The minutes of the meeting held on 8 December 2014 were submitted and approved and the Chairman was authorised to sign them as an accurate record.

There were none.

None reported.

Report of the Deputy Chief Executive.

Scrutiny considered the report of the Deputy Chief Executive setting out the general fund revenue budget proposals for 2015/16 and a rolling 3-year capital programme 2014/18. The medium term financial strategy (MTFS) had been revised in July 2014 and the Cabinet had agreed a draft 2015/16 budget proposal last December. The MTFS and resulting draft budget had been subject to extensive consultation and previously reported to Cabinet and the Scrutiny Committee.

The budget proposals included:

·         No increase in the Council Tax in 2015/16

·         Overall savings/new income totalling £1.5m (9% of the net budget)

·         Efficiency savings of £1m (6% of the net budget)

·         Inflation of £0.6m (4% of the net budget)

·         Other recurring service growth of £0.4m

·         Non recurring service investments £0.5m

·         General Reserves averaging in excess of £4m (against a minimum recommended of £2m)

·         Capital resources of £0.8m invested in new capital schemes

The budget represented management of financial risks which were highlighted within the report.

The committee was advised that the headline figures of the Government settlement were;

•        A reduction in revenue support grant of £1.2m (30%)

•        Partially offset by new homes bonus (additional £0.2m in 2015/16)  

The NNDR business rate base had increased slightly (£0.2m) largely as a result of the inflationary increase which had been capped at 2%.  In addition to the formula grant the Government was financing the cost of a 1% increase in council tax (£86,000) which it had confirmed would be put in the base for 2016/17 and beyond.

Members noted that the Government had announced that Eastbourne would receive £1.1m in total of new homes bonus due to the growth in housing in the area and the further reduction in empty properties. The grant would be paid in tranches for six years.  The 2015/16 figure included five tranches.

The committee was further advised that the funding was not guaranteed beyond a six year horizon for each tranche and that the projected award for 2016/17 was £1.3m.

The Government was financing the additional NHB from reductions in RSG, therefore, whilst volatile, it is currently the preferred method of distribution of resources.

Members noted that no increase to council tax for 2015/16 had been proposed and this would result in an unchanged band D rate of £224.19 (14% of the total council tax bill).

A summary of the resources available was given within the report.  In order to achieve a balanced budget without using reserves, the Council would need to set a net expenditure budget for 2015/16 of £15.2m.

In addition to the general grant distributed through the new formula grant system, given towards financing the Council’s net expenditure, the Government also provided some specific grants.  These specific grants would fund in part or in full, service costs.

National Benefit Subsidy - as part of a national scheme delivered locally, this grant was intended to reimburse the Council for the awards of benefit made to eligible tenants in both the private and public rented sector.  Not only was this by far the largest  ...  view the full minutes text for item 18.

Report of Senior Head of Community and Chief Finance Officer.

Scrutiny considered the report of the Senior Head of Community and Chief Finance Officer detailing the HRA budget proposals, rent levels, service charges and heating costs for 2015/16 and the HRA Capital Programme for 2014/17.

The committee was advised that from 1 April 2012 the way that the Council’s social housing was financed had changed and the HRA became self-financing.  Expenditure therefore needed to be supported from rental and other income.

HRA Revenue Budget – The 2015/16 budget had been prepared following the principles adopted within the HRA 30 year Business Plan and showed a surplus of (£296,130) which was due to a number of favourable factors detailed within the report.

Members noted that the HRA budget was performing better than expected in the 30 year business plan due to various initiatives to control expenditure, including a reduction in the management fee payable to EHL since the start of the plan and lower than anticipated interest rates. At the same time income earnings from rents and service charges had remained on target. This allowed some scope for some spending to be realigned, as summarised within the report.

Rent Levels – The Council had been following the Government’s guidance for rents for social housing since December 2001. Under the HRA self-financing settlement the government had assumed that rent convergence was achieved in 2015/16.   In May 2014, the Government issued new guidance setting out its policy on rents for social housing from April 2015.  The new guidance simplified the approach to setting the rent for each property. The Government recognised that some properties would not have reached their formula rent by April 2015 and recommended that rent only moves up to formula rent where the property was re-let following vacancy. Although most of the Council’s properties had reached convergence, the number of properties that still needed to reach convergence would reach convergence at a slower rate.

Members noted that compliance with new guidance was not compulsory.

Previously, rent setting above government convergence limits was discouraged by the ‘rent rebate subsidy limitation’ rule which made the HRA liable for the additional Housing Benefit payments generated by excess rents. Following the move to self-financing, the ‘limits’ rule was no longer relevant to local authorities.  In order to reduce the number of properties trying to reach their formula rent, members noted that Cabinet were asked to recommend that council rents were set at a higher level with an average increase of 2.28%.

Although the accelerated convergence proposed showed more of a weekly increase to 896 tenants, it did not suggest an increase over £3.00 per week to any of the Council’s tenants keeping the increase at an affordable level as shown in the profiling tables at Appendix 2 of the report. 

Service Charges – The committee was advised that for properties in shared blocks these charges cover common services such as communal heating, lighting, equipment maintenance contracts, cleaning and grounds maintenance. In Older Persons Sheltered Accommodation the charges additionally included On-Site Co-ordinators, Lifeline services, lift  ...  view the full minutes text for item 19.

Report of the Deputy Chief Executive and Senior Head of Corporate Development and Governance.

Members considered the report of the Chief Finance Officer and Head of Corporate Development updating Members on the Council’s performance against Corporate Plan Priority actions, indicators and milestones for Quarter 3 2014/15.

Following the changes to the crime reporting procedures, changes would be made to crime related PI’s only, as previous targets were no longer relevant to the data being reported.  These PI’s would be revised for the next iteration of the Corporate Plan.

Appendix 1 to the report provided a detailed report on the 2014/15 activities and outturns of the performance indicators listed within the Corporate Plan.  The first section of Appendix 1 listed all the Corporate Plan priority actions whose in-year milestones had already been fully completed this year.  The second section of Appendix 1 listed the ongoing actions showing all milestones that were scheduled for completion within the first quarter of the 2014/5.

Of the 25 Key Performance Indicators reported in the Corporate Plan this quarter, four were currently showing as Red, 12 were showing as Green, three were showing as Amber and six were data only or contextual PIs.  The off target PIs were as follows:

·         DE_011 -  Number of reported fly-tipping incidents

·         CD_008 - Decent Homes programme

·         CD_055 – Number of completed adaptations (Disabled Facilities Grants)

·         CD_181 – Time taken to process Housing Benefit/Council Tax Benefit new claims and change events

Members discussed the value for money Marketing Campaign and its reach nationally and internationally.

The Revenues and Benefits Manager was in attendance to answer members’ questions regarding the recent transition from Northgate to OpenRevs.  The committee was advised that risks had been identified prior to the transition period and that where possible manual calculations had been made to ensure residents had received at least partial payments.  There were some 400/500 pieces of work at the beginning of close down with around 3,500 at the end of close down.  This had now been reduced to 800 pieces of work, taking around 15 calendar days to process.  Members noted that ‘pieces of work’ related to households with changes of circumstances, and not individuals that had been affected during the transition period.  The Council received 50,000-60,000 change of circumstance requests and 5,000-6,000 new claims annually.  It was anticipated that ‘pieces of work’ outstanding would be comparable to the same period last year by the end of the first quarter 2015/16, given that the Council was now entering one of the busiest times of year.  The committee was assured that no one had been adversely affected by the transition, and that landlords had been advised of potential delays in payments.  Some 10 complaints had been received throughout the process.

Members noted that the position to the end of December was a positive variance of (£99,000) on net expenditure - a movement of (£176,000) compared to the position at the end of the second quarter in September. Service expenditure showed a variance of (£44,000) mainly as a result of:

   Additional corporate income (£77k)

   Refuse Collection contract savings (£71k)

   One  ...  view the full minutes text for item 20.