report of the Section 151 Officer
Council - 18 February 2014
MEDIUM TERM FINANCIAL PLAN 2015/16-2017/18
Purpose:
This report proposes a Medium Term Financial
Plan 2015/16-2017/18
Policy framework:
Sustainable Swansea – Fit for the Future
Reason for decision:
To agree a financial framework for future service
planning
Consultation:
Cabinet Members & Executive Board
Recommendation:
The Medium Term Financial Plan 2015/16-2017/18 be
approved.
Report Author:
Mike Hawes
Finance Officer:
Mike Hawes
Legal Officer:
Patrick Arran
Access to Services Officer: Euros Owen
1. Introduction
1.1 This report details:
• An overview of financial planning
• A financial and service overview
• A spending and resources forecast
• The strategy to resolve future Medium Term Financial Plan (MTFP) shortfalls, including
delivery of the
Sustainable Swansea strategy
• Risks and uncertainties
2. Overview of Financial Planning
2.1
Service and financial planning is undertaken against a backcloth of reducing overall
resources.
The Medium Term Financial Plan (MTFP) is an overarching plan which:
Page 114
• Covers several future years.
• Forecasts future known additional spending requirements, likely resources and potential
funding shortfalls
• Links to the Councils adopted strategy ‘
Sustainable Swansea – Fit for the Future’ as a
means of addressing future budget shortfalls.
Service planning is undertaken in the light of the assessments and forecasts
contained in the MTFP.
3.
Financial and Service Overview
Background
3.1 The Medium Term Financial Plan (MTFP) report considered by Council on 14th
February 2013 included a service and financial overview. This has been updated as
follows:
Economic outlook and prospects for Public Finances
3.2
The announcement of both the provisional and final Revenue and Capital Settlements
for 2014/15 and beyond has led to a significant acceleration with regard to cuts in core
revenue funding. Whilst the previous MTFP assumed a small increase in levels of
support for 2014/15 followed by significant reductions from 2015/16 onwards, the
announcements made clear that there would be an acceleration in terms of funding
reductions leading specifically to a net movement in assumed available resources for
2014/15 of -£16.020million compared to the MTFP as published.
3.3
The UK Government’s decision to cut public spending over several years is being
implemented as planned.
3.4
Whilst Welsh local government has seen relative protection from cuts in Government
grant since 2010, it is now clear that the Council faces an overall funding gap of around
£45m in the next 3 years (2014/15 to 2016/17) due to both reductions in Welsh
Government Finance and Service pressures – and it may be more.
3.5
In addition to known core funding reductions, the Council also has a wide range of
service and demographic pressures which will inevitably impact on demand for services.
3.6
Given the current Economic Climate both in the UK and the Eurozone it is likely that
reductions in core funding will be exacerbated by further reductions in specific grant
funding both for Revenue and Capital purposes. Some commentators, such as the
Institute for Fiscal Studies, are predicting cuts in public spending up until 2020, reducing
the overall level of spending in the UK to immediate post Second World War levels.
3.7
In terms of core revenue funding the Revenue and Capital settlement issued by the
Welsh Government on 11th December 2013 contained the following indicative figures:-
Page 115
Revenue Aggregate External Finance
%
reduction
Cash
% reduction
on
reduction
on previous
2013/14
Year
£’000
£’000*
year*
level*
2014/15
318,224
12,255
3.65
2015/16
314,385
3,839
1.2
4.81
* after allowing for the effects of specific grant transfers and Council Tax support
No indicative figures have been given beyond 2015/16. It is clear that in terms of
planning assumptions across Local Authorities in Wales a number of scenarios have
been mapped for 2016/17 and beyond. For the purposes of the planning assumptions
within this Council further cash reductions of 1.5% have been assumed for both 2016/17
and 2017/18.
Support for Capital Programmes
The settlement indicated support for future General Fund Capital programmes for both
204/15 and 2015/16 at a level of £10.129m, largely unchanged from 2013/14. This
support is through a mix of General Capital Grant and support for borrowing.
Planning assumptions for both 2016/17 and 2017/18 are based on unchanged levels of
support.
In addition, the Welsh Government has committed some £25.655m (50% of overall cost)
towards the 21st Century Schools programme over the lifetime of this MTFP.
3.8
In providing indicative settlement levels for 2015/16 in terms of Revenue funding, as
detailed in the table within paragraph 3.7 above, the Welsh Government made clear that
the assumptions made around indicative reductions were heavily dependant on the
outcome of at least two National Budget announcements. Given recent publicity around
an additional potential cut of around £25bn in National support for the Public Sector as a
whole during the lifetime of this MTFP, it is clear that there is significant and ongoing
potential for levels of support to fall short of the current planning assumptions.
3.9
In terms of resource requirements the MTFP projects further cash reductions in terms of
Aggregate External Finance of -1.5% for both 2016/17 and 2017/18.
Service overviews
3.10
The key service issues which will impact on 2014/15 and future years are set out below.
Education
3.11
The protection afforded to schools in 2011/12, 2012/13 and 2013/14 ameliorated the
impact of the Government‘s spending reductions on delegated school budgets. The
Minister has stated that protection will once again apply in 2014/15. However there
is no commitment by the Welsh Government to maintain the protection after
2014/15.
Page 116
Given the poor outlook for public finances, it is extremely difficult to envisage how
schools could be protected beyond 2014/15. As such, the outlook going forward
remains challenging and difficult for delegated school budgets.
The non-delegated Education budget has not benefited from the protection afforded to
delegated school budgets in recent years and the outlook for this budget remains
challenging and difficult.
3.12
The Council will continue to implement its school improvement and re-organisation
programme in 2014/15. The Council has been successful in applying for Welsh
Government funding support to further progress the programme. In this context, the
Council continues to have a challenging funding target as detailed in the Capital
Budget report elsewhere on the agenda.
In addition, the revenue implications of the planned programme for the Council’s
budget – including delegated school budgets – will need to be considered in future
financial plans. As stated in the capital budget report elsewhere on the agenda, given
the poor outlook for the Council’s finances, it is very likely that, i n t h e a b s e n c e
o f s i g n i f i c a n t C a p i t a l r e c e i p t s b e i n g g e n e r a t e d t h r o u g h t h e s a l e o f
S c h o o l s ’ l a n d a n d p r o p e r t y , schools will need to significantly contribute to
any borrowing requirement if the programme is to progress as planned.
3.13
The 2014/15 Revenue Budget report to Council elsewhere on this agenda highlights
the mechanism by which the Council will evidence Ministerial Funding Guarantees to
Schools in respect of delegated budgets.
3.14
In addition to the funding issues highlighted above, current policies surrounding the
Regionalisation of Education Services will undoubtedly impact on the Council’s ability
to fund and deliver traditional non-delegated Education Services. The requirement for
the Council to top slice elements of the core education budget relating to Schools
Improvement Services from 1st April 2014 will, if continued across other core areas of
education support, significantly reduce the quantum of the non delegated budget.
Adult Services
3.15
An increasingly older population is both a cause for celebration and also
creates greater demand for services and also changes the nature of that demand.
Options for future service have been identified as part of the Budget Consultation and
will need to be progressed in coming years.
Going forward, the ability of Councils to provide comprehensive Adult Services will be
heavily impacted by the funding decisions of the UK Government. As such, the
promotion of independence, self help and the development of a strong community
and third sector is likely to be inevitable.
Child & Family Services
3.16
Significant improvements have been made in this service. However, the implications
for the Council’s overall budget remain extremely challenging. As previously, the aim
going forward is to achieve a further improvement in standards whilst simultaneously
achieving cost reductions where possible. The latter can only be achieved by a real
terms reduction in numbers of Looked After Children, changes in practice and less
reliance on high cost interventions.
Page 117
3.17
There has, however, been consistent and sustained progress in terms of addressing
specific service overspends in the area of Looked After Children which has led to an
overall reduction in expenditure in this area for 2013/14 with an ongoing requirement
for savings in 2014/15.
3.18 As is the case for Education Services, there have been considerable developments in
terms of the development of regional collaborative working for both Adult Social
Services and Child and Family Services through the Western Bay Partnership,
encompassing the Council, Neath Port Talbot CBC, Bridgend CBC and Abertawe Bro
Morgannwg Health Authority.
3.19
It is increasingly likely that this collaborative working will involve specific Regional
funding requests and allocations from Welsh Government and, inevitably, the
development of pooled budget arrangements for some areas of work.
Environment & Waste Management
The Council is progressing its waste management strategy to achieve the Welsh
Government’s landfill diversion and recycling targets and also to achieve the best
financial outcomes for the Council. The 2014/15 budget and future MTFP makes
provision for:
a) the Council’s future waste disposal requirements and
b) expenditures needed to comply with the requirement to achieve specified recycling
targets.
In particular, the development of Regional Waste treatment facilities and/or the further
development of Local Facilities will play an important part in terms of future service
delivery.
Going forward, the Council’s ability to provide core Environment Services will be
severely impacted by the funding decisions of the UK Government and Welsh
Government, particularly in respect of the level of Sustainable Waste Management
Grant.
Workforce
3.20 The workforce is both the Council’s major asset and its major cost. Significant
progress has been made on Single Status and a compliant Pay & Grading scheme is
planned to be implemented on 1st April 2014. Revised terms and conditions will be
implemented at the same time.
3.21 The financial implications of resolving all Single Status issues have been reported to
Cabinet on several occasions. Whilst there is no additional funding requirement in
2014/15, there is an increased financial requirement in future years which will need to
be provided in the MTFP.
3.22 O n 19th December 2012 C a b i n e t agreed to implement a minimum Living
Wage of £7.45p per hour. This was introduced across the Council with effect from 1st
April 2013. Future pay increases will be subject to an annual consideration as is
currently the case. In particular there is no commitment to increase the Living Wage in
line with the increases calculated by the Rowntree Foundation from time to time.
Page 118
3.23 The Council has an ongoing aim to achieve headcount reductions wherever possible.
This has and continues to be achieved by strict vacancy management and also by the
implementation of an early/voluntary retirement scheme since 2010. However, it is
unlikely that voluntary reductions will be sufficient to achieve future spending
reductions going forward. Future year on year headcount reductions – probably by
compulsory means – will inevitably result in service reductions, closures and service
cessations.
Regeneration & the City Centre
3.24 The Council’s ability to regenerate the City Centre is constrained by the current
economic downturn and the availability of capital and revenue funding to match grants
and external funding. However, future spending plans need to provide a minimum
level of funding if the much needed redevelopment of the City Centre is to be
achieved.
Whilst negotiations in Brussels continue, the next round (post 2014) of EU structural
funds for West Wales and the Valleys are likely to be of a similar value to the current
round – a value in excess of £1bn. If the Authority is to maximise the potential of this
funding opportunity to further the economic and social well-being of its communities,
then match funding and funding in kind will be required from this Authority. This would
be essential in order to leverage EU funds and deliver projects in line with the
Authority’s priorities. In addition, the inevitable hiatus between the closure of the
current programme and the commencement of the next EU programme presents a
risk in terms of grant funded staff retention. The loss of key skills will deteriorate the
capability of the Authority to react quickly to funding opportunities to develop projects
and initiatives. The emerging City Region is also placing greater emphasis on the
importance of EU funds post 2014 and the Authority will be expected to play a full part
in their delivery given its City status. Consideration therefore needs to be given to the
establishment of an EU match funding provision within the future financial plans.
Going forward, the Council’s ability to provide discretionary services such as Culture &
Tourism will be severely impacted by the funding decisions of the UK Government and
Welsh Government. The Council will increasingly have to use its limited resources to
facilitate actions rather than provide direct services.
Welfare Reform
3.25 The UK Government’s Welfare Reform programme will impact on Council services in
2014/15 and future years. There are likely to be direct implications for the Council’s
Benefits and Housing services. There are likely to be further significant indirect
impacts on a number of other services including Social Services and Education.
Corporate Services
3.26 In addition to the workforce challenges highlighted above, the key priorities for
corporate services include:
•
Sustainable Swansea: overseeing the savings programme and supporting service
and community change
•
Innovation Programme: the new Swansea culture, new values, new thinking
•
Performance improvement: a simpler, easier, better process with stronger links
between outcomes and resources and more accessible information on progress for
residents
Page 119
•
Customer Contact: a radical change in the use of digital channels; using customer
insight to improve services
•
Commercial strategy: a whole Council approach to market development, supplier
management, category management, leading to smarter and cheaper purchasing
•
ICT: setting out the Council’s new requirements and how these will be delivered in
the future
4.
Spending and Resources Forecast
Overview
4.1
The Capital Budget report forecasts capital spending and resources in the period
covered by the MTFP.
4.2
In the context of financial planning over the period of the MTFP the overriding issue is
likely to be the need to make significant ongoing savings in Service Expenditure in
order to meet both projected reductions in core and specific funding from the Welsh
Government together with known and anticipated spending pressures.
4.3
The following table represents as a minimum the expected funding requirements for
the period of the MTFP:
Projected spending pressures 2015/16 – 2017/18
2015/16
2016/17
2017/18
Note
£’000
£’000
£’000
Future cost of pay awards
1
3,400
6,800
10,200
Pay and grading scheme
2
3,000
5,700
8,400
Cumulative contract inflation
3
2,000
3,000
4,000
Capital charges
4
2,750
4,250
4,250
Schools pay award
5
2,400
4,800
7,200
Contribution to capital charges
6
-2,000
-2,000
-2,000
Use of General Reserves
7
2,200
1,200
Total known pressures
13,750
23,750
32,050
AEF movement (327,772)
8
3,545
6,745
6,745
Cumulative budget shortfall
17,295
30,495
38,795
Page 120
Note:
1) Assumed pay increases at 2% p.a. for each year. Value of pay award remains relatively
static based on falling staff numbers and costs relating to savings programme largely
offset by increases in payroll costs due to single status implementation and cumulative
effect of pay awards.
2) Predicted annual cumulative effect of current scheme due to be implemented on 1st April
2014 – no account taken of potential additional costs arising out of appeals process
3) Assumed minimum cumulative effect of known contract inflation
4) Presumed overall increase in borrowing due to delays in capital receipts on both general
fund and schools programmes.
5) Presumed minimum addition to schools funding to cover base payroll cost increases.
Offset by 6) below.
6) Assumed contribution to capital charges for schools improvement programme. Dependent
entirely on level of capital receipts. If capital receipts achieved then both this contribution
line and capital receipts costs go down – i.e. nil overall effect.
7) Planned use of a further £1.2m for 2015/16 dependent on 2013/14 and 2014/15 outturn
position.
8) Based on indicative figure for 2015/16 as supplied by WG plus a further 1.5% reduction in
2016/17 and a static position for 2017/18.
4.4 The forecast makes no allowance for potential funding changes to employers National
Insurance contracted out pension arrangements which are inexorably linked with the
Government’s single state pension proposals
4.5 As stated, this forecast contains no provision for increases in net service costs, in
particular:-
a) Projected increases in demand for older peoples services based on demographic
pressures in relation to an increasingly elderly population.
b) Any increases in costs relating to Children’s services, in particular any increase in
numbers relating to looked after children. The assumptions within the current MTFP
in respect of downward movements in both the number and costs of looked after
children are projected to continue.
c) Any increase in costs arising from decisions on Government taxation – most
significantly increases arising from upward increases in landfill tax costs
d) Corporate costs in excess of budget provision in respect of single status
implementation or other issues relating to employee costs.
e) Any one off costs arising from complex service delivery across the Council.
f) Any general inflation provision relating to non contractual issues.
g) Any increased costs or reductions in income arising from ongoing changes to
welfare reform, in particular the potential introduction of Universal Credit during the
lifetime of the MTFP.
h) Any budget changes arising from further regionalisation of Education and Social
Services particularly where projected budget transfers may be in excess of current
CCS service budgets.
i) Any increases in Capital financing charges which is dependent on the Council
achieving a level of capital receipts as detailed within the Capital budget submitted
for approval elsewhere on this agenda.
j) Future funding decisions in respect of protection for Social Services or Delegated
Schools’ budgets which may be specified by the Welsh Government in future budget
settlements
k) Any potential downward movement in service specific grants.
Page 121
4.6
On a positive note, projected spending increases anticipated in the current MTFP in
relation to employers pension contributions have not materialised, with the outcome of
the 2013 Pension Fund triennial valuation indicating no additional costs for the first
two years of the MTFP.
4.7
In terms of the forecast, the cumulative budget shortfall contains key assumptions
around future levels of core Welsh Government Funding which will be subject to
change depending specifically on the outcome of Central Government policy.
4.8
In addition the recent publication of the Williams Commission report on the reform of
the Public Sector in Wales raises the possibility of Local Government reorganisation
involving the Council. However, both the potential to reorganise and the timing of that
reorganisation are such that the MTFP as presented continues to forecast a scenario
for the Council on an ‘as is’ basis.
5.
Strategy to resolve forecast shortfalls
Sustainable Swansea- Savings proposals
5.1
In determining its budget proposals, the Authority has embarked on a specific strategy –
‘
Sustainable Swansea – Fit for the Future’ - as a means of setting Council priorities,
transforming services and addressing current and future deficits. The scale of the
financial, demographic and sustainability challenge requires the Council to adopt a
radically different approach to previous years. An approach that focuses on:
•
The core future purpose of the Council
•
The transformation of services and the model of delivery
•
Greater collaboration with other councils and local organisations, community groups
and residents
•
And, above all, sustainable solutions with prevention at the heart of this
This ambition is set out in
Sustainable Swansea – fit for the future.
5.2
Details of that strategy, including the budget principles that the Authority has adopted
together with a description of the key elements that underpin the service savings
proposals, was presented and approved at Cabinet on 15th October and subsequently at
a meeting of Council on 22nd October 2013.
5.3
The strategy as adopted underpinned the decision taken at the Council’s Cabinet on 10th
December 2013 to recommend specific savings proposals totaling £12.2m in 2014/15 for
consultation and indeed the final savings proposals included in the separate report
relating to the 2014/15 Revenue Budget included on this agenda.
5.4
In addition to specific savings proposals detailed above, Cabinet has also agreed
proposed savings of £5.6m in 2014/15 within the Revenue Budget Report from the
further workstreams looking at the potential for management and administration savings,
procurement savings, asset management utilisation and income generation.
5.5
However, in terms of savings proposals, work on savings to date has also focused on
specific proposals relating to 2015/16, 2016/17 and beyond. These savings proposals
build on those recommended as part of the Revenue Budget Report and reflect ongoing
changes to methods and levels of service delivery.
Page 122
5.6
Details of the projected savings over the period of the MTFP are shown in Appendix ‘A’
to this report.
5.7
In addition, as part of its budget strategy the Council will continue to develop themed
strategies across the following areas:-
a) Workforce
b) Support Services
c) Assets
d) Third Party Spend
e) Income and Trading
f) Customer Services
g) Recommissioning
h) Community Action
i) Demand Management
j) Early Intervention
k) Decommissioning Services
5.8
Whilst some savings have been forecast to arise from these workstreams during
2014/15, the nature of some of the work means that savings proposals will continue to
be developed during the overall period of the MTFP. Where appropriate, assumptions
around those savings levels have been built into the funding proposals shown later in
this report. The projected savings arising from the workstreams for the purpose of the
MTFP are shown at appendix ‘B’. The Council will also have to consider some invest to
save proposals to support the change in service delivery and cost reduction
Sustainable Swansea – Next Steps
5.9
A possible cut in spend of 20-30% over the next few years cannot take place without a
fundamental review of the future purpose and shape of the Council to 2017 and beyond.
This is particularly important because:
• The Council has clear aspirations and policy commitments to improve outcomes for
residents that will need to be delivered alongside savings
• We will also need to consider the requirement for further investment in prevention in
social care to reduce the projected future demand for services
• This requires a debate about innovation, service transformation, and doing things
differently
• And we must collaborate with others to achieve this
5.10 Consequently, we need a debate with residents and partners, as well as inside the
Council, about how we will achieve a
Sustainable Swansea, fit for the future. This
debate will need to address questions such as:
•
What are the long term priorities for the area
•
What is our core purpose as a Council
•
What is the Council best placed to do and what might be done differently by others?
•
How will we achieve financial, service and community sustainability in the long term?
•
What is our future relationship with others? (partners, staff, trade unions, schools etc)
5.11 The debate about a Sustainable Swansea has already started through the Phase 1 and
Phase 2 engagement , but we will need to take this a step further following the current
Council Budget meeting in order to inform our plans for future years.
Page 123
Use of Reserves
5.12 The Council holds Earmarked Reserves for specific purposes, together with a level of
General Reserves which are available to support overall Council expenditure. However,
due to the nature, size and complexity of the Councils operations, and in particular the
potential for short term volatility in terms of elements of income and expenditure, it is
prudent to maintain a level of General Reserves sufficient to meet anticipated and known
financial risks.
5.13 In determining the strategy to meet projected budget shortfalls, it is intended to make
limited temporary use of general reserves during 2015/16. However, this is entirely
dependant on a favourable financial outcome for both the current financial year and in
2014/15.
5.14 During the period of the MTFP it will be necessary to review both the level and proposed
use of earmarked reserves and the potential level of General Reserves on a regular
basis.
Council Tax levels
5.15 Apart from service transformation and savings and use of reserves the Council
maintains an independent source of revenue, Local Council taxes, and within the MTFP
there has to be clear consideration of Council Tax levels potentially arising from the
overall need to meet the ongoing funding deficit.
5.16 Taking into account the above options, the following table represents the potential
funding strategy in respect of the forecast budget shortfall during the life of the MTFP:
Potential Funding 2015/16 to 2017/18
2015/16
2016/17
2017/18
Note
£’000
£’000
£’000
Specific savings proposals
9
-8,990
-17,143
-18,706
Current Workstream savings
10
-4,500
-6,500
-8,000
Further workstream savings
11
-500
-2,450
-5,200
Council Tax Charge
12
-2,105
-4,402
-6,889
Use of General Reserves
13
-1,200
0
0
Overall resourcing
-17,295
-30,495
-38,795
Page 124
Note:
9) Per specific savings schedules – Appendix ‘A’.
10) Per workstream savings – Appendix ‘B’
11) Per workstream savings – Appendix ‘B’
12) Assumes cumulative effect of an annual 3% increase
13) Limited one off use for 2015/16 based on current year and 2014/15 outturn.
6.
Status of the MTFP
6.1
The MTFP does not constitute a formal budget in respect of the period 2015/16 to
2017/18 and as such the indicative annual assumptions included both within the
projected spending pressures detailed in 4.3 above and the potential funding detailed in
5.16 above will be subject to a full review and decision making process as part of each
of the annual Revenue Budget and Council Tax setting decisions.
6.2
Instead, the MTFP is intended to outline in broad terms the specific service and funding
issues over the three year period which it covers.
6.3
It is essential as a planning and review tool in order to assess and evaluate the status of
met expenditure requirements, and, equally importantly as a method of assessing
progress in meeting those requirements through the complex and challenging changes
to levels and methods of service delivery that are implicit within the savings proposals.
6.4
The plan serves to highlight the trend for increasingly difficult times ahead in terms of
funding for the Council in general and Local Government in general.
6.5
Importantly, it is essential that the MTFP becomes a ‘living’ document that is subject to
regular review and revision in line with what will be a dynamic and fluctuating period for
the finances of the Council. As such, it is anticipated that, along with close monitoring of
the specific budget proposals and savings targets for 2014/15, further reports to Cabinet
regarding the MTFP are envisaged at key points should any significant variation from
the broad estimates contained herein be identified.
7.
Overall risks
7.1
As stated throughout this report the financial risks facing the Council include:-
a)
Assumptions surrounding the level of future Welsh Government core funding
proving to be incorrect.
b)
Significant reductions in specific grant funding
c)
Inability to deliver core changes to service levels and methods of delivery implicit
within the savings proposals
d)
Changes to methods and funding for service delivery arising from development of
Regional Working proposals.
e)
Significant and unforeseen increases in service pressures and projected costs.
8.
Legal Implications
8.1
The Authority is under a duty to make arrangements for the proper administration of its
financial affairs. Failure to do so will be a breach of that duty.
Page 125
9.
Equalities implications
9.1
Budget proposals are subject to the Council’s Equality Impact Assessment (EIA)
process. Current proposals for 2014/15 have been screened and where potential for
impact has been identified EIA reports have been opened.
9.2
An Equality Impact Assessment (EIA) Statement for the Budget has been produced as
an overarching assessment of the impact of the revenue budget including a summary of
the provisional outcomes of the process by Directorate.
9.3
EIA reports are also produced for specific proposals and will be updated or completed
over a period of time to take account of impact and the outcomes of service specific
engagement where required.
Page 126
Appendix A
2015-16
2016-17
2017-18
£'000
£'000
£'000
Corporate Services
Central overheads and management and
administrative savings
1,143
1,532
1,590
Reduce subsidy of providing services to Schools
50
50
50
Reduce grants to external bodies
50
85
85
Renegotiate strategic contracts with large suppliers
0
1,136
1,136
Savings from automating payments and reducing
invoice processing
0
120
240
Total
1,243
2,923
3,101
2015-16
2016-17
2017-18
£'000
£'000
£'000
People - Education
Mainstream home to school transport - efficiencies
0
50
500
Non staffing service efficiencies
40
50
50
Central overheads and management and
administrative savings
104
135
135
Increase meal charges
25
25
25
Savings in non-school Cleaning Services
30
30
30
Provide Ethnic Minority Achievement Service at
level of specific grant
294
294
294
Reduce demand/need for out of county education
provision
50
100
100
Schools contribution to Capital Investment
1,400
3,265
3,265
ICT support - School's contribution
466
566
566
Employment training reorganisation
0
121
121
Home to School Transport - change eligibility
criteria
138
283
918
Total
2,547
4,919
6,004
Page 127
Appendix A
2015-16
2016-17
2017-18
£'000
£'000
£'000
Place
Management and admin savings - reductions in
staff numbers
108
185
185
More cost effective use of Council vehicle fleet
80
100
100
Efficiencies through replacing old street lighting
with energy efficient LEDs
400
400
400
Transfer more leisure facilities to not for profit trust
165
265
265
Parks costs reduction
242
831
831
Reduce planning control and design costs
50
100
170
Increase fees (for agency work) and reduce costs
18
36
36
Efficiencies in building management and additional
income generation
200
400
400
Reduce subsidy to sports facilities
86
102
102
Residents parking - increase residents' parking
areas and introduce fees to cover costs
(DEFERRED ONE YEAR) . Introduction of parking
charges in car parks.
187
187
187
Grand theatre - reduce subsidy
45
95
95
Reduce landfill costs through increased recycling
165
295
295
Withdraw school crossing patrols at sites with
controlled crossings
22
22
22
Libraries - Reduce book fund, close Pennard
Library and changes to specialist services.
175
272
272
Relocate Tourist Information Centre and review
marketing activity
133
133
133
Transfer Swansea Mobility hire to not for profit
organisation
0
0
100
Total
2,076
3,423
3,593
2015-16
2016-17
2017-18
£'000
£'000
£'000
People - Poverty and Prevention
Reduce residential and outdoor centre provision to
focus resources
40
60
60
Reconfigure Childcare and Early Years Support
and childcare apprentice training
19
31
31
Total
59
91
91
Page 128
Appendix A
2015-16
2016-17
2017-18
£'000
£'000
£'000
People - Social Services
Regional efficiencies re Adoption services, Youth
Offending prevention, Alcohol and Substance
Misuse
79
179
179
Change skill mix of staff providing services for older
people, community mental health and learning
disabilities
80
155
155
Social Services transport efficiencies
150
300
300
Contract changes and more effective
commissioning and support for carers and
supporting people
275
552
552
Central overheads and management and
administrative savings
246
435
435
Talking Books - become self funding
80
100
130
Older Peoples Day Services - seek alternative
operating model
600
1,006
1,006
Develop independent living by reinvesting money
released from closure of three residential care
homes
500
1,000
1,000
Learning Disability Day Services - seek alternative
operating model
200
600
600
Increase supported living and reduce residential
care for mental health and learning disability
350
550
550
Residential Long Term care for disabled - move to
alternative model of provision
100
200
300
Mental Health Day Services - seek alternative
operating model
75
150
150
Llanfair House - move to alternative model of
provision
200
250
250
Review and remodel respite care for families with
children with disabilities
130
310
310
Total
3,065
5,787
5,917
Page 129
Medium term Financial Plan
Appendix 'B'
Additional Savings proposals
2015/16
2016/17
2017/18
£'000
£'000
£'000
Current workstream savings
Workforce
-1,500
-2,500
-3,000
Assets
-500
-500
-1,000
Third party spend
-1,000
-1,500
-1,500
Income and Charging
-1,500
-2,000
-2,500
-4,500
-6,500
-8,000
Future workstream
savings*
-500
-2,450
-5,200
-5,000
-8,950
-13,200
These workstreams will include:-
a) Recommissioning
b) Community Action
c) Demand Management
d) Early Intervention
e) Decommissioning
Page 130
Agenda Item 11.d
Report of the Section 151 Officer
Council – 18 February 2014
TREASURY MANAGEMENT STRATEGY, PRUDENTIAL INDICATORS,
INVESTMENT STRATEGY AND MINIMUM REVENUE PROVISION POLICY
STATEMENT 2014/15
Purpose:
To recommend the Treasury Management Strategy
Statement, Prudential Indicators, Investment Strategy and
Minimum Revenue Provision Policy Statement for
2014/15.
Policy Framework:
None
Reason for Decision:
To allow for the proper management of the Council’s
borrowing and investments, to comply with statute, and
the adopted CIPFA Prudential Code for Capital Finance in
Local Authorities and the Revised CIPFA Treasury
Management Code of Practice
Consultation:
Legal Finance and Access to Services.
Recommendations:
That the:
(1) Treasury Management Strategy and Prudential
Indicators (Sections 2-7) and
(2) Investment Strategy (Section 8) and
(3) Minimum Revenue Provision (MRP) Statement
(Section 9)
be approved
Report Author:
Jeffrey Dong
Finance Officer:
Mike Hawes
Legal Officer:
Tracey Meredith
Access to Services
Sherill Hopkins
Officer:
1. Introduction
1.1
This strategy statement has been prepared in accordance with the revised
CIPFA Treasury Management Code of Practice adopted by this Council in
2010. The Council’s Treasury Management Strategy will be received and
reviewed annually by Council and there will also be a mid year report
providing an interim update. The aim of these reporting arrangements is to
ensure that those with ultimate responsibility for the scrutiny of the Treasury
Page 131
Management function appreciate fully the implications of Treasury
Management policies and activities, and that those implementing policies and
executing transactions have properly fulfilled their responsibilities with regard
to delegation and reporting.
1.2
Revised CIPFA Prudential Code
CIPFA has issued a revised Prudential Code which primarily covers
borrowing and the Prudential Indicators. Three of these indicators have now
been moved from being Prudential Indicators to being Treasury Indicators: -
•
authorised limit for external debt
•
operational boundary for external debt
•
actual external debt.
However, all indicators are to be presented together as one suite. In
addition, where there is a significant difference between the net and the gross
borrowing position, the risks and benefits associated with this strategy should
be clearly stated in the annual strategy report.
1.3
The Local Government Act 2003 requires the Council to have regard to the
Prudential Code and to set Prudential and Treasury Indicators for the next
three years to ensure that the Council’s capital investment plans are
affordable, prudent and sustainable.
The Council is required to formally consider the Prudential and Treasury
Indicators as detailed in section 2 of this report
1.4
The Act also requires the Council to set out its Treasury Strategy for
borrowing and to prepare an Annual Investment Strategy as required by
Investment Guidance issued subsequent to the Act. This strategy sets out the
Council’s policies for managing its investments and for giving priority to the
security and liquidity of those investments. The management of the Council’s
Treasury Management activities are in line with the CIPFA Treasury
Management Revised Code of Practice.
1.5
The recommended strategy for 2014/15 is based upon a view on interest
rates, having considered leading market forecasts provided by the Council’s
treasury advisor, Capita Asset Services. The overall strategy covers:
• Treasury Limits 2014/15-2017/18
• Prudential / Treasury Indicators
• The current portfolio position
• Prospects for interest rates including a summary of the
economic background
• The Borrowing Requirement
• The Borrowing Strategy
• Gross v Net Debt Position
• Policy on Borrowing in Advance of Need
• Debt Rescheduling
• The Annual Investment Strategy
• Investment Policy
Page 132
• Interest Rate Outlook
• Creditworthiness Policy
• Country Limits
• Policy on the Use of External Advisors
• Scheme of Delegation
• Pension Fund Cash
• Minimum Revenue Provision (MRP) Policy Statement
1.6
A glossary of terms used within this report is attached at Appendix A.
2. Treasury Limits 2014/15 to 2017/18
2.1
It is a statutory requirement under Section 33 of the Local Government
Finance Act 1992, for the Council to set a balanced budget. Section 32
requires a local authority to calculate its budget requirement for each financial
year to include the revenue costs that flow from capital financing decisions.
This means that increases in capital expenditure must be limited to a level
whereby increases in charges to revenue from: -
• increases in capital finance charges (principal and net interest)
caused by increased borrowing to finance additional capital
expenditure and
• any increases in running costs from new capital projects
are affordable within the projected income of the Council for the foreseeable
future.
2.2
Under statute, the Council is required to set an Affordable Borrowing Limit i.e
a limit which the Council can afford to borrow. In Wales, the Authorised Limit
represents the legislative limit specified in section 3 of the Local Government
Act 2003.
2.3
The Council must have regard to the Prudential Code when setting the
Authorised Limit . This limit requires the Council to ensure that total capital
investment remains within sustainable limits. The Authorised Limit must be
set for the forthcoming financial year and the two successive financial years.
2.4
The Prudential Code for Capital Finance in Local Authorities requires
Councils to calculate treasury indicators (formerly prudential indicators) which
demonstrate prudence in the formulation of borrowing proposals. These are
defined as:
• The Operational Boundary :
“…is based on expectations of the maximum external debt of the
authority according to probable not simply possible events and
being consistent with the maximum level of external debt projected
by the estimates….”
• The Authorised Limit :
“..t
he Authorised Limit must therefore be set to establish the outer
boundary of the local authority’s borrowing based on a realistic
Page 133
assessment of the risks. The authorised limit is certainly not a limit
that an authority will expect to borrow up to on a regular basis. It is
crucial that it is not treated as an upper limit for borrowing for
capital expenditure alone since it must also encompass borrowing
for temporary purposes...”
• Upper limits for borrowing of fixed and variable rate loans.
• Upper limit for investments for over 364 days.
• Upper and lower limits for the maturity profile of the Council’s debt
• Estimates of the incremental impact of capital investment decisions
on Council Tax / Housing rents
• Estimates of the ratio of financing costs to net revenue stream
• Estimates of the capital financing requirement
In setting and revising Prudential Indicators the authority is required to have
regard to:-
• Affordability e.g. implications for Council Tax / Housing rents
• Prudence and sustainability e.g. implications for external borrowing
• Value for money e.g. option appraisals
• Stewardship of assets e.g. strategic planning
• Practicality e.g. achievability of forward plans
It is a requirement of the Code that Prudential / Treasury Indicators are
regularly monitored and systems are in place to achieve compliance.
Treasury / Prudential Indicators
2012/13
2013/14
2014/15
2015/16
2016/17
207/18
£’000
£’000
£’000
£’000
£’000
£’000
Actual
Probable
Estimate
Estimate
Estimate
Estimate
Capital
Expenditure
GF
51,785
57,106
37,046
20,608
14,252
12,980
HRA
25,303
24,524
38,500
40,000
40,000
40,000
TOTAL
77,088
81,630
75,546
60,608
54,252
52,980
Capital
Financing
Requirement ***
GF
305,972
314,852
330,430
334,396
332,615
333,879
Credit
2,337
3,264
2,259
1,351
861
565
Arrangements *
HRA
68,995
67,934
66,054
69,933
80,234
91,239
Magistrates’
1,696
1,628
1,563
1,500
1,411
1,383
Court **
TOTAL
379,000
387,678
400,306
407,180
415,121
427,066
Page 134
Authorised limit
£532,464
£527,220
£500,561
£511,501
£511,501
£511,501
for external debt
Operational
£416,464
£445,829
£454,260
£466,501
£466,501
£466,501
boundary for
external debt
Upper limit for
100%/
100%/
100%/
100%/
100%/
100%/
fixed interest
£532,464
£527,220
£500,561
£511,501
£511,501
£511,501
rate exposure
Upper limit for
40%/
40%/
40%/
40%/
40%/
40%/
variable rate
£212,986
£210,888
£200,224
£204,600
£204,600
£204,600
exposure
Upper limit for
£51,000
75,000
40,000
40,000
40,000
40,000
total principal
sums invested
for over 364
days
* The GF Capital Financing Requirements includes arrangements classified as
credit arrangements ( finance leases) under International Financial Reporting
Standards ( IFRS) requirements as of 2011/12. However these continue to be
funded directly on a revenue basis and do not form part of the borrowing
requirement.
** Legacy Magistrates’ Court debt which is recharged is included for completeness
*** Excludes potential additional borrowing if forecast capital budget shortfalls
can not be resolved in future years
Maturity structure of fixed rate borrowing during 2013/14-2017/18
Upper limit %
Lower limit %
Under 12 months
50
0
12 months and within 24 months
50
0
24 months and within 5 years
50
0
5 years and within 10 years
85
0
10 years and above
95
15
Ratio of Financing Costs to Net Revenue Stream
Actual
Revised
Estimate
Estimate
Estimate
Estimate
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
%
%
%
%
%
%
General
6.63
6.42
6.55
6.86
6.82
6.92
Fund
HRA
9.98
8.99
8.07
8.64
9.95
11.33
Page 135
Estimates of Incremental Impact of Capital Investment Decisions on Council Tax
(Band D) and Council Housing Rents
Actual
Revised
Estimate
Estimate
Estimate
Estimate
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
£
£
£
£
£
£
General
70.50
82.20
85.50
91.10
92.30
97.66
Fund
HRA
0.00
0.00
0.00
44.72
113.48
184.06
Gross Debt v Capital Financing Requirement
The gross debt position versus the capital financing requirement is detailed below.
The profile below assumes progressive external funding of the internalised
borrowing and the budgeted use of reserves as profiled in the revenue budget
report.
Comparison of average 2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
gross debt and capital
financing requirement
actual
probable
estimate
estimate
estimate
estimate
£’000
£’000
£’000
£’000
£’000
£’000
Average debt (gross)
331,309
324,945
321,345
345,268
367,269
391,291
Capital Financing
376,663
384,414
398,047
405,829
414,260
426,501
Requirement
Net Position
45,354
59,469
76,702
60,561
46,991
35,210
3 . The current portfolio position
3.1 The Council’s probable debt portfolio position at 31/3/14 comprises:
Principal outstanding
Average rate of
31 March 2014
Interest
£’000
%
Public Works Loan Board (fixed)
220,305
6.16
Money Market
98,000
4.10
Temporary
2,046
1.40
TOTAL
320,351
5.51
3.2 The Council’s forecast investment portfolio at 31 March 2014 is as follows:
Managed investments
Investments
2013/14
2014/15
31 March
Estimated
Estimated
2014
Investment
Investment
Return
Return
£’000
%
%
Externally Managed
22,529
0.24
0.5
Internally Managed
121,391
0.53
0.5
Page 136
4. Prospects for Interest Rates
4.1
The Council’s Treasury advisers (Capita Asset Services) provided the
following interest rate forecast for both short term ( bank rate) and long
term (PWLB) interest rates as at 17th January 2014. There is a
downside risk to these forecasts if economic growth proves to be
weaker and slower than currently forecast.
Annual Average %
Bank
PWLB Borrowing Rates
Rate
25 year
50 year
March 2014
0.50
4.40
4.40
June 2014
0.50
4.50
4.50
Sep 2014
0.50
4.50
4.50
Dec 2014
0.50
4.60
4.60
Mar 2015
0.50
4.60
4.70
June 2015
0.50
4.70
4.80
Sep 2015
0.50
4.80
4.90
Dec 2015
0.50
4.90
5.00
Mar 2016
0.75
5.00
5.10
4.2
Economic Background
Attached at Appendix B is an economic background assessment
provided by our Treasury advisers, Capita Asset Services. This
assessment has informed the proposed strategies .
5. The Borrowing Requirement
5.1
The Council will have the following net capital borrowing / repayment
requirements for 2013/14 to 2017/18 :
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
Borrowing and repayment
Actual
Probable
Estimate
Estimate
Estimate
Estimate
requirements
£’000
£’000
£’000
£’000
£’000
£’000
To finance new capital
7,224
6,227
6,297
6,297
6,297
6,297
expenditure by supported
borrowing
To finance new capital
1,859
5,060
3,450
-
-
-
expenditure supported by
Local Authority Government
Borrowing Initiative (highways)
To finance new capital
9,920
15,088
18,707
-
10,258
5,509
expenditure by unsupported
borrowing
To replace loans
6,151
6,283
7,323
3,189
286
9,002
maturing/repaid prematurely
Less
Repayments (MRP)
13,859
14,298
14,834
14,777
14,579
15,033
Set aside capital receipts
716
743
300
300
300
300
NET BORROWING
10,579
17,617
20,643
(5,591)
1,962
5,475
/(REPAYMENT)
REQUIREMENT
Principal repayment element
of finance lease payments
876
1,020
928
569
296
299
Page 137
5.2
The above table details the net borrowing requirement for each financial
year. In accordance with the Prudential Code, borrowing must be
undertaken in line with a funding plan informed by the projected capital
financing requirement. Borrowing may be financed from one or more of
Public Works Loan Board loans; Money Market loans or internal loans.
The precise choice will depend on market conditions from time to time.
5.3
At time of writing, borrowing rates are materially higher then investment
rates and it is projected that the remaining borrowing requirement for
2013/14 will be met from internal loans i.e it will be internalised.
However, we will continue to appraise market conditions and
opportunities to externalise debt when borrowing rates offer long term
value during 2014/15 onwards as cashflow requirements dictate.
Short term savings (by avoiding new long term external borrowing) will
be weighed against the potential additional long term extra costs (by
delaying unavoidable new external borrowing until later when PWLB
long term rates are forecast to be marginally higher).
6. Borrowing Strategy
6.1
Long term borrowing rates are expected to be significantly higher than
rates available for investment deposits. It is likely that this position will
pertain in the short to medium term.
In addition, the continuing weak economic conditions - exacerbated by
the Eurozone crisis - has highlighted the need for caution in managing
credit counterparty risk. Clearly there is a risk of a bank / institution
defaulting on the payment of interest due or repayment of amounts
invested.
6.2
Taking the above points together, it is not proposed to undertake any
new long term external borrowing for the remainder of 2013/14. The
main strategy - with a view to minimising interest costs and the risk of
default by counterparties - is therefore to internalise borrowing in the
remainder of 2013/14 . It will be required to consider externalising the
borrowing requirement in 2014/15 as the changing interest rates and
cashflow dictate
We will continue to monitor PWLB rates i.e if rates offer long term value
in the context of market rates and the current debt portfolio, then
borrowing will be undertaken
6.4
Policy on borrowing in advance of need
The Council has only a limited power to borrow in advance of need.
In determining whether borrowing will be undertaken in advance of need the
Council will;
•
ensure that there is a clear link between the capital programme and
maturity profile of the existing debt portfolio which supports the need to
borrow in advance of need
Page 138
•
ensure the ongoing revenue liabilities created, and the implications for
the future plans and budgets have been considered
•
evaluate the economic and market factors that might influence the
manner and timing of any decision to borrow
•
consider the merits and demerits of alternative forms of funding
•
consider the alternative interest rate bases available, the most
appropriate periods to fund and which repayment profiles to use.
7
Debt Rescheduling
7.1
The introduction of different PWLB rates on 1 November 2007 for
new borrowing (as opposed to early repayment of debt) and the setting of a
spread between the two rates (of about 0.4%-0.5% for the longest period loans
narrowing down to 0.25%-0.30% for the shortest loans), has meant that PWLB
to PWLB debt restructuring is now much less attractive than before that date.
7.2
Due to short term borrowing rates being expected to be considerably cheaper
than longer term rates, there may be opportunities to generate savings by
switching from long term debt to short term debt. However, these savings will
need to be considered in the light of their short term nature and the likely cost
of refinancing short term loans, once they mature, compared to the current
rates of longer term debt in the existing debt portfolio
7.3
In actively managing credit counterparty and interest rate risks, consideration
will also be given to running down investment balances by repaying debt
prematurely as short term rates on investments are likely to be significantly
lower than rates paid on current debt.
However, a repayment strategy will only be considered if a loan repayment
offers value in terms of discount / associated costs and does not compromise
the Council’s long term debt management policies. In this respect, we will
need to be mindful of the potential future need to arrange new long term loans
as market conditions change from time to time.
7.4
Notwithstanding the above, it is not envisaged that there will any debt
rescheduling opportunities in the remainder of 2013/14 or 2014/15 in the
PWLB portfolio, however there may be opportunities to review the Authority’s
market debt. All rescheduling decisions will be reported to the Cabinet Member
for Finance in the quarter following action.
8. The Annual Investment Strategy
8.1
Investment policy
8.1.1
The Council will have regard to the National Assembly of Wales’ Guidance on
Local Government Investments (“the Guidance”) issued in March 2004 (and
subsequent amendments); CIPFA’s Revised Treasury Management in Public
Services Code of Practice and Cross Sectoral Guidance Notes (“the CIPFA
Treasury Management Code”) and the Local Authorities (Capital Finance and
Accounting) (Wales) (Amendment) Regulations 2004 SI 1010(W.107). The
Council’s investment priorities are: -
(a) to ensure the security of capital
(b) to ensure the liquidity of investments.
(c) to maximise interest returns commensurate with (a) and (b)
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The investment strategy will be implemented with security of investment as the
main consideration. The Council will also aim to achieve the optimum return on
its investments commensurate with proper levels of security and liquidity.
8.1.2
Investment instruments identified for use in the financial year are listed in
Appendix C under the ‘Specified’ and ‘Non-Specified’ Investments categories.
Operational investment limits with individual institutions will be as set through
the Council’s Operational Treasury Management Practices.
8.1.3
Amendments to the arrangements, limits and criteria detailed in Appendix C
may be made by the Head of Financial Services and advised to the Cabinet
Member for Finance in the quarter following action.
Appendix G is the list of UK financial institutions (counterparties) which satisfy
the Council’s minimum credit criteria as at 17th January 2014.
8.1.4
The Council retains the services of two external fund managers who manage a
portion of the Council’s investments. They are Investec Asset Management -
who currently have no Council assets under management - and Invesco
Investment Management. The fund managers will comply with the Annual
Investment Strategy. The fund managers investment criteria are outlined in
Appendix C
8.1.5
It is anticipated that the Council will continue to hold externally and internally
managed funds during 2014/15 ensuring a suitable spread of investment risks.
The performance of the investments for both external funds and internal funds
will be reported. The Council has fixed benchmarks against which investment
performance will be measured, i.e. the three month (cash fund managers) and
7 day LIBID rate (internally managed).
8.1.6
Interest Rate Outlook:
Bank Rate is forecast by the Council’s advisors to remain unchanged at 0.5%
before starting to rise in quarter 2 of 2016. Bank Rate forecasts as at 31st
March are:
•
2013/ 2014 0.50%
•
2014/ 2015 0.50%
•
2015/ 2016 0.50%
•
2016/ 2017 1.25%
There are upside risks to these forecasts ( i.e. start of increases in Bank Rate
starts sooner) if economic growth remains strong and unemployment falls
faster than expected. However should the pace of growth fall back, there could
be downside risk, particularly if BoE inflation forecasts for the rate of fall of
unemployment were to prove to be too optimistic.
8.1.7
For its cash flow generated balances, the Council will seek to utilise its
business reserve accounts and short-dated deposits (1-3 months) in order to
benefit from the compounding of interest. However longer dated deposits will
be made with appropriate counterparties if opportunities arise.
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8.1.8
During and following the end of the financial year, the Council will report on its
investment activity as part of its Mid Term Treasury Management Report and
its Annual Treasury Management Report.
8.2
Creditworthiness Policy
This Council uses the creditworthiness service provided by our Treasury
Management Advisors. This service has been progressively enhanced over
the years and now uses a sophisticated modelling approach with credit ratings
from all three rating agencies. Fitch, Moodys and Standard & Poors form the
core element.
Appendix D details Fitch’s short and long term ratings.
The creditworthiness service does not rely solely on the current credit ratings
of counterparties but also uses the following as overlays: -
• credit watches and credit outlooks from credit rating agencies
• Credit Default Swaps (CDS) spreads to give early warning of likely
changes in credit ratings
• sovereign ratings to select counterparties from only the most
creditworthy countries
This modelling approach combines credit ratings, credit watches, credit
outlooks and CDS spreads in a weighted scoring system. The end product is a
series of colour code bands which indicate the relative creditworthiness of
counterparties. These colour codes are also used by the Council to determine
the duration for investments.
All credit ratings will be monitored daily with reference to the credit ratings
report and updates
. The Council is alerted to changes to ratings of all three
agencies through its use of the Sector creditworthiness service.
There will be no future use of a counterparty/investment scheme which fails
the credit rating tests .
In addition to the use of credit ratings the Council will be advised of information
in movements in Credit Default Swaps against the iTraxx benchmark and other
market data on a weekly basis. Extreme market movements may result in the
downgrade of an institution or removal from the Council’s lending list.
Sole reliance will not be placed on the use of this external service. In addition
the Council will also use market data, market information, information on
government support for banks and the credit ratings of that government
support.
8.3
Country Limits
The Authority has not made any new overseas deposits for several years.
Going forward, extreme caution will be required when considering future
opportunities to make overseas investments. There are no plans to make
overseas investments at this time.
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If such opportunities arise then the Council has determined that it will only use
approved counterparties from countries with a minimum sovereign credit rating
of AA- from Fitch Ratings (or equivalent from other agencies if Fitch does not
provide a rating) The list of countries that qualify using this credit criteria as at
the date of this report are shown in Appendix E. This list will be added to or
deducted from should ratings change in accordance with this policy.
8.4
Policy on the use of external advisers
The Council uses the services of an external Treasury Management adviser
namely - Capita Asset Services Treasury Management Advisors.
The Council recognises that responsibility for Treasury Management decisions
remains with the Council at all times and as such, we will ensure that undue
reliance is not placed upon external advisers.
However it is recognised that there is value in employing external advisers in
relation to Treasury Management services in order to acquire access to
specialist skills and resources. The Council will ensure that the terms of their
appointment and the methods by which their value will be assessed are
properly agreed and documented, and subjected to regular review.
8.5
Scheme of Delegation
The role and responsibilities of the Council, Scrutiny Board , Cabinet Member
for Finance and the s151 officer are as follows:
(i) Council
•
to receive and review reports on Treasury Management policies,
practices and activities
•
to receive and review the annual strategy.
•
to receive and review amendments to the Authority’s adopted clauses,
Treasury Management policy statement and Treasury Management
practices
•
to consider and approve the annual budget
•
to receive and review the division of responsibilities
(ii) Scrutiny Board
•
to scrutinise and provide overview on:
•
Annual Treasury Management Strategy Statement Report &
Budget Reports
•
Mid Year Treasury Management Report
•
Annual Treasury Management Report
(iii) Cabinet Member for Finance
•
to receive and review regular briefings/reports
•
to receive and review the Treasury Management policy and procedures
(iv) Section 151 Officer
•
to recommend clauses, Treasury Management policy/practices for
approval
•
to review the same regularly and monitor compliance
•
to submit regular Treasury Management policy reports
•
to submit budgets and budget variations
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•
to receive and review management information reports
•
to review the performance of the Treasury Management function
•
to ensure the adequacy of Treasury Management resources and skills,
and the effective division of responsibilities within the Treasury
Management function
•
to ensure the adequacy of internal audit, and liaise with external audit
•
to recommend the appointment of external service providers.
8.6
Pension Fund Cash
The Council will comply with the requirements of The Local Government
Pension Scheme (Management and Investment of Funds) Regulations 2009
which was implemented on 1st January 2010. Any investments made by the
Pension Fund will comply with the requirements of SI 2009 No 393 and will
comply with the prevailing City & County of Swansea Treasury Management
Policies, Practices and Strategies.
9. Minimum Revenue Provision Policy Statement
9.1
Capital expenditure is generally expenditure on assets which have a life
expectancy of more than one year e.g. buildings, vehicles, machinery. It is
inappropriate to charge the entirety of this expenditure in the year in which it is
incurred i.e the expenditure benefits more than a single year of account. As
such, the resulting costs are spread over several years. The manner of
spreading these costs is through an annual Minimum Revenue Provision
(MRP) which was previously determined under Regulation and now is
determined under Guidance.
9.2
Statutory instrument WSI 2008 no.588 section 3 states that “..a local authority
must calculate for the current financial year an amount of minimum revenue
provision which it considers to be prudent,,”
The previous requirement to make a 2% MRP charge for the Housing
Revenue Account share of the Capital Financing Requirement (CFR) is
unchanged by this instrument.
9.3
Along with the above duty, the Welsh Assembly Government issued guidance
in March 2008 which requires that a Statement on the Council’s Policy for its
annual MRP should be submitted to the full Council for review before the start
of the financial year to which the provision will relate. The Council is legally
obliged to ‘have regard’ to the guidance.
9.4
The Welsh Assembly Government guidance outlined four broad options to
adopt for the calculation of MRP. They are:
Option 1- Regulatory Method
Option 2 - Capital Financing Requirement Method
Option 3 - Asset Life Method
Option 4 – Depreciation Method
The options are detailed at Appendix F.
9.5
The Council implemented the new Minimum Revenue Provision (MRP)
guidance in 2008/09 and will calculate the MRP for 2014/15 in accordance
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with the main recommendations contained within the guidance issued by the
Secretary of State under section 21(1A) of the Local Government Act.
9.6
The major proportion of the MRP chargeable will relate to the more historic
debt liability that will continue to be charged at the rate of 4%, in accordance
with option 1 or 2 of the guidance.
Certain expenditure reflected within the debt liability at 31st March 2014 will
under delegated powers be subject to MRP under option 3 or 4 which will be
charged over a period commensurate with the estimated useful life applicable
to the nature of expenditure.
Estimated life periods will be determined under delegated powers. The Section
151 Officer reserves the right to determine useful life periods and prudent
MRP in exceptional circumstances where the recommendations of the
guidance would not be appropriate.
Going forward, it is proposed that all debt arising from capital expenditure
supported by the WG will be charged MRP in accordance with option 1 or 2
and all other capital expenditure and other ‘capitalised’ expenditure will be
repaid under option 3 or 4 as deemed most appropriate.
10
Legal Implications
10.1
The Authority is under a duty to make arrangements for the proper
administration of its financial affairs. Failure to do so will be a breach of that
duty.
11.
Equality Impact Implications
11.1
There are no equality impact implications arising from this report
Background papers:
The revised CIPFA Treasury Management Code of Practice
2011
The revised CIPFA Prudential Code for Capital Finance in
Local Authorities 2011
Appendices:
Appendix A – Glossary of Terms
Appendix B – Treasury Advisors’ View On The Economic
Background
Appendix C – Investment Criteria for Specified & Non
Specified Investments
Appendix D – Credit Rating Agency Definitions
Appendix E – Approved Countries for Investment
Appendix F Minimum Revenue Provision Guidance
Appendix G – Approved Internal Counterparty Lending List
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APPENDIX A
TREASURY MANAGEMENT – GLOSSARY OF TERMS
Annualised Rate of Return
Represents the average return which would have been
achieved each year.
Authorised Limit
The authorised limit must be set to establish the outer
( can also be considered
boundary of the local authority’s borrowing based on a
as the affordable
realistic assessment of the risks. The authorised limit is
borrowing limit)
certainly not a limit that an authority will expect to
borrow up to on a regular basis. It is crucial that it is not
treated as an upper limit for borrowing for capital
expenditure alone since it must also encompass
borrowing for temporary purposes. It is the expected
maximum borrowing need, with some headroom for
unexpected movement.
Bank Rate
The Official Bank rate paid on commercial bank
reserves i.e. reserves placed by commercial banks with
the Bank of England as part of the Bank’s operations to
reduce volatility in short term interest rates in the
money markets.
Base Rate
Minimum lending rate of a bank or financial institution
in the UK.
Basis Points (bp)
A basis point is 0.01 of 1% (100 bp = 1%)
Borrowing
In the Code, borrowing refers to external borrowing.
Borrowing is defined as both:-
• Borrowing repayable with a period in excess of
12months
• Borrowing
repayable on demand or within
12months
Capital Expenditure
The definition of capital expenditure starts with all those
items which can be capitalised in accordance with the
Statement of Recommended Practice (SORP). To this
must be added any items that have/will be capitalised
in accordance with legislation that otherwise would not
be capitalised. Prudential indicators for current and
future years are calculated in a manner consistent with
this definition.
Capital Financing Charges
These are the net costs of financing capital i.e. interest
(see financing costs also)
and principal, premium less interest received and
discounts received.
Capital Financing
The Capital Financing Requirement is simply the total
Requirement
outstanding capital expenditure, which has not yet
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been paid for from either revenue or capital resources.
It is essentially a measure of the Council’s underlying
borrowing need.
CIPFA
The Chartered Institute of Public Finance and
Accountancy. One of the leading professional
accountancy bodies in the UK and the only one which
specialises in the public services.
Counterparty
The organisations responsible for repaying the
Council’s investment upon maturity and for making
interest payments.
Credit Rating
This is a scoring system that lenders issue people with
to determine how credit worthy they are.
The Credit Rating components are as follows:
1. The AAA ratings through to C/D are long-term rating
definitions and generally cover maturities of up to
five years, with the emphasis on the ongoing
stability of the institution’s prospective financial
condition. AAA are the most highly rates, C/D are
the lowest. This Council does not invest with
institutions lower than AA- for investments over 364
days
2. F1/A1/P1 are short-term rating definitions used by
Moody’s, S&P and Fitch Ratings for banks and
building societies based on their individual opinion
on an institution’s capacity to repay punctually its
short-term debt obligations (which do not exceed
one year). This Council does not invest with
institutions lower than F1/A1/P1 for investments
under 364 days.
Debt
For the purposes of the Code, debt refers to the sum of
borrowing (see above) and other long-term liabilities
(see below). It should be noted that the term borrowing
used with the Act includes both borrowing as defined
for the balance sheet and other long terms liabilities
defined as credit arrangements through legislation.
Discounts
Where the prevailing interest rate is higher than the
fixed rate of a long-term loan, which is being repaid
early, the lender can refund the borrower a discount.
This is calculated on the difference between the two
interest rates over the remaining years of the loan,
discounted back to present value. The lender is able to
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offer the discount, as their investment will now earn
more than when the original loan was taken out.
Financing Costs
The financing costs are an estimate of the aggregate of
the following:-
• Interest payable with respect to borrowing
• Interest payable under other long-term liabilities
• Gains and losses on the repurchase or early
settlement of borrowing credited or charged to the
amount to be met from government grants and local
taxpayers (premiums and discounts)
• Interest earned and investment income
• Amounts required in respect of the minimum
revenue provision plus any additional voluntary
contributions
plus
any
other
amounts
for
depreciation/impairment that are charged to the
amount to be met from government grants and local
taxpayers
Financial Reporting
These are standards set by governing bodies on how
Standards (FRSs)
the financial statements should look and be presented.
Investments
Investments are the aggregate of:-
• Long term investments
• Short term investments (within current assets)
• Cash and bank balances including overdrawn
balances
From this should be subtracted any investments that
are held clearly and explicitly in the course of the
provision of, and for the purposes of, operational
services.
IMF
International Monetary Fund
LOBO (Lender’s Option/
Money Market instruments that have a fixed initial term
Borrower’s Option
(typically one to ten year) and then move to an
arrangement whereby the lender can decide at pre-
determined intervals to adjust the rate on the loan. At
this stage the borrower has the option to repay the
loan.
London Inter-Bank Bid
The interest rate at which major banks in London are
Rate (LIBID)
willing to borrow (bid for) funds from each other.
Managed Funds
In-House Fund Management
Surplus cash arising from unused capital receipts and
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working cashflows can be managed either by external
fund managers or by the Council’s staff in-house. The
in-house funds are invested in fixed deposits through
the money markets for periods up to one year.
Externally Management Funds
Fund managers appointed by the Council invest
surplus cash arising from unused capital receipts in
liquid instruments such as bank certificates of deposit
and government stocks. The fund managers’ specialist
knowledge should ensure a higher rate of earnings on
the managed funds than would be otherwise obtained.
Maturity
The date when an investment is repaid or the period
covered by a fixed term investment.
Minimum Revenue
The amount required by statute to be principal
Provision (MRP)
repayment each year.
Monetary Policy
This is a body set up by the Government in 1997 to set
Committee (MPC)
the repo rate (commonly referred to as being base
rate). Their primary target (as set by the Government)
is to keep inflation within plus or minus 1% of a central
target of 2% in two year time from the date of the
monthly meeting of the Committee. Their secondary
target is to support the Government in maintaining high
and stable levels of growth and employment.
Money Market
Consists of financial institutions and deals in money
and credit.
The term applied to the institutions willing to trade in
financial instruments. It is not a physical creation, but
an electronic/telephone one.
Net Borrowing
For the purposes of the Code, net borrowing refers to
borrowing (see above) net of investments (see above).
Net Revenue Stream
Estimates for net revenue stream for current and future
years are the local authority’s estimates of the amounts
to be met from government grants and local taxpayers.
Operational Boundary
This is based on expectations of the maximum external
debt of the authority according to probable not simply
possible – events and being consistent with the
maximum level of external debt projected by the
estimates. It is not a limit and actual borrowing could
vary around this boundary for short periods.
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Other Long Term Liabilities
The definition of other long term liabilities is the sum of
the amounts in the Council’s accounts that are
classified as liabilities that are for periods in excess of
12months, other than borrowing (see definition above).
Premature Repayment of
A facility for loans where the Council can repay loans
Loans (debt
prior to the original maturity date. If the loan repaid has
restructuring/rescheduling) a lower interest rate than the current rate for a loan of
the same maturity period the Council can secure a
cash discount on the repayment of the original loan. If
the loan replaced has a higher rate of interest than the
current rate for a loan of the same maturity period, a
cash penalty is payable to the lender.
Premia
Where the prevailing current interest rate is lower than
the fixed rate of a long term loan, which is being repaid
early, the lender can charge the borrower a premium.
This is calculated on the difference between the two
interest rates over the remaining years of the loan,
discounted back to present value. The lender may
charge the premium, as their investment will now earn
less than when the original loan was taken out.
Prudential Code
The Prudential Code is the largely self regulatory
framework outlined by CIPFA for managing/monitoring
capital investment in local government.
Public Works Loan Board
A Government agency which provides loans to local
(PWLB)
authorities. Each year, it issues a circular setting out
the basis on which loans will be made available. Loans
can be either at a fixed rate or on a variable rate basis.
They can be repaid on either an annuity, equal
instalment of principal or maturity basis. The interest
rate charged is linked to the cost at which the
Government itself borrows.
Risk
Counterparty Credit Risk
The risk that a counterparty defaults on its obligations.
Inflation Risk
The risk that growth in the Authority’s investment
income does not keep pace with the effects of inflation
on its expenditure.
Interest Rate Risk
The risk that changes in rates of interest creates an
unexpected or unbudgeted burden on the Council’s
finances.
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Liquidity Risk
The risk that cash will not be available when it is
needed.
Operational Risk
The risk of loss through fraud, error, corruption, system
failure or other eventualities in Treasury Management
dealings, and failure to maintain effective contingency
management arrangements.
Refinancing Risk
The risk that the Authority is unable to replace its
maturing funding arrangements on appropriate terms.
Set Aside Capital Receipts
A proportion of money received by the Council for the
sale of fixed assets must be set aside to repay debt.
SORP
Statement of Recommended Practice, published by
CIPFA (Local Authority Accounting Body). This sets
out guidelines regarding the Council’s financial matters.
Specified/Non Specified
Specified investments are sterling denominated
investments
investments for less than 364 days as identified in
Appendix A in line with statutory investment
regulations. Non- specified investments are all other
investments identified in Appendix A in line with
statutory investment regulations.
Supranational Bonds
These are bonds issued by institutions such as the
European Investment Bank and World Bank. As with
Government bonds (Gilts) they are regarded as the
safest bond investments with a high credit rating.
Temporary Borrowing and
Loans which are capable of being repaid within one
Investment
year. The term of the loans will be negotiated from
overnight to 364 days.
Treasury Management
Treasury Management has the same definition as in
CIPFA’s code of Practice of Treasury Management in
the Public Services.
“The management of the organisation’s cash flows its
banking,
money
market
and
capital
market
transactions; the effective control of the risks
associated with those activities; and the pursuit of
optimum performance consistent with those risks.”
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Yield Curve
The line resulting from portraying interest rate
graphically for a series of periods, e.g. 7days, 1month,
3, 6, 9, and 12months. When longer-term interest rates
are higher than short-term rates the yield curve slopes
upwards and is described as positive. When the
opposite prevails the yield curve is referred to as
inverse.
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APPENDIX B
TREASURY ADVISORS’ VIEW ON THE ECONOMIC BACKGROUND
1.2
UK Economy
Economic growth. Until 2013, the economic recovery in the UK since 2008 had
been the worst and slowest recovery in recent history. However, growth strongly
rebounded in 2013 - quarter 1 (+0.3%), 2 (+0.7%) and 3 (+0.8%), to surpass all
expectations as all three main sectors, services, manufacturing and construction
contributed to this strong upturn. The Bank of England has, therefore, upgraded
growth forecasts in the August and November quarterly Inflation Reports for
2013 from 1.2% to 1.6% and for 2014 from 1.7% to 2.8%, (2015 unchanged at
2.3%). The November Report stated that: -
In the United Kingdom, recovery has finally taken hold. The economy is
growing robustly as lifting uncertainty and thawing credit conditions start
to unlock pent-up demand. But significant headwinds — both at home and
abroad — remain, and there is a long way to go before the aftermath of
the financial crisis has cleared and economic conditions normalise. That
underpins the MPC’s intention to maintain the exceptionally stimulative
stance of monetary policy until there has been a substantial reduction in
the degree of economic slack. The pace at which that slack is eroded, and
the durability of the recovery, will depend on the extent to which
productivity picks up alongside demand. Productivity growth has risen in
recent quarters, although unemployment has fallen by slightly more than
expected on the back of strong output growth.
Forward surveys are currently very positive in indicating that growth prospects
are also strong for 2014, not only in the UK economy as a whole, but in all three
main sectors, services, manufacturing and construction. This is very
encouraging as there does need to be a significant rebalancing of the economy
away from consumer spending to construction, manufacturing, business
investment and exporting in order for this start to recovery to become more firmly
established. One drag on the economy is that wage inflation continues to remain
significantly below CPI inflation so disposable income and living standards are
under pressure, although income tax cuts have ameliorated this to some extent.
This therefore means that labour productivity must improve significantly for this
situation to be corrected by the warranting of increases in pay rates.
Forward guidance. The Bank of England issued forward guidance in August which
stated that the Bank will not start to consider raising interest rates until the jobless
rate (Labour Force Survey / ILO i.e. not the claimant count measure) has fallen to
7% or below. This would require the creation of about 750,000 jobs and was
forecast to take three years in August, but revised to possibly quarter 4 2014 in
November. The UK unemployment rate has already fallen to 7.4% on the three
month rate to October 2013 (although the rate in October alone was actually 7.0%).
The Bank's guidance is subject to three provisos, mainly around inflation; breaching
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any of them would sever the link between interest rates and unemployment levels.
This actually makes forecasting Bank Rate much more complex given the lack of
available reliable forecasts by economists over a three year plus horizon. The
recession since 2007 was notable for how unemployment did NOT rise to the levels
that would normally be expected in a major recession and the August Inflation
Report noted that productivity had sunk to 2005 levels. There has, therefore, been a
significant level of retention of labour, which will mean that there is potential for a
significant amount of GDP growth to be accommodated without a major reduction in
unemployment. However, it has been particularly encouraging that the strong
economic growth in 2013 has also been accompanied by a rapid increase in
employment and forward hiring indicators are also currently very positive. It is
therefore increasingly likely that early in 2014, the MPC will need to amend its
forward guidance by reducing its 7.0% threshold rate and/or by adding further
wording similar to the Fed’s move in December (see below).
Credit conditions. While Bank Rate has remained unchanged at 0.5% and
quantitative easing has remained unchanged at £375bn in 2013, the Funding for
Lending Scheme (FLS) was extended to encourage banks to expand lending to
small and medium size enterprises. The second phase of Help to Buy aimed at
supporting the purchase of second hand properties, will also start in earnest in
January 2014. These measures have been so successful in boosting the supply
of credit for mortgages, and so of increasing house purchases, (though levels
are still far below the pre-crisis level), that the Bank of England announced at the
end of November that the FLS for mortgages would end in February 2014. While
there have been concerns that these schemes are creating a bubble in the
housing market, house price increases outside of London and the south-east
have been much weaker. However, bank lending to small and medium
enterprises continues to remain weak and inhibited by banks still repairing their
balance sheets and anticipating tightening of regulatory requirements.
Inflation. Inflation has fallen from a peak of 3.1% in June 2013 to 2.1% in
November. It is expected to remain near to the 2% target level over the MPC’s
two year time horizon.
AAA rating. The UK has lost its AAA rating from Fitch and Moody’s but that
caused little market reaction.
THE GLOBAL ECONOMY
The Eurozone (EZ). The sovereign debt crisis has eased considerably during
2013 which has been a year of comparative calm after the hiatus of the Cyprus
bailout in the spring. In December, Ireland escaped from its three year EZ
bailout programme as it had dynamically addressed the need to substantially cut
the growth in government debt, reduce internal price and wage levels and
promote economic growth. The EZ finally escaped from seven quarters of
recession in quarter 2 of 2013 but growth is likely to remain weak and so will
dampen UK growth. The ECB’s pledge to buy unlimited amounts of bonds of
countries which ask for a bail out has provided heavily indebted countries with a
strong defence against market forces. This has bought them time to make
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progress with their economies to return to growth or to reduce the degree of
recession. However, debt to GDP ratios (2012 figures) of Greece 176%, Italy
131%, Portugal 124%, Ireland 123% and Cyprus 110%, remain a cause of
concern, especially as many of these countries are experiencing continuing rates
of increase in debt in excess of their rate of economic growth i.e. these debt
ratios are continuing to deteriorate. Any sharp downturn in economic growth
would make these countries particularly vulnerable to a new bout of sovereign
debt crisis. It should also be noted that Italy has the third biggest debt mountain
in the world behind Japan and the US. Greece remains particularly vulnerable
and continues to struggle to meet EZ targets for fiscal correction. Whilst a Greek
exit from the Euro is now improbable in the short term, as Greece has made
considerable progress in reducing its annual government deficit and a return
towards some economic growth, some commentators still view an eventual exit
as being likely. There are also concerns that austerity measures in Cyprus could
also end up in forcing an exit. The question remains as to how much damage an
exit by one country would do and whether contagion would spread to other
countries. However, the longer a Greek exit is delayed, the less are likely to be
the repercussions beyond Greece on other countries and on EU banks.
Sentiment in financial markets has improved considerably during 2013 as a
result of firm Eurozone commitment to support struggling countries and to keep
the Eurozone intact. However, the foundations to this current “solution” to the
Eurozone debt crisis are still weak and events could easily conspire to put this
into reverse. There are particular concerns as to whether democratically elected
governments will lose the support of electorates suffering under EZ imposed
austerity programmes, especially in countries like Greece and Spain which have
unemployment rates of over 26% and unemployment among younger people of
over 50%. The Italian political situation is also fraught with difficulties in
maintaining a viable coalition which will implement an EZ imposed austerity
programme and undertake overdue reforms to government and the economy.
There are also concerns over the lack of political will in France to address issues
of poor international competitiveness,
USA. The economy has managed to return to robust growth in Q2 2013 of 2.5%
y/y and 4.1% y/y in Q3, in spite of the fiscal cliff induced sharp cuts in federal
expenditure that kicked in on 1 March, and increases in taxation. The Federal
Reserve therefore decided in December to reduce its $85bn per month asset
purchases programme of quantitative easing by $10bn. It also amended its
forward guidance on its pledge not to increase the central rate until
unemployment falls to 6.5% by adding that there would be no increases in the
central rate until ‘well past the time that the unemployment rate declines below
6.5%, especially if projected inflation continues to run below the 2% longer run
goal’. Consumer, investor and business confidence levels have all improved
markedly in 2013. The housing market has turned a corner and house sales and
increases in house prices have returned to healthy levels. Many house owners
have, therefore, been helped to escape from negative equity and banks have
also largely repaired their damaged balance sheets so that they can resume
healthy levels of lending. All this portends well for a reasonable growth rate
looking forward.
Page 154
China. There are concerns that Chinese growth could be on an overall marginal
downward annual trend. There are also concerns that the new Chinese
leadership have only started to address an unbalanced economy which is
heavily dependent on new investment expenditure, and for a potential bubble in
the property sector to burst, as it did in Japan in the 1990s, with its consequent
impact on the financial health of the banking sector. There are also concerns
around the potential size, and dubious creditworthiness, of some bank lending to
local government organisations and major corporates. This primarily occurred
during the government promoted expansion of credit, which was aimed at
protecting the overall rate of growth in the economy after the Lehmans crisis.
Japan. The initial euphoria generated by “Abenomics”, the huge QE operation
instituted by the Japanese government to buy Japanese debt, has tempered as
the follow through of measures to reform the financial system and the
introduction of other economic reforms, appears to have stalled. However, at
long last, Japan has seen a return to reasonable growth and positive inflation
during 2013 which augurs well for the hopes that Japan can escape from the bog
of stagnation and deflation and so help to support world growth. The fiscal
challenges though are huge; the gross debt to GDP ratio is about 245% in 2013
while the government is currently running an annual fiscal deficit of around 50%
of total government expenditure. Within two years, the central bank will end up
purchasing about Y190 trillion (£1,200 billion) of government debt. In addition,
the population is ageing due to a low birth rate and, on current trends, will fall
from 128m to 100m by 2050.
CAPITA ASSET SERVICES FORWARD VIEW
Economic forecasting remains difficult with so many external influences weighing
on the UK. Major volatility in bond yields is likely to endure as investor fears and
confidence ebb and flow between favouring more risky assets i.e. equities, and
safer bonds.
There could well be volatility in gilt yields over the next year as financial markets
anticipate further tapering of asset purchases by the Fed. The timing and degree of
tapering could have a significant effect on both Treasury and gilt yields. Equally,
while the political deadlock and infighting between Democrats and Republicans over
the budget has almost been resolved the raising of the debt limit, has only been
kicked down the road. A final resolution of these issues could have a significant
effect on gilt yields during 2014.
The longer run trend is for gilt yields and PWLB rates to rise, due to the high
volume of gilt issuance in the UK, and of bond issuance in other major western
countries. Increasing investor confidence in economic recovery is also likely to
compound this effect as a continuation of recovery will further encourage
investors to switch back from bonds to equities.
The overall balance of risks to economic recovery in the UK is currently evenly
Page 155
weighted. However, only time will tell just how long this period of strong
economic growth will last; it also remains exposed to vulnerabilities in a number
of key areas.
The interest rate forecasts in this report are based on an initial assumption that
there will not be a major resurgence of the EZ debt crisis, or a break-up of the
EZ, but rather that there will be a managed, albeit painful and tortuous,
resolution of the debt crisis where EZ institutions and governments eventually do
what is necessary - but only when all else has been tried and failed. Under this
assumed scenario, growth within the EZ will be tepid for the next couple of years
and some EZ countries experiencing low or negative growth, will, over that time
period, see a significant increase in total government debt to GDP ratios. There
is a significant danger that these ratios could rise to the point where markets lose
confidence in the financial viability of one, or more, countries. However, it is
impossible to forecast whether any individual country will lose such confidence,
or when, and so precipitate a resurgence of the EZ debt crisis. While the ECB
has adequate resources to manage a debt crisis in a small EZ country, if one, or
more, of the large countries were to experience a major crisis of market
confidence, this would present a serious challenge to the ECB and to EZ
politicians.
Downside risks currently include:
•
UK strong economic growth is currently very dependent on consumer
spending and recovery in the housing market. This is unlikely to endure much
beyond 2014 as most consumers are maxed out on borrowing and wage
inflation is less than CPI inflation, so disposable income is being eroded.
•
A weak rebalancing of UK growth to exporting and business investment
causing a major weakening of overall economic growth beyond 2014
•
Weak growth or recession in the UK’s main trading partners - the EU and US,
depressing economic recovery in the UK.
•
Prolonged political disagreement over the raising of the US debt ceiling.
•
A return to weak economic growth in the US, UK and China causing major
disappointment in investor and market expectations.
•
A resurgence of the Eurozone sovereign debt crisis caused by ongoing
deterioration in government debt to GDP ratios to the point where financial
markets lose confidence in the financial viability of one or more countries and
in the ability of the ECB and Eurozone governments to deal with the potential
size of the crisis.
•
The potential for a significant increase in negative reactions of populaces in
Eurozone countries against austerity programmes, especially in countries with
very high unemployment rates e.g. Greece and Spain, which face huge
challenges in engineering economic growth to correct their budget deficits on
a sustainable basis.
•
The Italian political situation is frail and unstable; this will cause major
Page 156
difficulties in implementing austerity measures and a programme of overdue
reforms. Italy has the third highest government debt mountain in the world.
•
Problems in other Eurozone heavily indebted countries (e.g. Cyprus and
Portugal) which could also generate safe haven flows into UK gilts, especially
if it looks likely that one, or more countries, will need to leave the Eurozone.
•
A lack of political will in France, (the second largest economy in the EZ), to
dynamically address fundamental issues of low growth, poor international
uncompetitiveness and the need for overdue reforms of the economy.
•
Monetary policy action failing to stimulate sustainable growth in western
economies, especially the Eurozone and Japan.
•
Geopolitical risks e.g. Syria, Iran, North Korea, which could trigger safe haven
flows back into bonds.
The potential for upside risks to UK gilt yields and PWLB rates, especially for
longer term PWLB rates include: -
•
A sharp upturn in investor confidence that sustainable robust world economic
growth is firmly expected, causing a surge in the flow of funds out of bonds
into equities.
•
A reversal of Sterling’s safe-haven status on a sustainable improvement in
financial stresses in the Eurozone.
•
UK inflation being significantly higher than in the wider EU and US, causing an
increase in the inflation premium inherent to gilt yields.
•
In the longer term – an earlier than currently expected reversal of QE in the
UK; this could initially be implemented by allowing gilts held by the Bank to
mature without reinvesting in new purchases, followed later by outright sale of
gilts currently held.
Page 157
APPENDIX C
1.
Investment Criteria for Specified and Non Specified Investments
1.1
Investments will be made in accordance with the following terms:
1.1.1
Specified Investments:
(All such investments will be sterling denominated, with maturities up to
maximum of 1 year, meeting the minimum ‘high’ rating criteria where
applicable and the principal sum to be repaid at maturity is the same as
the initial sum invested other than investments in the UK Government.)
Instrument
Minimum Credit Use
Max
Criteria
investment
Debt Management Agency
--
In-house
£120M
Deposit Facility
Term deposits – UK government
--
In-house
£120M
Term deposits – other LAs
--
In-house
£20M with each
counterparty
Term deposits – banks and
Short-term
In-house and
£20M with each
building societies
F1,P1,A1, Long-
fund
counterparty/
term AA- or UK
managers
See 2 and 3
nationalised banks
below
Term deposits – Banks
Short-term
In-house and
£25M with each
nationalised by highly credit
F1,P1,A1, Long-
fund
counterparty/
rated sovereign countries
term AA-
managers
See 2 and 3
below
Government guarantee on all
AA-
In-house and
£20M with each
deposits by high credit rated
fund
counterparty/
sovereign countries
managers
See 2 and 3
below
UK Government supported
AA-
In-house and
£20M with each
banking sector
fund
counterparty/
managers
See 2 and 3
below
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1.1.2
Non-Specified Investments:
A maximum of 35% will be held in aggregate of Council managed
funds in non-specified investments. A maximum of 50% of aggregate
funds managed by the Council’s external fund managers will be held in
non-specified investments.
Instrument
Min Credit/Colour
Use
Maximum
Maximum
Criteria
Period
Investment
Term deposits – UK
In-house
5 years
£30M
government (with
maturities in excess of 1
year)
Term deposits – other
In-house
5 years
£20M with
Local Authorities (with
each
maturities in excess of 1
counterparty
year)
Deposits with banks and
Short-term
Fund
See 2 and
See 2 and 3
building societies
F1,P1,A1 Long-
managers/
3 below
below/£25m
covered by UK
term AA-
in-house
with each
government guarantee
counterparty
Certificates of deposits
Short-term
Fund
See 2 and
See 2 and 3
issued by banks and
F1,P1,A1 Long-
managers/in
3 below
below/£20m
building societies
term AA-
house
with each
covered by UK
counterparty
government guarantee
UK Government Gilts
-
Fund
See 2 and
See 2 and 3
Managers/in 3 below/5
below
house
years
/£20M
Treasury Bills
-
Fund
See 2 and
See 2 and 3
Managers/in 3 below/5
below
house
years
/£20M
Term deposits – banks
Short-term
In-house
5 years
£20M with
and building societies
F1,P1,A1 Long-
each
(with maturities in
term AA-, or UK
counterparty
excess of 1 year)
nationalised banks
Certificates of deposits
Short-term
fund
10 years
See 2 and 3
issued by banks and
F1,P1,A1 Long-
managers/in
below/£20M
building societies
term AA-,
-house
with each
counterparty
UK Government Gilts
AAA
Fund
10 years
See 2 and 3
with maturities in excess
Managers/in
below/£20M
of 1 year
house
with each
counterparty
Bonds issued by
AAA
In-house on
5 years
£20M with
multilateral development
a ‘buy-and-
each
banks
hold’ basis.
counterparty
and
Also for use
10 years
See 2 and 3
by fund
below
managers
Bonds issued by a
-
In-house on
5 years
£20M with
financial institution which
a ‘buy-and-
each
is guaranteed by the UK
hold’ basis.
counterparty
government
Also for use
10 years
See 2 and 3
Page 159
by fund
below
managers
Sovereign bond issues
AAA
In- house
5 years
£20M with
(i.e. other than the UK
each
govt)
Fund
10 years
counterparty
Managers
See 2 and 3
below
Corporate Bonds :
Long-term AA-
In- house
5 years
£20M with
[under SI 1010 (W.107)]
each
Fund
10years
counterparty
Managers
See 2 and 3
below
Gilt Funds and Bond
Long-term AA-
In- house
5 years
£15M
Funds
Fund
10years
See 2 and 3
Managers
below
Money Market Funds
AAA
In- house
n/a
£20M
Fund
n/a
See 2 and 3
Managers
below
Property funds
-
Fund
n/a
£20M
managers
See 2 and 3
below
Floating Rate Notes
Long-term AA-
Fund
10 years
See 2 and 3
managers
below
Treasury Bills
N/A
Fund
10 years
See 2 and 3
Managers
below
Local authority mortgage Short-term
In-house
10 years
£20m with
guarantee scheme
F1,P1,A1 Long-
each
term AA-,
counterparty
Fixed term deposits
with variable rate and
variable maturities 1. Callable deposits
Short-term
In-house
5/10 years £20m
with
F1,P1,A1 Long-
and fund
each
term AA-,
managers
counterparty
/see 2 and 3
below
2.
Range
trade Short-term
In-house
5/10 years £20m
with
accrual (see glossary)
F1,P1,A1 Long-
and fund
each
term AA-,
managers
counterparty
/see 2 and 3
below
3. Snowballs (see Short-term
In-house
5/10 years £20m
with
glossary)
F1,P1,A1 Long-
and fund
each
term AA-,
managers
counterparty
/see 2 and 3
below
1.2
The Council’s external fund managers will comply with the Annual
Investment Strategy. The agreements between the Council and the
Page 160
fund managers additionally stipulate guidelines and duration and other
limits in order to contain and control risk.
1.3
The Council uses a combination of Fitch, Standard & Poor and
Moody’s (credit rating agency) ratings to derive its criteria. All credit
ratings will be monitored daily. The Council is alerted to changes in
ratings through its use of its adviser’s creditworthiness service. If a
downgrade results in the counterparty/investment scheme no longer
meeting the Council’s minimum criteria, its further use as a new
investment will be withdrawn immediately.
2.
Investment Criteria - Invesco
2.1
The Fund will normally be invested in short term fixed interest rate
deposits and certificates of deposit carrying interest rates of up to one
year or debt instruments guaranteed by the UK government and also
AAA rated money market funds. At any given time, a maximum of 50%
of the portfolio by market value may be invested in negotiable
securities carrying rates of interest for periods of over one year from
the date of investment.
2.2
The maximum exposure to any one counter party is not to exceed 10%
of the fund value or £2,000,000 whichever is the lower with the
exception of money market funds where the whole balance may be
invested therein. Variances to be agreed by the Head of Financial
Services.
2.3
The average duration of the investments for the fund shall not exceed 3
years, with the maximum maturity of any individual investment shall not
exceed 10 years.
2.4
The fund will only lend to counterparties on the Invesco Standard
lending list. The minimum criterion for the same is:
Short term rating of A1, F1, P1 from the credit ratings agencies
Moody’s Fitch and Standard and Poor.
Long term rating of AA- from Standard and Poor or equivalent from
Moody’s or Fitch.
Invesco reserve the right to amend the standard lending list if
internal research generated supports such a move.
N.B if there is a variation in ratings between agencies for a particular
counterparty the lowest rating will be applied.
Page 161
3.
Investment Criteria – Investec
Note – Investec currently have no Council assets under management.
3.1 The managed fund will normally be invested in investments or deposits
carrying rates of interest fixed for up to one year from the date of
purchase. However, at any given time, a maximum of 50% of the
nominal value of the managed fund may be invested in securities
carrying interest rates fixed for periods between one and ten years and
within this 50%, 20% of the nominal value of the managed fund may be
invested in securities carrying interest rates fixed for periods of longer
than ten years.
3.2 The average duration of the investments for the fund shall not exceed 3
years, with the maximum maturity of any individual investment shall not
exceed 10 years.
3.3 The maximum exposure to any one counterparty is not to exceed 10%
of the fund value or £2,000,000 whichever is the lower. Variances to be
agreed by the Head of Financial Services
3.4 The fund will only lend to counterparties on the Investec standard
lending list. The minimum criterion for the same is:
Short term rating of F1 as specified by the Fitch credit ratings
agency or equivalent
Long term rating of AA- or better as specified by Fitch credit ratings
agency or equivalent
Page 162
APPENDIX D
Fitch International Long-Term Credit Ratings
International Long-Term Credit Ratings (LTCR) may also be referred to as
Long-Term Ratings. When assigned to most issuers, it is used as a
benchmark measure of probability of default and is formally described as an
Issuer Default Rating (IDR). The major exception is within Public Finance,
where IDRs will not be assigned as market convention has always focused on
timeliness and does not draw analytical distinctions between issuers and their
underlying obligations. When applied to issues or securities, the LTCR may
be higher or lower than the issuer rating (IDR) to reflect relative differences in
recovery expectations. The following rating scale applies to foreign currency
and local currency ratings:
Investment Grade
Definition
AAA
Highest credit quality. 'AAA' ratings denote the lowest expectation
of credit risk. They are assigned only in case of exceptionally
strong capacity for payment of financial commitments. This
capacity is highly unlikely to be adversely affected by foreseeable
events.
AA
Very high credit quality. 'AA' ratings denote expectations of very
low credit risk. They indicate very strong capacity for payment of
financial commitments. This capacity is not significantly
vulnerable to foreseeable events.
A
High credit quality. 'A' ratings denote expectations of low credit
risk. The capacity for payment of financial commitments is
considered strong. This capacity may, nevertheless, be more
vulnerable to changes in circumstances or in economic conditions
than is the case for higher ratings.
BBB
Good credit quality. 'BBB' ratings indicate that there are currently
expectations of low credit risk. The capacity for payment of
financial commitments is considered adequate but adverse
changes in circumstances and economic conditions are more
likely to impair this capacity. This is the lowest investment grade
category.
Speculative Grade
Definition
BB
Speculative. 'BB' ratings indicate that there is a possibility of
credit risk developing, particularly as the result of adverse
economic change over time; however, business or financial
alternatives may be available to allow financial commitments to
be met. Securities rated in this category are not investment
grade.
B
Highly speculative.
For issuers and performing obligations, 'B' ratings indicate that
significant credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met;
Page 163
however, capacity for continued payment is contingent upon a
sustained, favourable business and economic environment.
For individual obligations, may indicate distressed or
defaulted obligations with potential for extremely high
recoveries. Such obligations would possess a Recovery Rating of
'RR1' (outstanding).
CCC
For issuers and performing obligations, default is a real
possibility. Capacity for meeting financial commitments is solely
reliant upon sustained, favourable business or
economic conditions.
For individual obligations, may indicate distressed or
defaulted obligations with potential for average to superior levels
of recovery. Differences in credit quality may be denoted by
plus/minus distinctions. Such obligations typically would possess
a Recovery Rating of 'RR2' (superior), or 'RR3' (good) or 'RR4'
(average).
CC
For issuers and performing obligations, default of some
kind appears probable.
For individual obligations, may indicate distressed or
defaulted obligations with a Recovery Rating of 'RR4'
(average) or 'RR5' (below average).
C
For issuers and performing obligations, default is
imminent.
For individual obligations, may indicate distressed or
defaulted obligations with potential for below-average to poor
recoveries. Such obligations would possess a
Recovery Rating of 'RR6' (poor).
RD
Indicates an entity that has failed to make due payments (within
the applicable grace period) on some but not all material financial
obligations, but continues to honour other classes of obligations.
D
Indicates an entity or sovereign that has defaulted on all of its
financial obligations. Default generally is defined as one of the
following:
Failure of an obligor to make timely payment of principal and/or
interest under the contractual terms of any financial obligation;
The bankruptcy filings, administration, receivership,
liquidation or other winding-up or cessation of business of an
obligor;
The distressed or other coercive exchange of an
obligation, where creditors were offered securities with
diminished structural or economic terms compared with the
existing obligation.
Page 164
Fitch International Short-Term Credit Ratings
The following ratings scale applies to foreign currency and local currency
ratings. A Short-term rating has a time horizon of less than 13 months for
most obligations, or up to three years for US public finance, in line with
industry standards, to reflect unique risk characteristics of bond, tax, and
revenue anticipation notes that are commonly issued with terms up to three
years. Short-term ratings thus place greater emphasis on the liquidity
necessary to meet financial commitments in a timely manner.
Short Term Rating
Current Definition
F1
Highest credit quality. Indicates the strongest capacity for timely
payment of financial commitments; may have an added "+" to
denote any exceptionally strong credit feature.
F2
Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as
great as in the case of the higher ratings.
F3
Fair credit quality. The capacity for timely payment of financial
commitments is adequate; however, near term adverse
changes could result in a reduction to non investment grade.
B
Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near term adverse changes
in financial and economic conditions.
C
High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a
sustained, favourable business and economic environment.
D
Indicates an entity or sovereign that has defaulted on all of its
financial obligations.
Page 165
APPENDIX E
Approved Countries for Investment
AAA
•
Australia
•
Canada
•
Denmark
•
Finland
•
Germany
•
Luxembourg
•
Norway
•
Singapore
•
Sweden
•
Switzerland
AA+
•
Hong Kong
•
U.S.A.
•
U.K.
•
Netherlands
AA
•
Abu Dhabi (UAE
•
Qatar
•
France
AA-
•
Belgium
•
Saudi Arabia
Page 166
APPENDIX F
MINIMUM REVENUE PROVISION
1. Government Guidance
The Welsh Assembly Government issued new guidance in March 2008 which
requires that a Statement on the Council’s policy for its annual MRP should be
submitted to the full Council for approval before the start of the financial year
to which the provision will relate.
The Council are legally obliged by section 21 (1b) to “have regard” to the
guidance, which is intended to enable a more flexible approach to assessing
the amount of annual provision than was required under the previous statutory
requirements. The guidance offers four main options under which MRP could
be made, with an overriding recommendation that the Council should make
prudent provision to redeem its debt liability over a period which is reasonably
commensurate with that over which the capital expenditure is estimated to
provide benefits. The requirement to ‘have regard’ to the guidance therefore
means that: -
Although four main options are recommended in the guidance, there is no
intention to be prescriptive by making these the only methods of charge under
which a local authority may consider its MRP to be prudent.
It is the responsibility of each authority to decide upon the most appropriate
method of making a prudent provision, after having had regard to the
guidance.
Where the CFR was nil or negative on the last day of the preceding financial
year, the authority does not need to make an MRP provision. MRP in the
current financial year would therefore by zero,
Option 1: Regulatory Method
Under the previous MRP regulations, General Fund MRP was set at a uniform
rate of 4% of the adjusted CFR (i.e. adjusted for “Adjustment A”) on a
reducing balance method (which in effect meant that MRP charges would
stretch into infinity). This option is available for the General Fund share of
capital financing requirement which relates to capital expenditure incurred
prior to 1 April 2008. It may also be used for new capital expenditure up to
the amount which is deemed to be supported by the Welsh Assembly
Government annual supported borrowing allocation. The use of the
commutation adjustment to mitigate the MRP charge is also allowed to
continue under this option.
Option 2: Capital Financing Requirement Method
This is a variation on option 1 which is based upon a charge of 4% of the
aggregate CFR without any adjustment for Adjustment A, or certain other
factors which were brought into account under the previous statutory MRP
calculation. The CFR is the measure of an authority’s outstanding debt
liability as depicted by their balance sheet.
Page 167
Option 3: Asset Life Method.
This method may be applied to most new capital expenditure, including where
desired that which may alternatively continue to be treated under options 1 or
2.
The guidance suggests that any new borrowing which receives no
Government support and is therefore self-financed would fall under option 3
Under this option, it is intended that MRP should be spread over the
estimated useful life of either an asset created, or other purpose of the
expenditure. There are two useful advantages of this option: -
• Longer life assets e.g. freehold land can be charged over a longer
period than would arise under options 1 and 2.
• No MRP charges need to be made until the financial year after that in
which an item of capital expenditure is fully incurred and, in the case of
a new asset, comes into service use (this is often referred to as being
an ‘MRP holiday’). This is not available under options 1 and 2.
There are two methods of calculating charges under option 3:
Equal instalment method – equal annual instalments which are
calculated using a simple formula set out in paragraph 9 of the MRP
guidance,
under this approach, the MRP is provided by the following formula
A – B divided by C
A is the amount of capital expenditure in respect of the asset financed
by borrowing or credit arrangements
B is the total provision made before the current financial year in respect
of that expenditure
C is the inclusive number of financial years from the current year to that
in which the estimated life of the asset expires
Annuity method – annual payments gradually increase during the life of
the asset with an appropriate interest rate used to calculate the annual
amount
Asset life - the MRP guidance makes it clear that the estimated life of an asset
should be determined in the year MRP commences and should not
subsequently be revised
Under both options, the authority may make additional voluntary revenue
provision and this may require an appropriate reduction in later years’ MRP
Page 168
In addition adjustments to the calculation to take account of repayment by
other methods (e.g. application of capital receipts) should be made as
necessary.
Option 4: Depreciation Method
Under this option, MRP charges are to be linked to the useful life of each type
of asset using the standard accounting rules for depreciation (but with some
exceptions) i.e. this is a more complex approach than option 3.
The same conditions apply regarding the date of completion of the new
expenditure as apply under option 3.
2. Date of implementation
The previous statutory MRP requirements cease to have effect after the
2006/07 financial year. However, the same basis of 4% charge in respect of
the GF share of CFR may continue to be used without limit until the 2009/10
financial year, relative to expenditure incurred up to 31/3/2008.
The guidance suggests that Options 3 and 4 should be applied to any capital
expenditure which results in an increase in the CFR and does not relate to the
authority’s Supported Capital Expenditure.
The guidance also provides the authority with discretion to apply Options 3 or
4 to all capital expenditure whether or not supported and whenever it is
incurred.
Any capitalised expenditure incurred after 1 April 2008 which gives rise to an
increase in the GF CFR should be repaid by using option 3 as adapted by
paragraphs 23 and 24 of the guidance.
Page 169
APPENDIX G
Active Internal Credit UK Counterparty List (as at 17th January 2014)
Fitch
Institution
Country Bank/BS Ratings
S Term
Support
L Term
Bank of New York Mellon
UK
Bank
F1+
1
AA-
Bank of Scotland
UK
Bank
F1
1
A
Barclays
UK
Bank
F1
1
A
Credit Suisse International
UK
Bank
F1
1
A
Goldman Sachs International Bank
UK
Bank
F1
A
HSBC
UK
Bank
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MBNA Europe
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National Westminster
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Santander
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UBS Ltd
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Debt Management Office
UK
Local Authorities
UK
Page 170
Agenda Item 12.a
Report of the Section 151 Officer and the Corporate Director Place
Council – 18 February 2014
HOUSING REVENUE ACCOUNT (HRA) REVENUE BUDGET 2014/15
Purpose:
This report proposes a Revenue Budget for 2014/15
and a rent increase for properties within the HRA.
Policy Framework:
None.
Reason for Decision:
To agree a revenue budget as indicated and a rent
increase for 2014/15.
Consultation:
Cabinet Members, Finance, & Legal
Recommendations:
The following budget proposals be approved:
a) Rents be increased in line with the Welsh
Government guideline as detailed in section 4.
b) Fees, charges and allowances are approved as
outlined in section 4.
c) The revenue budget proposals as detailed in
section 4.
Report Author:
K. Lawrence
Finance Officer:
K. Lawrence
Legal Officer
T.Meredith
Access to Services Officer
Phil Couch
1.
Introduction
1.1
The setting of the revenue budget has to take account of the following issues and
factors:-
•
the requirement to achieve the Welsh Housing Quality Standard (WHQS);
•
the effects and restrictions of the housing subsidy system;
•
future income and expenditure trends;
•
delivering service efficiencies;
•
increases to guideline rents advised by the Welsh Government (WG);
•
the effect on tenants of rent increases;
1.2
The proposals in this report are based on the objective of maximising the resources
available for investment in the housing stock to make progress in achieving the
WHQS.
Page 171
2.
Projected Revenue Outturn 2013/14
2.1
An updated assessment of forecast spending in 2013/14 is subject to a separate
report on this agenda. This forecasts an underspend of £3m due to savings and
slippage on the capital programme of £3.3m, plus an underspend of £400,000 on
the bad debt provision due to a less than expected increase in rent arrears, less
projected revenue overspends mainly on repairs and maintenance. These issues
have been taken into account in the proposals for future years budgets.
3.
Housing Revenue Account Subsidy
3.1
The production of the annual HRA budget is heavily impacted by the control that
the WG has over the resources available. The control is exercised through the use
of the Housing Subsidy system. The abolition of this system is expected to take
place in April 2015, but at this time the proposals are based on the continuation of
the current system.
3.2
The calculation of the amount of negative housing subsidy payable by local
authorities is made by the WG. The calculation is based on a notional HRA which
includes an assumed level of rent known as the guideline rent. The draft increase
in the guideline rent for Swansea assumed by the WG in respect of 2014/15 is
£2.61 – this is based on the WG recently amended policy of basing rent increases
on CPI plus 1.5% (changed from RPI plus 2% until convergence).
3.3
The subsidy formula also includes a notional management and maintenance
allowance. The draft increase in this allowance for 2014/15 is 6%.
3.4
The net effect of these two assumptions is an estimated reduction of £100,000 in
Swansea’s negative subsidy payment to the WG next year, and it enables the
Council to set a rent increase of up to 3.68% and retain all of the resulting
increased rent income (£1.75m).
4.
Revenue Budget Proposals 2014/15
4.1
Overview
The main changes to the current year are an increase in rent and other income of
£1.75m mainly arising from the proposed rent increase, and an increase of £1.1m
in the revenue maintenance budget. This results in a projected surplus on the HRA
next year of £15.25m. This will contribute towards an increase in the capital
programme which is planned to increase from an original programme in the current
year of £30m to £38.5m next year. The main changes from the 2013/14 budget are
shown in the following table:-
Item
£000
Additional income including a 3.68% rent increase -
1 ,
7
5
0
Reduced negative subsidy budget
-100
Increased maintenance costs on void properties
550
Increased day to day maintenance
550
Efficiency savings
-250
Reduction in capital financing charges
-150
1% pay award
100
Single status salary increase
150
Contribution from reserves
-250
Other cost reductions
-50
Increased investment to meet WHQS
1,200
Page 172
4.2
Rent Income
To ensure that the authority and tenants maximise the benefit from the subsidy
system, and that the maximum resources are available to invest in meeting the
WHQS, it is recommended that the WG guideline rent increase be adopted. This
means an average rent increase of £2.61 per week (3.68%) – this compares with
the average guideline increase for Wales of 4.2% specified by the WG. This will
result in additional rent and associated income next year of £1.75m.
4.3
Inflation
Provision has been included in the budget for a 1% annual pay increase from April.
Other budgets, in particular repairs and maintenance and utility costs have been
based on the latest prices.
4.4
Capital Financing Charges
There is a projected reduction in capital financing charges of £150,000 mainly due
to a lower interest charge due to lower debt outstanding.
4.5
Fees, Charges and Allowances
General fees, charges and allowances are normally increased either in line with the
Authority’s own inflation assumption, or in line with the agreed rent increase. If the
recommendations relating to the rent increase are approved then these rent related
items will increase by 3.68% and other charges by 2.5%.
4.6
Contributions to the Capital Programme
The additional income enables a real increase of £1.2m to be made in the
contribution from the revenue account to the capital programme. The estimated
contribution for next year is £15.5m.
4.7
Efficiency Savings
The long term Business Plan assumes 1% efficiency savings on management and
maintenance costs each year. In addition to staff reductions achieved each year
through the ER/VR process, a review is being carried out to identify both short term
and long term improvements
4.8
Revenue Maintenance Costs
There is an increased provision for maintenance work on responsive repairs of
£550,000 and on void properties of £550,000. In terms of response repairs, this is
an increase in the allowance for anticipated demand. Projected demand over the
longer term will be assessed and will be taken into account as part of the
development of longer term efficiency savings referred to in paragraph 4.7. In terms
of the increase in budget for voids, the number of end of tenancies was higher than
anticipated in 2013/14, a trend that is likely to continue in 2014/15.
4.9
Single Status
The estimated cost of HRA staff gaining through job evaluation is £150,000. This
cost will reduce over the next two years by £100,000 as protection ceases.
5.
Risks and Uncertainties
5.1
The main risks and uncertainties for next year are a potential pay rise, the level of
inflation, and risks around productivity, system changes and charging methods
pending the potential removal of bonus schemes, but steps will be taken to manage
this risk.
Page 173
6.
Reserves
6.1
The HRA balance at the start of this year was £14m and at the end of the current
year it is estimated to be £13.5m. A reasonable contingency level is considered to
be £4m. It is therefore proposed that £9m is used next year to finance capital
expenditure, and £250,000 for revenue expenditure. The reserves position is
detailed in Table B.
7.
Equality Impact Assessments
7.1
Proposals for changing levels of funding in specific areas have been subject to a
screening process. Service managers have considered the implications of
proposed budgetary decisions and believe that the proposed budget protects the
most vulnerable and will not disproportionately impact on protected groups.
8
Legal Implications
8.1
Tenants will need to be notified of the proposed increase in accordance with the
provisions of section 102 of the Housing Act 1985. Section 102 b) states that
variation of the Rent shall be carried out in accordance with the provisions of the
Tenancy Agreement. Section 2.6 of the Council’s Tenancy Agreement states that
Tenants must be given 4 weeks notice before any Rent change.
Appendix Table A: Summarised HRA 2013/14 to 2014/15
Table B: Movement in Balances 2013/14 to 2016/17
Background Papers:
None
Contact Officers:
Kim Lawrence, Group Accountant, Tel 637431
David Evans, Housing Business Manager, Tel 635795
Page 174
Appendix
Table A: Summarised HRA 2013/14 to 2014/15
Classification
Budget
Budget
2013/14
2014/15
£’000
£’000
Expenditure
Management and Maintenance (see note)
25,763
28,310
Capital Charges
4,815
4,665
Revenue Funding for capital schemes
19,300
24,500
Negative subsidy
5,675
5,575
Total Expenditure
55,553
63,050
Income
Rents and other income
52,053
53,800
Use of balances
3,500
9,250
Total Income
55,553
63,050
Note
£1.5m of the increase in management and maintenance is a technical adjustment arising
from a change in the charging mechanism due to the proposed implementation of single
status. This will be offset by a reduction of £1.5m in the capital programme.
Table B: Movement in Balances 2013/14 to 2016/17
Description
£000’s
st
Balance at 1 April 2013
13,958
Budgeted use 2013/14
-500
st
Forecast balance 31 March 2014
13,458
Budgeted use 2014/15
-9,250
st
Forecast balance 31 March 2015
4,208
Page 175
Agenda Item 12.b
Report of the Section 151 Officer & the Director of Place
Council – 18 February 2014
HOUSING REVENUE ACCOUNT
- CAPITAL BUDGET & PROGRAMME 2014/15 – 2017/18
Purpose
This report proposes a capital budget for
2014/15 – 2017/18
Policy Framework:
None
Reason for Decision:
To agree a revised budget for 2013/14 and a
budget for 2014/15 – 2017/18
Consultation:
Legal, Finance & Access to Services
Recommendation(s):
It is recommended that:
1)
The transfers between schemes and the revised budgets for
schemes in 2013/14 be approved.
2)
The budget proposals for 2014/15 - 2017/18 be approved.
3)
That, where individual schemes in Appendix B are programmed over
2, 3 or 4 years, then these are committed and approved and that
their financial implications for funding over subsequent years are
approved.
4)
Authorisation is granted to officers to submit planning applications in
relation to capital repair schemes on Council owned land where
planning permission is considered necessary.
Report Author:
Steve Matthews
Finance Officer:
Steve Matthews
Legal Officer:
T Meredith
Access to Services Officer
Phil Couch
1.0
Introduction
1.1
This report details:
• Revised Housing Revenue Account (HRA) capital expenditure and
financing proposals in 2013/14
• HRA Capital expenditure and financing proposals in 2014/15 – 2017/18
Page 176
1.2
The budget proposals are further detailed in appendices to this report as
follows:
• Appendix A: Summary of capital expenditure and financing 2013/14 -
2017/18
• Appendix B: A detailed breakdown of the capital budget for 2013/14 –
2017/18
• Appendix C: Scheme descriptions
2.0
Capital Budget 2013/14 – 2017/18
2.1
The total programme for this current year is £31.96m i.e. an original budget of
£30m plus slippage from 2012/13 of £1.96m. Slippage from this current year
into 2014/15 is principally to fund the refurbishment of six highrise blocks of
flats in the Town Centre, Penlan and Sketty areas. Total spending in this
current year projected to remain at £24.524m. Notwithstanding the high rise
projects, the majority of all other projects are complete in 2013/14, although a
small element of under spend may exist due to a range of reasons including
retentions retained for the defects liability period and some under spends on
completed projects. Any projects not currently complete will be completed
within the early part of the 2014/2015 financial year. Notwithstanding these,
the anticipated spend against profile for 13/14 (excluding high rise) will be in
excess of 95% of the overall budget and if where under spend has occurred
officers have mitigated these by bringing other priority work forward to
compensate. Transfers and changes to the 2013/14 budget are reflected and
detailed in Appendix B.
2.2
To make use of savings in this current year’s programme, the following
schemes will be advanced:
• British Iron and Steel Federation (BISF) Houses Gendros (£208k). The
contract will be extended to bring forward 10 dwellings with the rest being
completed in 2014/15.
• Boiler Replacement (£600k). Additional properties will be added to this
year’s programme.
3.0 High Rise Refurbishment Programme
3.1 Included in the long term programme of improving the stock up to the WHQS is
the refurbishment of the high rise blocks with initial focus on the following six:
• 2 blocks at Mathew Street, Dyfatty,
• 3 blocks at Clyne Court, Sketty Park.
• 1 block at Jeffreys Court, Penlan.
3.2 The original proposals were first put forward prior to the development of a
financial plan to secure the improvement of the stock up to WHQS by 2020. At
that time, and in keeping with the aim for the entire stock, the proposals were
to ensure the long term structural stability of the blocks and where possible,
increase their thermal efficiency. The approved budget reflected this aim.
Page 177
3.3 A two stage method has been used to procure the works, a process which is
commonly adopted in such large complex schemes. This allows for the
appointment of expert contractors at stage one and then to work collaboratively
with them on more detailed technical appraisals, final specifications and cost
plans during the pre construction phase.
3.4 The multi storey blocks are complex structures and as part of this pre
construction work, up to 24 different types of surveys were undertaken to fully
identify the true scope of repairs and the likely costs. These assessments have
ranged from invasive structural investigations on the integrity of the blocks, to
bat and ecological surveys. As a result, extra structural works have been
identified over and above those contained within the original brief.
3.5 In addition and in keeping with the revised aim to meet the WHQS by 2020, the
scope of the work has been extended to include:
• renewal of the kitchens and bathrooms;
• renewal of above ground drainage;
• electrical rewiring of the blocks;
• renewal of the mechanical ventilation;
• external design features;
• reconfiguration of some flats from 3 bedroom to 2 bedroom;
• additional accommodation to the ground floors in the Mathew Street blocks;
• upgrades to the CCTV facilities;
• enclosure of the external access balconies;
• improvements to the entrances;
• laundry facilities at Clyne Court;
• Improvements and added facilities in the immediate environment of the
blocks.
3.6 The combination of all the above items will secure the long term structural
stability of the blocks and ensure that all the flats meet the requirements of the
Welsh Housing Quality Standard. It should also be noted that many of the
items are not necessarily additional to the overall WHQS proposals and
funding will have been allowed for in the long term Business Plan. The
opportunity has therefore been taken to bring forward items for completion at
the same time as other significant works, rather than later in the programme.
3.7 As a result and in order to proceed, the approved budget will need to be
revised as follows:
2013/14
2014/15
2015/16
2016/17
Total
(£000)
(£000)
(£000)
(£000)
(£000)
Current approved
5,385
8,786
2,600
0
16,771
budget for all 3
locations
Revised budget
1,149
13,327
14,041
5,386
33,903
requirement for all
3 locations
Balance
4,236
- 4,541
- 11.441
- 5,386
-17,132
Page 178
3.8
These adjustments have been reflected in the overall programme set out in
Appendix B.
3.9
Whilst an option appraisal has been undertaken in relation to the proposed
refurbishment of the high rise blocks which demonstrated that this is the most
cost effective and feasible option to meet the Welsh Housing Quality
Standard and represents value for money, given the scale of the proposed
investment the appraisal will be updated prior to the implementation of this
scheme.
4.0
2014/15 – 2017/18
4.1
The proposed four year capital programme and the priorities of the various
schemes have been developed in line with the HRA Business Plan and
reflect the results of a stock condition survey. In addition, the programme
contributes towards the Council’s strategic aim of improving homes up to the
Welsh Housing Quality Standard (WHQS).
4.2
Schemes detailed in Appendix C contribute towards the key components of
the Welsh Housing Quality Standard as follows:
In a Good State of Repair
Dwellings must be structurally stable; free from damp and disrepair with key
building components being in good condition – roofs, walls, windows, doors
and chimneys.
Safe and Secure
Dwellings should be free from risks that could cause serious harm and should
be secure in key areas of the home. Heating and electrical systems to be up
to date and safe; doors and windows to provide good levels of security; risk
of falls from height to be prevented; fire safety measures to be in good
condition and well designed.
Adequately Heated, Fuel Efficient and Well Insulated
Dwellings must be capable of being heated adequately by ensuring heating
systems are fuel efficient and properties well insulated.
Contain Up to Date Kitchens and Bathrooms
Kitchen and bathroom facilities are to be relatively modern and in good
condition; sufficient to meet the needs of the household and well laid out to
prevent accidents.
Located in Attractive and Safe Environments
Homes should be located in environments that residents can relate to and in
which they are proud to live. Improvements will be required to ensure areas
within the curtilage of properties are safe and communal areas and the wider
shared environment is safe and attractive.
Suit the Specific Requirements of the Household
The requirement is that homes meet the necessary requirements for their
occupants in terms of room sizes, ensuring necessary facilities such as
kitchens and bathrooms are sufficient and where required, adaptations are
undertaken for persons with disabilities.
Page 179
5.0
Target Areas
5.1
The programme also reflects the Council’s policy on target areas with £37m
of the proposed programme earmarked over the four year reporting period for
the following schemes:
• In the Castle Ward, it is proposed that a programme to refurbish the
highrise blocks which will include kitchen and bathroom renewal is
undertaken to Matthew Street and Croft Street. This work will cover 4
highrise blocks and cost approximately £19 million.
• In the Townhill Ward, it is proposed that enveloping works are continued
in the Mayhill area. These works will encompass 380 homes at a total
cost of approximately £6.2 million.
• In the Penderry Ward, it is proposed that enveloping works are
undertaken in the Penlan area. These works will encompass 328 homes
at a total cost of approximately £5.3 million.
5.2
In addition, elements of schemes in the wider programme will occur in target
areas. Overall, 24% of the proposed programme expenditure will be used to
support schemes in target areas.
6.0
Financing of HRA Capital Budget 2014/15 - 2017/18
6.1
The attached capital budget proposals will be funded by Major Repair
Allowance (MRA) grant, revenue contributions, borrowing and capital
receipts. Details are set out in Appendix A.
7.0
Risks
7.1
The risks to the 4 year programme are similar to those set out in the HRA
Revenue report. In particular, the level of MRA grant, future rent increases
(which are determined by WG) and the potential effect of Welfare Reform on
levels of income.
8.0
Equality and Engagement Implications
8.1
Tenants and leaseholders have been engaged as part of the Council’s
Tenant Participation Strategy. There are no equality implications associated
with the recommendations of this report, since this deals with the financial
aspects of agreeing a budget for the scheme. Individual projects will take
account of specific equality issues.
9.0
Legal Implications
9.1
The Authority is under a duty to make arrangements for the proper
administration of its financial affairs. Failure to do so will be a breach of that
duty.
Page 180
10.0 Financial Implications
10.1 Expenditure is ring fenced to the HRA and will be fully funded by MRA grant
from WG and revenue contributions from the Housing Revenue Account.
There are no financial implications for the Council General Fund.
10.2 Implicit in the report is additional borrowing of £37m to fund the specific
programme up until 2017/18 which has the potential to rise to some £85m by
2020.
10.3 The maximum proposed level of borrowing of £85m will result in additional
estimated annual principal and interest charges of approximately £6m
(reducing over time). This is affordable on the assumptions that:-
• rents continue to rise by 1.5% more than CPI inflation up to 2020;
• the effects of the abolition of housing subsidy are as expected;
• principal repayments remain at the statutory 2%;
• MRA grant continues to be paid at the current level of £9m per year;
10.4 Based on the above assumptions the annual surplus on the HRA after the
achievement of WHQS in 2020 is estimated to average £10m even after
funding the additional debt charges and contributing £14m per year to the
capital programme (the estimated amount in addition to the MRA required to
maintain the stock post 2020), and assuming no real increases in rents after
2020.
10.5 The estimated HRA position post 2020 would therefore appear to have
substantial room to accommodate adverse effects of welfare reform and
increases in interest rates.
10.6 The amount to be borrowed each year will need to be appraised each year to
ensure it is consistent with the capital expenditure in each year and is
affordable in each year. The actual borrowing profile will be in line with long
term best value and best treasury management practice and may well be in
advance of or succeed actual spending requirements as cash flows dictate.
Background Papers
None
Appendices
Appendix A: Summary of Capital Expenditure and Financing 2013/14 to 2017/18
Appendix B: A detailed breakdown of the capital budget for 2013/14 - 2017/18
Appendix C: Scheme descriptions
Contact Officer: Steve Matthews
01792 636478
File Reference – Housing Capital Programme 2014/15
Page 181
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Page 189 P
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Appendix C
HRA 4 Year Capital Programme
Scheme Description
Good State of Repair
Wind and Weatherproofing
Wind and Weatherproofing - will repair and upgrade the external fabric of Council owned
homes to maintain structural integrity, improve weather protection and thermal efficiency.
Work typically includes wall tie renewal, application of insulated render, alteration or
improvements to roofs and rainwater goods and new front and back doors. In some
instances, improvements to fire safety may be undertaken also. These contracts will
operate over the period of this four year programme. Schemes may be subject to planning
permission requirements and officers will submit planning applications as necessary.
Resiform Properties
Resiform properties are of a timber frame and fibre glass panel type construction and
were, built in the 1970s. The repair scheme will secure the long term structural integrity of
the properties, improve weather protection and increase the thermal efficiency of the
dwellings. Renewable energy systems will be explored and may form part for the project
subject to costs.
British Iron & Steel Federation (BISFs) Houses BISF houses are of a steel frame construction built in the 1950s. The scheme is designed
to repair and maintain the structural integrity and to improve thermal efficiency and
weather protection. The specification of work includes roof renewal, insulated render
system and door renewal, boiler replacement and electrical rewiring These contracts will
typically run for the length of this reporting period.
Wimpey No Fines Houses
Wimpey No Fines are properties built with solid concrete walls and the repair scheme will
address structural cracking where present. The application of insulated render will improve
thermal efficiency and weather protection. Roof repairs and door renewal are also
included. Contracts will operate over length of this reporting period.
Trusteel Houses, Penllergaer
Trusteel houses are of a steel frame construction but are different in design and
specification to the British Iron and Steel houses in Gendros. This scheme will involve the
testing and condition assessment of Trusteel houses to inform the refurbishment scheme
design. The design and refurbishment scheme will be an ongoing scheme over the 4 year
reporting period.
Easiform Properties
Easiform properties are typically a poured concrete construction built in the 1950s and
60s. The scheme will secure the long term structural integrity of the properties, improve
the weather protection and particularly improve the thermal efficiency of the properties.
The scope of work will include roof repairs, wall repairs and insulation, improvement to
balconies where present and minor upgrades to fire safety where required.
Page 190
Refurbishment of Highrise Flats
The Council’s highrise blocks were all built in the early 1960s and now require repairs to
ensure their continued use over the long term. The schemes will protect the structures of
the blocks, improve their weather resistance, thermal efficiency and their fire safety. The
flats will also receive internal improvements, such as upgrades to security systems and
the immediate environment.
Externally, the work will include a new roof, balcony rails, repairs to balcony slabs,
insulated cladding across the walls, new double glazed windows, upgrades to fire
protection, revised CCTV systems where required, improved access paths and entrances
and improvements to the immediate HRA owned environment.
For individual flats, the schemes will provide new kitchens and bathrooms including
associated work and improved kitchen layout. Electrical rewiring will be renewed where
required, improvements to heating systems, integrated television reception systems, new
door entry systems and upgrades to fire safety will also be included. Redundant storage
areas will be converted to provide new additional units of accommodation.
The local environment will receive upgrades to CCTV systems, renewal of the communal
electrical wiring and lighting, improvements to fire safety measures, improvements to the
decoration, new flooring in communal areas where agreed with residents, upgrades to
paths and immediate areas of hard and soft landscaping. Additional resident parking will
be provided where required.
The projects are expected to take over three years to complete and will run across the full
time scale of this reporting period.
Chimney Repairs
Where chimneys are in poor condition, work will involve repairing, rebuilding or taking
away the chimney if it is no longer required. The work will prevent damp and minimise
repairs for the response repair service and will be an ongoing scheme over the four year
reporting period.
Pitched Roof Renewal
Pitched roof renewal includes repairing the roof structure and chimneys and replacing the
roof covering to ensure long term weather protection. Contracts are expected to run over
the period of this four year programme.
Flat Roof Renewal
Flat roof renewal includes repairing the roof structure and replacing the roof covering to
ensure long term weather protection. Contracts are expected to run over the period of this
four year programme.
Window Renewal
Windows which are at the end of their useful life or require upgrading for fire safety
purposes will be renewed with appropriate and thermally efficient units.
Balcony Repairs
Balconies will be repaired and improved to ensure they remain in good condition and safe
to use. Repairs will include new balcony rails and repairs to the balcony slabs and floor
surface.
Page 191
Door Renewal - Various locations
Doors will be renewed with Composite type units or fire doors with secure locks and
hinges. The door will improve weather protection, security, thermal efficiency and fire
safety. This scheme is expected to run over the period of this four year programme.
Structural Repairs Structural Repairs will treat retaining wall failure or disrepair, subsidence cases, and other
structural elements that are considered to be in need of repair or renewal.
Drainage and drainage protection
Where existing drainage is in disrepair or in need of upgrading or there is a need to
address changes in demand, the scheme will look to improve selected sites and may
include amongst other items: new systems, alternative or new layouts, expansion of
current systems.
Safe and Secure
Fire Safety General – Various Locations
A range of fire safety measures will be undertaken to homes across the City & County of
Swansea. Work will be varied but likely to include the provision of up-to-date fire safety
signs, upgrading fire stopping materials, minor changes to layout, improvements to fire
warning systems.
Smoke Alarms and Carbon Monoxide Detectors Renewal
Hard wired smoke alarms and carbon monoxide detectors in homes are renewed to
ensure uninterrupted service. The project will be ongoing and will run over the period of
this four year programme.
Fire Safety - Sprinkler Systems to Sheltered Complexes
The scheme will install a sprinkler system to the flats and communal areas of sheltered
complexes. The aim is to improve the fire safety for older tenants.
Fire Protection: Kitchen and Stair Separation - Various
Work will be to construct separating walls and doors in homes where currently the stairs
descend directly into the kitchen area. The outcome will improve fire safety.
Fire Separation between Flats - Various
The scheme will upgrade the fire and sound separation between ground and first floor flats
where the separation is currently made up of timber joists. The outcome will improve fire
safety and sound insulation between the flats.
Electrical Rewiring Contingency – Various Locations
Properties will be rewired where an electrical inspection has identified that this is
necessary.
Electrical Rewiring – Various Locations
Homes with electrical installations that are approximately 30 years will be rewired as part
of a planned scheme. The project will be a long term contract and will run over the period
of this four year programme.
Electrical Rewiring Communal Blocks and Emergency Lighting – Communal Areas
Blocks of flats with communal areas will be rewired where the existing installations are
approximately 30 years old or where an electrical inspection has identified that this is
Page 192
required. The scope of the work will include the provision new emergency lighting. This
contract will operate over the period of this four year programme.
Adequately Heated
Boiler Replacement – Various Locations
Gas boilers will be renewed as part of a long term programme aimed at improving the
efficiency and reliability of heating systems. This contract is ongoing and will run over the
period of this four year programme.
Heating Upgrades – Various Locations
The scheme is designed to provide fuel switching to council homes e.g. coal to gas,
storage heaters to gas etc. as well as provide minor improvements to heating systems
including time clocks and room thermostats. This contract will operate over the period of
this four year programme.
Energy Efficiency Measures and Energy Grant Support – Various
There are a range of energy efficiency measures and supporting grants available. This
investment is to meet the costs directly and/or support grants for measures that contribute
towards improving thermal efficiency in council homes. Work may include Solar
Photovoltaics, Solar Hot water, insulation measures or other emerging energy saving
technology / application to homes and which can provide a benefit to council tenants. The
work will be ongoing and is expected to run over the period of this four year programme.
Kitchen and Bathroom Renewal
Kitchen and Bathroom Renewal
The investment will be to improve the internal living facilities, making these more safe and
useable. Work will include alterations to electrical wiring, renewing food preparation
surfaces, storage and cooking areas, minor kitchen layout alterations, flooring, decorative
finishes including tiling and renewal of sanitary facilities.
Kitchen and Bathroom Renewal Contingency
The investment will be to improve the internal living facilities to those homes scheduled for
new kitchen and bathrooms but which have become empty and require significant level of
repair in order to make ready for letting. Work will include alterations to electrical wiring,
renewing food preparation surfaces, storage and cooking areas, minor kitchen layout
alterations, flooring, decorative finishes including tiling and renewal of sanitary facilities.
Located in Safe/Attractive Environments
Environment - Within the Curtilage
Fencing, Boundary Walls, Hard Standings
The scheme will install fencing and protection work within the curtilage of homes. The
work will include repairs or renewal to walls and fencing to boundaries and locations within
the garden where there is a risk of falls from height as well a the installation of hand rails.
Where required repairs will be undertaken to Council owned hard standings. The aim is to
improve home safety and security.
Page 193
Fencing, Boundary Walls, Hard Standings Contingency
The scheme will install fencing and handrails to those homes scheduled for this work but
which have become empty and require significant level of repair in order to make ready for
letting. The work will include repairs or renewal to walls and fencing to boundaries and
locations within the garden where there is a risk of falls from height as well as the
installation hand rails. The aim is to improve home safety and security.
Paths, Steps and Housing Health and Safety Rating System - Various
The scheme will repair or renew paths and steps within the curtilage of homes to ensure
safe circulation in and around the property.
Drying Facilities
The WHQS requires the provision of adequate drying facilities. The scheme will repair
existing and improve drying areas to ensure there is a suitable facility.
Voice Entry Systems
Voice entry systems provide a secure point of entry for flats with communal entrances.
The investment is to renew existing systems as well as providing new systems for
selected blocks of flats based on stock condition survey results.
Meter Boxes – Various Locations
Meter boxes will be renewed to ensure adequate protection and ensure homes are safe.
This contract is ongoing and will operate over the period of this four year programme.
Environment – Estate Based
Environment – General
The scheme is to improve areas belonging to the Housing Service which are outside the
curtilage of individuals’ homes. The schemes will be based on consultation exercises with
stakeholders as well as repairs necessary for the Housing Service to discharge it duties as
the asset holder.
Resurfacing Communal Areas and Walkways
The scheme is to repair and renew sections of communal areas in Housing Service
ownership where currently there is a risk of accidents and injury to tenants and the
general public. The outcome will improve general health and safety.
Car Parking
Under this scheme, repairs will be undertaken to car parking areas in Housing ownership
to ensure their safe and continued use.
Meeting Requirements of the Household
Adaptations
This funding is for alterations and improvements to council homes for tenants with medical
conditions or disabilities. This contract is ongoing and will operate over the period of this
four year programme.
Page 194
Agenda Item 13.a
Report of the Section 151 Officer
Council - 18 February 2014
STATUTORY RESOLUTION –
RESOLUTIONS TO BE MADE IN ACCORDANCE WITH THE REGULATIONS IN THE
SETTING OF THE COUNCIL TAX 2014/2015
(1)
THAT the Council notes and adopts the statutory resolutions set out below.
(2)
THAT it be noted that at its meeting on 19th November 2013 the Council calculated the
following amounts for the year 2014/2015 in accordance with Regulations made under
Section 33(5) of the Local Government Finance Act 1992 (as amended) -
a) 88,367 being the amount calculated by the Council, in accordance with Regulation 3
of the Local Authorities (Calculation of Council Tax Base) (Wales) Regulations 1995,
as amended, as its Council Tax base for the year.
b) Parts of the Council’s Area –
Bishopston
1,920
Clydach
2,554
Gorseinon
3,080
Gowerton
1,940
Grovesend
398
Ilston
313
Killay
2,086
Llangennith, Llanmadoc & Cheriton
488
Llangyfelach
946
Llanrhidian Higher
1,567
Llanrhidian Lower
316
Llwchwr
3,178
Mawr
737
Mumbles
9,546
Penllergaer
1,291
Pennard
1,437
Penrice
431
Pontarddulais
2,279
Pontlliw & Tircoed
1,035
Port Eynon
402
Reynoldston
282
Rhossilli
195
Three Crosses
711
Upper Killay
573
being the amounts calculated by the Council, in accordance with Regulation 6 of the
Regulations, as the amounts of its Council Tax base for dwellings in those parts of its area to
which special items relate.
Page 195
(3)
THAT the following amounts be now calculated by the Council for the year 2014/2015 in
accordance with Section 32 to 36 of the Local Government Finance Act 1992 -
(a)
£681,055,243
being the aggregate of the amounts which the
Council estimates for the items set out in Sections
32(2)(a) to (d) of the Act.
(b)
£266,902,731
being the aggregate of the amounts which the
Council estimates for the items set out in Sections
32(3)(a), 32(3)(c) and 32(3a) of the Act.
(c)
£414,152,512
being the amount by which the aggregate at (3)(a)
above exceeds the aggregate at 3(b) above,
calculated by the Council, in accordance with
Section 32(4) of the Act, as its budget requirement
for the year.
(d)
£317,849,496
being the aggregate of the sums which the Council
estimates will be payable for the year into its
Council Fund in respect of redistributed non-
domestic rates, and revenue support grant less
discretionary Non Domestic Rate relief.
(e)
£1,089.81
being the amount at (3)(c) above less the amount
at (3)(d) above, all divided by the amount at (2)(a)
above, calculated by the Council, in accordance
with Section 33(1) of the Act, as the basic amount
of its Council Tax for the year.
(f)
£867,812
being the aggregate amount of all special items
referred to in Section 34(1) of the Act.
(g)
£1,079.98
being the amount at (3)(e) above less the result
given by dividing the amount at (3)(f) above by
the amount at (2)(a) above, calculated by the
Council, in accordance with Section 34(2) of the
Act, as the basic amount of its Council Tax for the
year for dwellings in those parts of its area to
which no special items relate.
Page 196
(h)
Parts of the Council’s Area -
Bishopston
1,097.69
Clydach
1,116.64
Gorseinon
1,106.77
Gowerton
1,097.34
Grovesend & Waungron
1,092.54
Ilston
1,089.43
Killay
1,089.09
Llangennith, Llanmadoc
1,094.84
& Cheriton
Llangyfelach
1,100.06
Llanrhidian Higher
1,124.33
Llanrhidian Lower
1,086.31
Llwchwr
1,104.82
Mawr
1,143.75
Mumbles
1,091.64
Penllergaer
1,099.34
Pennard
1,109.21
Penrice
1,103.18
Pontarddulais
1,116.40
Pontlliw & Tircoed
1,113.00
Port Eynon
1,093.66
Reynoldston
1,118.99
Rhossili
1,096.90
Three Crosses
1,122.22
Upper Killay
1,111.39
being the amounts given by adding to the amount at (3)(g) above the amounts of the special
items relating to dwellings in those parts of the Council’s area mentioned above divided in each
case by the amount at (2)(b) above, calculated by the Council, in accordance with Section 34(3)
of the Act, as the basic amounts of its Council Tax for the year for dwellings in those parts of its
area to which one or more special items relate.
Page 197
(I)
Parts of the Council’s Area -
Band
Band
Band
Band
Band
Band
Band
Band
Band
A
B
C
D
E
F
G
H
I
£
£
£
£
£
£
£
£
£
Bishopston
731.80 853.75 975.72 1,097.69 1,341.63 1,585.55 1,829.49
2,195.38
2,561.27
Clydach
744.43 868.49 992.57 1,116.64 1,364.79 1,612.92 1,861.07
2,233.28
2,605.49
Gorseinon
737.85 860.82 983.79 1,106.77 1,352.72 1,598.67 1,844.62
2,213.54
2,582.46
Gowerton
731.56 853.48 975.41 1,097.34 1,341.20 1,585.05 1,828.90
2,194.68
2,560.46
Grovesend & Waungron
728.36 849.75 971.14 1,092.54 1,335.33 1,578.11 1,820.90
2,185.08
2,549.26
Ilston
726.29 847.33 968.38 1,089.43 1,331.53 1,573.62 1,815.72
2,178.86
2,542.00
Killay
726.06 847.07 968.08 1,089.09 1,331.11 1,573.13 1,815.15
2,178.18
2,541.21
Llangennith, Llanmadoc
729.90 851.54 973.19 1,094.84 1,338.14 1,581.43 1,824.74
2,189.68
2,554.62
& Cheriton
Llangyfelach
733.38 855.60 977.83 1,100.06 1,344.52 1,588.97 1,833.44
2,200.12
2,566.80
Llanrhidian Higher
749.56 874.47 999.40 1,124.33 1,374.19 1,624.03 1,873.89
2,248.66
2,623.43
Llanrhidian Lower
724.21 844.90 965.61 1,086.31 1,327.72 1,569.11 1,810.52
2,172.62
2,534.72
Llwchwr
736.55 859.30 982.06 1,104.82 1,350.34 1,595.85 1,841.37
2,209.64
2,577.91
Mawr
762.50 889.58 1,016.66 1,143.75 1,397.92 1,652.08 1,906.25
2,287.50
2,668.75
Mumbles
727.76 849.05 970.34 1,091.64 1,334.23 1,576.81 1,819.40
2,183.28
2,547.16
Penllergaer
732.90 855.04 977.19 1,099.34 1,343.64 1,587.93 1,832.24
2,198.68
2,565.12
Pennard
739.48 862.71 985.96 1,109.21 1,355.71 1,602.19 1,848.69
2,218.42
2,588.15
Penrice
735.46 858.02 980.60 1,103.18 1,348.34 1,593.48 1,838.64
2,206.36
2,574.08
Pontarddulais
744.27 868.31 992.35 1,116.40 1,364.49 1,612.58 1,860.67
2,232.80
2,604.93
Pontlliw & Tircoed
742.00 865.66 989.33 1,113.00 1,360.34 1,607.67 1,855.00
2,226.00
2,597.00
Port Eynon
729.11 850.62 972.14 1,093.66 1,336.70 1,579.73 1,822.77
2,187.32
2,551.87
Reynoldston
746.00 870.32 994.66 1,118.99 1,367.66 1,616.32 1,864.99
2,237.98
2,610.97
Rhossili
731.27 853.14 975.02 1,096.90 1,340.66 1,584.41 1,828.17
2,193.80
2,559.43
Three Crosses
748.15 872.83 997.53 1,122.22 1,371.61 1,620.98 1,870.37
2,244.44
2,618.51
Upper Killay
740.93 864.41 987.90 1,111.39 1,358.37 1,605.34 1,852.32
2,222.78
2,593.24
All other parts
719.99 839.98 959.98 1,079.98 1,319.98 1,559.97 1,799.97
2,159.96
2,519.95
of the Council area
being the amounts given by multiplying the amounts at (3)(g) and (3)(h) above by the number
which, in the population set out in Section 5(1) of the Act, is applicable to dwellings listed in a
particular valuation band divided by the number which in that proportion is applicable to
dwellings listed in valuation band D, calculated by the Council, in accordance with Section 36(1)
of the Act, as the amounts to be taken into account for the year in respect of the categories of
dwellings listed in the different valuation bands.
Page 198
(4)
THAT it be noted that for the year 2014/2015 the Police and Crime Commissioner for
South Wales have stated the following amounts in precepts issued to the Council, in
accordance with Section 40 of the Local Government Finance Act 1992, for each of the
categories of dwelling shown below -
Band
Band
Band
Band
Band
Band
Band
Band
Band
A
B
C
D
E
F
G
H
I
£
£
£
£
£
£
£
£
£
The Police and
126.89
148.04
169.19
190.34
232.64
274.94
317.23
380.68
444.13
Crime Commissioner
for South Wales
(5)
THAT having calculated the aggregate in each case of the amounts at (3)(I) and (4)
above, the Council, in accordance with Section 30(2) of the Local Government Finance
Act 1992, hereby sets the following amounts as the amounts of Council Tax for the year
2014/15 for each of the categories of dwelling shown below –
Band
Band
Band
Band
Band
Band
Band
Band
Band
A
B
C
D
E
F
G
H
I
£
£
£
£
£
£
£
£
£
Bishopston
858.69 1,001.79 1,144.91 1,288.03 1,574.27 1,860.49 2,146.72 2,576.06 3,005.40
Clydach
871.32 1,016.53 1,161.76 1,306.98 1,597.43 1,887.86 2,178.30 2,613.96 3,049.62
Gorseinon
864.74 1,008.86 1,152.98 1,297.11 1,585.36 1,873.61 2,161.85 2,594.22 3,026.59
Gowerton
858.45 1,001.52 1,144.60 1,287.68 1,573.84 1,859.99 2,146.13 2,575.36 3,004.59
Grovesend & Waugron
855.25
997.79 1,140.33 1,282.88 1,567.97 1,853.05 2,138.13 2,565.76 2,993.39
Ilston
853.18
995.37 1,137.57 1,279.77 1,564.17 1,848.56 2,132.95 2,559.54 2,986.13
Killay
852.95
995.11 1,137.27 1,279.43 1,563.75 1,848.07 2,132.38 2,558.86 2,985.34
Llangennith, Llanmadoc
856.79
999.58 1,142.38 1,285.18 1,570.78 1,856.37 2,141.97 2,570.36 2,998.75
& Cheriton
Llangyfelach
860.27 1,003.64 1,147.02 1,290.40 1,577.16 1,863.91 2,150.67 2,580.80 3,010.93
Llanrhidian Higher
876.45 1,022.51 1,168.59 1,314.67 1,606.83 1,898.97 2,191.12 2,629.34 3,067.56
Llanrhidian Lower
851.10
992.94 1,134.80 1,276.65 1,560.36 1,844.05 2,127.75 2,553.30 2,978.85
Llwchwr
863.44 1,007.34 1,151.25 1,295.16 1,582.98 1,870.79 2,158.60 2,590.32 3,022.04
Mawr
889.39 1,037.62 1,185.85 1,334.09 1,630.56 1,927.02 2,223.48 2,668.18 3,112.88
Mumbles
854.65
997.09 1,139.53 1,281.98 1,566.87 1,851.75 2,136.63 2,563.96 2,991.29
Penllergaer
859.79 1,003.08 1,146.38 1,289.68 1,576.28 1,862.87 2,149.47 2,579.36 3,009.25
Pennard
866.37 1,010.75 1,155.15 1,299.55 1,588.35 1,877.13 2,165.92 2,599.10 3,032.28
Penrice
862.35 1,006.06 1,149.79 1,293.52 1,580.98 1,868.42 2,155.87 2,587.04 3,018.21
Pontarddulais
871.16 1,016.35 1,161.54 1,306.74 1,597.13 1,887.52 2,177.90 2,613.48 3,049.06
Pontlliw & Tircoed
868.89 1,013.70 1,158.52 1,303.34 1,592.98 1,882.61 2,172.23 2,606.68 3,041.13
Port Eynon
856.00
998.66 1,141.33 1,284.00 1,569.34 1,854.67 2,140.00 2,568.00 2,996.00
Reynoldston
872.89 1,018.36 1,163.85 1,309.33 1,600.30 1,891.26 2,182.22 2,618.66 3,055.10
Rhossili
858.16 1,001.18 1,144.21 1,287.24 1,573.30 1,859.35 2,145.40 2,574.48 3,003.56
Three Crosses
875.04 1,020.87 1,166.72 1,312.56 1,604.25 1,895.92 2,187.60 2,625.12 3,062.64
Upper Killay
867.82 1,012.45 1,157.09 1,301.73 1,591.01 1,880.28 2,169.55 2,603.46 3,037.37
All other parts of the
Council area
846.88
988.02 1,129.17 1,270.32 1,552.62 1,834.91 2,117.20 2,540.64 2,964.08
Page 199
Agenda Item 14.
COUNCILLORS’ QUESTIONS – COUNCIL PROCEDURE RULE 22
PART A - SUPPLEMENTARIES
1.
Councillors C A Holley, J W Jones, E W Fitzgerald and P R Hood- Williams
The Council engaged Mr James Goudie QC at a cost of £15,000 to advise the
Council on the Gypsy Traveller site selection process. Will the Leader / Cabinet
Member tell Council did Mr Goudie advise that the process was at anytime
flawed or carried out incorrectly.
Response of the Leader
Yes I will tell you, no he didn’t.
2.
Councillors E W Fitzgerald & I M Richard
The Leader has indicated that the Council has signed the Dublin Declaration.
Could he inform Members what changes and improvements this will bring and if
there are any associated costs.
Response of the Leader
During the Irish Presidency of the European Union, in June 2013, senior
political and other representatives of European cities, municipalities,
communities and regions attended a summit on “Age friendly communities” in
Dublin. Wales was invited to participate and sign up to a common set of
principles and actions known as the Dublin Declaration.
In common with a number of Welsh Local Authorities Cabinet, on the 14th of
January 2014, agreed to sign the Declaration and be part of European wide
work on ageing well and age friendly cities. This is very closely aligned to work
that has been undertaken and, is planned, in Swansea in implementing the
Welsh Government’s Strategy for Older People. It also aligns with the Council’s
partnership work in the Healthy Cities’ Network and its intention to be a Healthy
City.
In terms of key changes and improvements - by becoming a signatory the
Council is demonstrating a commitment to the pledges and aspirations of the
Dublin Declaration. It will provide a framework for a wide range of benefits for
older people, for example:
• To highlight, value and support the positive social, economic and cultural
contribution older people make to our communities
• An opportunity to re-examine what actions and considerations are required
for us to become a more age friendly city and Council
• How communities and services are supported to be sensitive to the needs of
people with dementia.
This work will be undertaken within existing budgets/business as usual and will
include raising awareness, sharing good practice and considering how current
services can be reshaped to support the aims within the Dublin Declaration.
Implementation will be reported and monitored through our work on the third
phase of the Strategy for Older People.
PART B - None
Page 200
Agenda Item 15.a
‘Scrutiny enables councillors who are not in the cabinet to examine the quality and effectiveness of
services and policies, hold decision makers to account, and make recommendations for improvement’
What is the connection between Parks, Planning and School Meals?
These issues were recently looked at by a Scrutiny Working Group. This involved a group of
interested councillors getting together to meet with relevant cabinet members and/or officers for a
one-off meeting. Whilst most scrutiny activity is carried out through the Scrutiny Programme
Committee itself and by establishing informal Inquiry and Performance Panels, Scrutiny Working
Groups provide opportunity for ‘light touch’ scrutiny of a topic of interest. This supports the idea of
flexibility within the work programme and capacity to pick up specific issues as they arise. The
Working Group may then make recommendations to the relevant Cabinet Member (typically through
a convener’s letter) or, if it is felt that more in-depth scrutiny is required, they can refer this to the
committee for a future work planning discussion.
In the case of the Working Group looking at the Parks Service, led by Councillor John Newbury, the
meeting enabled scrutiny councillors to obtain information and put questions relating to: parks
provision across Swansea; performance and trends (including usage); the upkeep of parks in local
communities; green flag success; and future challenges, risks and opportunities.
Another Working Group recently held, led by Councillor Mark Thomas, focused on the Planning
Service, with scrutiny councillors raising questions and getting the opportunity to talk about concerns
relating to issues including: enforcement activity; the relationship between planning and building
control; staff recruitment and retention; officer / member relationship; and planning fee income.
Over the last year a number of other issues have been tackled using a Working Group including:
Allotments; Welfare Reform; and School Meals. Future Working Groups that have already been
identified will soon be looking at the following:
•
Social Housing – to discuss the potential of introducing a single waiting list for social housing in
Swansea that covers the Council and all Registered Social Landlords (convener: Cllr Hennegan)
•
Historic Buildings – to discuss the maintenance of historic buildings in Swansea, powers and
responsibilities (convener: Cllr Meara)
•
Car Parking – to discuss the provision across Swansea, performance, and plans for improvement
(convener: Cllr Colburn)
New Education Inclusion Inquiry Panel
(Lead: Councillor Cheryl Philpott)
As existing inquiries come to an end the Scrutiny Programme Committee considers what new Inquiry
Panels are needed. The guiding principles behind any future inquiry are that it must be strategic and
significant, an issue of concern, and represent a good use of scrutiny time. One of the issues
identified is the need to look at why some children require education other than at school, and what
can be done to improve their outcomes. A new Inquiry Panel has been established and will be
meeting in February to commence this work. The first task for any Inquiry Panel is to develop clear
Terms of Reference and plan the evidence gathering. The Panel will report after 6 months.
Page 201
Gypsy & Traveller Site Provision – Scrutiny Review of Process
(Lead: Councillor Clive Lloyd)
Following reference at Council, the Scrutiny Programme Committee has now agreed a brief for this
scrutiny activity. This work will enable scrutiny to review the process adopted to date in the search for
a second Gypsy and Traveller Site, seek assurance on quality, identify any learning points, and
recommend any changes for the future as appropriate.
It was agreed that the most effective way of carrying out this work would be via special meetings of
the committee, but giving thought to how other councillors can be engaged in the process. These
meetings will be chaired by Cllr Clive Lloyd.
A series of special meetings of the Scrutiny Programme Committee are being planned for 20
February, 6 March, 24 March and 3 April.
How can I find out more about informal Panels and Working Groups?
(Lead: Councillor Mike Day)
Although Scrutiny Panels and Working Groups represent an informal way of working, meetings are
accessible to the public. Because of their ad hoc nature efforts are being made to ensure visibility
and awareness about meetings and issues being discussed, so that people can engage with this
work as desired.
All meetings are included in the Council diary and included in the timetable of fortnightly meetings. A
weekly update is provided to councillors, published on the council’s website and placed on notice
boards. In addition, news about Panels and Working Groups is featured on the Swansea Scrutiny
blog (link below). Here you will find details of upcoming meetings and points of contact if you require
more details, as well as stories about key findings from this work. Councillors receive an automatic
email of new content which they can share, but anyone can subscribe for updates.
How can I influence the future Scrutiny Work Programme?
(Lead: Councillor Mike Day)
As we are about to enter the final quarter of the municipal year councillors are reminded that they will
once again be invited to participate in the Scrutiny Annual Work Planning Conference. The
conference will take place in May 2014 to consider and identify priorities for scrutiny for the 2014/15
council year. Councillors will be able to feed in ideas about future topics for scrutiny through the
Scrutiny Annual Stakeholder Survey that will be out in March. The Scrutiny Work Programme will be
also be informed by views from staff, public and partners.
Even with a work programme established requests for scrutiny on matters of concern can be made
throughout the year The chair of the Scrutiny Programme Committee will consider any issue raised
and, with the committee’s agreement, determine how best scrutiny can deal with it.
Connect with Scrutiny:
Room 3.3.7, Civic Centre, Swansea. SA1 3SN (Tel. 01792 637732)
Web: www.swansea.gov.uk/scrutiny
Twitter: @swanseascrutiny
Email: xxxxxxxx@xxxxxxx.xxx.xx
Blog: www.swanseascrutiny.co.uk
Like us on Facebook: www.facebook.com/swanseascrutiny
Page 202
Agenda Item 15.b
Report of the Head of Legal, Democratic Services & Procurement
Council – 18 February 2014
WRITTEN RESPONSES TO QUESTIONS ASKED AT THE LAST
ORDINARY MEETING OF COUNCIL
The report provides an update on the responses to Questions asked during
the last Ordinary Meeting of Council on 21 January 2014.
FOR INFORMATION
1.
INTRODUCTION
1.1
It was agreed at Council on 8 April 2010 that a standing item be
added to the Council Summons entitled “Written Responses to
Questions Asked at the Last Ordinary Meeting of Council”.
1.2
A “For Information” report will be compiled by the Democratic
Services Team collating all written responses from the last
Ordinary Meeting of Council and placed in the Agenda Pack;
1.3
Any consequential amendments be made to the Council
Constitution.
2.
RESPONSES
2.1
Responses to questions asked during the last ordinary meeting of
Council are included as Appendix A.
Background Papers: None
Appendices: Appendix A (Questions & Responses)
Page 203
Appendix A
Providing Council with Written Responses to Questions at Council –
21 January 2014
1.
Mrs Lis Davies asked the Cabinet Member for Opportunities & Young
People
Question
In the 2012-2013 budget £10,000 was allocated to ‘show Racism the Red card’.
The Cabinet Members response states that there had been positive feedback
from teachers and pupils. There is also a list of schools that have been visited
and are due to be visited in the future.
Could I have a copy of the list and any supporting documentation relating to the
initiative
Response of the Cabinet Member for Opportunities & Young People
Thank you for your question in regards to the Show Racism the Red Card
provision. Please find attached a copy of the report but I would like to caution
that it is a very open and frank report and so it contains some particularly
unsavoury language and images.
I hope you find the information useful and I hope once you’ve read through it
you’re as pleased as I am with the work the organisation is doing with our
Children and Young People.
The schools that have been scheduled for 2014/2015 include:
Cefn Hengoed
Lon Las
Blaenymaes
Hafod
Brynhyfryd
Glyncollen
Cadle
Townhill
Gwyrosydd
Terrace Road
Seaview
Dylan Thomas
Dunvant
Portmead
Login Fach
Waunarlwydd
Gorseinon
Penyrheol Comp
Penyrheol Primary
Trallwyn
Birchgrove
If you’d like any more information please feel free to contact me
Page 204
2.
Councillor EW Fitzgerald asked the Cabinet Member for Finance &
Resources
Question
Can Council be provided with the costs associated with the following elements
of the modernisation of the Council Chamber, Civic Centre scheme:
i)Improving flexibility and access for wheelchair users;
ii)Installation of a wheelchair lift / platform into the public gallery, and 2
wheelchair spaces, allowing access to all members of the public.
Response of the Cabinet Member for Finance and Resources
i) Improving flexibility and access for wheelchair users;
It is very difficult to answer this question with precision due to the nature of the
project. The project was based on providing the best possible accessibility both
in terms of physical attendance and democracy. The design specification took
into account a number of infrastructure works and, as one would appreciate,
the costings were not provided in terms of “packages of works”, but on a whole
project specification basis.
Improving flexibility and access for wheelchair users was therefore one of a
number of important elements of the overall inclusive design package
ii)
Installation of a wheelchair lift / platform into the public gallery, and 2
wheelchair spaces, allowing access to all members of the public.
As stated above, the works to enable the wheelchair lift / platform and 2
wheelchair spaces was included in the overall design specification and it is not
possible to provide the building costs to facilitate it in isolation.
However, I can confirm that the basic cost for the supply of a wheelchair
platform lift is approximately £10K.
Page 205
Document Outline