FINANCE AND ASSET MANAGEMENT SUB-COMMITTEE. Meeting held at the Civic Centre, Uxbridge on Tuesday 20 June 2000 at 7.30pm

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1 FINANCE AND ASSET MANAGEMENT SUB-COMMITTEE Meeting held at the Civic Centre, Uxbridge on Tuesday 20 June 2000 at 7.30pm Councillors: Robert Benson John Morse Jonathan Bianco Norman Nunn-Price Steve Carey Raymond Puddifoot Geoffrey Courtenay Jeanne Smith Paul Harmsworth Councillor Raymond Puddifoot substituted for Councillor Mohammed Miraj and Councillor Jeanne Smith substituted for Councillor Parmjit Dhanda 1. APPOINTMENT OF CHAIRMAN RESOLVED That Councillor Jonathan Bianco be appointed Chairman for the first cycle of meetings. 2. APPOINTMENT OF VICE-CHAIRMAN RESOLVED That Councillor Courtenay be appointed Vice-Chairman for the first cycle of meetings. 3. MINUTES OF SUB-COMMITTEE The Minutes of the meeting held on 7 March 2000, were agreed as a correct record and signed by the Chairman. 4. CONSIDERATION OF REPORTS IN PUBLIC AND PRIVATE The Sub-Committee agreed that the items of business marked Part 1 would be considered in public and that the matter referred to in Minute 15 would be considered in private for the reasons stated in that minute. Members of the public and press were therefore excluded from the meeting during consideration of that item. 5. SECTION 106 OF THE LOCAL GOVERNMENT FINANCE ACT 1992 It was noted that none of the reports fell within the provisions of Section 106 of the Local Government Finance Act REVIEW OF CAR LOAN SCHEME RECOMMENDATION The Sub-Committee considered a report that set out proposed changes to the car loan scheme provided to Council employees classified as essential or casual car users. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 1

2 Principal elements of the new scheme were that: The manager authorising the loan should state the reason why the applicant required a vehicle for Council business, together with an estimate of annual business mileage. Loans should only to be granted to essential car users, and casual users with annual business mileage in excess of 200. The maximum loan available to an employee would be 14,000, or the equivalent of 9 months salary whichever was the lower. No loan should be granted for purchase of a car which was older than 6 years at the date of purchase (see resolution below). Any vehicle older than 3 years should have a MOT certificate valid for a minimum of 6 months, which certificate should be produced to the Financial Services section along with the DVLC registration document, certificate of insurance and driving licence before the loan is awarded. For any car more than 3 years old a report from a motoring organisation as to the roadworthiness and general state of repair of the car should be obtained, cost to be borne by the applicant. Loans should not be granted for cars with an engine size in excess of 2000cc, for sports cars, 2 seater cars, minibuses or off road vehicles (unless an off road vehicle were particularly suitable for the type of business an applicant would be required to make on official Council business). Where a borrower leaves the service of the Council and the loan is not cleared in full the interest charged on the loan should be at a variable interest rate rather than the beneficial interest rate. An administration charge of 60 should be applied to each loan, to be added to the principal. The report also informed the Sub-Committee that random checks were made on applicants for loans during the lifetime of the loan as part of the Council s anti-fraud deterrent strategy. It would be possible for employees of the Council to become members of the Credit Union, where low cost loans could be obtained. It was moved and seconded that no loan should be issued for a car older than 5 years old, and that the maximum age of a car at the end of a loan should be no more than 8 years. It was also moved and seconded that it be recommended to Policy Committee that it consider adding a review of staff car use to the Human Resources Strategy programme. RECOMMENDATION RECOMMENDED That the Policy Committee give favourable consideration to adding a review of staff car use to the Human Resources Strategy programme. RESOLUTION RESOLVED That the car loan scheme be rewritten in line with the recommendations in the body of the report, subject to no loan being issued for a Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 2

3 car older than 5 years old and the maximum age of the car at the end of the loan being no more than 8 years 7. REVENUE BUDGET 2000/2001 RESOLUTIONS AND REPORTS The Sub-Committee considered a report setting out the final approved revenue budget for the Sub-Committee 2000/01, and monitoring information after month 1. The budget covered direct services within the remit of the Sub-Committee, plus the budget position of support services provided within the Corporate Services Department and Chief Executive s Office. The final approved budget for 2000/01 for this Sub-Committee was 13,124,360. A number of issues were brought to the Members attention. National Non-Domestic Rates additional costs of approximately 45,000 would be needed to fund the NNDR recovery plan (also see Minute 10). Legal staffing budget additional resources were required in specialist fields such as employment and procurement legal advice, and ways of funding these requirements from within existing resources were being investigated. Members allowances to date no agreement had been reached on how to best use an additional allocation of an 315,000 in the base budget for members services, to either be used for members allowances, or an increase in support services allocated to members or a combination of the two. Role of Honour - this proposal was discussed at Council in April 2000, but was not being pursued because of a lack of resources. Savings of 175,000 on the Facility Management base budget were expected to be achieved in full for this financial year. There would however be a probable shortfall of 30-40,000 on the target raised with regard to staff car parking charges. RESOLVED (1) That the final revenue budget 2000/2001 for the Finance and Asset Management Sub-Committee be noted. be noted. (2) That the position with regard to the 2000/01 revenue budget 8. INTERNAL AUDIT ANNUAL REPORT 1999/2000 The Sub-Committee considered a report that set out details of activity carried out by the Internal Audit Section during 1999/2000. The number of final audits issued by the Section had increased dramatically and client satisfaction surveys had a majority of responses ranging from good to very good. The Borough Treasurer commented that the Internal Audit Team was smaller than the size and range of Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 3

4 functions of this Council would indicate and it was also possible that there would be an increased level of Internal Audit activity following a revised code of audit practice for external auditors issued by The Audit Commission. The report stated that the Council s internal control framework was adequate. However a number of areas were identified where improvements could be made to strengthen controls across the Authority. There was a need to raise the profile of existing controls and ensure that staff at all levels are fully aware of consequences that could follow from not complying with existing policies or operating with adequate controls/procedure. Members expressed particular concern at issues raised relating to computer security. Further information was also requested on a number of the Internal Audit reviews already undertaken. Resolved (1) That the report be noted, (2) That a report come to a future meeting of this Sub-Committee outlining actions taken further to secure ICT systems (3) That a further report come to a future meeting of this Sub-Committee outlining the results of 5 of the recent internal audit reports dealing with significant potential financial risks to the authority, and actions taken arising from the internal audit reports. 9. THE COUNCIL S CAPITAL MAINTENANCE PROGRAMME AUDIT REPORT ON THE MULTI-STOREY CAR PARK SCHEME Further to Minute 5 of the meeting held on 7 th March 2000 the Sub-Committee considered a report produced by Internal Audit, on the multi-storey car park scheme. The report set out 12 recommendations arising from the Internal Audit report (as set out below), all of which were recommended for acceptance, with the exception of recommendation 6. The recommendations were: 1. That any as built plans produced are securely held for possible future reference as an aid to more accurately estimating and specifying quantities for contract works. 2. That where as built plans are not available, consideration is given to performing additional preliminary site tests as a means to establishing and specifying the best estimates of quantities as is reasonably possible. Alternatively, consideration should be given to providing an appropriate contract contingency sum or to let the contract on a lump sum basis. 3. That Standing Order No. 78 is amended to clearly reflect the requirement that where a potential capital overspend situation arises, there is a clear requirement for a report to be made to the Borough Treasurer/next relevant Committee. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 4

5 4. That action is taken to ensure that in future, there is a requirement to complete contract documentation provided for the financial control of contract expenditure, without exception. If there is contract proforma documentation that is no longer used/not considered any longer to be relevant, then, their reference should be removed from contract documentation. It is recognised that in future Best Value rather than by Compulsory Competitive Tendering will form the relationship between in-house professional advice and clients. As such, it is important that a client is in receipt of timely and accurate financial information that enables the client to manage a scheme properly. 5. That the requirements for the purposes of financial control as outlined in contract documents and method statement are strictly complied with in all respects. In order for HEC to exercise adequate financial control on behalf of the client (whilst having due regard to the contract requirement to inform the client of any potential overspending) HEC are informed of the total client budget in respect of every contract where they receive an associated commission. The client should inform HEC of any subsequent budget changes as soon as possible. It is recognised that in future Best Value rather than Compulsory Competitive Tendering will form the relationship between in-house professional advice and clients. As such, it is important that the client is in receipt of timely and accurate financial information that enables the client to manage a scheme properly. 6. That the value ( ) of each contract variation is established (estimated or otherwise) at the time of commissioning the variation as soon as possible by HEC. The client should be informed of the value of each and every variation at the earliest opportunity as an aid to budgetary control and having due regard to the requirements of Standing Order No. 78 and the financial control duties imposed by the Contract for Engineering Consultancy Services, whilst also having due regard to the duties and requirements imposed by the forms of works contracts in relation to the issue of variations. 7. That the requirement for establishing the value of each contract variation (estimated or otherwise) at the time of (or very soon after) the commissioning of the variation, should be contained within Standing Orders / Financial Regulations, whilst also having due regard to the duties and requirements imposed by the forms of works contract in relation to the issue of variations. 8. That the client is provided with all necessary and practical information in order that the client is made clearly aware of the distinctive roles and responsibilities of officers in the contract. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 5

6 9. That the client seeks the advice of the client agent and engineer when formulating the detailed budget allocation requirement for contract works, as a means to ensuring that all relevant costs are duly reflected in the total budget allocation. 10. That the client is advised of the differing forms of contract that could be employed in attainment of the works required, together with the advantages and disadvantages thereof and the recommendations of the Project Engineer, having due regard to the associated financial risks. 11. That the Hillingdon Engineering Consultancy procedure for contract supervision and communication processes are reviewed to ensure that there is appropriate cover of all aspects of a contract in the absence of key designated staff. 12. That consideration be given to using the London Housing Consortium as a possible additional means to contractor procurement on behalf of the Council. The report of officers suggested a revised recommendation 6 to read That the value ( ) of each contract variation is established (estimated or otherwise) and referred to the client for decision before the variation is commissioned by HEC, as an aid to effective budgetary control. Where this is ruled out by the need for urgency on Health and Safety grounds or significant further costs arising from delay, the client should be informed of the variation at the earliest opportunity and the reason that consultation was not practical. RESOLVED (1) All the recommendations of the Audit Report on refurbishment of the multi-storey Civic Centre car park be accepted, subject to the revised recommendation 6 set out above replacing that in the Internal Audit report. (2)That officers take appropriate action to implement these recommendations, including where appropriate seeking approval from Council to changes in Standing Orders; and the revision of financial regulations by the Borough Treasurer. 10. NATIONAL NON-DOMESTIC RATES RESCUE PLAN PROGRESS REPORT Further to Minute 13 of the meeting held on 7 th March 2000 the Sub-Committee considered a report setting out actions taken to deal with ongoing difficulties experienced with the Council s National Non-Domestic Rates (NNDR) system. It was necessary to complete remedial work by the end of July 2000 so as to make a claim for reimbursement for National Non-Domestic Rates from the national pool. A significant programme of work to correct corrupted data had been undertaken, as well as dealing with a backlog of valuation work. Sampled manual calculations were now being undertaken to demonstrate that information was correct. The District Auditor was working with the Council on these calculations. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 6

7 The report indicated that it would be necessary to spend approximately 44,700 above the base budget for NNDR to complete the plan. Compensating savings would be identified elsewhere within the Corporate Services department to fund this expenditure. RESOLVED (1) That the progress made to date be noted. (2) That the additional resources, of approximately, 44,700, required to meet the deadline of July 2000 be authorised. 11. REVENUES AND BENEFITS - REPLACEMENT SERVER The Sub-Committee considered a report that set out a requirement to replace a computer used to provide the Revenues and Benefits service. The existing hardware would be unable to operate a new version of application software and the existing application software would no longer be supported by its supplier, with effect from September It would not be possible to upgrade the current machine any further to run new software. Comparison with more modern machines indicated that significant performance improvements could be obtained by moving to the new machine. The cost of acquiring new hardware and migration of data from the existing machine was estimated to be approximately 83,000 which could be covered by existing provision within the current budget for Corporate Services projects. Officers had investigated a number of different options to acquire a new machine which were set out in the report of officers, and purchase from capital was recommended as the best option. RESOLVED That the existing Sequent equipment be replaced, to be funded from capital. 12. REVIEW OF IN-HOUSE ADDITIONAL VOLUNTARY CONTRIBUTION ARRANGEMENTS The Sub-Committee considered a report that outlined options currently available for staff to make Additional Voluntary Contributions (AVC) to the Prudential and Nationwide. Since the scheme was initially set up additional options had been developed by the Prudential, and it was recommended that the full range of these investment funds should be made available to the members of the Council s Local Government Pension Scheme electing to pay AVC s. The report recommended that the Nationwide Building Society be withdrawn as a provider for AVC s, as it was not taking any steps to promote its scheme, and no new contracts had been made with Nationwide for at least the past 3 years. RESOLVED (1) That the full range of investment funds currently offered by Prudential be made available to members of the Local Government Pension Scheme electing to pay Additional Voluntary Contributions. introduced. (2) That new funds be made automatically available as Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 7

8 (3) That the Nationwide Deposit Fund be withdrawn as an option for new AVC contracts. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 8

9 13. COUNCIL TAX AND NATIONAL NON-DOMESTIC RATES IRRECOVERABLE AMOUNTS WRITTEN OFF UNDER DELEGATED POWERS The Sub-Committee considered a report that set out details of the irrecoverable amounts of Council Tax and National Non-Domestic Rates which had been writtenoff by officers under delegated powers in the last quarter. These totalled 4, in respect of Council Tax and 69, in respect of National Non-Domestic Rates. RESOLVED That the irrecoverable amounts of Council Tax and National Non- Domestic Rates written-off by officers under delegated powers be noted. 14. DAMAGE TO VEHICLE CIVIC CENTRE MULTI STOREY CAR PARK The Sub-Committee considered a report that set out details of damage caused to a vehicle whilst parked in the Civic Centre multi storey car park. RESOLVED That whilst not accepting liability for any damage alleged to have been caused, that as a gesture of good will, expenditure of 170 plus VAT be approved for repairs to the vehicle outlined in the report of officers. 15. THE LAPWING SITE, HEATHROW The Sub-Committee considered a report that set out issues in relation to the Lapwing site and the wider Crane Valley. The report outlined the history of the site, ongoing negotiations between this Council and the London Borough of Hounslow, which had been referred to the DETR for arbitration; and the proposed sale of the Lapwing site. RESOLVED (1) That the Sub-Committee notes the current position and endorses officer action taken to protect the Council s position. (2) That the Sub-Committee approve sale of the Lapwing site on terms to be approved by the Head of Property Services Agency, subject to satisfactory proposals for reclamation of the Crane Valley. (This report was included in Part 2 of the Agenda as it contained exempt information as defined in paragraph 12 of schedule 12A of the Local Government Act 1972). Any instructions to Counsel and any opinion of Counsel (whether or not in connection with any proceedings) and any advice received, information obtained or action to be taken in connection with (a) any legal proceedings by or against the Authority, or (b) the determination of any matter affecting the Authority, (whether in each case proceedings have been commenced or are in contemplation). The meeting closed at 9.03 p.m. Finance and Asset Management Sub-Committee Minutes 20 June 2000 Page 9