Civic Centre, Riverside, Stafford Contact Andrew Bailey Direct Dial 01785 619212 Email [email protected]Dear Members Cabinet A meeting of the Cabinet will be held in the Sheridan Room, Civic Centre, Riverside, Stafford on Thursday 5 December 2019 at 6.30pm to deal with the business as set out on the agenda. Please note that this meeting will be recorded Members are reminded that contact officers are shown at the top of each report and members are welcome to raise questions etc in advance of the meeting with the appropriate officer. Head of Law and Administration 1
Transcript
Civic Centre, Riverside, Stafford Contact Andrew Bailey
A G E N D A 1 Minutes of 7 November 2019 as published in Digest No 261 on 8 November
2019 2 Apologies 3 Councillors’ Question Time (if any) 4 Proposals of the Cabinet Members (as follows):- Page Nos (a) RESOURCES PORTFOLIO (i) General Fund Revenue Budget 2019-20 to 4 - 25 2022-23 and Capital Programme 2019-20 to 2022-23 (ii) Resources Portfolio - General Fund Revenue 26 - 42 Budget 2019/20 - 2022/23 and Capital Programme 2019/20 - 2022/23 (iii) Treasury Management Strategy, Minimum Revenue 43 - 75 Provision Policy, Annual Investment Strategy 2020/21 (iv) Risk Management Report 76 - 108 (v) Permission to Spend Capital for Agile Working 109 - 115 (vi) Committee Cycle 2020/21 116 - 131 (vii) Revenues and Benefits Collection Report - 132 - 144 Quarter 2 - PART CONFIDENTIAL
This Report is part confidential due to the inclusion of information relating to an action taken or to be taken in connection with the prevention, investigation or prosecution of crime, along with information relating to individuals. No representations have been received in respect of this matter.
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Page Nos (b) ECONOMIC DEVELOPMENT AND PLANNING PORTFOLIO (i) Planning Portfolio - General Fund Revenue 145 - 157 Budget 2019/2020 - 2022/2023 and Capital Programme 2019/2020 - 2022/2023 (ii) Great Crested Newts - NatureSpace Partnership 158 - 179 (iii) Brownfield Land Register Part 1 - Update 180 - 188 (iv) Government Grant Funding - Future High 189 - 190 Street Fund (c) COMMUNITY AND HEALTH PORTFOLIO (i) Community Portfolio - General Fund Revenue 191 - 202 Budget 2019/2020 - 2022/2023 and Capital Programme 2019/2020 - 2022/2023 (d) ENVIRONMENT PORTFOLIO (i) Environment Portfolio - General Fund Revenue 203 - 216 Budget 2019/2020 - 2022/2023 and Capital Programme 2019/2020 - 2022/2023 (e) LEISURE PORTFOLIO (i) Leisure Portfolio - General Fund Revenue 217 - 228 Budget 2019/2020 - 2022/2023 and Capital Programme 2019/2020 - 2022/2023
Membership
Chair - Councillor P M M Farrington
P M M Farrington R M Smith J M Pert J K Price F Beatty C V Trowbridge
- Leader - Deputy Leader and Resources Portfolio - Community and Health Portfolio - Environment Portfolio - Economic Development and Planning Portfolio - Leisure Portfolio
SUBMISSION BY COUNCILLOR R M SMITH RESOURCES PORTFOLIO
CABINET 5 DECEMBER 2019
General Fund Revenue Budget 2019-20 to 2022-23 and Capital Programme 2019-20 to 2022-23
This report is not subject to the call-in procedure and will be referred directly to the Scrutiny Committee for consultation. 1 Purpose of Report 1.1 To consider the current position of the General Fund Revenue Budget for
2019-20 to 2022-23 and the updated capital programme 2019-20 to 2022-23. 2 Proposal of Cabinet Member 2.1 That the following be submitted to the Resources Scrutiny Committee for
consultation:-
(a) the level of net spending for the General Fund Revenue Budget for 2020-21 be set at £17.063 million; with indicative net spending for 2021-22 and 2022-23 of £14.224 million and £14.405 million respectively;
(b) that Government Grants of £3.202 million be used in 2020-21, (c) that council tax is recommended to increase by 1.9% (to £159.27) for
2020-2021, with similar indicative increases for 2021-22 and 2022-23 respectively.
(d) the revised capital programme as set out in APPENDIX 2;
(e) that the Revised Outturn Forecast for 2019-20 of £17.190 million be
approved 2.2 To note that, as a result of the 12 December General Election no date is
currently available for the announcement of the Provisional Local Government Finance Settlement .
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2.3 To note that although indicative figures exist for the use of Governments
Grants for 2021-22 and 2022-23 they cannot be accurately determined at this stage with each element of Government funding being subject to review.
2.4 Details will not be known until the provisional settlement for 2021-22
nevertheless the level of Working Balances maintained by the Council will enable a Balanced Budget to be set for the duration of the Financial Plan.
3 Key Issues and Reasons for Recommendation 3.1 The report sets out the draft budget for 2020-21 as well as indicative budgets
for 2021-22 and 2022-23 and associated issues and also includes current indications of the impact that this will have on Council Tax. Indicative budgets for 2020-21 and 2021-22 were prepared as part of the 2019-20 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022-23.
3.2 The report sets out the Council’s forecast financial position for the next three
years, incorporating the best estimate of Financial Resources available to the Council over the three year period. Actual resources for 2021-22 and 2022-23 will not be known until the Autumn of 2020.
3.3 The report also sets out the updated capital programme and the capital
resources available to the authority to finance that capital programme.
4 Relationship to Corporate Priorities 4.1 The revenue budget and the capital programme have been based on the
Council’s priorities. 5 Report Detail 5.1 Cabinet at its meeting on the 7 November 2019 received the Councils
Financial Plan for the period 2019-20 to 2022-23.The Financial Plan provides the framework for compiling the net expenditure of services as denoted by Controllable Portfolio Budgets and provides a projection of the overall level of resources likely to be available to the Council.
5.2 Individual Draft Portfolio Budgets for 2020-21 are set out elsewhere on this
agenda. The Draft Budgets will be submitted to the Economic Development and Planning Scrutiny Committee on 14 January 2020; Community Wellbeing Scrutiny Committee on the 13 January 2020 and the Resources Scrutiny Committee on 7 January 2020 as part of the Budget consultation process.
5.3 The overall level of resources available to the Council is a key element in the Financial Plan however details for 2020-21 are dependant upon the Provisional Local Government Settlement to be announced late December 2019.
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5.4 2020-21 was envisaged to be the first year of a new financial regime for local government however in accordance with the 2019 Spending Review the 2019-20 Settlement, as uplifted for inflation, will be rolled forward to 2020-21 and the new regime postponed until 2021-22.
5.5 The following paragraphs highlight the background to the compilation of the
Revenue Budget. 5.6 Budget issues Inflation 5.6.1 No material changes have been made to the inflation assumptions with the
provision for CPI and pay awards remaining at 2% for the duration of the budget period. Business Rates income for 2020-21 has been adjusted to reflect the CPI as at September 2019 pending the Provisional Local Government settlement
Additional Cost Pressures/Income variations 5.6.2 The detailed budgets have been refreshed to reflect the outturn for 2018-19 ,
latest spending patterns and variations arising from Fees and Charges approved by Council on the 19 November 2019. The outturn for 2018-19 was reported to Cabinet in August 2019 whereas the Council continues to monitor budgets on a monthly basis and submits regular reports to Scrutiny as part of its Corporate Monitoring.
5.6.3 The outturn for the first seven months shows that income from Bereavement
Services ( £107,000 ) ; Markets (£25,000) and Development Management (£98,000) is lower than anticipated however this has been offset by additional income (£104,000)from Off Street Car Parking and in particular the Waterfront and Riverside Developments and Land Charges (£9,000).
5.6.4 Provision exists within the 2019-20 budgets for increases of 2% per annum
resulting from the 2016 Actuarial Valuation of the Pension Fund. The 2020-21 and 2021-22 budgets reflect the recommended contribution rates arising from the 2019 triennial Actuarial Valuation of the Pension Fund with contributions set to increase by 2% per annum for the next three years.
5.6.5 Other cost pressures include the final reduction of Green Waste Recycling
Credits from the County Council in 2022-23 and the demographic uplift on the Waste Collection budget for that year. The annual provision for tree maintenance has been consolidated into 2020-21 to provide greater flexibility in the application of resources ,arising from the triennial survey of stock condition, over the medium term
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Changes to the Recycling and Waste Collection Service 5.6.6 Cabinet at its meeting of the 7 November 2019 approved a number of
changes to the Recycling and Waste Collection Service to address the issues arising from the Medium Term Financial Plan of the Council.
5.6.7 The Environment Portfolio Budget has therefore been amended to reflect the
changes in Expenditure and Income for the Removal of Recycling Collection sites; Introduction of Additional Kerbside Capacity for Mixed Fibre Material and the Introduction of Chargeable Garden Waste Collection service
Growth Bids - Revenue 5.6.8 The Draft Budget contains a number of additional proposals (Revenue and
Capital). The revenue proposals are summarised below and relate to additional expenditure to be incurred in 2020-21.
Table 1 : Revenue Growth Proposals Ref Description 2020-21 £’000 1. Delivering the Economic Growth Strategy 80 2. Station Gateway Delivery Plan 150 Total 230
5.6.9 In addition Cabinet at its meeting of the 7 November 2019 approved a restructure
of the Economic Development Team to support the Economic Growth Agenda Revenue Impact of Capital programme.
5.6.10 The Revenue Budget has been updated to reflect the impact of the existing
Capital Programme and new bids as referred to in Section 9. Provision exists for the potential additional costs of dry side facilities at Alleynes pending the completion of phase 1 of the Stone Leisure Strategy, whereas ongoing income of £15,000 per annum is anticipated from changes to the Victoria Street Car park
Use of Government Grants New Homes Bonus Grant 5.6.11 The current New Homes Bonus (NHB) Grant is calculated based upon the
movement in the year of the Valuation Office Agency Council Tax list (as at mid September) as adjusted by movements in Long Term Empty Properties (determined by the Council tax Base return to Government in October of each year). The net increase however is then subject to a deadweight reduction based upon each authority naturally achieving a 0.4% increase in housing growth.
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5.6.12 For the period October 2018 to September 2019 Band D new properties have increased by 825, long term empty properties have increased by 49, however the increase is partly offset by 220 of the properties being not eligible for grant reflecting the 0.4% deadweight reduction . The net increase, pending publication of the provisional settlement, is estimated to be 556 properties and will determine the 2020-21 grant allocation.
5.6.13 The Technical Consultation on the 2020-21 Settlement indicated that the government would continue to top slice the Revenue Support Grant to fund legacy payments achieved to date but was also minded to allocate a new allocation for 2020-21. The 2020-21 allocation would not however be subject to future legacy payments.
5.6.14 The Technical Consultation also indicated that the scheme thereafter would be amended to be more effective in incentivizing housing growth and they would consult widely on proposals prior to implementation.
Negative RSG 5.6.15 The roll forward of the 2019-20 settlement to 2020-21 is also likely to see
Negative RSG not being implemented for 2020-21. Negative RSG by its nature requires the core funding arising from business rates to be reduced to reflect the overall funding assessment for the Borough. The Negative Adjustment for 2019-20 amounted to £0.254 million however confirmation of this proposed treatment is awaited as part of the Provisional Local Government Settlement with the Technical Consultation seeking assurances that this remains the right approach. Business Rates
5.6.16 The Baseline (Core Funding ) for Business Rates is similarly to be uplifted for
inflation as part of the roll forward of the 2019-20 settlement. More importantly the postponement of the introduction of the 75% Business Rates scheme until 2021-22 will also delay the reset of Business Rates Growth for that year, as initially reflected in the 2020-21 Budget , with a one off impact of approximately £1.4 million.
5.6.17 The Governments one year Spending Review in 2019 indicated that Business
rates pilots, other than Devolution areas, would cease as at 31 March 2020 and this has been confirmed as part of the Technical Consultation on the 2020-21 Settlement. A letter signed by all the leaders of authorities in Staffordshire has been sent to the Secretary of State for Local Government asking for this proposal to be reconsidered and that Staffordshire & Stoke – on Trent Business Rates Pilot be rolled forward to 2020-21.
5.6.18 In the event that this request is not successful the Members of the pilot have
agreed that pooling arrangements will remain in place for 2020-21 and the benefit of such arrangements has been reflected in the Draft Budget for consultation.
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5.7 Monitoring of the 2019-20 Revenue Budget 5.7.1 The Budget for 2019-20 is monitored each month against the profiled budget.
The position based on the October 2019 figures is set out in the following table:
Table 2 : Budget Monitoring as at 31 October 2019 2019-20 Latest
5.7.2 The table above sets out the current monitoring position as at the end of
October 2019 and includes a projection to the financial year end of the forecast outturn position. The portfolio budget change primarily relates to the changes in income as highlighted in paragraph 5.6.3 The actual outturn for 2019-20, taking into account the above; is now forecast to be likely to be £17.190 million representing a saving of £0.257 million.
5.7.3 Business Rates income is similarly monitored on a monthly basis. The Gross
Rates receivable for 2019-20 is some £0.280 million lower than anticipated however it is envisaged that this may be offset by a reduction in the provision for outstanding appeals as at 31 March 2020.
5.7.4 The overall effect on Working Balances is a year end surplus of £0.773
million. This compares with a surplus of £0.796 million as approved in February 2019.
5.8 Financing of the Budget from 2021-22
Core Government Funding
5.8.1 The Council is no longer in receipt of Revenue Support Grant, the current year settlement actually reflecting a negative requirement, as referred to in paragraph 5.6.15. The Finance Settlement in future years will therefore only relate to Core Funding as reflected in the Business Rates Core Funding Baseline. This Baseline is to be determined as part of a Fair Funding Review across Local Government. A formal consultation on Relative Needs, Resources and principles for Transitional arrangements is still awaited and the setting of baselines and finalising transitional arrangements for 2021-22 onwards is unlikely to be determined in advance of Autumn 2020.
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Business rates retention
5.8.2 The Business Rates Retention Scheme now represents the core form of Government Support. The scheme incentivises Councils to promote economic growth in their area as they are entitled to retain a share of business rates growth. At present local government retains 50% retention of growth and a new scheme was intended to be in place for 2020-21.The new scheme although enabling local government to retain 75% of Business Rates would be fiscally neutral across the sector. This would be achieved by incorporating existing grants ,with Revenue Support Grant and Public Health Grant in particular, to be absorbed within Business Rates funding.
5.8.3 The current Business Rates scheme is particularly complicated and contains a
number of individual components such as Appeals Provision; Tier Splits; Central /Local Rating Lists; Section 31 Grants; Resets and Pooling. Each element of the scheme has been examined however a proposal exists to completely simplify the system, whereby the income of appeals and other variables would be excluded and core income determined and set in advance of the year with growth being separately determined.
5.8.4 Nevertheless in reviewing the work undertaken by the Working Groups established to Steer, Design and Implement this scheme the following key issues have been identified for this Authority: • Core Funding/Fair Funding Baseline • Tier Splits • Transitional Funding • Resets.
5.8.5 It is, however, envisaged that the latter item of Resets will have the major
/material impact on this authority. The forecast growth above baseline for the Borough for 2019-20 currently amounts to £11.03 million and in accordance with a 50% scheme £5.5 million is retained within Staffordshire. Stafford Borough retains £3.1 million (or 28% of overall growth) and the balance is distributed to the County Council and Fire and Recue Service based upon tier splits with a balance being allocated to the Business Rates Pool.
5.8.6 The reset is effectively about how much of this £3.1 million growth generated between resets (in this case 2013-14 to 2019-20) is retained by the local authority and how much is redistributed in the sector.
5.8.7 How resets are to be implemented is still to be determined. Consultation
documents produced to date indicate that a Full Reset would take place in 2020-21(now 2021-22) but thereafter a partial or phased reset would take place. Initial feedback from the government suggests that a phased reset, where authorities retain each year’s growth (or loss) in rates for a number of years and thereafter that growth is redistributed with a minimum 5 year reset period is the preferred option.
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5.8.8 No details are however available for how the Reset at the start of the scheme will be determined and the Consultation document stated that the approach to the reset in 2020-21 and future resets need not be the same.
5.8.9 At worst a full reset would be implemented with a loss of £3.1 million whereas the best outcome now available, whereby existing growth is retained on a five year rolling program basis, could see little impact in 2021-22 but material reductions in 2023-24 and the full loss of growth in 2024-25.
5.8.10 Pending the determination of the basis of the reset and any transitional arrangements a variety of scenarios exist and a middle ground 50% Partial Reset has been assumed in financial projections. A separate provision reflecting a full reset has been provided for 2021-22 and 2022-23 however further savings will be required for future years if the worst case scenario arises.
5.8.11 More robust figures will be determined as further details become available from the government however actual details for Stafford Borough will not be known until the late Autumn of 2020.
5.9 Council Tax Base and Collection Fund 5.9.1 A key part of determining the overall funding available to support the budget is
the amount available to be raised by Council Tax. This is determined by the level of Council Tax set multiplied by the Council Tax base (the number of properties in the borough expressed in terms of Band D equivalents). The amount of money that the council can raise per £1 charge for a Band D equivalent property can be established from the tax base.
5.9.2 An initial assessment of the gross Council Tax Base for budget purposes is that the Council will see an increase of just over 1.6% over the current year’s Council Tax base and is provisionally set at 48,260.69
5.9.3 The Council are currently consulting on changes to the Local Council Tax Reduction scheme and the outcome of which will form part of determining the actual Council Tax Base to be recommended to Council as part of the Budget Setting process.
5.9.4 The factors to be considered in setting the actual Council Tax level is described in more detail in Section 8.
6 General Fund Revenue Draft Budget 2019-20 to 2022-23 6.1 Table 3 overleaf sets out the forecast outturn for 2019-20; the Council’s current
draft General Fund Revenue Budget position for 2020-21 and indicative budgets for 2021-22 and 2022-23 reflecting the above changes. The Budget includes growth proposals as referred to in paragraph 5.6.8.
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6.2 It should be noted that the position outlined above is draft and the Councils Budget Requirement could marginally change between now and the Council Tax being set by Council in late February. For the purpose of the table below, costs relating to capital charges and the allocation of departmental and support services recharges have been disregarded as they do not affect the level of expenditure to be met from Council Tax.
6.3 Based on the current estimates of the draft Portfolio Budgets, Investment Income, Technical Financing adjustments, Government Grants and Council Tax income a balanced budget exists for 2020-21. Although balanced budgets exist thereafter the actual deficit or surplus in each of those years is entirely dependant upon the new financial regime for Local Government and should be treated with great caution at this stage. Table 3 : General Fund Revenue Budget 2019-20 to 2022-23 Budget
2019-20 Budget 2020-21
Budget 2021-22
Budget 2022-23
£000 £000 £000 £000 Net Expenditure Portfolio budgets 14,567 14,913 13,940 14,507 Investment income & technical financing adjustments
2,623 2,150 284 (102)
Net Spending 17,190 17,063 14,224 14,405 Less: Government Grants Rural Services Grant (43) Levy Account Surplus (43) New Homes Bonus (3,265) (3,159) (1,852) (1,100) Budget Requirement 13,882 13,861 12,372 13,305 Financing Business Rates (7,207) (6,189) (4,509) (4,925) Revenue Support Grant Collection fund Surplus (25) (147) Council Tax Income (7,423) (7,686) (7,950) (8,182) Total Financing (14,655) (14,022) (12,459) (13,107) Transfer To Working Balances (773) (161) (87) Use of Working Balances 198
7 Reserves and Balances
7.1 Reserves and Balances comprise the Council’s general reserves, the working
balance, and earmarked reserves. The general strategy for using unallocated reserves is that they are used to meet shortfalls in the net budget during the year. This is particularly important in the current economic circumstances when sources of income are particularly volatile.
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7.2 The Working Balance - the current policy is to maintain the level of the
General Fund balance at a minimum of £1 million. The General Fund balance at 1 April 2019 was £1.313 million resulting in £0.313 million remaining to support the revenue Budget.
7.3 A revised surplus on Working Balances of £0.966 million is now forecast as at
31 March 2023. 7.4 The Council holds a number of earmarked reserves for specific purposes. A
comprehensive review of earmarked reserves was undertaken last year and a refreshed schedule is now attached as APPENDIX 4.
8 Council Tax for 2020-21 8.1 The summary of the Budget for 2020-21 as in Table 3 assumes Council Tax
income based on a 1.9% increase with the Band D figure increasing to £159.27 with similar indicative increases for 2021-22 and 2022-23.
8.2 In considering the level of Council Tax members will need to take into account
the parameters as contained in the Governments Council Tax Referendum principles. Although no principles have been set out for shire districts in the Technical Consultation on the 2020-21 Local Government Finance Settlement consideration is being given whether council tax increases of less than 2% or up to and including £5, whichever is higher, should be replicated as for other tiers.
8.3 The final level of Council Tax levied will be determined by Council in February 2020.
9 Capital Programme 2019-20 to 2022-23 9.1 On 29 January 2019 the Council approved a capital programme to 2021-22.
This programme has been updated to include approved changes, re-profiled to reflect current spend estimates reflecting slippage in schemes and more up to date information on costs.
9.2 In relation to the new Capital year (2022-23) provision has been made for the
rolling programme for Disabled Facility Grants and Bin provision, in addition there are 2 new schemes as follows: Table 4 : Capital Growth Proposals Ref Description Total Cost £’000 1 Victoria Street Car Park Improvements 48 2 CCTV Operating system Replacement 49 Total 97
Further details of the new schemes are included at APPENDIX 3.
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9.3 The updated programme is attached at APPENDIX 2. The capital resources position, based on the approved capital programme, for the period 2019-20 to 2022-23 is summarised below: Table 5: Estimates Resources and Expenditure 2019-20 to 2022-23 General Section
106 Total
£’000 £’000 £’000 Capital resources b/fwd. 1 April 2019 (6,483) (3,527) (10,010)
Capital Grants (5,744) (163) (5,907) Capital Receipts (900) (900) Reserves &RCCO (512) (512) Contributions (224) (224) New Homes Bonus (1,179) (1,179) Working Balances (169) (169) Draft Capital Programme 2019-20 to 2022-23 14,983 1,453 16,436 New Schemes 97 97 Transfer to Revenue 66 66
Remaining resources at 31 March 2023 (65) (2,237) (2,302)
9.4 Remaining General Resources as at 31 March 2023 are now estimated to be
£65,000. 10 Implications 10.1 Financial Contained within the report Legal Nil Human Resources Nil Human Rights Act Nil Data Protection Nil Risk Management See APPENDIX 5 10.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Cabinet - 7 November 2019 - Minute No CAB45/19 Background Papers - File available in Financial Services
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APPENDIX 1
CABINET 5 DECEMBER 2019
General Fund Revenue Budget 2019-20 to 2022-23 and Capital Programme 2019-20 to 2022-23
The General Fund Working Balance The Council retains a Working Balance and a number of Earmarked Reserves for specific purposes. The Working Balance stood at £1.313 million at 1 April 2019. A risk assessment has been carried out to identify the key potential financial risks from 2020-21 onwards which forms the basis for determining the minimum level of the Working Balance. It is not a complete list of all the financial risks facing the Borough Council however it focuses on the most likely potential risks that could have a significant impact on the Budget. This process does not presume that these issues will arise but identifies how the level of the Working Balance has been calculated. The Council’s policy is to set a minimum level for the Working Balance at £1 million, subject to the outcome of this Risk Analysis. Area of expenditure Level of
risk Explanation of risk/justification for Reserve
Inflation Medium Inflation has been included in the Financial Plan in accordance with Government policy.
Investment interest Medium The amount earned depends on the prevailing interest rates and the level of cash balances held.
Major income sources: • Planning application
fees Medium Dependent on economic conditions.
• Land charges fees Medium Dependent on the housing market / basis of determining recoverable expenses/ proposed transfer to Land Registry.
• Car parking income Medium Certain amount of volatility based on demand.
• Borough Markets Medium Dependent on occupancy levels. • Environmental
services Low Licensing income dependent on renewals.
• Bereavement services Low Some risk as it is a main source of income. • Letting of Civic Centre High The revenue budget includes additional
income from the Accommodation transformation and rationalisation scheme. The income is dependant upon the timescale for completion of such work and
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Area of expenditure Level of risk
Explanation of risk/justification for Reserve
hence it is prudent to increase the Minimum working balances requirement for that year.
Spending pressures: • Waste and recycling
targets High The Council will need to reach recycling
targets in order to maximise income from recycling credits and avoid penalties. Recycling Credits are in accordance with the regime operated by the County Council.
• Homelessness Dependant upon the level of supported housing facilities.
Funding Sources:
• New Homes Bonus Low Although allocations for 2020-21 can be predicted accurately, the future level of funding is now not only dependant upon completions of new properties but what incentive scheme will exist instead of New Homes Bonus. A prudent approach has been set for the outcome of the scheme with only legacy payments existing post 2020-21.
• 75% Business Rates Scheme and Resets
High A new scheme is to be introduced w.e.f April 2021. In addition a reset of growth achieved under the current system will take place at the same time The council is a high growth achiever hence how the reset is implemented could have material implications.
• Volatility in Business Rates
Medium The Council will be exposed to volatility or reduction in its business rates due to the failure or temporary closure of a key industry and successful appeals against Rateable Values and back dated refunds. Although this gives councils greater freedoms and removes dependency on central funding it passes on greater risks with not only pay awards and inflation entirely falling on the Council but also its core funding will reduce if Business Rates contracts.
COMMUNITYDisabled Facilities Grants 900 1,478 1,037 1,037 1,335 Private Sector Housing Assistance 30 125 - - - Improvements at Glover St caravan site - 171 - - - CCTV Operating system * - 49 Empty Homes 50 50 50 20 - Total 980 1,824 1,087 1,057 1,384
LEISURE Stone Leisure Strategy (part s106) 502 400 - Stone Leisure Strategy Phase 2 (part s106) - - - - 1,212 Stafford Castle - H&S Works 6 - - - 16 Stafford Castle Motte 21 - - - - Victoria Park Refurbishment 1,667 300 50 - - Victoria Park Pedestrian Bridge 95 - - - - Charnley Road Destination Park (s106) 385 - - - - Gatehouse - MET rigging 78 - - - - Holmcroft Leisure Facilities (part s106) 483 - - - - Jubilee Playing Field Leisure Facilities (s106) - 104 - - - Gnosall Leisure Facilities 47 - - - - Total 3,284 804 50 - 1,228
PLANNING AND REGENERATION Growth Point capital - 50 - - - Stafford Town Centre Enhancement 25 - - - - Pearl Brook Path Improvements - 75 - - - Stafford Western Access Route - 2,500 - - - Victoria Street Car Park Improvements * - - - - 48 New Gypsy & Traveller Site - 150 - - - Total 25 2,775 - - 48
RESOURCESCorporate IT equipment 58 50 - - - Contact Centre Phone system - - - - 30 Civic Centre Generator - - - - 50 Accommodation transformation & rationalisation - - - - 752 Total 58 50 - - 832
TOTAL CAPITAL PROGRAMME 4,637 5,708 1,287 1,207 3,694
* New scheme
APPENDIX 2GENERAL FUND CAPITAL PROGRAMME 19/20 to 22/23
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APPENDIX 3
CABINET 5 DECEMBER 2019
General Fund Revenue Budget 2019-20 to 2022-23 and Capital Programme 2019-20 to 2022-23
NEW CAPITAL SCHEMES
COMMUNITY
CCTV Operating System Replacement
Upgrade of Operating system in line with the current CCTV cameras and associated infrastructure network
PLANNING
Victoria Street Car Park Improvements
Development of a formal Long Stay Pay & Display Car Park and a residents Permit Holder car park
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APPENDIX 4
CABINET 5 DECEMBER 2019
General Fund Revenue Budget 2019-20 to 2022-23 and Capital Programme 2019-20 to 2022-23
General Fund Revenue Budget 2019-20 to 2022-23 and Capital Programme 2019-20 to 2022-23
FINANCIAL RISK ANALYSIS OF THE REVENUE BUDGET 2020-21
Sound corporate governance includes consideration of the financial risks facing an organisation. A risk assessment of the key financial risks affecting the Council’s revenue budget for 2020-21 is set out below. It sets out the main risks in accordance with best practice and highlights the need to monitor and manage the risks. Council Tax The Council’s current policy for increases in Council Tax is that should be limited to the rate of inflation. Increasing Council Tax by 1% generates an additional £74k. The Council Tax base has been reviewed based on the effect on the base of the current economic conditions with increases in the number of properties expected over the next three years and is consistent with New Homes Bonus Grant forecasts. Inflation Pay inflation has been included at 2% in 2020-21. Inflation on contracts has been included at 2%. Investment income The level of investment income generated from cash investment clearly depends on economic conditions. Our investment income projections are based on estimated cash flow taking into account capital and revenue spending plans. Significant slippage in the capital programme in particular can lead to more investment income being generated than budgeted. Fees and charges income Stafford has an approved scale of fees and charges for a wide range of services. The level of some fees and charges is discretionary whilst others are prescribed. Planning and land charges income are demand led – generally reflecting housing market conditions. A number of the Council’s main income streams including car park charges etc. are dependent on economic conditions and can change significantly as conditions change.
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Staff turnover savings The staffing budget assumes vacancy rates that have been established based on past trends. Close control over vacancy management will be exercised by officers to ensure staffing costs overall are within budget. However if staff turnover is lower than anticipated then failure to achieve the overall target represents an additional spend over the budgeted position. Changes in taxation The budget assumes that the current national system of taxation remains the same. The Chancellor could further change employers’ National Insurance contribution rates or other taxes that may impact on the budget. FINANCIAL RISK ANALYSIS OF THE CAPITAL PROGRAMME 2019-20 TO 2022-23 Higher than anticipated Inflation and in particular its impact on construction costs, including the availability /demand for the construction industry, could increase the cost of any new schemes. The financing of the schemes is also dependant upon the generation of capital resources as highlighted in Section 9. The amount of uncommitted capital resources available following the implementation of the three year capital programme is minimal and in the event that the identified capital resources do not materialise and/or additional capital expenditure requirements occur the Council would need to consider the generation of additional resources from revenue contributions/use of reserves or borrowing. The latter will also have an impact on the Revenue Budget of the Council. An earmarked New Homes Bonus Reserve has been created that does provide an additional resource to fund future schemes. Any new schemes identified for inclusion in the capital programme that are financed from existing capital resources will reduce the amount of investment interest for the Council. However any slippage on schemes from one year to the following year will increase temporarily the balance available for investment.
SUBMISSION BY COUNCILLOR R M SMITH RESOURCES PORTFOLIO
CABINET 5 DECEMBER 2019
Resources Portfolio - General Fund Revenue Budget 2019/2020 - 2022/2023 and
Capital Programme 2019/2020 - 2022/2023
This report is not subject to the call in procedure and will be referred directly to the Scrutiny Committee for consultation.
1 Purpose of Report 1.1 To set out the draft detailed Resources Portfolio revenue budget for
2019/2020 - 2022/2023 and the draft Resources Portfolio Capital Programme for 2019/2020 - 2022/2023.
2 Proposal of Cabinet Member 2.1 That the detailed draft portfolio revenue budget for 2019/2020 - 2022/2023
and the draft Capital Programme 2019/2020 - 2022/2023 be approved for submission to the Resources Scrutiny Committee for consultation.
3 Key Issues and Reasons for Recommendation 3.1 To set out the detailed portfolio revenue budget. 3.2 To set out the variations between the indicative budgets for 2020/2021 and
2021/2022, as set last year, and the proposed budget for 2020/2021 and the draft budget for the following years to 2022/2023.
3.3 To set out the proposed Capital Programme 2019/2020 - 2022/2023.
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4 Relationship to Corporate Priorities 4.1 The revenue budget and capital programme reflect the Council’s priorities. 5 Report Detail 5.1 The detailed draft portfolio budget is attached at APPENDIX 1. 5.2 Indicative budgets for 2020/2021 and 2021/2022 were prepared as part of the
2019/2020 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022/2023.
5.3 An analysis of variations between the indicative budgets for 2020/2021 and
2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budgets for 2021/2022 and 2022/2023 is attached at APPENDIX 2.
5.4 Details of the overall proposed real terms / efficiency variations are attached
at APPENDIX 3. 5.5 Material variances include:
• Initial reduced lease income at Civic Centre as adjusted for additional income in later years arising from Invest to Save Capital programme initiative
• Amendments to Items to be allocated in relation to contract inflation and income provision.
• Hosting income Sports across Staffordshire falling out • Revenue bids falling out : Member Development Training, Employee
Survey Outcomes additional training and Organisational Development plan 2022/23
5.6 An analysis by budget page of the variations between the indicative budgets for 2020/2021 and 2021/22 (as set last year) and the proposed budget for 2020/2021 and draft budget for 2021/2022 is attached at APPENDIX 4.
5.7 On 29 January 2019, the Council approved a capital programme to 2021/2022
which has been updated to include approved changes and re-profiled to reflect current spend estimates The proposed Capital Programme 2019/2020 – 2022/2023 for the Resources Portfolio is attached at APPENDIX 5.
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6 Implications 6.1 Financial The potential loss of external core /incentive
funding from the Government and other sources is a risk which can impact on the Council’s future ability to deliver the service.
Legal Human Resources Any resourcing implications of continuing loss
of external funding will be considered in line with Council policies and consultation with staff groups affected and recognised trade unions
Human Rights Act Data Protection Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers - File available in Financial Services.
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Resources
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Public Buildings1
60,530 63,970 65,640 67,320 Employee Expenses
1,200,080 1,192,550 1,203,290 1,214,300 Premises Related Expenditure
This report is not subject to the call-in procedure and will be referred to Audit and Accounts Committee and Council.
1 Purpose of Report 1.1 This report is presented to obtain the Council’s approval to:-
• Prudential and Treasury indicators - setting of indicators to ensure that the capital investment plans of the Council are affordable, prudent and sustainable;
• The Minimum Revenue Provision (MRP) Policy; • Treasury Management Strategy Statement for 2020/21 - to set treasury
limits for 2020/21 to 2022/23 and to provide a background to the latest economic forecasts of interest rates;
• Annual Investment Strategy 2020/21 - to set out the strategy of investment
of surplus funds.
2 Recommendation 2.1 To approve:-
(a) The Prudential and Treasury indicators; (b) The MRP Policy Statement; (c) The Treasury Management Policy; (d) The Annual Investment Strategy for 2020/21;
2.2 To note that indicators may change in accordance with the final
recommendations from Cabinet to Council in relation to both the General Fund Revenue Budget and the Capital Programme.
Report of: Head of Finance Contact Officer: Bob Kean Telephone No: 01543 464334 Ward Interest: Nil Report Track: Cabinet 05/12/2019
Audit and Accounts 14/01/2019 Council 28/01/2019
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3 Key Issues and Reasons for Recommendations 3.1 The Council is required to approve its treasury management, investment and
capital strategies to ensure that cash flow is adequately planned and that surplus monies are invested appropriately.
4 Relationship to Corporate Priorities 4.1 Treasury management and investment activity link in with all of the Council’s
priorities and their spending plans. 5 Report Detail Background 5.1 The Council is required to operate a balanced budget, which broadly means
that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties or instruments commensurate with the Council’s low risk appetite, providing adequate liquidity initially before considering investment return.
5.2 The second main function of the treasury management service is the funding
of the Council’s capital plans. These capital plans provide a guide to the borrowing need of the Council, essentially the longer-term cash flow planning, to ensure that the Council can meet its capital spending obligations. This management of longer-term cash may involve arranging long or short-term loans, or using longer-term cash flow surpluses. On occasion, when it is prudent and economic, any debt previously drawn may be restructured to meet Council risk or cost objectives.
5.3 The contribution the treasury management function makes to the authority is
critical, as the balance of debt and investment operations ensure liquidity or the ability to meet spending commitments as they fall due, either on day-to-day revenue or for larger capital projects. The treasury operations will see a balance of the interest costs of debt and the investment income arising from cash deposits affecting the available budget. Since cash balances generally result from reserves and balances, it is paramount to ensure adequate security of the sums invested, as a loss of principal will in effect result in a loss to the General Fund Balance.
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5.4 CIPFA defines treasury management as:
“The management of the local authority’s borrowing, investments and 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.”
5.5 This authority has not engaged in any commercial investments and has no
non-treasury investments.
Reporting Requirements 5.6 Capital Strategy - The CIPFA 2017 Prudential and Treasury Management
Codes required all local authorities to prepare a capital strategy report which would provide the following:
• a high-level long term overview of how capital expenditure, capital
financing and treasury management activity contribute to the provision of services
• an overview of how the associated risk is managed • the implications for future financial sustainability
5.7 The aim of this capital strategy is to ensure that all elected members on the
full council fully understand the overall long-term policy objectives and resulting capital strategy requirements, governance procedures and risk appetite.
5.8 The capital strategy approved on the 6 December 2018 covers the period
2018/22 and is unchanged. 5.9 Treasury Management reporting - The Council is required to receive and
approve, as a minimum, three main reports each year, which incorporate a variety of policies, estimates and actuals:-
5.10 Prudential and treasury indicators and treasury strategy (this report) -
The first, and most important report covers:- • the capital plans (including prudential indicators); • a minimum revenue provision (MRP) policy (how residual capital
expenditure is charged to revenue over time); • the Treasury Management Strategy (how the investments and borrowings
are to be organised) including treasury indicators; and • an Investment Strategy (the parameters on how investments are to be
managed). 5.11 A mid year treasury management report - This is primarily a progress
report and will update members on the capital position, amending prudential indicators as necessary, and whether any policies require revision.
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5.12 An annual treasury report - This provides details of a selection of actual prudential and treasury indicators and actual treasury operations compared to the estimates within the strategy.
5.13 Scrutiny - The above reports are required to be adequately scrutinised before
being recommended to the Council. This role is undertaken by the Audit and Accounts Committee.
5.14 The Council has adopted the following reporting arrangements in accordance
with the requirements of the CIPFA Code of Practice:-
Area of Responsibility Council/Committee Frequency
Treasury Management Strategy/ Annual Investment Strategy/ MRP policy - updates or revisions at other times
Full Council As required
Annual Treasury Outturn Report
Audit and Accounts Committee and Council
Annually by 30 September after the end of the year
Scrutiny of treasury management strategy
Audit and Accounts Committee
Annually in December before the start of the year
Treasury Management Strategy for 2020/21
5.15 The strategy for 2020/21 covers two main areas:-
Capital issues • the capital expenditure plans and the associated prudential indicators; • the minimum revenue provision (MRP) policy. Treasury management issues • the current treasury position; • treasury indicators which limit the treasury risk and activities of the
Council; • prospects for interest rates; • the borrowing strategy;
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• policy on borrowing in advance of need; • debt rescheduling; • the investment strategy; • creditworthiness policy; and • policy on use of external service providers.
5.16 These elements cover the requirements of the Local Government Act 2003, the CIPFA Prudential Code, MHCLG MRP Guidance, the CIPFA Treasury Management Code and MHCLG Investment Guidance.
Training 5.17 The CIPFA Code requires the responsible officer to ensure that members with
responsibility for treasury management receive adequate training in treasury management. This especially applies to members responsible for scrutiny. Training has been undertaken by members of the Audit and Accounts Committee and further training is planned in January 2020.
5.18 The training needs of treasury management officers are periodically reviewed. Treasury Management Consultants 5.19 The Council uses Link Asset Services, Treasury Solutions as its external
treasury management advisors.
5.20 The Council recognises that responsibility for treasury management decisions remains with the organisation at all times and will ensure that undue reliance is not placed upon our external service providers. All decisions will be undertaken with regards to all available information, including, but not solely, our treasury advisers.
It also recognises that there is value in employing external providers of
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.
The Capital Prudential Indicators 2020/21 - 2022/23 5.21 The Council’s capital expenditure plans are the key driver of treasury
management activity. The output of the capital expenditure plans is reflected in prudential indicators, which are designed to assist members’ overview and confirm capital expenditure plans. Capital expenditure
5.22 This prudential indicator is a summary of the Council’s capital expenditure
plans, both those agreed previously, and those forming part of this budget cycle. Members are asked to approve the capital expenditure forecasts,
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which include a review of current schemes together with for growth bids, but to note these may change as part of the scrutiny process and finalisation of the Budget.
5.23 Any change to the forecast /growth bid will be separately identified in future
Budget Reports and reflected in this indicator as reported to full council.
Capital expenditure
2018/19 Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000
Earmarked
£’000
Community Portfolio
1,158 980 1,824 1,087 1,057 1,384
Environment Portfolio
240 290 255 150 150 202
Leisure and Culture Portfolio
7,195 3,284 804 50 - 1,228
Planning and Regeneration
249 25 2,775 - - 48
Resources Portfolio
791 58 50 - - 832
Total 9,633 4,637 5,708 1,287 1,207 3,694 5.24 Other long term liabilities. The financing need excludes other long term
liabilities, such leasing arrangements which already include borrowing instruments.
5.25 The table below summarises the above capital expenditure plans and how
these plans are being financed by capital or revenue resources. Any shortfall of resources results in a funding borrowing need.
Capital expenditure
2018/19 Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000
Unallocated
£’000
Total Spend 9,633 4,637 5,708 1,287 1,207 3,694 Financed by: Capital Receipts
1,192 1,022 1,741 100 - 714
Capital grants/ contributions
1,730 3,014 2,247 1,037 1,037 1,924
Revenue 6,711 601 1,720 150 170 1,056 Net financing need for the year
- - - -
- -
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5.26 The capital financing of the programme will similarly be reviewed as part of the Budget process and any change will be separately identified in future Budget Reports and reflected in this indicator.
The Council’s borrowing need (the Capital Financing Requirement) 5.27 The second prudential indicator is the Council’s Capital Financing
Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not yet been paid for from either revenue or capital resources. It is essentially a measure of the Council’s indebtedness and so it’s underlying borrowing need. Any capital expenditure above, which has not immediately been paid for through a revenue or capital resource, will increase the CFR.
5.28 The CFR does not increase indefinitely, as the minimum revenue provision
(MRP) is a statutory annual revenue charge which broadly reduces the borrowing need in line with each assets life and so charges the economic consumption of capital assets as they are used.
5.29 The CFR includes any other long-term liabilities (e.g. PFI schemes, finance
leases). Whilst these increase the CFR, and therefore the Council’s borrowing requirement, these types of scheme include a borrowing facility by the PFI, PPP lease provider and so the Council is not required to separately borrow for these schemes. The Council currently has £2.301m of such schemes within the CFR, however going forward its is anticipated that this will rise to £3.801m in respect of the Civic Centre leased land coming on balance sheet.
5.30 The Council is asked to approve the following CFR projections, subject to any
changes arising from the budget process:-
2018/19 Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000 Capital Financing Requirement
Total CFR 5,142 4,764 5,890 5,511 5,189 Movement in CFR
(378) 1,126 (379) (322)
Movement in CFR represented by Net financing need for the year
- - - -
Less MRP and other financing movements
(378) 1,126 (379) (322)
Movement in CFR
(378) 1,126 (379) (322)
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Core funds and expected investment balances
5.31 The application of resources (capital receipts, reserves etc.) to either finance capital expenditure or other budget decisions to support the revenue budget will have an ongoing impact on investments unless resources are supplemented each year from new sources (asset sales etc.). Detailed below are estimates of the year-end balances for each resource and anticipated day-to-day cash flow balances.
Year End Resources £m
2018/19 Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000
Earmarked Fund balances / reserves
11,556 10,824 10,390 9,425 8,484
Unallocated Reserves
312 2,145 1,788 1,687 1,489
Capital receipts 2,696 1,674 833 376 19 Provisions 2,647 2,647 - - - Other 2,945 2,962 2,648 2,461 2,237 Total core funds 20,156 20,252 15,659 13,949 12,229 Working Cashflow requirement
(12,722) 5,000 5,000 5,000 5,000
Under/over borrowing
2,841 2,715 2,593 2,475 2,361
Expected investments
30,037 12,537 8,066 6,474 4,868
*Working cashflow requirement shown are estimated year-end; these may be higher mid-year. Minimum revenue provision (MRP) policy statement
5.32 The Council is required to pay off an element of the accumulated General
Fund capital spend each year (the CFR) through a revenue charge (the minimum revenue provision - MRP).
5.33 MHCLG Regulations have been issued which require the full Council to
approve an MRP Statement in advance of each year. A variety of options are provided to councils, so long as there is a prudent provision. The Council is recommended to approve the following MRP Statement:-
5.34 The Council implemented the new Minimum Revenue Provision (MRP)
guidance in 2008/09, and will assess MRP for 2009/10 onwards in accordance with the recommendations contained within the guidance issued by the Secretary of State under section 21(1A) of the Local Government Act 2003.
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5.35 Under powers delegated to the Section 151 Officer, the Council’s annual MRP provision for expenditure incurred after 1 April 2008 and before 31 March 2017 will be based on the uniform rate of 4% of the Capital Financing Requirement. The Council’s annual MRP provision for expenditure incurred on or after 1 April 2017 will be based on the asset life method i.e. the provision will be calculated with reference to the estimated life of the assets acquired, in accordance with the regulations.
5.36 MRP will be applicable from the year following that in which the asset is brought into operation.
5.37 Repayments included in annual PFI or finance leases are applied as MRP.
5.38 The Council are satisfied that the policy for calculating MRP set out in this policy statement will result in the Council continuing to make prudent provision for the repayment of debt, over a period that is on average reasonably commensurate with that over which the expenditure provides benefit.
5.39 The Section 151 Officer will, where it is prudent to do so, use discretion to review the overall financing of the Capital Programme and the opportunities afforded by the regulations, to maximise the benefit to the Council whilst ensuring the Council meets its duty to charge a prudent provision.
5.40 MRP Overpayments - A change introduced by the revised MHCLG MRP Guidance was the allowance that any charges made over the statutory minimum revenue provision (MRP), voluntary revenue provision or overpayments, can, if needed, be reclaimed in later years if deemed necessary or prudent. The Council has previously not made any MRP overpayments. Affordability prudential indicators
5.41 The previous sections cover the overall capital and control of borrowing prudential indicators, but within this framework prudential indicators are required to assess the affordability of the capital investment plans. These provide an indication of the impact of the capital investment plans on the Council’s overall finances. The Council is asked to approve the following indicators:-
Ratio of financing costs to net revenue stream
5.42 This indicator identifies the trend in the cost of capital (borrowing and other
long term obligation costs net of investment income) against the net revenue stream.
% 2018/19
Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000 Ratio of financing costs
0.3
0.5
0.4
0.5
0.1
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Borrowing 5.43 The capital expenditure plans provide details of the service activity of the
Council. The treasury management function ensures that the Council’s cash is organised in accordance with the relevant professional codes, so that sufficient cash is available to meet this service activity. This will involve both the organisation of the cash flow and, where capital plans require, the organisation of appropriate borrowing facilities. The strategy covers the relevant treasury/prudential indicators, the current and projected debt positions and the annual investment strategy.
Current portfolio position 5.44 The Council’s forward projections for borrowing are summarised below. The
table shows the actual external debt against the underlying capital borrowing need (the Capital Financing Requirement - CFR), highlighting any over or under borrowing.
2018/19
Actual £’000
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000 External Debt PWLB debt at 1
April -
-
-
-
-
Expected change in Debt
- - - - -
Other long-term liabilities (OLTL)
2,301 2,049 3,297 3,036 2,828
Expected change in OLTL
- (252) 1,248 (261) (208)
Actual gross debt at 31 March
2,301 2,049 3,297 3,036 2,828
The Capital Financing Requirement
5,142 4,764 5,890 5,511 5,189
Under / (over) borrowing
2,841 2,715 2,593 2,475 2,361
5.45 Within the range of prudential indicators there are a number of key indicators
to ensure that the Council operates its activities within well-defined limits. One of these is that the Council needs to ensure that its gross debt does not, except in the short term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2020/21 and the following two financial years. This allows some flexibility for limited early borrowing for future years, but ensures that borrowing is not undertaken for revenue or speculative purposes.
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5.46 The Head of Finance reports that the Council complied with this prudential indicator in the current year and does not envisage difficulties for the future. This view takes into account current commitments, existing plans, and the proposals contained in the General Fund Budget for 2019/20 to 2022/23.
Treasury Indicators: limits to borrowing activity
5.47 The operational boundary. This is the limit beyond which external debt is
not normally expected to exceed. In most cases, this would be a similar figure to the CFR, but may be lower or higher depending on the levels of actual debt.The operational boundary includes as in previous years a contingency borrowing provision of £2 million for future years.
Operational boundary £m
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000 Debt 3,144 5,144 5,144 5,144 Other long term liabilities
2,301
3,549
3,288
3,080
Total 5,445 8,693 8,432 8,224 5.48 The authorised limit for external debt. This is a key prudential indicator and
represents a control on the maximum level of borrowing. This represents a legal limit beyond which external debt is prohibited, and this limit needs to be set or revised by the full Council. It reflects the level of external debt which, while not desired, could be afforded in the short term, but is not sustainable in the longer term.
1. This is the statutory limit determined under section 3 (1) of the Local
Government Act 2003. The Government retains an option to control either the total of all councils’ plans, or those of a specific council, although this power has not yet been exercised.
2. The Council is asked to approve the following authorised limit:- Authorised limit £m
2019/20 Estimate
£’000
2020/21 Estimate
£’000
2021/22 Estimate
£’000
2022/23 Estimate
£’000 Debt 6,144 8,144 8,144 8,144 Other long term liabilities
2,301
3,549
3,288
3,080
Total 8,445 11,693 11,432 11,224
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Prospects for interest rates 5.49 The Council has appointed Link Asset Services as its treasury advisor and
part of their service is to assist the Council to formulate a view on interest rates. The following table gives their central view.
5.50 The above forecasts have been based on an assumption that there is some
sort of muddle through to an agreed deal on Brexit at some point in time. Given the current level of uncertainties, this is a major assumption and so forecasts may need to be materially reassessed in the light of events over the coming weeks or months.
5.51 It has been little surprise that the Monetary Policy Committee (MPC) has left
Bank Rate unchanged at 0.75% so far in 2019 due to the ongoing uncertainty over Brexit. In its meeting on 1 August, the MPC became more dovish as it was more concerned about the outlook for both the global and domestic economies. That’s shown in the policy statement, based on an assumption that there is an agreed deal on Brexit, where the suggestion that rates would need to rise at a “gradual pace and to a limited extent” is now also conditional on “some recovery in global growth”. Brexit uncertainty has had a dampening effect on UK GDP growth in 2019, especially around mid-year. If there were a no deal Brexit, then it is likely that there will be a cut or cuts in Bank Rate to help support economic growth. The September MPC meeting sounded even more concern about world growth and the effect that prolonged Brexit uncertainty is likely to have on growth.
5.52 Bond yields / PWLB rates. There has been much speculation recently that we are currently in a bond market bubble. However, given the context that there are heightened expectations that the US could be heading for a recession, and a general background of a downturn in world economic growth, together with inflation generally at low levels in most countries and expected to remain subdued, conditions are ripe for low bond yields. While inflation targeting by the major central banks has been successful over the last thirty years in lowering inflation expectations, the real equilibrium rate for central rates has fallen considerably due to the high level of borrowing by consumers: this means that central banks do not need to raise rates as much now to have a major impact on consumer spending, inflation, etc. This has pulled down the overall level of interest rates and bond yields in financial markets over the last thirty years. We have therefore seen over the last year,
many bond yields up to ten years in the Eurozone actually turn negative. In addition, there has, at times, been an inversion of bond yields in the US whereby ten-year yields have fallen below shorter-term yields. In the past, this has been a precursor of a recession. The other side of this coin is that bond prices are elevated, as investors would be expected to be moving out of riskier assets i.e. shares, in anticipation of a downturn in corporate earnings and so selling out of equities. However, stock markets are also currently at high levels as some investors have focused on chasing returns in the context of dismal ultra-low interest rates on cash deposits. .
5.53 During the first half of 2019-20 to 30 September, gilt yields plunged and caused a near halving of longer term PWLB rates to completely unprecedented historic low levels. There is though, an expectation that financial markets have gone too far in their fears about the degree of the downturn in US and world growth. If, as expected, the US only suffers a mild downturn in growth, bond markets in the US are likely to sell off and that would be expected to put upward pressure on bond yields, not only in the US, but also in the UK due to a correlation between US treasuries and UK gilts; at various times this correlation has been strong but at other times weak. However, forecasting the timing of this and how strong the correlation is likely to be is very difficult to forecast with any degree of confidence. Changes in UK Bank Rate will also impact on gilt yields.
5.54 One potential danger that may be lurking in investor minds is that Japan has become mired in a twenty-year bog of failing to get economic growth and inflation up off the floor, despite a combination of massive monetary and fiscal stimulus by both the central bank and government. Investors could be fretting that this condition might become contagious to other western economies.
5.55 Another danger is that unconventional monetary policy post 2008, (ultra-low
interest rates plus quantitative easing), may end up doing more harm than good through prolonged use. Low interest rates have encouraged a debt-fuelled boom that now makes it harder for central banks to raise interest rates. Negative interest rates could damage the profitability of commercial banks and so impair their ability to lend and / or push them into riskier lending. Banks could also end up holding large amounts of their government’s bonds and so create a potential doom loop. (A doom loop would occur where the credit rating of the debt of a nation was downgraded which would cause bond prices to fall, causing losses on debt portfolios held by banks and insurers, so reducing their capital and forcing them to sell bonds – which, in turn, would cause further falls in their prices etc.). In addition, the financial viability of pension funds could be damaged by low yields on holdings of bonds.
5.56 The overall longer run future trend is for gilt yields, and consequently PWLB
rates, to rise, albeit gently. From time to time, gilt yields, and therefore PWLB rates, can be subject to exceptional levels of volatility due to geo-political, sovereign debt crisis, emerging market developments and sharp changes in investor sentiment. Such volatility could occur at any time during the forecast period.
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5.57 In addition, PWLB rates are subject to ad hoc decisions by H.M. Treasury to change the margin over gilt yields charged in PWLB rates: such changes could be up or down. It is not clear that if gilt yields were to rise back up again by over 100bps within the next year or so, whether H M Treasury would remove the extra 100 bps margin implemented on 9.10.19.
5.58 Economic and interest rate forecasting remains difficult with so many
influences weighing on UK gilt yields and PWLB rates. The above forecasts, (and MPC decisions), will be liable to further amendment depending on how economic data and developments in financial markets transpire over the next year. Geopolitical developments, especially in the EU, could also have a major impact. Forecasts for average investment earnings beyond the three-year time horizon will be heavily dependent on economic and political developments.
Investment and borrowing rates
• Investment returns are likely to remain low during 2020/21 with little increase in the following two years. However, if major progress was made with an agreed Brexit, then there is upside potential for earnings.
• Borrowing interest rates were on a major falling trend during the first half of 2019-20 but then jumped up by 100 bps on 9.10.19. The policy of avoiding new borrowing by running down spare cash balances has served local authorities well over the last few years. However, the unexpected increase of 100 bps in PWLB rates requires a major rethink of local authority treasury management strategy and risk management. Now that the gap between longer term borrowing rates and investment rates has materially widened, and in the long term Bank Rate is not expected to rise above 2.5%.
• There will remain a cost of carry, (the difference between higher borrowing costs and lower investment returns), to any new long-term borrowing that causes a temporary increase in cash balances as this position will, most likely, incur a revenue cost.
Borrowing strategy 5.59 The Council is currently maintaining an under-borrowed position. This means
that the capital borrowing need (the Capital Financing Requirement), has not been fully funded with loan debt as cash supporting the Council’s reserves, balances and cash flow has been used as a temporary measure. This strategy is prudent as investment returns are low and counterparty risk is still an issue that needs to be considred.
5.60 Against this background and the risks within the economic forecast, caution
will be adopted with the 2020/21 treasury operations. The Head of Finance will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances:
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5.61 Any decisions will be reported to members appropriately at the next available opportunity.
Treasury management limits on activity
5.62 There are three debt related treasury activity limits. The purpose of these are to restrain the activity of the treasury function within certain limits, thereby managing risk and reducing the impact of any adverse movement in interest rates. However, if these are set to be too restrictive they will impair the opportunities to reduce costs / improve performance.
The indicators are:-
• Upper limits on variable interest rate exposure. This identifies a maximum limit for variable interest rates based upon the debt position net of investments
• Upper limits on fixed interest rate exposure. This is similar to the previous indicator and covers a maximum limit on fixed interest rates;
• Maturity structure of borrowing. These gross limits are set to reduce the Council’s exposure to large fixed rate sums falling due for refinancing, and are required for upper and lower limits.
5.63 The Council is asked to approve the following treasury indicators and limits:-
£m 2020/21 2021/22 2022/23 Interest rate exposures Upper Upper Upper Limits on fixed interest rates based on net debt
100% 100% 100%
Limits on variable interest rates based on net debt
75% 75% 75%
Maturity structure of fixed interest rate borrowing 2020/21 Lower Upper Under 12 months 0% 100% 12 months to 2 years 0% 100% 2 years to 5 years 0% 100% 5 years to 10 years 0% 100% 10 years and above 0% 100% Maturity structure of variable interest rate borrowing 2020/21 Lower Upper Under 12 months 0% 75% 12 months to 2 years 0% 75% 2 years to 5 years 0% 75% 5 years to 10 years 0% 75% 10 years and above 0% 75%
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Policy on borrowing in advance of need 5.64 The Council will not borrow more than or in advance of its needs purely in
order to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates, and will be considered carefully to ensure that value for money can be demonstrated and that the Council can ensure the security of such funds.
5.65 Risks associated with any borrowing in advance activity will be subject to prior
appraisal and subsequent reporting through the mid-year or annual reporting mechanism.
New financial institutions as a source of borrowing and / or types of borrowing
5.66 Following the decision by the PWLB on 9 October 2019 to increase their margin over gilt yields by 100 bps to 180 basis points on loans lent to local authorities, consideration will also need to be given to sourcing funding at cheaper rates from the following:
• Local authorities (primarily shorter dated maturities) • Financial institutions (primarily insurance companies and pension funds
but also some banks, out of spot or forward dates) • Municipal Bonds Agency (no issuance at present but there is potential)
5.67 The degree which any of these options proves cheaper than PWLB Certainty
Rate is still evolving at the time of writing but our advisors will keep us informed.
Annual Investment Strategy Investment policy – management of risk 5.68 The Council’s investment policy has regard to the following: -
• MHCLG’s Guidance on Local Government Investments (“the Guidance”) • CIPFA Treasury Management in Public Services Code of Practice and
5.69 The Council’s investment priorities will be security first, portfolio liquidity
second and then yield, (return). 5.70 The above guidance from the MHCLG and CIPFA place a high priority on the
management of risk. This authority has adopted a prudent approach to managing risk and defines its risk appetite by the following means: -
(a) In accordance with the above guidance from the CLG and CIPFA, and
in order to minimise the risk to investments, the Council applies minimum acceptable credit criteria in order to generate a list of highly
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creditworthy counterparties which also enables diversification and thus avoidance of concentration risk. The key ratings used to monitor counterparties are the Short Term and Long Term ratings.
(b) Ratings will not be the sole determinant of the quality of an institution; it
is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To this end the Council will engage with its advisors to maintain a monitor on market pricing such as “credit default swaps” and overlay that information on top of the credit ratings.
(c) Other information sources used will include the financial press, share
price and other such information pertaining to the banking sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties.
5.71 This authority has defined the list of types of investment instruments that the
treasury management team are authorised to use, as per APPENDIX 2. • Specified investments are those with a high level of credit quality and
subject to a maturity limit of one year. • Non-specified investments are those with less high credit quality, may be
for periods in excess of one year, and/or are more complex instruments which require greater consideration by members and officers before being authorised for use. Once an investment is classed as non-specified, it remains non-specified all the way through to maturity i.e. an 18 month deposit would still be non-specified even if it has only 11 months left until maturity.
5.72 Non-specified investments limit. The Council has determined that it will limit
the maximum total exposure to non-specified investments as being 50% of the total investment portfolio.
5.73 Lending limits, (amounts and maturity), for each counterparty will be set through applying the matrix table in the APPENDIX 2.
5.74 Transaction limits are set for each type of investment in APPENDIX 2.
5.75 This authority will set a limit for the amount of its investments which are invested for longer than 365 days.
5.76 Investments will only be placed with counterparties from countries with a specified minimum sovereign rating.
5.77 This authority has engaged external consultants, to provide expert advice on how to optimise an appropriate balance of security, liquidity and yield, given the risk appetite of this authority in the context of the expected level of cash balances and need for liquidity throughout the year.
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5.78 All investments will be denominated in sterling.
5.79 As a result of the change in accounting standards for 2019/20 under IFRS 9,
this authority will consider the implications of investment instruments which could result in an adverse movement in the value of the amount invested and resultant charges at the end of the year to the General Fund. (In November 2018, the Ministry of Housing, Communities and Local Government, [MHCLG], concluded a consultation for a temporary override to allow English local authorities time to adjust their portfolio of all pooled investments by announcing a statutory override to delay implementation of IFRS 9 for five years commencing from 1.4.18.)
5.80 However, this authority will also pursue value for money in treasury management and will monitor the yield from investment income against appropriate benchmarks for investment performance. Regular monitoring of investment performance will be carried out during the year.
Creditworthiness policy 5.81 The Council applies the creditworthiness service provided by Link Asset
Services. This service employs a sophisticated modelling approach utilising credit ratings from the three main credit rating agencies - Fitch, Moody’s and Standard and Poor’s. The credit ratings of counterparties are supplemented with the following overlays:-
• credit watches and credit outlooks from credit rating agencies; • CDS spreads to give early warning of likely changes in credit ratings; • sovereign ratings to select counterparties from only the most creditworthy
countries. 5.82 This modelling approach combines credit ratings, credit watches and credit
outlooks in a weighted scoring system which is then combined with an overlay of CDS spreads for which the end product is a series of colour coded bands which indicate the relative creditworthiness of counterparties. These colour codes are used by the Council to determine the suggested duration for investments. The Council will therefore use counterparties within the following durational bands:-
• Yellow 5 years • Dark pink 5 years for Ultra-Short Dated Bond Funds with a
credit score of 1.25 • Light pink 5 years for Ultra-Short Dated Bond Funds with a
credit score of 1.5 • Purple 2 years • Blue 1 year (only applies to nationalised or semi
nationalised UK Banks) • Orange 1 year • Red 6 months • Green 100 days • No colour not to be used
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5.83 The Link creditworthiness service uses a wider array of information than just
primary ratings and by using a risk weighted scoring system, does not give undue preponderance to just one agency’s ratings.
5.84 Typically the minimum credit ratings criteria the Council use will be a short
term rating (Fitch or equivalents) of short term rating F1 and a long term rating of A-. There may be occasions when the counterparty ratings from one rating agency are marginally lower than these ratings but may still be used. In these instances consideration will be given to the whole range of ratings available, or other topical market information, to support their use.
5.85 All credit ratings will be monitored weekly. The Council is alerted to changes
to ratings of all three agencies through its use of our 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.
• in addition to the use of credit ratings the Council will be advised of information in movements in credit default swap spreads against the iTraxx benchmark and other market data on a weekly basis. Extreme market movements may result in downgrade of an institution or removal from the Council’s lending list.
5.86 Sole reliance will not be placed on the use of this external service. In addition
the Council will also use market data and market information, information on any external support for banks to help support its decision making process.
5.87 The Council has determined that it will only use approved counterparties from
the UK and countries with a minimum sovereign credit rating of AA- from Fitch or equivalent. The list of countries that qualify using this credit criteria as at the date of this report are shown in APPENDIX 3. This list will be added to, or deducted from, by officers should ratings change in accordance with this policy.
UK banks – ring fencing 5.88 The largest UK banks, (those with more than £25bn of retail / Small and
Medium-sized Enterprise (SME) deposits), are required, by UK law, to separate core retail banking services from their investment and international banking activities by 1st January 2019. This is known as “ring-fencing”. Whilst smaller banks with less than £25bn in deposits are exempt, they can choose to opt up. Several banks are very close to the threshold already and so may come into scope in the future regardless.
5.89 Ring-fencing is a regulatory initiative created in response to the global
financial crisis. It mandates the separation of retail and SME deposits from investment banking, in order to improve the resilience and resolvability of banks by changing their structure. In general, simpler, activities offered from within a ring-fenced bank, (RFB), will be focused on lower risk, day-to-day
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core transactions, whilst more complex and “riskier” activities are required to be housed in a separate entity, a non-ring-fenced bank, (NRFB). This is intended to ensure that an entity’s core activities are not adversely affected by the acts or omissions of other members of its group.
5.90 While the structure of the banks included within this process may have
changed, the fundamentals of credit assessment have not. The Council will continue to assess the new-formed entities in the same way that it does others and those with sufficiently high ratings, (and any other metrics considered); will be considered for investment purposes.
Investment Strategy 5.91 Investments will be made with reference to the core balance and cash flow
requirements and the outlook for short-term interest rates (i.e. rates for investments up to 12 months). Greater returns are usually obtainable by investing for longer periods. While most cash balances are required in order to manage the ups and downs of cash flow, where cash sums can be identified that could be invested for longer periods, the value to be obtained from longer term investments will be carefully assessed. • If it is thought that Bank Rate is likely to rise significantly within the time
horizon being considered, then consideration will be given to keeping most investments as being short term or variable.
• Conversely, if it is thought that Bank Rate is likely to fall within that time period, consideration will be given to locking in higher rates currently obtainable, for longer periods.
5.92 Investment returns expectations. On the assumption that the UK and EU
agree a Brexit deal by the end of 2019 or soon after, then Bank Rate is forecast to increase only slowly over the next few years to reach 1.25% by quarter 1 2022. Bank Rate forecasts for financial year ends (March) are:
• Q1 2021 0.75% • Q1 2022 1.00% • Q1 2023 1.25%
5.93 The suggested budgeted investment earnings rates for returns on investments placed for periods up to about three months during each financial year are as follows:
2019/20 0.75% 2020/21 0.75% 2021/22 1.00% 2022/23 1.25% 2023/24 1.50% 2024/25 1.75% Later years 2.25%
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5.94 The overall balance of risks to economic growth in the UK is probably to the downside due to the weight of all the uncertainties over Brexit, as well as a softening global economic picture. The balance of risks to increases in Bank Rate and shorter term PWLB rates are broadly similarly to the downside. In the event that a Brexit deal is agreed with the EU and approved by Parliament, the balance of risks to economic growth and to increases in Bank Rate is likely to change to the upside.
5.95 Investment treasury indicator and limit - total principal funds invested for
greater than 365 days. These limits are set with regard to the Council’s liquidity requirements and to reduce the need for early sale of an investment, and are based on the availability of funds after each year-end.
The Council is asked to approve the treasury indicator and limit:-
Maximum principal sums invested > 365 days 2020/21 2021/22 2022/23 Principal sums invested > 365 days
£10m
£10m
£10m
5.96 For its cash flow generated balances, the Council will seek to utilise its
business reserve instant access and notice accounts, money market funds and short-dated deposits (overnight to 100 days) in order to benefit from the compounding of interest.
Investment risk benchmarking 5.97 This Council will use an investment benchmark to assess the investment
performance of its investment portfolio of 7 day, 1, 3, 6 or 12 month LIBID uncompounded.
End of year investment report 5.98 At the end of the financial year, the Council will report on its investment
activity as part of its Annual Treasury Report.
6 Implications 6.1 Financial Included in the report Legal Nil Human Resources Nil Human Rights Act Nil Data Protection Nil Risk Management The Council regards security of the sums it
invests to be the key objective of its treasury management activity. Close management of counterparty risk is therefore a key element of
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day to day management of treasury activity. The practices designed to ensure that risks are managed effectively are set out in the Treasury Management Practices available on the Council’s website.
6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers - File available in Financial Services
UK. Brexit. 2019 has been a year of upheaval on the political front as Theresa May resigned as Prime Minister to be replaced by Boris Johnson on a platform of the UK leaving the EU on 31 October 2019, with or without a deal. However, MPs blocked leaving on that date and the EU has agreed an extension to 31 January 2020. In addition, a general election has been called for 12 December. Given the uncertainty about the result of the general election and what MPs could afterwards decide, any interest rate forecasts are subject to material change as this situation evolves. If Parliament agrees to a deal on 31 January then it is possible that growth could recover relatively quickly. The MPC could then need to address the issue of whether to raise Bank Rate at some point in the coming year when there is little slack left in the labour market that could cause wage inflation to accelerate; this would then feed through into general inflation. On the other hand, if there was a no deal Brexit and there was a significant level of disruption to the economy, then growth could weaken even further than currently: the MPC would then be likely to cut Bank Rate in order to support growth. However, with Bank Rate still only at 0.75%, the MPC has relatively little room to make a big impact and it would probably suggest that it would be up to the Chancellor to provide help to support growth by way of a fiscal boost by e.g. tax cuts, increases in the annual expenditure budgets of government departments and services and expenditure on infrastructure projects, to boost the economy. The Government has already made moves in this direction. It also has to be borne in mind that even if a deal is agreed on 31 January 2020, the current transition period for negotiating a trade deal only runs until 31 December 2020. This could prove to be an unrealistically short timetable for such major negotiations which leaves open two possibilities; one the need for an extension of negotiations, probably two years, or a no deal Brexit in December 2020. The first half of 2019 saw UK economic growth falling to -0.2% in quarter 2 as Brexit uncertainty took a toll. In its Inflation Report of 1 August, the Bank of England was notably downbeat about the outlook for both the UK and major world economies. The MPC meeting of 19 September reemphasised their concern about the downturn in world growth and also expressed concern that prolonged Brexit uncertainty would contribute to a build-up of spare capacity in the UK economy, especially in the context of a downturn in world growth. This mirrored investor concerns around the world which are now expecting a significant downturn or possibly even a recession in some major developed economies. It was therefore no surprise that the Monetary Policy Committee (MPC) left Bank Rate unchanged at 0.75% throughout 2019, so far, and is expected to hold off on changes until there is some clarity on what is going to happen over Brexit. However, it is also worth noting that since Boris Johnson became Prime Minister, the government has made significant statements on various spending commitments and a relaxation in the austerity programme. This will provide some support to the economy and, conversely, take some pressure off the MPC to cut Bank Rate to support growth. As for inflation itself, CPI has been hovering around the Bank of England’s target of 2% during 2019, but fell to 1.7% in August and September. It is likely to remain close to 2% over
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the next two years and so it does not pose any immediate concern to the MPC at the current time. However, if there was a no deal Brexit, inflation could rise towards 4%, primarily because of imported inflation on the back of a weakening pound. With regard to the labour market, despite the contraction in quarterly GDP growth of -0.2% q/q, (+1.3% y/y), in quarter 2, employment continued to rise, but at only a muted rate of 31,000 in the three months to July after having risen by no less than 115,000 in quarter 2 itself. However, in the three months to August, employment swung into negative with a fall of 56,000, the first fall for two years. Unemployment duly rose from a 44 year low of 3.8% on the Independent Labour Organisation measure in July to 3.9%. Wage inflation also edged down slightly from a high point of 3.9% to 3.8% in August, (3 month average regular pay, excluding bonuses). This meant that in real terms, (i.e. wage rates higher than CPI inflation), earnings grew by about 2.1%. As the UK economy is very much services sector driven, an increase in household spending power is likely to feed through into providing some support to the overall rate of economic growth in the coming months. The quarter 2 GDP statistics also included a revision of the savings ratio from 4.1% to 6.4% which provides reassurance that consumers’ balance sheets are not over stretched and so will be able to support growth going forward. This would then mean that the MPC will need to consider carefully at what point to take action to raise Bank Rate if there is an agreed Brexit deal, as the recent pick-up in wage costs is consistent with a rise in core services inflation to more than 4% in 2020. In the political arena, a general election could result in a potential loosening of monetary policy and therefore medium to longer dated gilt yields could rise on the expectation of a weak pound and concerns around inflation picking up although, conversely, a weak international backdrop could provide further support for low yielding government bonds and gilts. USA. President Trump’s massive easing of fiscal policy in 2018 fuelled a temporary boost in consumption in that year which generated an upturn in the rate of growth to a robust 2.9% y/y. Growth in 2019 has been falling after a strong start in quarter 1 at 3.1%, (annualised rate), to 2.0% in quarter 2 and then 1.9% in quarter 3 ; it is expected to fall further. The strong growth in employment numbers during 2018 has weakened during 2019, indicating that the economy is cooling, while inflationary pressures are also weakening; CPI inflation fell from 2.3% to 2.0% in September. The Fed finished its series of increases in rates to 2.25 – 2.50% in December 2018. In July 2019, it cut rates by 0.25% as a ‘midterm adjustment’ but flagged up that this was not intended to be seen as the start of a series of cuts to ward off a downturn in growth. It also ended its programme of quantitative tightening in August, (reducing its holdings of treasuries etc). It then cut rates by 0.25% again in September and by another 0.25% in its October meeting to 1.50 – 1.75%.. At its September meeting it also said it was going to start buying Treasuries again, although this was not to be seen as a resumption of quantitative easing but rather an exercise to relieve liquidity pressures in the repo market. Despite those protestations, this still means that the Fed is again expanding its balance sheet holdings of government debt. In the first month, it will buy $60bn , whereas it had been reducing its balance sheet by $50bn per month during 2019. As it will be buying only short-term (less than 12 months) Treasury bills, it is technically correct that this is not quantitative easing (which is purchase of long term debt). Investor confidence has been badly rattled by the progressive ramping up of increases in tariffs President Trump has made on Chinese imports and China has responded with increases in tariffs on American imports. This trade war is seen as depressing US, Chinese and world growth. In the EU, it is also particularly impacting Germany as exports of goods
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and services are equivalent to 46% of total GDP. It will also impact developing countries dependent on exporting commodities to China. EUROZONE. Growth has been slowing from +1.8 % during 2018 to around half of that in 2019. Growth was +0.4% q/q (+1.2% y/y) in quarter 1, +0.2% q/q (+1.2% y/y) in quarter 2 and then +0.2% q/q, +1.1% in quarter 3; there appears to be little upside potential in the near future. German GDP growth has been struggling to stay in positive territory in 2019 and fell by -0.1% in quarter 2; industrial production was down 4% y/y in June with car production down 10% y/y. Germany would be particularly vulnerable to a no deal Brexit depressing exports further and if President Trump imposes tariffs on EU produced cars. The European Central Bank (ECB) ended its programme of quantitative easing purchases of debt in December 2018, which then meant that the central banks in the US, UK and EU had all ended the phase of post financial crisis expansion of liquidity supporting world financial markets by quantitative easing purchases of debt. However, the downturn in EZ growth in the second half of 2018 and into 2019, together with inflation falling well under the upper limit of its target range of 0 to 2%, (but it aims to keep it near to 2%), has prompted the ECB to take new measures to stimulate growth. At its March meeting it said that it expected to leave interest rates at their present levels “at least through the end of 2019”, but that was of little help to boosting growth in the near term. Consequently, it announced a third round of TLTROs; this provides banks with cheap borrowing every three months from September 2019 until March 2021 that means that, although they will have only a two-year maturity, the Bank was making funds available until 2023, two years later than under its previous policy. As with the last round, the new TLTROs will include an incentive to encourage bank lending, and they will be capped at 30% of a bank’s eligible loans. However, since then, the downturn in EZ and world growth has gathered momentum; at its meeting on 12 September, it cut its deposit rate further into negative territory, from -0.4% to -0.5%, and announced a resumption of quantitative easing purchases of debt for an unlimited period; (at its October meeting it said this would start in November at €20bn per month - a relatively small amount compared to the previous buying programme). It also increased the maturity of the third round of TLTROs from two to three years. However, it is doubtful whether this loosening of monetary policy will have much impact on growth and, unsurprisingly, the ECB stated that governments will need to help stimulate growth by ‘growth friendly’ fiscal policy. On the political front, Austria, Spain and Italy have been in the throes of forming coalition governments with some unlikely combinations of parties i.e. this raises questions around their likely endurance. The latest results of German state elections has put further pressure on the frail German CDU/SDP coalition government and on the current leadership of the CDU. CHINA. Economic growth has been weakening over successive years, despite repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and shadow banking systems. In addition, there still needs to be a greater switch from investment in industrial capacity, property construction and infrastructure to consumer goods production. JAPAN - has been struggling to stimulate consistent significant GDP growth and to get inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy. WORLD GROWTH. Until recent years, world growth has been boosted by increasing globalisation i.e. countries specialising in producing goods and commodities in which they have an economic advantage and which they then trade with the rest of the world. This has boosted worldwide productivity and growth, and, by lowering costs, has also depressed
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inflation. However, the rise of China as an economic superpower over the last thirty years, which now accounts for nearly 20% of total world GDP, has unbalanced the world economy. The Chinese government has targeted achieving major world positions in specific key sectors and products, especially high tech areas and production of rare earth minerals used in high tech products. It is achieving this by massive financial support (i.e. subsidies) to state owned firms, government directions to other firms, technology theft, restrictions on market access by foreign firms and informal targets for the domestic market share of Chinese producers in the selected sectors. This is regarded as being unfair competition that is putting western firms at an unfair disadvantage or even putting some out of business. It is also regarded with suspicion on the political front as China is an authoritarian country that is not averse to using economic and military power for political advantage. The current trade war between the US and China therefore needs to be seen against that backdrop. It is, therefore, likely that we are heading into a period where there will be a reversal of world globalisation and a decoupling of western countries from dependence on China to supply products. This is likely to produce a backdrop in the coming years of weak global growth and so weak inflation. Central banks are, therefore, likely to come under more pressure to support growth by looser monetary policy measures and this will militate against central banks increasing interest rates. The trade war between the US and China is a major concern to financial markets due to the synchronised general weakening of growth in the major economies of the world, compounded by fears that there could even be a recession looming up in the US, though this is probably overblown. These concerns resulted in government bond yields in the developed world falling significantly during 2019. If there were a major worldwide downturn in growth, central banks in most of the major economies will have limited ammunition available, in terms of monetary policy measures, when rates are already very low in most countries, (apart from the US). There are also concerns about how much distortion of financial markets has already occurred with the current levels of quantitative easing purchases of debt by central banks and the use of negative central bank rates in some countries. The latest PMI survey statistics of economic health for the US, UK, EU and China have all been predicting a downturn in growth; this confirms investor sentiment that the outlook for growth during the year ahead is weak. INTEREST RATE FORECASTS The interest rate forecasts provided by Link Asset Services are predicated on an assumption of an agreement being reached on Brexit between the UK and the EU. On this basis, while GDP growth is likely to be subdued in 2019 due to all the uncertainties around Brexit depressing consumer and business confidence, an agreement is likely to lead to a boost to the rate of growth in subsequent years which could, in turn, increase inflationary pressures in the economy and so cause the Bank of England to resume a series of gentle increases in Bank Rate. Just how fast, and how far, those increases will occur and rise to, will be data dependent. The forecasts in this report assume a modest recovery in the rate and timing of stronger growth and in the corresponding response by the Bank in raising rates.
• In the event of an orderly non-agreement exit, it is likely that the Bank of England would take action to cut Bank Rate from 0.75% in order to help economic growth deal with the adverse effects of this situation. This is also likely to cause short to medium term gilt yields to fall.
• If there was a disorderly Brexit, then any cut in Bank Rate would be likely to last for a longer period and also depress short and medium gilt yields correspondingly. Quantitative easing could also be restarted by the Bank of England. It is also possible that the government could act to protect economic growth by implementing fiscal stimulus.
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However, there would appear to be a majority consensus in the Commons against any form of non-agreement exit so the chance of this occurring has diminished. The balance of risks to the UK
• The overall balance of risks to economic growth in the UK is probably to the downside due to the weight of all the uncertainties over Brexit, as well as a softening global economic picture.
• The balance of risks to increases in Bank Rate and shorter term PWLB rates are broadly similarly to the downside.
• In the event that a Brexit deal was agreed with the EU and approved by Parliament, the balance of risks to economic growth and to increases in Bank Rate is likely to change to the upside.
One risk that is both an upside and downside risk, is that all central banks are now working in very different economic conditions than before the 2008 financial crash as there has been a major increase in consumer and other debt due to the exceptionally low levels of borrowing rates that have prevailed since 2008. This means that the neutral rate of interest in an economy, (i.e. the rate that is neither expansionary nor deflationary), is difficult to determine definitively in this new environment, although central banks have made statements that they expect it to be much lower than before 2008. Central banks could therefore either over or under do increases in central interest rates. Downside risks to current forecasts for UK gilt yields and PWLB rates currently include:
• Brexit – if it were to cause significant economic disruption and a major downturn in the rate of growth.
• Bank of England takes action too quickly, or too far, over the next three years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker than we currently anticipate.
• A resurgence of the Eurozone sovereign debt crisis. In 2018, Italy was a major concern due to having a populist coalition government which made a lot of anti-austerity and anti-EU noise. However, in September 2019 there was a major change in the coalition governing Italy which has brought to power a much more EU friendly government; this has eased the pressure on Italian bonds. Only time will tell whether this new coalition based on an unlikely alliance of two very different parties will endure.
• Weak capitalisation of some European banks, particularly Italian banks. • German minority government. In the German general election of September 2017,
Angela Merkel’s CDU party was left in a vulnerable minority position dependent on the fractious support of the SPD party, as a result of the rise in popularity of the anti-immigration AfD party. The CDU has done badly in recent state elections but the SPD has done particularly badly and this has raised a major question mark over continuing to support the CDU. Angela Merkel has stepped down from being the CDU party leader but she intends to remain as Chancellor until 2021.
• Other minority EU governments. Austria, Sweden, Spain, Portugal, Netherlands and Belgium also have vulnerable minority governments dependent on coalitions which could prove fragile.
• Austria, the Czech Republic, Poland and Hungary now form a strongly anti-immigration bloc within the EU. There has also been rising anti-immigration sentiment in Germany and France.
• In October 2019, the IMF issued a report on the World Economic Outlook which flagged up a synchronised slowdown in world growth. However, it also flagged up that there was potential for a rerun of the 2008 financial crisis, but his time
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centred on the huge debt binge accumulated by corporations during the decade of low interest rates. This now means that there are corporates who would be unable to cover basic interest costs on some $19trn of corporate debt in major western economies, if world growth was to dip further than just a minor cooling. This debt is mainly held by the shadow banking sector i.e. pension funds, insurers, hedge funds, asset managers etc., who, when there is $15trn of corporate and government debt now yielding negative interest rates, have been searching for higher returns in riskier assets. Much of this debt is only marginally above investment grade so any rating downgrade could force some holders into a fire sale, which would then depress prices further and so set off a spiral down. The IMF’s answer is to suggest imposing higher capital charges on lending to corporates and for central banks to regulate the investment operations of the shadow banking sector. In October 2019, the deputy Governor of the Bank of England also flagged up the dangers of banks and the shadow banking sector lending to corporates, especially highly leveraged corporates, which had risen back up to near pre-2008 levels.
• Geopolitical risks, for example in North Korea, but also in Europe and the Middle East, which could lead to increasing safe haven flows.
Upside risks to current forecasts for UK gilt yields and PWLB rates
• Brexit – if agreement was reached all round that removed all threats of economic and political disruption between the EU and the UK.
• The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflationary pressures to build up too strongly within the UK economy, which then necessitates a later rapid series of increases in Bank Rate faster than we currently expect.
• UK inflation, whether domestically generated or imported, returning to sustained significantly higher levels causing an increase in the inflation premium inherent to gilt yields.
Treasury Management Practice (TMP1) - Credit and Counterparty Risk Management
SPECIFIED INVESTMENTS: All such investments will be sterling denominated, with maturities up to maximum of 1 year, meeting the minimum ‘high’ quality criteria where applicable. NON-SPECIFIED INVESTMENTS: These are any investments which do not meet the specified investment criteria. A maximum of 50% will be held in aggregate in non-specified investments. A variety of investment instruments will be used, subject to the credit quality of the institution, and depending on the type of investment made it will fall into one of the above categories. The criteria, time limits and monetary limits applying to institutions or investment vehicles are:-
Minimum credit criteria / colour
band
Max % of total investments/ £
limit per institution Max. maturity
period
DMADF – UK Government N/A 100% 6 months
UK Government gilts UK sovereign rating £6 million 5 years
UK Government Treasury bills
UK sovereign rating £6 million 12 months
Bonds issued by multilateral development banks
AAA £6 million 5 years
Money Market Funds CNAV AAA 100% Liquid
Money Market Funds LNVAV AAA 100% Liquid
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Minimum credit criteria / colour
band
Max % of total investments/ £
limit per institution Max. maturity
period
Money Market Funds VNAV AAA 100% Liquid
Ultra-Short Dated Bond Funds with a credit score of 1.25
AAA 100% Liquid
Ultra-Short Dated Bond Funds with a credit score of 1.5
AAA 100% Liquid
Local authorities N/A 100% 12 months
Call Accounts N/A £6 million Liquid
Term deposits with housing associations
Blue Orange Red Green No Colour
£6 million
12 months 12 months 6 months 100 days Not for use
Term deposits with banks and building societies
Blue Orange Red Green No Colour
£6 million
12 months 12 months 6 months 100 days Not for use
CDs or corporate bonds with banks and building societies
Blue Orange Red Green No Colour
£6 million
12 months 12 months 6 months 100 days Not for use
Gilt funds UK sovereign rating £6 million 12 months
Accounting treatment of investments. The accounting treatment may differ from the underlying cash transactions arising from investment decisions made by this Council. To ensure that the Council is protected from any adverse revenue impact, which may arise from these differences, we will review the accounting implications of new transactions before they are undertaken.
Full Council • receiving and reviewing reports on treasury management policies, practices and
activities; • approval of annual strategy. Committees/Council • approval of/amendments to the organisation’s adopted clauses, treasury
management policy statement and treasury management practices; • budget consideration and approval; • approval of the division of responsibilities; • receiving and reviewing regular monitoring reports and acting on
recommendations; • approving the selection of external service providers and agreeing terms of
appointment. Body/person(s) with responsibility for scrutiny • reviewing the treasury management policy and procedures and making
THE TREASURY MANAGEMENT ROLE OF THE SECTION 151 OFFICER
The S151 (responsible) officer • recommending clauses, treasury management policy/practices for approval, reviewing
the same regularly, and monitoring compliance; • submitting regular treasury management policy reports; • submitting budgets and budget variations; • receiving and reviewing management information reports; • reviewing the performance of the treasury management function; • ensuring the adequacy of treasury management resources and skills, and the effective
division of responsibilities within the treasury management function; • ensuring the adequacy of internal audit, and liaising with external audit; • recommending the appointment of external service providers; • preparation of a capital strategy to include capital expenditure, capital financing, and
SUBMISSION BY COUNCILLOR R M SMITH RESOURCES PORTFOLIO
CABINET 5 DECEMBER 2019
Risk Management Report
This report is not subject to the call-in procedure and will be referred to Audit and Accounts Committee. 1 Purpose of Report 1.1 To set out details of the Council’s Strategic Risk Register as at 30 September
2019.
2 Proposal of Cabinet Member 2.1 That Cabinet approves the Strategic Risk Register and considers the progress
made in the identification and management of the strategic risks. 3 Key Issues and Reasons for Recommendation 3.1 All Strategic Risks and associated action plans have been reviewed and the
Council’s current risk profile is summarised in the table below:-
Risk Category Number of Risks at 1 April 2019
Number of Risks at 30 September 2019
RED 1 1 AMBER 8 8 GREEN 0 0 TOTAL 9 9
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4 Relationship to Corporate Priorities 4.1 This report supports the Council’s Corporate Priorities as follows:-
(a) Risk management is a systematic process by which key business risks/opportunities are identified, prioritised and controlled so as to contribute towards the achievement of the Council’s aims and objectives.
(b) The strategic risks set out in the Appendices have been categorised
against the Council’s priorities. 5 Report Detail 5.1 The Accounts and Audit Regulations 2015 state that:-
“A relevant body must ensure that it has a sound system of internal control which:- (a) facilitates the effective exercise of its functions and the achievement of
its aims and objectives; (b) ensures that the financial and operational management of the authority
is effective; and (c) includes effective arrangements for the management of risk.”
5.2 Risk can be defined as uncertainty of outcome (whether positive opportunity or negative threat). Risk is ever present and some amount of risk-taking is inevitable if the council is to achieve its objectives. The aim of risk management is to ensure that the council makes cost-effective use of a risk process that has a series of well defined steps to support better decision making through good understanding of risks and their likely impact.
Management of Strategic Risks/Opportunities 5.3 The Council’s approach to risk management (including its risk appetite) has been reviewed and the revised policy and strategy was reported to the Audit Committee for endorsement at the March 2016 meeting and to Cabinet for approval at the May meeting.
5.4 Central to the risk management process is the identification, prioritisation and
management of strategic risks/opportunities. Strategic Risks are those that have a significant impact on the Council’s ability to deliver its Corporate Plan Objectives Strategic risks/opportunities have been identified and prioritised, action plans are in place for their effective management and delivery of the action plans is monitored. A summary of the Council’s strategic risk register as at 30 September 2019 is attached as APPENDIX 1.
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5.5 The risk summary illustrates the risks/opportunities using the “traffic light” method ie:-
RED risk score 12 and above (action plan required to reduce risk and/or regular monitoring)
AMBER risk score 5 to 10 (action plan required to reduce risk) GREEN risk score below 5 (risk tolerable, no action plan required)
5.6 The number of strategic risks has remained at 9 but there have been two
changes:
• One risk has been deleted (risk 40a) as the majority of Phase 1 of the Stone Leisure Strategy has now been delivered. The one outstanding action has been added to the risk relating to Phase 2 of the strategy; and
• one new risk added (risk 45) regarding the Transformation Programme. 5.7 All risks have controls in place and these controls have seen a reduction from
the Gross Risk to a net risk score. The net risk scores for all risks with the exception of Risk 34 remain as last reported to the committee. Management have an ongoing programme of actions to manage the risks and all risks have seen some progress in delivering these action plans however the progress in implementing the actions since April 2019 has not led to a revision of the net risk score for all risks apart from Risk 34.
Risk 34 has seen a reduction in the risk score from 9 to 6 which reflects the
fact that Universal Credit has now been in place for a reasonable time and the Council has not seen any significant impact.
5.7 A progress update for those actions due up to September 2019 is included in
the full strategic risk register attached at APPENDIX 2. This includes an ‘Overall Progress Summary’ for each risk.
6 Implications 6.1 Financial Nil Legal Nil Human Resources Nil Human Rights Act Nil Data Protection Nil Risk Management As set out in report and Appendices
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6.2 Community Impact Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers - File available in Internal Audit and Risk Section
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Summary - Strategic Risk Register as at 1 April 2019
Sept 2018 April 2019 Direction of Travel over period
reported RED RISKS
39 Viability / Funding of Stafford Borough Council as a result of public expenditure reductions and changes to Government’s funding regime
The Council may not be able to maintain the current level of services or is no longer sustainable as an organisation
2014 20
(Red)
12
(Red)
12
(Red) ↔
AMBER RISKS
34 Impact of Benefit Reform (e.g. Introduction of Universal Credit)
This could lead to an increase in claimants not being able to sustain their housing tenancy leading to an increase in homelessness.
2013 12
(Red)
9
(Amber)
9
(Amber)
↔
35 The failure to manage the changes to town centres as a result of changing trends away from shopping to leisure, living and working office use
This could lead to a reduction in investment from new and existing businesses into the area and a reduction in business rates income
2013 12
(Red)
9
(Amber)
9
(Amber) ↔
38a Failure to realise and facilitate the expected economic growth and prosperity for Stafford and Stone
This could lead to the delayed delivery of key regeneration projects such as Stafford Gateway and impact on future investment into the area
2014 15
(Red)
10
(Amber)
10
(Amber) ↔
38b Failure to minimise the impact on the environment from the construction and operation of HS2
This could result in a reduction in the air quality, excessive noise/vibration from the construction activities which may have an impact on people’s health and wellbeing
Sept 2018 April 2019 Direction of Travel over period
reported
40b Failure to deliver phase 2 of the Stone Leisure Strategy on time and within agreed budget.
This could affect the Council’s ability to deliver its Health and Wellbeing agenda, which may impact on people’s health.
2016 20
(Red)
10
(Amber)
10
(Amber) ↔
43 Failure to repel or recover from cyber-attack including targeted ransomware, malware and DDoS attacks
This could result in the Council not being able to deliver services
2017 20
(Red)
9
(Amber)
9
(Amber) ↔
44 Insufficient Capacity/Resilience to deliver the priorities contained in the Corporate Business Plan
This could result in projects being delayed or not delivered. There is also a risk to employees’ health & wellbeing through stress.
2018 12
(Red)
9
(Amber)
9
(Amber)
↔
45 The Council fails to achieve the anticipated benefits from its transformation project
This could lead to increased budget pressures and missed opportunities to improve efficiency and the customer experience
2019 9
(Amber)
New
GREEN RISKS
There are no current Green Risks
DELETED RISKS
40a Failure to deliver phase 1 of the Stone Leisure Strategy on time and within agreed budget.
This could affect the Council’s ability to deliver its Health and Wellbeing agenda, which may impact on people’s health.
2016
20 (Red) 10
(Amber) 10
(Amber)
↓ Risk has decreased
↔ Risk level unchanged
↑
Risk has increased
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Ref No: 34 Risk: Impact of Benefit Reform (e.g. Introduction of Universal Credit) Risk Owner: Head of Finance Cabinet Member: Resources TBC
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 3 Total Score: 12 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 3 Impact: 3 Total Score 9 - AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Monitor impact of Benefit Reform to identify areas of concern Quarterly, Local Taxation & Benefits Manager
An on-going monitoring routine is in place.
Identifying number of additional people falling into arrears with Council Tax payments and/or not claiming Council Tax Reduction.
Quarterly, Local Taxation & Benefits Manager
This forms part of the overall monitoring and any considerable difference would generate a review of the local scheme.
Review LCTR Scheme in partnership with Staffordshire authorities with a view to streamlining the application, assessment and award processes
Completion of review by 31 March 2020
Agreement in principle amongst Staffs authorities, to undertake review
Overall Progress Summary: The full impact of benefit reform cannot be determined until the phased introduction of Universal Credits. The impacts of existing reforms continue to be monitored.
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Ref No: 34 Risk: Impact of Benefit Reform (e.g. Introduction of Universal Credit) Consequences Of Risk:
• Increased demand for services (additional workload, pressure on service delivery, additional resourcing etc.) • Reduced DWP funding • Increase in arrears on Council Tax • Affects Housing Association tenancies
Links to Corporate Business Plan – Objective 2:
• To improve the quality of life of local people by providing a safe, clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing
Key Controls in Place: • Monitoring impact of localisation of Council Tax Support • Monitor increasing UC claim load and reducing HB caseload and align resources accordingly. • Liaison with DWP on implementation timetable for Universal Credits (Full Service commenced November 2018) • Liaison with Housing Providers, Advice agencies etc. about support available to landlord and tenants. • Liaison with other LAs, ahead of us on the implementation timeline. • Discretionary Housing Payment Policy refreshed December 2018. • Budget advice available, via Citizens Advice for affected residents to better manage their budgets set up
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Ref No: 35 Risk: The failure to manage the changes to town centres as a result of changing trends away from shopping to leisure, living and working office use
Risk Owner: Head of Development Cabinet Member: Economic Development & Prosperity
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 3 Total Score: 12 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 3 Impact: 3 Total Score 9 - AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Targeted actions identified from vacancy monitoring Quarterly/Economic Development Officer (Town Centres)
Business support and advice being provided to owners and landlords of vacant properties to encourage new investment and uses.
Maintain active dialogue with land and property owners, agents and new investors to town centres
On-going/ Economic Development Officer (Town Centres)
New development opportunities arising in Stafford town centre
New Action: Progress bids for funding to support town centre responding to challenges faced by retail e.g. Future High Street Fund
Head of Development Ongoing
Future High Streets fund bid submitted March 2019 Other bidding opportunities aligned with vision for town centres being monitored
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Actions Planned Timescale/Person Responsible
Progress/Comments
New Action: secure support from partners organisations such as SOT and Staffs Chamber and FSB and European and other funds for town centre businesses
Ongoing Economic Development Officer (town centres)
Staffordshire Chambers and Stafford Town Centre Partnership supported the successful Expression of Interest to the Future High Streets Fund which secured £150,000 revenue funding for the Council to develop detailed plans for Stafford Town Centre.
Stafford Town Centre Strategic Development Framework to be produced to integrate outputs from the Eastgate Masterplan, the Northern Town Centre Property, Land and Commercial Strategy and the Station Gateway masterplan into a comprehensive framework for the ongoing regeneration of Stafford Town Centre and to include comprehensive approach to car parking between SBC and SCC - Stafford
Head of Development – Q3 2019/20
Brief agreed April 2019 Out to tender April/May 2019 Completion December 2019
Station Gateway implementation plan to be developed providing a comprehensive approach to delivery of this project.
Q2/ Head of Development
Completion of commercial and Land Strategy Advice being prepared by June 2019. Housing development underway on central section of the Gateway. Implementation plan to be finalised Q2 2019/20
Eastgate Masterplan approved Q4 2018/19/ Strategic Business Manager
Complete – reported to Cabinet Briefing. Outputs to be incorporated into Stafford Town Centre Strategic Framework
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Actions Planned Timescale/Person Responsible
Progress/Comments
Northern Town Centre Property, Land and Commercial Strategy advice approved - Stafford
Q4/Economic Development Officer (Town Centres)
Work completed March 2019. Outputs to be incorporated into Stafford Town Centre Strategic Framework
Overall Progress Summary: Progression to Round 2 of the Future High Streets Funds is aligned with the development of the wider town centre Strategic Framework and completion of the Economic Growth Strategy. Partners are involved in each area of work through the Stafford Growth, Regeneration and Infrastructure Partnership.
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Ref No: 35 Risk: The failure to manage the changes to town centres as a result of changing trends away from shopping to leisure, living and working office use
Consequences Of Risk: • Increase in vacant business units in Stafford and Stone • Reduced business rates generation • Reputational damage and subsequent impact on footfall and tourism offer • Reduced investment from new and existing businesses into the area
Links to Corporate Business Plan – Objective 1:
• To deliver sustainable economic and housing growth to provide income and jobs.
Key Controls in Place: • Vacancy rates monitored quarterly • Ongoing support in Stafford via the Town Centre Partnership which has a new Chair Business rate reduction scheme launched 2017
for northern end of Stafford Town Centre [REVIEW] • Exploring new development opportunity areas in Stafford around the Station Gateway, Northern end of Town and South eastern end
of the town centre and development of an integrated Stafford Town Centre Strategic Framework to direct new investment • MIPIM Conference attended in March 2017, 2018 and 2019 which has generated investment interest in the Borough. • Constellation Partnership Growth Strategy has been developed together with central government to deliver Stafford Gateway and
Garden Settlement. • Stone Traders Association set up and Economic Development Officer (Town Centres) supporting work of Association and developing
events programme. • Business database in place to improve market intelligence
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Ref No: 38a Risk: Failure to realise and facilitate the expected economic growth and prosperity for Stafford and Stone Risk Owner: Head of Development Cabinet Member: Economic Development & Prosperity
Gross Risk Score (i.e. without controls) Likelihood: 3 Impact: 5 Total Score: 15 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 2 Impact: 5 Total Score 10 - AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Station Gateway implementation plan to be developed providing a comprehensive approach to delivery of this project.
Q2 2019/20 Head of Development
Completion of commercial and Land Strategy Advice being prepared by May 2019. Housing development underway on central section of the Gateway. Implementation plan to be finalised Q2 2019/20
Development of new Garden Settlement governance arrangements and programme plan to oversee this potential new development
Q1 2019/20 Project details being developed with Partners to progress this. Government announced Stafford successful in securing £750,000 funding to support the development of the Garden community proposal with the support of Homes England
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Actions Planned Timescale/Person Responsible
Progress/Comments
Economic growth strategy to be adopted Q3 2019/20 Head of Development
A strategy has been drafted with the Stafford Growth, Regeneration and Infrastructure Partnership and following consultation during summer 2019 is now awaiting final feedback from Staffordshire County Council. The Strategy is due to be considered by the SBC/SCC Growth Board in December 2019 ahead of formal adoption,
Overall Progress Summary: Station Gateway Masterplan project implementation plan has been developed. The development of a new Garden Settlement is gaining momentum and has secured MHCLG garden communities funding. A Programme Board has been established and is meeting regularly. Ref No: 38a Risk: Failure to realise and facilitate the expected economic growth and prosperity for Stafford and Stone Consequences Of Risk: • Failure to deliver future investment into the area • Delayed delivery of key regeneration projects such as Stafford Gateway • Loss of potential business rate and council tax generation • Failure of Constellation Partnership and reputational damage
Links to Corporate Business Plan – Objective 1:
• To deliver sustainable economic and housing growth to provide income and jobs
Key Controls in Place: • Lead officer nominated • Key stakeholder in the Constellation Partnership which aims to deliver 100,000 new homes and 120,000 new jobs Relationships
have been established with central government departments and local and regional stakeholders to deliver a new Garden
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Ref No: 38a Risk: Failure to realise and facilitate the expected economic growth and prosperity for Stafford and Stone Settlement.
• A partnership has been developed with local, regional and national stakeholders supported by an implementation plan to deliver the Stafford Station Gateway masterplan proposals.
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Ref No: 38b Risk: Failure to minimise the impact on the environment from the construction and operation of HS2 Risk Owner: Head of Operations Cabinet Member: Environment & Health
Gross Risk Score (i.e. without controls) Likelihood: 3 Impact: 5 Total Score: 15 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 2 Impact: 5 Total Score 10 - AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Monitor any preparation work being carried out by HS2 contractors QTR3+4 2019/2020 Customer Services Group Manager
Preparation work undertaken by HS2 monitored without any adverse effect or complaints.
Continued participation in HS2a Environmental Health Sub-Group covering Noise, Air Quality and land contamination implications
Ongoing Customer Services Group Manager
The next meeting of the HS2 Environmental Health Sub-Group is on 07/11/2019.
Watching brief on the House of Commons Select Committee and House of Lords Select Committee proceedings and the publication of Royal Assent (end of 2019)
QTRS 3 and 4 2019/20 Customer Services Group Manager
To ensure officers and elected members are updated on any changes to the scheme
Awaiting outcome of Independent Review into HS2 project QTR 3 2019/20 To ensure officers and elected members are updated on any changes to the scheme
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Overall Progress Summary: Information obtained by officer’s participation in HS2 working groups to address noise, environmental, air quality and planning elements of the route alignment, during construction and subsequent operation, has assisted them in providing an input into the Council’s petitioning document. Continued liaison between the Council’s Development Manager and Customer Services Group Manager has enabled better shared understanding of the issues/risks; and the use of appropriate mechanisms to try and address the areas of concern. Whilst the hybrid bill has been progressing through Parliament, officers have been providing information to support the Council’s petitioning. Officers provided the Development Manager with a response to the consultation on the second “Additional Provision” (AP2), and Statement of Environmental Standards (SES2) amendments.
Ref No: 38b Risk: Failure to minimise the impact on the environment from the construction and operation of HS2 Consequences Of Risk:
• A reduction in the air quality from the construction activities. This could arise directly from the construction sites and indirectly from changes in the volume, composition, and location of traffic on the highway network.
• Excessive levels of Noise and vibration from construction and operation activities could lead to a significant effect on the residential amenity to domestic premises close to the proposed line.
• The negative effects associated with the off-site disposal to landfill of solid waste that will be generated by the construction and operation of the proposed scheme.
• The adverse effect of contaminant mobilisation.
Links to Corporate Business Plan – Objective 2:
• To improve the quality of life of local people by providing a safe, clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing
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Ref No: 38b Risk: Failure to minimise the impact on the environment from the construction and operation of HS2 Key Controls in Place: • Lead officer nominated • Close working relationship with Staffordshire County Council and other District Council’s in Staffordshire on the route • Partnership in forums and working groups to maintain influence with major construction leads – Arup
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Ref No: 39 Risk: Medium Term Viability / funding of Stafford Borough Council as a result of public expenditure reductions
and changes to Government’s funding regime Risk Owner: Head of Finance Cabinet Member: Resources
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 5 Total Score: 20 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 4 Impact: 3 Total Score 12 - RED Actions Planned Timescale/Person
Responsible Progress/Comments
Responding to Government proposed legislation in relation to key funding regimes
On-going, Head of Financial Management
Work streams of MHCLG/LGA and CIPFA in relation to 75% Business Rates Schemes and pilot areas to be monitored Detailed responses to be submitted in relation to self -sufficient local government, 75% business rates retention and fair funding review as more technical detail becomes available Responses submitted in relation to: Business rates - dealing with the financial risks of appeals (June 2018) Local Government Finance Settlement 2019/20 : Technical Consultation (September 2018) Relative Needs and Resources (February 2019) Business Rates Reform (February ’19)
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Actions Planned Timescale/Person Responsible
Progress/Comments
Review criteria for 2019/20 Business Rates Pilot and subject to approval of partners submit application
Complete Application to pilot 75% Business Rates Retention in 2019/20 on behalf of the Staffordshire and Stoke on Trent proposed Business Rates Pool/Pilot was successful. SBC to benefit by app £1m in 2019/20
Determine impact of Government proposals for key funding regime On-going as information becomes available, Head of Financial Management
In Progress
Review impact of Implemented Savings Strands (as contained in Efficiency Statement )
All / Ongoing
Delivery Plan for Business Objectives of Corporate Plan • To deliver sustainable economic and housing growth to provide
income and jobs • To improve the quality of life of local people by providing a safe,
clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing.
• To be a well-run, financially sustainable and ambitious organisation, responsive to the needs of our customers and communities and focussed on delivering our objectives.
to be agreed and implemented
Chief Executive / Q2 Delivery Plan in place and Control Framework in place via Corporate Business Flow process
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Actions Planned Timescale/Person Responsible
Progress/Comments
Implement a rolling programme of service reviews to ensure that resources are aligned to business objectives and are operating as efficiently as they can be
Corporate Business and Partnerships Manager / Q3
Draft report received re joint review into the best model/s for delivering, including the possibility of extending shared services, for environmental services in Cannock and Stafford, Review of all other services to be undertaken
Refresh Budget Strategy to identify alternative scenarios in relation to external funding sources
Head of Financial Management / Q3
Refreshed Financial Plan reported to Cabinet/Council November 2018
Overall Progress Summary: The Council continues to progress the areas within its direct control with balanced budgets set for 2019/20 and 2020/21. A potentially balanced budget, based upon the current Local Government Finance Regime exists for 2021/22, however the key risks and uncertainty relate to the fundamental changes to Government Funding that take place in 2020/21 (implementation of 75% Business Rates Retention; Fair Funding and Business Rates Reset) whereas ongoing uncertainty exists in relation to the longevity of the New Homes Bonus grant scheme. A potential deficit of £0.645 million exists in 2021/22 , assuming that NHB is replaced and at this stage no grant is received from any new scheme, whereas the deficit could also increase/reduce based upon the methodology for resetting existing business rates growth Details are unlikely to become clear before the Autumn of 2019 and hence Budget strategies need to be developed reflecting the various scenarios and efficiency savings implemented as soon as practically possible.
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Ref No: 39 Risk: Medium Term Viability / funding of Stafford Borough Council as a result of public expenditure reductions and changes to Government’s funding regime
Consequences Of Risk: • Unable to provide desired levels of service • Council size becomes too small to sustain a viable organisation
Links to Corporate Business Plan – Objective 3
• To be a well-run, financially sustainable and ambitious organisation, responsive to the needs of our customers and communities and focussed on delivering our objectives
Key Controls in Place: • Medium term financial plan in place • Annual Financial Plan and Medium Term Financial Strategy to 2021/22 in place • The Revenue Budget for 2019/20 and indicative budgets for 2020/21 and 2021/22 are balanced (via transfer from balances in
2021/22. However the funding regime post 2019/20 is yet to be determined • Reliance on New Homes Bonus is reduced on an annual basis. • Comprehensive Service Review being undertaken to re-align resources to Corporate Plan • Corporate Budget Monitoring • Evaluation of consultations on changes to government funding regimes
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Ref No: 40b Risk: Failure to deliver phase 2 of the Stone Leisure Strategy on time and within agreed budget. Risk Owner: Head of Operations Cabinet Member: Leisure
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 5 Total Score: 20 - RED
Residual/Net Risk Score (i.e. with controls in place) Likelihood: 2 Impact: 5 Total Score: 10 - AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
A detailed consultation exercise has been completed on the future play and leisure needs for Stone and a Masterplan for Westbridge Park developed for consideration by the Stone Leisure Strategy Board.
Q2 / Cultural Services manager and Planning Obligations Monitoring and Implementation Officer
On track
Following development of the Masterplan for Westbridge Park detailed designs and a funding strategy to be developed for phase 2 of the Stone Leisure Strategy.
Q4 / Cultural Services manager and Planning Obligations Monitoring and Implementation Officer
Waiting for outcome of Planning Application on part of the Tilling Road site.
Detailed mapping of S106 funding availability to support project completed.
Q3 / Head of Development
Completed
Sale of Tilling Drive progressing, subject to completion, this will provide funds towards phase 2 of the strategy and for compensatory playing field provision.
Q3 / Head of Development
Planning Application by developer submitted. Compensatory playing field provision being finalised to mitigate for objection to the Planning Application by Sport England.
Procurement of playing pitch strategy completed and work commenced. Due to be completed by summer 2019.
Q2 2019 / Head of Development
On track
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A brief has been prepared for the decommissioning of the Alleynes swimming pool. Detailed proposals will be developed following the commissioning of building and M&E surveys. Revised cost estimate being prepared by Mace.
Q3 / Cultural Services manager
Cost estimate expected July 2019.
Overall Progress Summary: Sale of Tilling Drive approved by Cabinet, Planning Application by developer submitted, Compensatory playing field provision being finalised to mitigate for objection to the Planning Application by Sport England.
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Ref No: 40b Risk: Failure to deliver phase 2 of the Stone Leisure Strategy on time and within agreed budget. Phase 2 of strategy Consequences Of Risk:
• Additional funding needed to complete the project is not forthcoming • Reputational damage • Impact on delivery of Health and Wellbeing agenda. • Unable to deliver corporate plan objectives
Links to Corporate Business Plan – Objective 2:
• To improve the quality of life of local people by providing a safe, clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing.
Key Controls in Place: Phase 2 • Programme Board in operation which manages financial and legal controls • Dedicated Project Manager overseeing relevant milestones • Project Plan • Professional experts brought in (Consultants) • A detailed consultation exercise has been completed on the future play and leisure needs for Stone and a Masterplan for Westbridge
Park developed. Work on detailed designs and funding strategy to commence. Sale of Tilling Drive approved by Cabinet, Planning Application by developer submitted, Compensatory playing field provision being finalised to mitigate for objection to the Planning Application by Sport England.
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Ref No: 43 Risk: Failure to repel or recover from cyber-attack including targeted ransomware, malware and DDoS attacks Risk Owner: Head of Technology Cabinet Member: Resources
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 5 Total Score: 20 - RED Residual/Net Risk Score (i.e. with controls in place) Likelihood: 3 Impact: 3 Total Score 9 -AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Information Risk Management- Continuous review and work on our information risk management regime
Ongoing/ Head of Technology
Policies under review. Some elements will be dealt these will be reviewed
Monitoring – External and Internal checks. Threat and vulnerability assessment and remediation including Annual IT Health Check by CLAS approved consultant with remedial work carried out
Ongoing/ Head of Technology
Annual Healthcheck completed in March 2019.
Application Security Assessment and Remediation action taken Annually Head of Technology
The healthcheck will produce an action plan to feed into this.
Threat intelligence, Vulnerability management, Operational management, via internal and external monitoring.
December 2018 Head of Technology
Webfilter system is now part of the new firewalls.
Exploring options to improve security for sharing information with external partners
Ongoing Head of Technology
System procured to share data files.
Overall Progress Summary: Work has been completed and actions are in progress. However, the environment means that new risks and challenges are always developing and attacks are becoming more sophisticated.
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Ref No: 43 Risk: Failure to repel or recover from cyber-attack including targeted ransomware, malware and DDoS attacks Consequences Of Risk: • Data, Systems and Applications inaccessible • Inability to deliver Council services • Cybercrime/ Fraud/ Ransom demands/ Financial harm • Reputational damage locally and nationally • Data Loss & breach of Data Protection Act (DPA) • Financial Loss
Links to Corporate Business Plan – Objective 3:
• To be a well-run, financially sustainable and ambitious organisation, responsive to the needs of our customers and communities and focussed on delivering our objectives
Key Controls in Place: • Information Risk Management Regime – Assess the risks to our information assets, effective governance structure, Leadership Team
engagement with cyber risk, produce supporting information management policies. • Secure configuration – Corporate policies and processes to develop secure baseline builds • Network Security – Protection and secured perimeter of external security threats and untrusted networks • Managing user privileges – All users of ICT systems provided with privileges suitable for their role • User education and awareness – Security policies that describe acceptable and secure use of ICT assets • Incident management – Incident response and disaster recovery capabilities that address the full range of incidents that can occur • Malware prevention – Produce policies that directly address the business processes (such as email, web browsing, removable media
and personally owned devices) • Monitoring – Established monitoring taking into account previous security incidents and attacks. Annual IT Health Check and
penetration testing conducted by a Council of Registered Ethical Security Tester (CREST)/Communications-Electronics Security Group (CESEG) Listed Advisor Scheme (CLAS) - accredited Government Communication Headquarters (GCHQ) approved consultants.
• Removable media controls – Produce removable media policies that control the use of removable media for the import and export of information
• Home and mobile working – Assess the risks to all types of mobile working including remote working and develop appropriate security policies
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Ref No: 44 Risk: Insufficient Capacity/Resilience to deliver the priorities contained in the Corporate Business Plan Risk Owner: Chief Executive Cabinet Member: Resources
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 3 Total Score: 12 - RED Residual/Net Risk Score (i.e. with controls in place) Likelihood: 3 Impact: 3 Total Score 9 -AMBER Actions Planned Timescale/Person
Responsible Progress/Comments
Detailed Service Delivery plans including prioritisation of projects, timescales, key milestones, performance measures and risks to completion feed into to team and individual work programmes. Performance measures and progress are regularly reported to cabinet and scrutiny committees. An end of year report on progress has been written and will be submitted to cabinet and scrutiny. The report shows good progress towards the objectives agreed by members and has not identified significant capacity issues. Service Delivery Plans for 2019/20 are being updated to take account of progress made and any changes resulting from government or council decisions. Cabinet will also be asked to consider a change management/ transformation programme as part of delivering objective 3 of the Business Plan. This will introduce new ways of working that will enhance our performance, reduce costs and make us a more attractive employer. This will be a substantial programme or work and will require detailed planning.
Leadership Team May 2020
This has been translated into a comprehensive business flow document that is monitored through Leadership Team and Management meetings. The change management programme will engage a wide range of staff in its design and implementation.
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Actions Planned Timescale/Person Responsible
Progress/Comments
The recommendations of the Corporate Peer Review have been largely implemented and will be followed through to ensure that they deliver the full benefit i.e. –
• Draft Communications Strategy will be submitted to Leadership
Team. • The forward plan will be maintained and actively used. • Continue to develop member training and development and review
the effectiveness of the new member development programme. • A new Workforce development strategy is key to delivering the
planned change management programme and a working group has been set up to lead this
• The new local strategic partnership, community wellbeing
partnership and economic development partnerships will develop to lead the shared working of the key public, private, voluntary and community organisations.
• Follow up visit by the LGA to be organised for the Council to
demonstrate the implementation of the recommendations highlighted above.
Leadership Team March 2020
Project Management methodology to be reviewed and updated to ensure it matches the requirements of the planned actions. A successful programme of project management training has been delivered in the last year.
Tracy Redpath November 2019
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Actions Planned Timescale/Person Responsible
Progress/Comments
A light touch rolling programme of service reviews to be implemented Tracy Redpath/Bob Kean June 2020
Corporate organisational development strategy being developed Neville Raby March 2020
A change management/ transformation strategy is to be submitted to cabinet with the aim to enhance our performance, reduce costs and make us a more attractive employer.
Tim Clegg/Tracy Redpath Cabinet July 2019, Delivered March 2021
Overall Progress Summary: Some work has been carried out but a number of actions are still to be completed. The Change Management/ Transformation Programme will increase the capacity/ risk in the short to medium term, but will improve the working of the council longer term and address the capacity issues. This has been reflected in the addition of a new risk relating to the Transformation Programme
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Ref No: 44 Risk: Insufficient Capacity/Resilience to deliver the priorities contained in the Corporate Business Plan Consequences Of Risk: • The Corporate plan priorities are not delivered in accordance with the desired timescale • Resources may not be effectively used
Links to Corporate Business Plan – Objectives 1, 2 and 3:
• To deliver sustainable economic and housing growth to provide income and jobs
• To improve the quality of life of local people by providing a safe, clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing
• To be a well-run, financially sustainable and ambitious organisation, responsive to the needs of our customers and communities and focussed on delivering our objectives
Key Controls in Place: • Corporate Plan sets out main priorities and timescales, detailed delivery plans inform team and individual work programmes. • Corporate Business Planning process and MTFS • Performance and Project Management Framework and Scrutiny Process • Business Flow and reporting procedures via Leadership Team; Cabinet; Team meetings and individual 1:1 meetings • Annual Employee Review process • Change management plan drafted.
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Ref No: 45 Risk: The Council fails to achieve the anticipated benefits from its transformation project leading to increase budget pressure.
Gross Risk Score (i.e. without controls) Likelihood: 4 Impact: 3 Total Score: 12 Red Residual/Net Risk Score (i.e. with controls in place) Likelihood:3 Impact: 3 Total Score 9 Amber Actions Planned Timescale/Person
Responsible Progress/Comments
External project support is being procured to support the project management function
Chief Executive
Project groups are in the process of being formed to oversee the management of the overall project.
Corporate Business and Partnerships Manager
Project streams have been identified and delivery groups are being established to oversee elements of the project.
Corporate Business and Partnerships Manager
Project Assurance programme to be developed and delivered Head of Governance and the Chief Internal Auditor & Risk Manager
A project assurance strategy has been developed
Overall Progress Summary: N/A new risk
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Ref No: 44 Risk: The Council fails to achieve the anticipated benefits from its transformation project leading to increase budget pressure.
Consequences Of Risk: • Anticipated savings/additional income generation are not achieved by the Council as predicted leading to budget pressures • Working practices are not updated leading to requirement/retention issues
Links to Corporate Business Plan – Objectives 3:
• To be a well-run, financially sustainable and ambitious organisation, responsive to the needs of our customers and communities and focussed on delivering our objectives
Key Controls in Place: • Transformation Project Structure is in place • Governance Structure established
In accordance with the Risk Management Strategy, the green risks below are deemed to be tolerable (with existing controls in place) and will be monitored but require no further action at this time. GREEN RISKS Ref No: Risk: Score:
1 Purpose of Report 1.1 Permission to spend the approved capital for the First Floor project and
Transformation project to support smart and agile working.
1.2 Seek approval for funding from the General Fund Capital Programme to undertake the project to replace the desktop computers with laptops and docking stations as set out in budget bid C3 from 31 October 2018.
2 Proposal of Cabinet Member 2.1 That Cabinet support the project to provide the staff with the appropriate tools
to work in a more agile way. 2.2 Permission is requested to spend £40,000 from the General Fund Capital
Programme in the financial year 19/20 and £42,000 in the financial year 20/21. This element of the Accommodation, Transformation and Rationalisation project needs to be addressed early to allow the staff to commence work on their process redesigns and the adoption of new ways of working.
3 Key Issues and Reasons for Recommendation 3.1 The computers on the desktop are being replaced with laptops to enable staff
to work at any desk and in any office at the civic centre. We also wish them to be able to work electronically in meetings. A laptop will also be required to allow staff to work remotely which will mean their homes and the offices of other partners and councils.
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3.2 There are various other technologies that are being introduced to support the Smart/Agile working project these include -
• An updated version of Microsoft Office. This was also needed
because the current licences were about to expire. • Intranet access for non office based workers. • Desk phones that can be set to any dialling number. • Improved Wi-Fi for guests. This is now 900Mb and is shared
amongst those using it according to a profile. The list above is a few of the new facilities that are being put in place within current budgets.
3.3 We expect to make greater use of video conferencing and computer based training. We will buy laptops that have the capability to support these systems.
3.4 The expected lifecycle of new machines running the most recent software
(Windows 10) has improved over the last 4-5 years. The software will be supported by Microsoft until at least 2025.
3.5 In a similar way the laptop hardware itself is expected to last longer than its
predecessors due to there being few moving parts (apart from the keyboard). 3.6 Future application systems (Council Tax, Finance, HR) are likely to demand
lower processing power than their current versions. This again will extend the useful life of any new laptop.
4 Relationship to Corporate Priorities 4.1 Page 11 of the Corporate Business Plan includes the paragraph - We will
continue to explore other avenues for income generation such as commercial opportunities and maximising our assets including the Civic Centre, in order to reduce the dependency on New Homes Bonus in particular. In addition, we need to be as efficient and effective as possible and this will mean that as an authority, we will need to look at our own ways of working.
5 Report Detail Background 5.1 There is a long-standing capital budget (£50,000) to provide funds for the
replacement of Stafford technology infrastructure. Technology is a shared service and the Stafford infrastructure costs are kept separate from Cannock infrastructure costs. Under shared services, some of the revenue budget is amalgamated to provide a joint service.
We are about to embark on a project that will change the way we work within
the council and we therefore need to improve the technology equipment that we provide our officers with.
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We believe that once in place, the equipment will have an extended life cycle of replacements. Before we get to that point in the cycle, the infrastructure replacement budget will not be sufficient to provide all the hardware we need in the current and next financial years. We will need to replace most of the desktop devices with laptops. The council has not yet established the timescales for the accommodation project but to ensure it is successful we need to provide managers and staff with the appropriate technology to enable them to start to work in a Smart/Agile way.
Financial Implications 5.2 There is a requirement to provide 229 office-based staff with the software and
hardware that is needed for the transformation project. 5.3 The approximate cost of a suitable standard laptop is £540. Additional to this
would be items such as a case, keyboard, mouse, universal docking station and headset. The cost for these further items would be £195. A total cost per seat of £735.
5.4 40 staff already have a suitable laptop that will enable them to work in a Smart
way. These devices will probably not need upgrading until 2021/22. It is estimated that 30 staff will not require a laptop but will still need the software and hardware that is capable of using the new transformed processes. The cost for a standard desktop is £420. Adding the other required equipment, which still includes a docking station, it becomes £615.
Item qty Cost Total Cost Laptops and associated kit. 159 735 £116,865 PCs and associated kit 30 615 £18,450 £135,315
Funded from
Budget General Fund Capital Programme 19/20 C3 £40,000 General Fund Capital Programme 20/21 C3 £42,000 Corporate IT replacement Budget 20/21 £50,000 £132,000
5.5 Upgrades that may be required in 2022/23 include the above 30 staff .
Item qty Cost Total Cost Laptops and associated kit 2021/22 40 735 £29,400
5.6 It has been assumed that the current computer monitors will be adequate for
the new arrangements. 5.7 The procurement of all the equipment and software will be through the Link 2
IT Hardware & Services, the NHS Digital Framework.
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5.8 The replacement of the hardware is a disruptive process for any section or service. The timing of each upgrade will be agreed with the relevant manager and avoid their busiest periods. This would include the timing of elections and year end processing.
5.9 The timing of this upgrade has been set to be before any major movements of
staff that will be required during the First Floor project. 5.10 The Transformation agenda and Service reviews require the staff to be able to
work in a Smarter way. The equipment and associated software will be a key enabler for these new processes.
6 Implications 6.1 Financial The General Fund Capital bid together with the
on-going Corporate IT Replacement budget will be used to support this work.
Legal Human Resources There will be some training required for the use of
the laptops. This will mainly be covered by instruction documents.
Human Rights Act Data Protection There is an increase risk of data leakage with
Smarter working and the more widespread use of laptops.
Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Budget bid C3 from 31 October 2018. See APPENDIX 1 Background Papers - File available in Technology
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APPENDIX Previous Budget bid C3 from 31 October 2018
Outline Capital Bid Proforma
Budget Bid Title: Remote working
Service Area: Technology
Lead Officer: Peter Kendrick
Total Bid: £82,000
External Funding Contribution: NO
Brief Project Description
There is a project to enable a greater number of staff to work remotely from home or in alternative offices. As part of this project, we will need to upgrade the equipment that is presently supplied to them. There is also a requirement for some of the staff to be able to work in a more efficient way through the use of better quality laptops and software.
Contribution to Corporate Objectives
Please outline how the proposal supports strategic priorities and describe how it contributes towards the themes of the Corporate Business Plan. Delete as appropriate the priorities that are addressed. Sustainable Economic and Housing Growth NO Community Health and Wellbeing NO Financial Sustainability YES Lead Officer Comments Page 11 of the Corporate Business Plan includes the paragraph - We will continue to explore other avenues for income generation such as commercial opportunities and maximising our assets including the Civic Centre, in order to reduce the dependency on New Homes Bonus in particular. In addition, we need to be as efficient and effective as possible and this will mean that as an authority, we will need to look at our own ways of working. This bid is to ensure we supply the officers with the equipment to improve our ways of working.
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Peer Review
Will the proposal address any areas identified in the peer review? Lead Officer Comments Page 14 of the report also suggests that this is an approach that the council should take. Consideration should be given to increasing take-up of, and access to, agile working practices. For example; there was still an expectation on staff “clocking in and out” of work and the council should review whether hot-desking, more open plan office space (within restriction of current building) and home working, should be utilised. An increase in agile working may not only improve productivity and staff morale, but also help break down silos which were described in one case as “a product of the building”. The arrival of external partners into the Stafford Borough Council building through the One Public Estate programme offers a timely opportunity to consider flexible working arrangements.
Financial Summary
2019/20 2020/21
2021/22 Onwards
Estimated Total Cost
Project costs £ £ £ £ Note that this is part of a wider council plan that includes building alteration and other agencies. Laptops and associated hardware additional to that included in the technology replacement capital budget.
£82,000
External Funding Sources:
Grants & contributions Project costs (net of external funding)
£82,000 £ £ £
Ongoing revenue costs (if applicable)
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Other Financial Issues For externally funded projects – please provide details of the funding sources and whether or not the funding is guaranteed. For Capital Schemes – please provide details of ongoing revenue costs. For invest to save schemes – please provide details of the future revenue streams and the payback period.
Head of Service Approval / Comments
There is a long-standing capital budget (£50,000) to provide funds for the replacement of Stafford technology infrastructure. Technology is a shared service and the Stafford infrastructure costs are kept separate from Cannock infrastructure costs. Under shared services, some of the revenue budget is amalgamated to provide a joint service. The details of this infrastructure capital budget bid are on a separate form.
Most of the hardware is replaced on a cycle that is more than yearly; therefore the programme of replacement is spread over several years.
We are about to embark on a project that will change the way we work within the council and we therefore need to change the technology equipment that we provide our officers with.
We believe that once in place, the equipment will fall into a similar cycle of replacements and the infrastructure capital budget will be adequate to cover the on-going costs. Before we get to that point in the cycle, the infrastructure replacement budget will not be sufficient to provide all the hardware we need in the new financial year. It is likely we will replace a large number of desktop devices with laptops. The council has not yet established the timescales of this project but it is probable that we will need to replace the devices in the financial year 19/20.
At this stage, we do not know how many staff would work from home but for the purposes of this bid we have assumed 100 based on the number of staff that have remote access to our remote systems (122).
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ITEM NO 4(a)(vi) ITEM NO 4(a)(vi)
Contact Officer: Jim Dean Telephone No: 01785 619209 Ward Interest: Nil Report Track: Cabinet 05/12/19
(Only) Key Decision: No
SUBMISSION BY COUNCILLOR R M SMITH
RESOURCES PORTFOLIO
CABINET 5 DECEMBER 2019
Committee Cycle 2020/21
1 Purpose of Report 1.1 To consider the proposed Committee Cycle for 2020/21. 2 Proposal of Cabinet Member 2.1 That the Committee Cycle for 2020/21 as submitted be approved. 3 Key Issues and Reasons for Recommendation 3.1 The Committee Cycle for 2020/21 has been produced on the basis of the
current committee structure, and a similar basis to 2019/20. It also provides for the process leading to the 2021/22 budget.
3.2 Once again, the timing of the Scrutiny Committees have been arranged in
order to coincide with the production of performance and budgetary information. This enables the Scrutiny Committees to look at more current information with a view to taking more timely action, where necessary.
4 Relationship to Corporate Priorities 4.1 The Committee Cycle will assist the Council to support all of the Corporate
Priorities. 5 Report Detail 5.1 The suggested Committee Cycle for 2020/21 is attached as an APPENDIX.
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6 Implications 6.1 Financial Nil Legal Nil Human Resources Nil Human Rights Act Nil Data Protection Nil Risk Management Nil 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers - File available in Democratic Services
• Friday 8 May 2020 (75th anniversary of VE Day commemorations) • Monday 25 May - Friday 29 May 2020 (Half Term) • Tuesday 21 July to Monday 31 August 2020 (Summer Holiday) • Tuesday 1 September 2020 (Inset Day) • Monday 26 October - Friday 30 October 2020 (Half Term) • Monday 21 December 2020 - Friday 1 January 2021 (Christmas Holiday) • Monday 15 February - Friday 19 February 2021 (Half Term) • Friday 2 April - Friday 16 April 2021 (Easter Holiday) • Monday 3 May 2021 (May Day) • Monday 31 May - Friday 4 June 2021 (Half Term)
SUBMISSION BY COUNCILLOR R M SMITH RESOURCES PORTFOLIO
CABINET 5 DECEMBER 2019
Revenues and Benefits Collection Report - Quarter 2
1 Purpose of Report 1.1 To inform Cabinet of the performance of the Revenues and Benefits Service
as regards:
• collections of Council Tax during the first half of the financial year. • collections of Business Rates during the first half of the financial year. • the recovery of overpaid Housing Benefit during the first half of the
financial year. 1.2 To seek approval to the write off of the arrears listed in the CONFIDENTIAL
APPENDICES.
2 Proposal of Cabinet Member 2.1 That the information regarding collections be noted. 2.2 That the arrears listed in the CONFIDENTIAL APPENDICES be written off.
3 Key Issues and Reasons for Recommendations 3.1 Efficient collection of the Council’s revenues is of major importance to the
funding of Council services and those provided by our preceptors. 3.2 Council Tax due for the current year amounts to £81.8M, of which some
56.7% was collected by the end of the September.
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3.3 Business Rates due for the current year amounts to £51.7M of which some 58.5% was collected by the end of the September.
3.4 Whilst our collection rates are good, regrettably not all of the monies owed to
the Council can be collected and this report contains a recommendation to write off bad debts which cannot be recovered.
4 Relationship to Corporate Priorities 4.1 Not Applicable.
5 Report Detail Council Tax 5.1 Council Tax is collected on behalf of the District Council, Parish Councils and
our Major Preceptors (Staffordshire County Council and Commissioner for Police, Crime, Fire and Rescue). The effect of the Collection fund arrangements means that Stafford Borough Council retains around 10% of the council tax collected.
5.2 Council Tax due for the current year amounts to £81.8M and we would
anticipate collecting in the region of 98.4% within the year, as was the case in the last financial year. Action continues to collect the remainder, after the end of the financial year, with over 99% being recovered.
5.3 By 30 September, we had collected 56.7% of the year’s charges, which is
broadly in line with the corresponding period of the previous year (which was 57.2%).
5.4 Prior year arrears of £5,387,871.52 existed at 1 April 2019, but had reduced
by £615,493.33 to £4,772,378.19 by the end of September. 5.5 In accordance with the Council’s approved policies, all reasonable and lawful
attempts are made to recover all amounts due. In the first instance this involves the issue of bills, reminders and final notices, followed by Summonses in the Magistrates Court where the warning notices are not effective. At all stages of this process, debtors are encouraged to engage in voluntary arrangements to repay their arrears, to prevent the need for formal action.
Where necessary and when Liability Orders are granted by Magistrates, the
Council uses its powers to make deductions from earnings and benefits of debtors, where it can, and instructs Enforcement Agents where such deductions are not possible or appropriate.
In the most severe cases and for debts exceeding £5,000, the Council will
consider personal bankruptcy action against individuals.
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5.6 The recovery powers available to the Council are considerable but not
completely infallible. There are occasions when bills are not paid and the debts cannot be recovered.
5.7 Statutory safeguards such as Debt Relief Orders, Individual’s Voluntary
Arrangements exist to protect debtors suffering hardship, to attempt to the expensive, stressful and sometimes ineffective process of personal bankruptcy. Where a debt is included in such an instrument, or when a debtor is bankrupt, our ordinary recovery powers cannot be used.
5.8 For any of our powers to be effective we need to know the whereabouts of a
debtor and this is not always the case. Where debtors abscond we will use all reasonable endeavours to trace them and are often successful in doing so. Unfortunately, on occasions this is not so and we must submit a debt for write off.
Our trace procedures include;
• Checking our internal Council systems, and following any information which may help us to trace the debtor.
• Using the Locating Council Tax Absconders (LoCTA), a Local Authority data sharing system, to check for forwarding addresses at other Local Authorities,
• Use of Transunion credit reference agency data. • Trace and collect facilities offered by our Enforcement Agencies • Visits to the last known address by the Council’s Property Inspector and
use of external tracing agents. Unfortunately, legislation does not currently permit access to DWP or HMRC records to trace Council Tax debtors or their employers, though a Cabinet Office project is currently reviewing this. Data protection legislation allows us to receive information as to a debtor’s whereabouts but we cannot disclose information to other creditors. Reciprocal arrangements with utility companies and similar are not therefore workable.
5.9 Irrecoverable council tax debts in the sum of £8,865.27 are listed in the confidential appendix to this report.
Business Rates 5.10 Business Rates due for the current year amounts to £51.6M of which some
58.5% was collected by the end of the September. Again we would anticipate the collection rate to match last year’s performance of 98.4%.
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5.11 Prior year arrears of £1,616,142.53 were outstanding at the beginning of April, and were reduced to £1,264,762.69 by 30 September. A reduction of £351,379.84
5.12 The recovery powers available to us are again contained in the Council’s
approved policies and are used in full. Those powers and our procedures are similar to the council tax powers described above, with the exception that deductions from individuals’ benefits and earnings are not permissible, even if the debtor is an individual.
5.13 Where rates are owed by an individual, similar safe guards exist for the
debtors and trace facilities are used by the Council for absconding debtors, as described above.
5.14 Additionally, in the case of business rates, as has been reported to Cabinet
previously, our collection efforts are sometimes frustrated by weaknesses in legislation. Rates are due from the occupiers rather than the owners of property and where the occupier is a company, we can only recover from that company. Some proprietors will strip a company of its assets, or dissolve the company before we have had an opportunity to implement our recovery procedures. A new company is then formed in a similar style, to trade from the same premises.
Central Government has previously undertaken to review the loopholes that
exist in rating and company legislation, though no changes have yet been received. Officers continue to actively monitor these issues.
5.15 The CONFIDENTIAL APPENDIX to this report lists business rate debts of
£76,516.20 which cannot be recovered for the reasons stated and for which approval to write off, is requested.
Housing Benefit Overpayments 5.16 The Council manages the Housing Benefit scheme on behalf of the
Department for Work and Pensions, who fund the cost of benefits paid to claimants.
5.17 Overpayments of Housing Benefit occur when claimants claim more than they
are entitled to r do not tell us about changes to circumstances, when they happen. In these circumstances they are required to pay pack the amount that was overpaid.
5.18 Recovery of overpaid Housing Benefit continues to progress well, with some
£373,374.25 being collected into the Council’s General Fund in the first half of the year. In the period from April to September, the amount collected represents 141% of new bills raised and arrears have reduced by some £115,353.30, which is very pleasing.
5.19 One irrecoverable Benefit Overpayment debt in the sum of £3,615.08 is
included in the CONFIDENTIAL APPENDIX to this report.
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6 Implications 6.1 Financial Under the Business Rates Retention Scheme,
business rates write offs will no longer be offset against the National Non-Domestic Rating Pool. Write offs will now form part of the costs of collection of Business Rates. The Business Rates write offs in this report total £76,516.20. This represents 0.15% of the outstanding collectable debit for the current year. Council Tax write offs are losses to the Collection Fund and, as such, form part of the cost of collection incurred by this Council. The Council Tax write offs on this report total £8,865.27. This represents 0.01% of the outstanding collectable debit for the current year. The cost of collecting the debts has been considered as part of the decision to put them forward for write off. If further information does come forward about the whereabouts of any of the individual debtors the Council will pursue recovery action. Cabinet are asked to write off the debts as they are considered to be irrecoverable for the reasons given in the appendices. The debts remain legally due to the Council and should the circumstances causing the write off in any particular case, subsequently change, recovery action may be recommenced.
Legal Cabinet are asked to write off the debts as they are considered to be irrecoverable for the reasons given in the appendices. The debts remain legally due to the Council and should the circumstances causing the write off in any particular case, subsequently change, recovery action may be recommenced.
Human Resources None.
Human Rights Act None.
Data Protection The appendices to this report contain personal information and are therefore not published.
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Risk Management The risk issues contained in this report are not strategic and therefore should not be included in the Strategic Risk Register.
6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
7 Appendices to the Report Appendix 1 - Council Tax write offs over £2,500. Appendix 2 - Non-Domestic Rates write offs over £2,500
SUBMISSION BY COUNCILLOR F BEATTY ECONOMIC DEVELOPMENT AND PLANNING PORTFOLIO
CABINET 5 DECEMBER 2019
Planning Portfolio - General Fund Revenue Budget 2019/2020 - 2022/2023 and
Capital Programme 2019/2020 - 2022/2023
This report is not subject to the call in procedure and will be referred directly to the Scrutiny Committee for consultation.
1 Purpose of Report 1.1 To set out the draft detailed Economic Development and Planning Portfolio
revenue budget for 2019/2020 - 2022/2023 and the draft Economic Development and Planning Portfolio Capital Programme for 2019/2020 - 2022/2023.
2 Proposal of Cabinet Member 2.1 That the detailed draft portfolio revenue budget for 2019/2020 - 2022/2023
and the draft Capital Programme 2019/2020 - 2022/2023 be approved for submission to the Economic Development and Planning Scrutiny Committee for consultation.
3 Key Issues and Reasons for Recommendation 3.1 To set out the detailed portfolio revenue budget. 3.2 To set out the variations between the indicative budgets for 2020/2021 and
2021/2022, as set last year, and the proposed budget for 2020/2021 and the draft budget for the following years to 2022/2023.
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3.3 To set out the proposed Capital Programme 2019/2020 - 2022/2023. 4 Relationship to Corporate Priorities 4.1 The revenue budget and capital programme reflect the Council’s priorities. 5 Report Detail 5.1 The detailed draft portfolio budget is attached at APPENDIX 1. 5.2 Indicative budgets for 2020/2021 and 2021/2022 were prepared as part of the
2019/2020 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022/2023.
5.3 An analysis of variations between the indicative budgets for 2020/2021 and
2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budgets for 2021/2022 and 2022/2023 is attached at APPENDIX 2.
5.4 Details of the overall proposed real terms / efficiency variations are attached
at APPENDIX 3. 5.5 Material variances include:
• Garden Community grant spending • Local Plan rephasing • Revenue bids: Economic Growth Strategy and Station Gateway • Parking additional income • Economic development restructure
5.6 An analysis by budget page of the variations between the indicative budgets
for 2020/2021 and 2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budget for 2021/2022 is attached at APPENDIX 4.
5.7 On 29 January 2019, the Council approved a capital programme to 2021/2022
which has been updated to include approved changes and re-profiled to reflect current spend estimates. The proposed Capital Programme 2019/2020 – 2022/2023 for the Economic Development and Planning Portfolio is attached at APPENDIX 5.
5.8 A short description of the new capital scheme is attached at APPENDIX 6.
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6 Implications 6.1 Financial The potential loss of external core / incentive
funding from the Government and other sources is a risk which can impact on the Council’s future ability to deliver the service.
Legal Human Resources Any resourcing implications of continuing loss
of external funding will be considered in line with Council policies and consultation with staff groups affected and recognised trade unions
Human Rights Act Data Protection Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers - File available in Financial Services.
147
Planning and Regeneration
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Management and Support1
447,600 438,750 453,130 467,960 Employee Expenses
8,320 8,320 8,320 8,320 Transport Related Expenditure
95,560 72,290 72,290 72,290 Supplies & Services
551,480 519,360 533,740 548,570 ExpenditureTotal
(50,540) (27,710) (28,160) (28,620)Income
(50,540) (27,710) (28,160) (28,620)IncomeTotal
500,940 491,650 505,580 519,950 Management and Support Net Expenditure
Building Control2
2,180 2,180 2,180 2,180 Supplies & Services
135,720 141,710 148,750 155,730 Third Party Payments
137,900 143,890 150,930 157,910 ExpenditureTotal
137,900 143,890 150,930 157,910 Building Control Net Expenditure
Development Management3
742,790 825,100 857,910 888,160 Employee Expenses
40,640 40,640 40,640 40,640 Transport Related Expenditure
1 Purpose of Report 1.1 To seek Cabinet approval to sign the MoU with NatureSpace Partnership 2 Proposal of Cabinet Member 2.1 That the Memorandum of Understanding (MoU) is signed by Stafford Borough
Council (please see Appendix for further details) 3 Key Issues and Reasons for Recommendation 3.1 An alternative to current practice for dealing with great crested newts (GCN)
on development sites is proposed. The scheme, known as District Level Licensing, is run by the NatureSpace Partnership (NSP), a consortium of charities and commercial bodies. NSP undertake to carry out survey work and computer modelling, prepare licence application to Natural England, create initial areas of habitat and cover costs.
3.2 The current licensing system is focused on management to prevent harm on
individual development sites rather than addressing the wider health of GCN populations. The new district level licensing approach seeks to redress this balance, focusing on provision of GCN habitat in areas where surveys show it will most effectively connect and expand GCN populations. This new approach will increase GCN populations at a county level.
3.3 Under the scheme, SBC, after approving a planning application, would be
enabled to use district licensing where developers have contributed to creation of habitat elsewhere. This presents a ‘fast track’ option for developers that avoids the usual route of surveying, delays and uncertainty.
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4 Relationship to Corporate Priorities 4.1 Signing the MoU will help deliver two Corporate Business Objectives:
• To deliver sustainable economic and housing growth to provide income and jobs
• To improve the quality of life of local people by providing a safe, clean, attractive place to live and work and encouraging people to be engaged in developing strong communities that promote health and wellbeing.
5 Report Detail 5.1 Strategic licensing is a new approach that can be used in the consideration of
developments that would affect Great Crested Newts (GCN). It would focus conservation effort where it will create maximum benefit whilst reducing delays, costs, risks and uncertainty for developers. The scheme is identified in the Housing White Paper as one of the tools for speeding up sustainable housing delivery.
5.2 Under the current licensing approach, developers who want to build on land
which is home to GCNs need to trap and relocate the species before starting work. Seasonal restrictions, where these are not effectively planned for, can lead to delays and create uncertainty over the costs and scheduling of planned development.
5.3 The new district level licensing approach seeks to redress this balance,
focusing on provision of GCN habitat in areas where surveys show it will most effectively connect and expand GCN populations. This new approach will increase GCN populations at a county level. Under the scheme, SBC, after approving a planning application, would be enabled to use district licensing where developers have contributed to creation of habitat elsewhere. This presents a ‘fast track’ option for developers that avoids the delays associated with the standard approach.
5.4 GCN records and other data are used to map the areas where there are the
highest risks to the local conservation status of GCN and where the presence of GCN poses an issue for development. Guidance is provided to the local planning authority on where development should be avoided or high levels of mitigation would be required to protect important populations of GCN and where there are opportunities for the provision of compensatory habitat.
5.5 Compensatory habitat can be provided and managed by a range of
landowners, ideally strategically targeted and at a sufficient scale to maintain or improve the conservation status of GCN in the area. So instead of mitigation works carried out on site, GCN populations are protected by improving habitats elsewhere. Developer contributions are used to fund the scheme.
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5.6 By signing the MoU, The Council will hold an “organisational licence” from
Natural England that allows it to grant authorisations for works affecting GCNs, making planning applications and protected species licensing an integrated process. On low priority sites, surveys will not be necessary and the developer will simply make a contribution for habitat creation elsewhere.
5.7 The new scheme is voluntary; developers can choose to pursue the current
model instead: survey, report preparation, planning application, licence application, habitat creation, fencing, trapping and relocation of newts.
5.8 The scheme funding also provides for a Newt Officer that runs and promotes
the project. The post is part-time and/or shared with other LPAs in the scheme. It is expected that the County Council will be the hosting authority for the post. A more detailed summary of the officer’s role is provided in the Appendix.
5.9 NSP is already operating a similar scheme in the south midlands with seven
LPAs. Natural England has also been running pilot schemes. Ecology Consultancies and major developers are aware of this initiative.
5.10 The agreement requires a county landscape scale to work that can only be
provided by neighbouring LPA’s joining the scheme. At present South Staffordshire, Stafford Borough, Lichfield, East Staffordshire, Tamworth, Staffordshire County Council, Staffordshire Moorlands, Stoke-on-Trent and Newcastle are working towards the partnership.
5.11 The MoU needs to be signed off this year in order to allow NSP to arrange
and timetable the surveying and mapping work for spring 2020. This work will create a model of the Borough that maps the incidence and frequency of GCN. NSP will then work with landowners to create or enhance suitable habitat so the scheme will be ready for launch.
5.12 The scheme would be expected to be available to developers from early 2021 5.13 Further details of the scheme and the MoU can be found in the Appendix. 6 Implications 6.1 Financial Survey and modelling, licence application and initial
habitat creation and restoration costs will be met by NSP. Costs beyond this phase will be met by developer contributions. Therefore, other than staff involvement in learning the new procedures, the scheme is expected to be cost neutral.
Legal Legal have approved the MoU after dialogue with NSP
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Human Resources A part-time officer paid for by NSP will undertake all duties connected with the district licensing. It is envisaged that the officer will be part time or shared between the other local LPA’s. This work will only involve Great Crested Newt licensing. All other ecological duties will remain with the Council’s Biodiversity Officer.
Human Rights Act Nil Data Protection Nil Risk Management Natural England is committed to the new district
licensing scheme. If we carry on as normal then the licensing scheme could be rolled-out with the LPA expected to undertake the development and duties, including landowner agreements and monitoring. Who will run the scheme here in that eventuality? We do not have the resources. The advantage of entering the NSP scheme is that the development, training and day-to-day running of the project are carried out by them and is cost neutral to the Council.
6.2 Community Impact
Assessment Recommendations
Awaiting comment
Previous Consideration - Nil Background Papers - Development
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Local Planning Authority ‘Newt Officer (GCN District Licensing Scheme)’ Summary role description The role of the Newt Officer is to understand the extent, scope and detail of the scheme, raise awareness of the scheme internally within the LPA (especially to planning colleagues), understand what the planning and licensing requirements are, ensure the required processes are followed internally, and deliver compliance and enforcement measures. The LPA Newt Officer will also raise awareness of the scheme to all developers, in accordance with the Memorandum of Understanding between NatureSpace Partnership and the Local Planning Authorities. The following is a (non-exhaustive) suggested list of the responsibilities for the post to effectively deliver the District Licensing scheme: Raise general awareness of the licensing scheme
• With developers, planning agents & ecologists – through LPA websites, literature (such as may be provided for this purpose by NatureSpace Partnership), pre- (and during) application discussions & correspondence, etc (note, not active marketing and promotion)
• Within the LPA - promote the scheme, and the newt conservation strategy, across all appropriate staff.
Planning • Ensure LPA planning staff are familiar with the scheme and the process (dealing with
NatureSpace certificates, reports and authorisations) • Provide clear, timely, accurate and specific advice to LPA planners on any development in
respect of great crested newts and the options/requirements for licensing including the district licensing scheme
• Support planning officers to ensure that the District Licence requirements, as detailed in NatureSpace Partnership reports/certificates are for developments wishing to use the District Licence are converted fully and appropriately into planning conditions
• Ensure that any developments which either cannot be (or choose not to be) covered under the scheme revert to business as usual for GCN matters (survey, impact assessment, mitigation & compensation proposals and subsequent licence application to NE)
• Monitor developer compliance with any newt-related planning conditions and advise LPA planners on any compliance and enforcement issues
• Undertake site visits and meetings as required, to provide advice and guidance on newt licensing requirements
Communication
• Provide a point of contact for newt-related matters for the LPAs to liaise with NatureSpace Partnership, the Newt Conservation Partnership and Natural England as required
• Attend District Licensing Scheme networks and meetings – with other LPA GCN Officers, LPA Planners and Ecologists, NatureSpace Partnership and the Newt Conservation Partnership, as required
• Ensure relevant Council staff/Members are informed of the outputs and outcomes of the scheme, as appropriate.
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Report to: To be held on:
Report Title: The Business Case for the Council joining the NatureSpace Great Crested Newt delegated licensing scheme
Report presented by: 5T
Report prepared by: 5T
Delivery Plan Ref No: 5T
Recommendation: For Decision ☒ For Discussion ☐ For Information ☐
Recommendation(s) / Action Required: a. Report Summary 1. An alternative to current practice for dealing with a protected species (great
crested newts (GCN)) on development sites is proposed. The scheme, known as District Level Licensing, is run by the NatureSpace Partnership, a consortium of charities and commercial bodies.
2. The new scheme is voluntary, developers can choose to pursue the current model instead: survey (in April-May), report preparation, planning application, licence application, habitat creation, fencing, trapping and relocation of newts.
3. Under the scheme, XX Council as a planning authority, would be enabled to allow development that affects GCN where developers have contributed to creation of habitat elsewhere. Your officers consider that this presents a ‘fast track’ option for developers that avoids delays and uncertainty.
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Background Current process and issues 4. Great crested newts (GCN) receive a high level of protection under European1
and UK2 law. This is perceived to cause delays for developers and increase their costs. Most people will have seen plastic newt fencing around development sites, but the process behind this is not so well-known. There are costs and potential delays associated with every stage of the process:
a. Surveys carried out by licensed ecologists at the correct time of year (spring / early summer only)
b. Report detailing mitigation measures. The developer must provide replacement habitat, usually on part of the development site, often within public open space
c. Planning application determined; planning authority must be convinced that the licence will be provided.
d. Application to Natural England (NE) for a licence to move newts and destroy existing habitat.
e. Habitat creation f. Fencing and trapping newts – move to new habitat - requires on-site
ecologists. 5. Ecologists are also aware that in many cases the replacement habitat is poor,
being not strategically located and often badly maintained post-development. This leads to populations of newts being lost or decreasing despite efforts.
6. Due to pressure from the development industry, government has tasked NE with finding better ways of dealing with protected species.
General licensing policy 7. Natural England (NE) is changing the way protected species licensing works.
Changes have already been brought to general policies so that there are four new policies that apply everywhere:
a. Policy 1 - Greater flexibility when excluding and relocating European Protected Species (EPS) from development sites
b. Policy 2 - Greater flexibility in the location of newly created habitats that compensate for habitats that will be lost
c. Policy 3 - Allowing EPS to have access to temporary habitats that will be developed at a later date
d. Policy 4 - Appropriate and relevant surveys where the impacts of development can be confidently predicted
1 The Conservation of Habitats and Species Regulations 2017 42. Schedule 2 2 Wildlife and Countryside Act 1981 (as amended) 9 (4) (b) and (c) and 9 (5)
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District Level Licensing 8. Following a pilot study in Woking in 2016, and experiences in the south midlands
in 2018, NE are in the process of rolling out ‘District Level Licensing’(DLL) where administrative areas are surveyed and modelled for species, and work done to improve habitats / populations in advance of development. The planning authority is then enabled to consent development that affects GCN in parallel to the planning process, avoiding the need for developers to go through the usual licensing process.
9. It is expected that GCN hotspots will form the centres of habitat creation schemes and development will be a last resort in these areas. In the case of last resort, the scheme would be expected to enable extraordinary measures.
10. The scheme is voluntary - developers can still opt to use standard licensing instead.
11. At first, district licensing will concentrate on Great Crested Newt, but this may go on to affect other species, particularly bats.
South Midlands Great Crested Newt licensing pilot 12. A consortium of four organisations known as the NatureSpace partnership (NSP)
(see https://naturespaceuk.com/ ) (Environment Bank, Amphibian & Reptile Conservation Trust, Freshwater Habitats Trust & NatureMetrics) invited planning authorities in the South Midlands (Oxford eastwards to Bedford) to join an official (Natural England endorsed) pilot for delegated licensing of great crested newts in 2017. NatureMetrics are a new biotech company interested in environmental DNA (eDNA) monitoring.
13. The South Midlands Scheme has now been extended westwards and will include mineral planning authorities.
14. NatureSpace believes that the advantages of having worked on the South Midlands scheme are:
a. Models have been tested across different habitats and landscapes b. Scheme delivery has been tested across different planning situations
15. Generally, large-scale schemes for district licencing bring the following advantages:
a. Improved accuracy of modelling newt distribution across a large scale b. Economies of scale in surveying, monitoring and habitat delivery c. A uniform approach across neighbouring planning authorities, giving
widespread comfort to contiguous planning departments and 'level playing fields' to developers
d. A more dependable and, in total, less variable demand from developers.
How the scheme works 16. ‘District Level’ licensing for great crested newts is where the power to authorise
actions that might harm newts is held by the same body that grants planning permission – creating a simpler and quicker ‘one stop shop’ for developers. District Licensing also delivers better newt conservation by using funds raised from development impacts permitted through the planning system to create high quality, sustainable habitat and provide long term management and monitoring. (NatureSpace website, accessed July 2019)
Phase 1 - survey and computer modelling 17. Existing data and new eDNA data are used in computer models to predict where
newts are most likely to be found. Further maps are produced to show where conservation activity would benefit newts most (conservation priorities mapping) and where development is most likely (using local plan allocations data etc.) Models are refined using local knowledge. An assessment of likely impact from development over the Local Plan period is undertaken by NatureSpace.
Phase 2 – licence application 18. The information from models, the impact assessment and local advice from
ecologists and others is used by NSP to write a licence application for each planning authority. The planning authority signs this application and it then goes to Natural England. It is envisaged that in XX we would wish the licence to cover all our planning responsibilities including council as developer if appropriate. This would mean that the fast track system is available to our own functions {I am not sure to what extent other authorities licence internal development} as well as to developers.
Phase 3 - licence 19. If a net gain in conservation for newts is expected, and all three of the licensing
tests are met, Natural England approves the application and grant a 2-year licence to each planning authority. NSP and the Newt Conservation Partnership (NCP) enter into the legally binding contract with NE to deliver the scheme over 25 years, including habitat creation and maintenance and monitoring. NSP are responsible for all the reporting requirements under the licences, reporting to Natural England and each planning authority at least annually, and applying for timely renewals of the licences, with permission from each authority.
20. NSP will provide training for planning staff within each individual Planning authority once the licences have been granted to ensure all staff are aware of the scheme and the requirements.
Phase 4 – initial habitat creation 21. NSP fund a not-for-profit organisation, the Newt Conservation Partnership, to
work with landowners to set up initial habitat creation for GCN. This may be on public or private land, as long as it is in appropriate areas for GCN conservation – largely within target areas according to the conservation model.
Phase 5 - operation 22. NSP produce publicity material and promote the scheme. Planning authorities
are also expected to provide information regarding the scheme; in the case of Staffordshire this would be mainly internal and minerals operators.
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23. Developers approach NSP with their schemes. The simplest situations will result in NSP issuing a certificate or report to the developer. The developer submits this to the planning authority with their planning application. The Planning authority under the terms of their licence has a requirement to check this certificate / report before issuing planning consent. They must also use standard planning conditions in respect to the scheme because these are written into the licence from NE.
24. In more complex cases, a developer with an extant planning consent who wishes to join the district licensing scheme, will have to apply to have conditions amended or varied through section 73 / section 96A TCPA applications, in order to have the necessary conditions added.
25. In all cases, once planning consent has been granted (and provided a certificate from NSP has been provided by the developer) the planning authority can then authorise the development under the district licence.
26. NSP will keep each planning authority (through the named contact point) fully appraised of all work under the district licensing scheme. Reports can be requested by planning authorities at any time and NSP will provide timely updates, as well as regular updates and opportunities for planning authority officers and members to find out more about the local conservation activities under the scheme.
Timescales 27. The Memorandum of Understanding needs to be signed and returned by Friday
15th November 2019 at the latest. This is to enable NSP to let contracts and line up staff to work on the licence application process.
28. After the MoU is signed, NSP will instigate the survey programme and convene further meetings with all Planning Authorities to commence the partnership and ensure everyone is fully informed of progress.
29. Surveying must (because of the newt breeding season) run throughout May for the Staffordshire scheme, and there is significant work to be done before this to determine survey locations (random stratified sampling) and then contact landowners for permission to visit and sample ponds and waterbodies.
30. Following survey and modelling, maps of future conservation status and newt planning criteria will be produced by NSP with local planning authorities
31. The remainder of 2020 would be used to refine models and write licence applications. The scheme would be expected to be available to developers and operational from early 2021.
32. It is intended that the application to Natural England to secure district licensing for each authority would be made towards the end of 2020. XX will need to formally sign the licence application as planning authority at this stage.
33. Developers would be offered the option of using the scheme from early 2021 onwards.
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Finances 34. NatureSpace (NSP) estimated for South Midlands that in year one, it would cost
around £250k to complete survey work, eDNA analysis and modelling, which is necessary to set up the necessary infrastructure and achieve delegated licensing from Natural England. No financial contribution was required from Planning Authorities, this financial burden was borne entirely by NSP. In practice, the costs were higher, and time invested by NSP was considerable. NSP have continued to invest in the scheme by expanding the South Midlands area and will provide all necessary investment to set up a scheme in Staffordshire.
35. The first tranche of habitat creation and restoration plans in Staffordshire will be funded by a further investment from NSP. It is expected that once the scheme is fully operational that substantial resources will go into habitat creation and management in Staffordshire. Note: this is dependent upon the level of activity and uptake by developers.
36. Staff time from planning authorities will be required to provide data, e.g. on allocations (strategic planning officers and GIS staff) and to refine the models (mainly ecologists’ time.) Once the scheme is operational (Phase 5 above), planning authorities receive contributions from NSP to cover any new staffing resources required for checking certificates, issuing authorisations and monitoring work.
Implications and Risks Identified and Managed Partnerships with other Authorities and organisations 37. At present South Staffordshire, Stafford, Lichfield, East Staffordshire, Tamworth,
Staffordshire County Council, Staffordshire Moorlands, Stoke on Trent and Newcastle have agreed in principle to join the partnership, leaving only Cannock Chase District. In year 3, the models of newt distribution and areas for habitat creation will be revised to take into account new data and scheme monitoring results. At this point other districts (including those from neighbouring counties) may join the scheme; it is too expensive to re-run models more frequently.
38. The NatureSpace model scheme utilises existing newt records from, and provides data back to, Local Records Centres (Staffordshire Ecological Record (SER).) SER’s administrative fees would be covered under the agreement. Data is also made available on the National Biodiversity Network gateway. It is understood that there may be opportunities for SER involvement in subsequent monitoring phases, which would be funded by NSP.
Reputational 39. This approach is still in its early stages and is unpopular with some ecology
professionals, who may be concerned about the scheme. The fact that we would follow the South Midlands scheme, where authorities played a strong role in shaping the model as ‘critical friends’ may help reconcile them.
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40. The approach is likely to prove popular with developers, although the cost to them can appear high. With NSP managing the income and certificates, it is expected that the process becomes largely arm’s length for planning authorities. This should avoid the perception that it might be a scheme to further income / improve our own land.
41. The public may be critical, and careful management of expectations and message will be needed, particularly where GCN are seen as a means of preventing development. However, this is no different from the current situation where developers put forward adequate mitigation and GCN cease to be a ‘showstopper’ for objectors to use.
Financial 42. Survey and modelling, licence application and initial habitat creation and
restoration costs will be met by NSP (phases 1- 4). Costs beyond phase 4 are expected to be met by developer contributions.
43. Therefore, other than staff involvement in the early phases, the scheme is expected to be cost neutral to XX.
Staffing 44. During the set-up of the project and survey and modelling phases, it is envisaged
that regular attendance at meetings / input of local knowledge will be required. 45. Beyond the initial work, developer contributions are expected to cover staff costs
of any administration, via NSP. Depending on demand this could be part-time or shared with other authorities. In South Midlands NSP have been relaxed about the amount of time spent on newt work, allowing flexibility to deal with other casework; this is expected to continue (within reason.) NSP offer three models for staffing, all fully funded:
a. Provide funding for authorities to employ staff directly b. Employ officers at NSP, who would be placed in council offices with cost of
hosting covered
c. Officers employed by third party
46. The latter options avoid recruitment and employment liabilities for councils. 47. Uptake is expected to be slow in the early stages of the scheme so the role for
each authority will be part-time. This could be shared with other authorities to create full-time posts.
48. The GCN postholder/s will need to work alongside ecologists, but in close cooperation with planning officers. The role includes:
a. checking reports and certificates b. ensuring the conditions are applied correctly c. issuing authorisations d. compliance checking.
Co-operation 49. There is a requirement for partners to provide species, habitat and strategic
development site data, to participate actively (mainly ecology staff, apart from
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scheme administration) in the programme over the three years. There is also an expectation that if the pilot is successful that NSP will continue to be the provider of choice for delivery of GCN compensatory habitat in the longer-term.
50. Partners need to sign-up to a Memorandum of Understanding (MoU) This is reproduced in full in Appendix 1 and has standard preamble and break clauses. This MoU carries no legal weight or financial commitment; it is essentially a gentleman’s agreement. A summary of the terms is listed below with comments:
No. Summarised terms Comment regarding XX
commitment 1 All signatory parties agree to work together to seek
to apply to NE for a GCN District Licence expected to commence during 2021.
Reasonable; collaboration in South Midlands considerably improved the project model.
2 The conservation strategy, scheme design and metrics, documentation to be submitted for the Licence application will be funded and delivered by NSP in co-operation with, and agreement by, the Local Planning Authorities (LPAs).
XX required to co-operate in refining models and sign off the licence application
3 NSP will adhere to any District Licence and will provide advice to LPAs. All arrangements will be facilitated in an unbiased, independent and transparent manner. NSP will monitor and report on delivery of the spatial strategy to both NE and LPAs
None
4 Following issuance of a District Licence, participating LPAs agree to promote and publish details of the District Licence service.
Mainly likely to involve internal promotion, plus some work with mineral and waste operators.
5 NSP will pay for all reasonable costs associated with LPA resource needs (on an annual basis, in advance, subject to detailed agreement).
None
6 Participating LPAs agree to use NSP as the sole provider of District great crested newt licensing services for the duration of this agreement
Reasonable, given the level of investment from NSP. It is unlikely that any other provider would come forward given the up-front costs.
7 Participating LPAs agree to work within the guidelines and protocols set out in the Licence, and to provide feedback to NE where requested
Includes use of standard planning conditions. These have now been tested in South Midlands since 2018.
8-11
Terms 8-11 refer to collaboration and information sharing
These represent good partnership practice
Other schemes 51. Joining the NSP scheme helps avoid the risk that XX might be under pressure
from NE and / or developers to initiate a scheme without adequate resources. The Kent scheme, initiated by NE is a recent example that has been criticised for being poorly designed and resourced and likely to threaten the conservation status of GCN https://kentarg.org/wp-content/uploads/2019/03/GCN-District-Level-Licensing-Position-Statement-FINAL.pdf
52. Involvement means that we can take an active role in refining the model and process
53. Involvement means we can offer a helpful service to our developer clients 54. The NSP model is designed well, meaning a better outcome for GCN (our wildlife
client) Location of new habitat 55. [optional] The possibility of using XX-owned land to create new habitats can also
be considered at a later stage. It could offer NSP a degree of certainty about availability of space to create habitat and would also provide XX with income. This would clearly require land in the correct strategic locations for GCN, and also need to ensure it did not compromise XX business or other uses.
Future management of habitat 56. Once newt habitat has been created there is an ongoing need to monitor and
maintain it. At present this will be undertaken by NSP and the costs will be built into the initial developer funding. An endowment fund has been set up and is held by the not-for-profit NCT. It will support this aspect of long-term management of created habitat. It would also deal with the chance of NSP ceasing to trade.
Conclusion It is recommended that XX Council joins the Staffordshire Scheme run by NatureSpace by signing the Memorandum of Understanding List of Background Documents/Appendices: Appendix 1 – Memorandum of Understanding Contact Details Report Author: 5T SLT Lead: 5T Cabinet Member Lead: 5T
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Glossary Term Acronym Definition District Level Licensing
DLL Process by which planning authorities are enabled by Natural England to consent harm to GCN because their habitat is provided elsewhere.
Environmental DNA
eDNA genetic testing of water or soil samples shows what species are present. This is possible due to relatively recent scientific advances, especially in forensic science.
Great crested newt
GCN Protected species that requires ponds for breeding and surrounding habitat for other life stages.
Natural England NE Government body responsible for species and habitats; part of Defra
Newt Conservation Partnership
NCP Not-for-profit (community benefit society) organisation legally responsible for creation and management of habitat under the scheme. Formerly known as the South Midlands Newt Conservation Partnership
NatureSpace NSP Commercial consortium implementing newt licencing in South Midlands
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Design and delivery of
District Licensing for great crested newts
Memorandum of Understanding NatureSpace Partnership and Planning Authorities
A partnership between the NatureSpace Partnership (NSP) and XX Council(s) in relation to the design and application for, and subsequent delivery and implementation of, a great crested newt District Licensing scheme. Effective date: Initial review date: Background Natural England are now able to grant organisational licences (‘District Licences’) for great crested newts to LPAs to enable them to grant authorisation to developers to work under that Licence at the same time that they grant planning permission for a development. This will remove the need for a separate licensing process and thus save developers considerable time and expense in dealing with great crested newts. District Licensing schemes also improve planning processes and deliver net gain for great crested newts at no extra cost to LPAs. Natural England are conducting national eDNA surveys for great crested newts to provide the evidence base for District Licence applications but expect individual LPAs to do all the preparatory work and to take responsibility for delivery of the District Licence (or to contract this out to third parties). In 2017/18 a pilot project was set up by NSP, a consortium of the Environment Bank Ltd, Nature Metrics Ltd, the Freshwater Habitats Trust and Amphibian & Reptile Conservation Trust. It obtained great crested newt District Licences for seven local planning authorities in the South Midlands (South Oxfordshire, Vale of White Horse, Oxford City, Milton Keynes, Aylesbury Vale, Central Bedfordshire and Bedford Borough). The strategy developed by the partnership, and its implementation, differs from the basic Natural England model in a number of ways in that it:
• Works across several contiguous LPAs at a landscape scale • Funds the preparatory work necessary for LPAs to apply for a District Licence • Creates and administers all of the mechanisms needed for developers to (voluntarily) engage
with the process • Funds the up-front creation of ponds and habitat so that a scheme can be launched where
gain precedes loss • Creates and funds a not for profit Community Benefit Society to work with landowners to
deliver pond and habitat creation
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• Independently creates and applies a ‘newt metric’ that embeds the mitigation hierarchy and prescribes in advance planning conditions relating to newts – so that LPAs are not liable for these decisions
• Delivers a ratio of 4 high quality ponds created for every occupied pond lost through a conservation strategy
• Funds the long-term monitoring programme • Funds the appointment of newt officers in LPAs • Reacts and adapts to developer uptake
The District Licence is granted to LPAs based on:
• eDNA survey and modelling for great crested newts, which could be commissioned either by Natural England or a third party (such as NSP);
• the design of a spatial conservation strategy to deliver net gain for great crested newts across both Districts and Regions;
• the design and implementation of an operational licensing scheme to fairly and proportionately charge developers that wish to enter the scheme and which meets all legislative and policy planning requirements, designed and delivered by NSP for participating LPAs;
• a commitment to the future implementation, by NSP and a regional Newt Conservation Partnership, of a spatial conservation strategy to ensure that development impacts on the species are mitigated and the conservation status of the species is improved; and
• A detailed Licence application that sets out how the submission meets all the Licensing tests for the region and also delivered by NatureSpace on behalf of the LPAs.
Thus, the preparatory work for applying for, and a LPA receiving, a District Licence is substantial. In previous District Licence applications this preparatory work has taken 8 months and cost £500k, and in the event of a partnership agreement these costs will be borne in their entirety by NSP. Though there are many advantages for developers in applying to have their work covered by a new great crested newt District Licence, it is not yet mandatory for them to do so – developers can, if they choose, continue to apply for a licence under the existing scheme via Natural England. However, firstly, it is expected that, once the District Licences have been issued to the LPAs, then they will encourage developers to enter the scheme and, secondly, all licensing decisions that are made under the new District Licence must then contribute to the spatial conservation strategy and must be delivered through NSP. This MoU between NSP and XX Council seeks to protect both parties through clear definition of roles and responsibilities. This MoU will apply for the period XX to XX, or for as long as any District Licence issued by Natural England is operational.
Terms:
1. All signatory parties agree to work together to seek to apply to Natural England for a great crested newt District Licence expected to commence during 20XX.
2. The spatial conservation strategy, the scheme design and metrics, and all other documentation to be submitted to Natural England as the basis for the District Licence
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application will be funded and delivered by NatureSpace Partnership (NSP), in close co-operation with, and to the satisfaction of, and agreement by, the Local Planning Authorities (LPAs).
3. NSP will adhere to the terms of any District Licence subsequently issued and will provide
timely and appropriate advice and recommendations to LPAs in accordance with the District Licence. All services and arrangements will be facilitated in an unbiased, independent and transparent manner. NSP will monitor and report on delivery of the spatial strategy to both Natural England and to participating LPAs.
4. Following issuance of a District Licence, participating LPAs agree to promote and publish details of the District Licence service.
5. NSP will pay for all reasonable costs associated with LPA resource needs (on an annual basis,
in advance, subject to detailed agreement).
6. Participating LPAs agree to use NSP as the sole provider of District great crested newt licensing services for the duration of this agreement.
7. Participating LPAs agree to work within the guidelines and protocols set out in the Licence,
and to provide information, evaluation and feedback on use of the Licence to Natural England where requested according to the terms of any District Licence.
8. All parties agree to consult each other in relation to any publicity material that references each party in any way, or the relationship that exists, or any particular development or compensatory site brought about by the pilot via this Agreement.
9. All parties agree to share any relevant detail about arrangements or partnerships with other
parties that may affect the working relationship or the outcomes of the District Licence application or scheme. This must at least include the relevant Local Biological Records Centre(s).
10. NSP and LPAs agree to share relevant mapped information and records that will form the
basis of the District Licence scheme.
11. The Partnership Leads listed in Schedule 1 are the main contacts for all parties to use and will be jointly responsible for arranging any meetings required between parties
Confidentiality Subject to the requirements of the Freedom of Information and Environmental Information requests the parties agree not to divulge the details, methodology, processes or inner workings of the District Licence application to third parties without the express permission of all the parties. The parties shall use all reasonable endeavours to ensure that the employees of each of the parties shall observe a similar obligation of confidence. Termination
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Any party may terminate the relationship as detailed within this MoU subject to 4 weeks notice given in writing to the other parties specifying the reason. The Agreement and any associated terms would no longer apply to that party should this occur. Alternatively, should either a party’s business, organisation or department cease to exist then the MoU will be immediately reviewed. Dispute Resolution In the event of any significant dispute arising between any of the parties in relation to any aspect of this MoU, which must be made formal as soon as is reasonable, the named Partnership Leads in Schedule 1 will meet as soon as possible, with other parties as may be necessary, to try and resolve the issue and ideally within 2 weeks of formal notice of a dispute. With the agreement of all Partnership Leads additional parties may attend any dispute resolution meetings. If a resolution cannot be found, then the MoU will be terminated with regard to that party according to the termination conditions detailed above. Execution This Agreement has been entered into on the date stated at the beginning of this Agreement.
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Schedule 1 – Partnership Leads A named representative from NSP A named representative from each Council There shall also be a named substitute for each Partnership Lead who can act when that individual is either one of the parties in dispute or cannot be involved for other reasons. Named Partnership Leads are to be confirmed by the parties to this agreement within one month of signing this Memorandum of Understanding
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Signed by Date: ) ) ) Print name: ) for and on behalf of NatureSpace Partnership
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Signed by Date: ) ) ) Print name: ) for and on behalf of XX Council
1 Purpose of Report 1.1 To approve the sites on the update to Part 1 of the Brownfield Land Register
and to agree to it’s publication on the Borough Council’s web site. 2 Proposal of Cabinet Member 2.1 To recommend that the updated Part 1 of the Brownfield Land Register is
published by the end of December 2019. 3 Relationship to Corporate Priorities 3.1 To deliver sustainable economic and housing growth to provide income and
jobs. 4 Details 4.1 The Government requires local planning authorities in England to prepare,
maintain and publish registers of previously developed (brownfield) land through the Town and Country Planning (Brownfield Land Register) Regulations 2017.
4.2 The Brownfield Land Register is a list of previously developed sites that are
suitable for housing development and should include sites with or without planning consent. The Government’s intention is that sites identified on the Register without planning consent could be granted a special planning permission called ‘permission in principle’ which is intended to encourage their development. In turn, this will help deliver additional housing across the country.
4.3 The Brownfield Land Register is kept in two parts:
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• Part 1 of the register is for sites identified as previously developed land which can include sites with existing full or outline planning permission as well as sites without planning permission. Any sites included must be in accordance with Local Plan policies and should not have commenced development.
• Part 2 of the register is optional and allows sites from part one of the
register to be granted permission in principle (PiP) for housing-led development. Therefore Part 2 of the Register is a sub-set of those sites on Part 1 without planning consent that the Council consider should be granted ‘permission in principle’ for housing development.
4.4 The first Part 1 Brownfield Land Register for Stafford Borough was published
in December 2017. National Planning Guidance requires the register to be reviewed once a year to reflect the changing status of sites, and to add any new sites that become available.
4.5 The 2019 Part 1 Register (please refer to the APPENDIX with further details
included in the attached BOOKLET) has been updated to include new brownfield sites that have gained planning permission in the year 2017/2018 and sites that have been submitted through the New Local Plan ‘call for sites’ process that meet the brownfield land eligibility criteria. The Register now consists of 30 sites with planning consent and 13 sites without planning consent.
4.6 The inclusion of a site on the Brownfield Land Register does not guarantee
that the developer will deliver the site. The Council have not been given any powers by the Government to enforce that sites on the Register are developed.
4.7 Part 2 of the register has not been taken forward at this stage. It is still unclear
of the added-value of granting ‘permission in principle’ to un-permissioned sites when there is an existing planning application process that can be used to take forward such sites.
4.8 As a Government requirement, the Brownfield Land Register for Stafford
Borough will be published on the Council’s web-site to provide open and transparent information about suitable and available sites.
4.9 Members are asked to approve the updated Part 1 of the Register so that it
can be published on the Council’s web-site by the end of December 2019.
5 Implications 5.1 Financial To support the statutory duty for preparing a
register of brownfield land the Government has provided, up to the end of 2018-19, New Burden Funding totalling £104,677 of which £25,197 was used to fund the post in 2018-19, so the remaining balance is £79,480 with further payments due over the next two years. Part of this New Burdens Funding has been to provide staff resources to deliver the Brownfield Land Register and associated work.
Legal The Brownfield Land Register Part 1 update has been produced to meet the requirements of the relevant Planning Acts, Regulations and specified data standards.
Human Resources The Brownfield Land Register Part 1 will be delivered by existing staff from within the Development department and the wider organisation. At this stage it is not envisaged to require external support.
Human Rights Act None identified
Data Protection None identified
Risk Management The Brownfield Land Register Part 1 must be updated to meet Government legislative requirements in order to identify new housing sites. Without progressing with an update to the Brownfield Land Register Part 1 would not enable to Council to progress with a Part 2 Register and could lead to Legal Challenges and / or Appeals with significant costs for the Council.
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5.2 Community Impact Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
The Brownfield Land Register Part 1 update provides key information on new housing sites across Stafford Borough, and has been designed to be inclusive to all residents and those interested in development for the Borough. The Brownfield Land Register Part 1 will be published to enable residents and interested parties to be involved in its annual update, including 24/7 access through the Borough Council’s web-site.
Previous Consideration N/A Background Papers File available in Development
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APPENDIX
Site Reference Hectares Planning Status
Minimum Net
Dwellings Development Description
128 North Walls, Stafford 0.02 Permissioned 5 16/24628/FUL - Existing terraces (128-130 North Walls)
converted into flats and bedsits (5 units) with new external access stair.
69-70 Foregate Street, Stafford 0.13 Permissioned 18 15/21611/POTH - Prior approval - change of use from offices to residential (18 apartments)
Areva Fairway, Stafford 7.52 Permissioned 194 15/22735/REM - Approval of reserved matters for residential development consisting of 194 dwellings, public open space,
access, parking and landscaping
Land at Elms Business Centre, Main Road, Great Haywood 0.33 Permissioned 6 18/28018/FUL - Residential development of six terraced houses
Land at Elms Business Centre Phase 2, Main Road, Great
Haywood 0.2 Permissioned 10
15/23140/FUL - Demolish existing commercial units and change of use of existing 2 storey to create 2 two-bedroom units and
build an additional attached block of 4 one-bedroom units and 4 two-bedroom units (total number 10 units)
Land at Former Carers Centre, Austin Friars, Stafford 0.08 Permissioned 8 18/29526/OUT - Demolition of office building and replacement
with apartment block which would provide 8 units
Land at George Street Press and Car Park, Fancy Walk,
Stafford 0.18 Under
Construction 20 15/22060/FUL - Conversion of Mill building to create twenty two-bedroom apartments with associated car parking
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Site Reference Hectares Planning Status
Minimum Net
Dwellings Development Description
Land at Silkmore Lane, Stafford 0.5 Under Construction 76 15/23463/FUL - Residential Care Home (Use Class C2). 76
bedroom units with en-suite facilities.
Land at Yarnfield Park 2.85 Permissioned 45 15/21721/OUT - The provision of dwellings and associated infrastructure, including parking provision and roads
Land SCC Development Service Parcel 4, Riverway,
Stafford 0.18 Permissioned 15 15/23103/FUL - Erection of three storey block of 15 supported
living units with associated open space and car parking
Whitebridge Lane, Stone, Staffordshire 0.36 Under
Construction 11 17/27651/REM – Residential development
St John’s Church, Stone 0.16 Permissioned 9
16/23671/FUL - Conversion of Church and erection of rear two-storey extension (following demolition of existing single-storey extension) to provide five residential units and the erection of a
2.5 storey building fronting The Avenue to provide four apartments on the former Church car park
Truview, 12 Sandon Road, Stafford 0.13 Permissioned 11 17/25523/OUT - Construct up to 11 apartments (outline)
The Halsteads, Milwich 0.89 Permissioned 0 17/26358/FUL - Part-demolition of existing dwelling, construction
of replacement dwelling, construction of detached carport and reorientation of residential curtilage
Claremont Garage, Eccleshall 0.42 Permissioned 9 17/26714/OUT- Outline application for residential development (including access, all other matters reserved)
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Site Reference Hectares Planning Status
Minimum Net
Dwellings Development Description
43 Eccleshall Road, Stafford 0.05 Permissioned 6 17/26235/OUT - Demolition of existing buildings; construct building to accommodate 7 apartments.
Salt Works Farm, Salt Works Lane, Weston 0.16 Permissioned 5 17/26105/OUT - Proposed residential development of three two
storey dwellings and two semi-detached dormer bungalows
Woodville, 158 Oulton Road, Stone 0.17 Permissioned 5
17/27337/FUL - Conversion and alteration of existing dwelling to form five apartments and erection of new detached coach house
to form one apartment.
Staffordshire Police Headquarters, Cannock Road,
Stafford 5.07 Under
Construction 141 18/27849/FUL - Residential development of 141 dwellings,
including balancing pond, play and open space and associated infrastructure.
Britannia House, 6-7 Eastgate Street, Stafford 0.005 Under
Construction 32 18/28212/POR - Notification for prior approval for proposed
change of use from office B1(a) to dwellinghouse C3 (32 apartments)
Land at Bank Top Garage, Gnosall 0.28 SHELAA
submission 7 N/A
Former Staffordshire University Campus, Beaconside 17.55 SHELAA
submission 30 N/A
Land south of Brunswick Terrace, Stafford 1.2 SHELAA
submission 26 N/A
Land south of Brunswick Terrace, Stafford 3 SHELAA
Stone Highways Depot, Newcastle Road, Stone 0.8 SHELAA
submission 20 N/A
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Site Reference Hectares Planning Status
Minimum Net
Dwellings Development Description
Stone Police Station 0.3 SHELAA submission 8 N/A
Land at Portal Road, Stafford 0.51 Under Construction 16 17/25983/FUL - Construction of 16 dwellings
Land at Rear of Former Browse Antiques, 15 Sandon Road,
Stafford 0.306572 Under
Construction 23
17/25983/FUL - demolish buildings; erect 23 dwellings comprising 8 no 3 bedroom houses, 9 no 1 bedroom flats, 6 no 2
bedroom flats with associated car parking, landscaping and access roads
Chetwynd Centre, Newport Road, Stafford 0.9687 Permissioned 32
18/28342/FUL - proposed change of use of former school to residential use and to a performing arts centre with associated
uses along with then new build houses in a terrace
Land at Riverway, Stafford 0.67 Under
Construction 80 18/28138/FUL - erection of a 4 storey building comprising 80 residential apartments for occupants aged over 55 years old
Stone Town Council Car Park, Stone 0.3568 Under
Construction 1 18/28965/FUL - public house and studio theatre including use of wharfingers cottage; outbuildings; parking; alterations
National Westminster Bank, 75 The High Street, Stone 0.1632 Permissioned 6 18/28418/FUL - change of use from a2 (bank) and school (d1) to
mixed uses retail (a1) and residential (c3)
The Whitehouse, Chapel Street, Stafford 0.04 Under
Construction 9 18/28695/POR - prior approval - change of use from office to 9 flats (class c3)
Garages, West Way, Highfields, Stafford 0.2 Permissioned 7 18/28296/FUL - demolition of garages and construction of 7
houses
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Site Reference Hectares Planning Status
Minimum Net
Dwellings Development Description
Former County Council, 4 Greengate Street, Stafford 0.03 Under
Construction 8 18/29731/FUL - conversion of 1st, 2nd, 3rd floors above retail unit to provide eight residential apartments
Former Stafford College Annex, North Walls, Stafford 0.1191 Permissioned 15 18/28772/OUT - outline application to demolish existing building
and build 15 apartments
MoD 4 Site, Sandon Road, Stafford 11.88 SHELAA
submission 324 N/A
St. Mary’s Abbey, Colwich / Little Haywood 2.29 SHELAA
submission 80 N/A
Midfield Nurseries Garden Centre, Oulton Heath, Stone,
Staffordshire ST15 8US 0.5 SHELAA
submission 16 Affordable Housing development on rural exception site in the Green Belt, subject to NPPF
Leisure Complex, Yarnfield Park, Yarnfield, Staffordshire
ST15 0NL 0.6 SHELAA
submission 13 Affordable Housing development on rural exception site in the Green Belt, subject to NPPF
Silver Birches, Stone Road, Tittensor 1.05 SHELAA
submission 23 Affordable Housing development on rural exception site in the Green Belt, subject to NPPF
Wellbeing Park, Yarnfield Lane, Yarnfield, Stone, ST15 0NF 0.9 SHELAA
submission 24 Affordable Housing development on rural exception site in the Green Belt, subject to NPPF
Footnote: Details for the above Permissioned sites are correct as at 31 March 2019. It is possible that a number of the Permissioned sites may have commenced development since 31 March 2019. If this is the case the sites will be removed for the Brownfield Land Register next year.
Government Grant Funding – Future High Streets Fund
1 Purpose of Report 1.1 To recommend approval to spend a Government grant of up to £150,000 during the
financial year 2019/20 from the Government’s Future High Streets Fund to develop a full business case for proposals for transformational change within Stafford Town Centre.
2 Proposal of Cabinet Member 2.1 That authority to spend the MHCLG Future High Streets Fund grant of
£150,000 be delegated to the Head of Development. 3 Key Issues and Reasons for Recommendation 3.1 On 17 September 2019 the Council was awarded £150,000 by the
Government to help to develop a full business case for proposals for transformational change within Stafford Town Centre. The funding was based on an Expression of Interest that set out ambitious plans for the town centre for the next five years.
3.2 The £150,000 of grant funding has been paid to Stafford Borough Council
under Section 31 of the Local Government Act 2003 for the purposes of progressing the Future High Streets Fund Full Business Case with the opportunity to receive up to £25 million capital grant.
3.3 Following receipt of the funding the Council has appointed consultants to
support the delivery of the business case who will provide valuation and appraisal work as appropriate. The business case must be submitted by no later than 30 April 2020.
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4 Relationship to Corporate Priorities 4.1 Submitting a robust business case could result in significant capital funding
that would deliver sustainable economic and housing growth and provide an attractive place to live and work as set out in Corporate Business Objectives 1 and 2.
5 Implications 5.1 Financial As this request is to spend a government grant
receipt up to a maximum of £150k, there is no direct financial impact on the Council’s finances.
Legal N/A Human Resources N/A Human Rights Act N/A Data Protection N/A Risk Management As previously stated the Government grant
funding is subject t to Section 31 grant rules which means that the Council will not be required to repay this money, only to demonstrate that it has been used in the completion of the business case.
5.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
The project aims to transform the town centre into
a space that is accessible by all. The proposals will be consulted on publically to ensure that all members of our community have the opportunity to influence future plans.
Previous Consideration - Nil Background Papers – File available in Development
SUBMISSION BY COUNCILLOR J M PERT COMMUNITY PORTFOLIO
CABINET 5 DECEMBER 2019
Community Portfolio - General Fund Revenue Budget 2019/2020 - 2022/2023 and
Capital Programme 2019/2020 - 2022/2023
This report is not subject to the call in procedure and will be referred directly to the Scrutiny Committee for consultation.
1 Purpose of Report 1.1 To set out the draft detailed Community Portfolio revenue budget for
2019/2020 - 2022/2023 and the draft Community Portfolio Capital Programme for 2019/2020 - 2022/2023.
2 Proposal of Cabinet Member 2.1 That the detailed draft portfolio revenue budget for 2019/2020 - 2022/2023
and the draft Capital Programme 2019/2020 - 2022/2023 be approved for submission to the Community Wellbeing Scrutiny Committee for consultation.
3 Key Issues and Reasons for Recommendation 3.1 To set out the detailed portfolio revenue budget. 3.2 To set out the variations between the indicative budgets for 2020/2021 and
2021/2022, as set last year, and the proposed budget for 2020/201 and the draft budget for the following years to 2022/2023.
3.3 To set out the proposed Capital Programme 2019/2020 - 2022/2023.
191
4 Relationship to Corporate Priorities 4.1 The revenue budget and capital programme reflect the Council’s priorities. 5 Report Detail 5.1 The detailed draft portfolio budget is attached at APPENDIX 1. 5.2 Indicative budgets for 2020/2021 and 2021/2022 were prepared as part of the
2019/2020 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022/2023.
5.3 An analysis of variations between the indicative budgets for 2020/2021 and
2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budgets for 2021/2022 and 2022/2023 is attached at APPENDIX 2.
5.4 Details of the overall proposed real terms / efficiency variations are attached
at APPENDIX 3. 5.5 An analysis by budget page of the variations between the indicative budgets
for 2020/2021 and 2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budget for 2021/2022 is attached at APPENDIX 4.
5.6 Material changes to Revenue include: -
• Additional bed and breakfast costs • CCTV contract costs
5.7 On 29 January 2019, the Council approved a capital programme to 2021/2022
which has been updated to include approved changes and re-profiled to reflect current spend estimates. The proposed Capital Programme 2019/2020 – 2022/2023 incorporating the assumed ongoing provision of Disabled Facilities Grants in 2021/2022 and 2022/2023 within the Community Portfolio is attached at APPENDIX 5.
5.8 The Disabled Facilities Grants allocation is an indicative allocation at this
stage, pending further details on the value allocated as part of the Better Care Funding passported from Staffordshire County Council. The budget will be updated to reflect the actual amount received.
5.9 A short description of the new capital scheme is attached at APPENDIX 6.
192
6 Implications 6.1 Financial The potential loss of external core/incentive
funding from the Government (and other sources is a risk which can impact on the Council’s future ability to deliver the service.
Legal Human Resources Any resourcing implications of continuing loss
of external funding will be considered in line with Council policies and consultation with staff groups affected and recognised trade unions
Human Rights Act Data Protection Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers – File available in Financial Services.
193
Community
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Private Sector Housing (Standards)1
131,160 132,120 136,930 141,840 Employee Expenses
4,320 4,320 4,320 4,320 Transport Related Expenditure
20,170 25,170 25,170 10,170 Supplies & Services
155,650 161,610 166,420 156,330 ExpenditureTotal
(16,050) (17,440) (32,490) (22,540)Income
(16,050) (17,440) (32,490) (22,540)IncomeTotal
139,600 144,170 133,930 133,790 Private Sector Housing (Standards) Net Expenditure
Housing Act Sewerage Works2
2,110 2,150 2,190 2,230 Premises Related Expenditure
2,110 2,150 2,190 2,230 ExpenditureTotal
2,110 2,150 2,190 2,230 Housing Act Sewerage Works Net Expenditure
Private Sector Hsg (Loans & Mortgages)3
5,560 5,670 5,780 5,900 Premises Related Expenditure
SUBMISSION BY COUNCILLOR J K PRICE ENVIRONMENT PORTFOLIO
CABINET 5 DECEMBER 2019
Environment Portfolio - General Fund Revenue Budget 2019/2020 - 2022/2023 and
Capital Programme 2019/2020 - 2022/2023
This report is not subject to the call in procedure and will be referred directly to the Scrutiny Committee for consultation.
1 Purpose of Report 1.1 To set out the draft detailed Environment Portfolio revenue budget for
2019/2020 - 2022/2023 and the draft Environment Portfolio Capital Programme for 2019/2020 - 2022/2023.
2 Proposal of Cabinet Member 2.1 That the detailed draft portfolio revenue budget for 2019/2020 - 2022/2023
and the draft Capital Programme 2019/2020 - 2022/2023 be approved for submission to the Community Wellbeing Scrutiny Committee for consultation.
3 Key Issues and Reasons for Recommendation 3.1 To set out the detailed portfolio revenue budget. 3.2 To set out the variations between the indicative budgets for 2020/2021 and
2021/2022, as set last year, and the proposed budget for 2020/2021 and the draft budget for the following years to 2022/2023.
3.3 To set out the proposed Capital Programme 2019/2020 - 2022/2023.
203
4 Relationship to Corporate Priorities 4.1 The revenue budget and capital programme reflect the Council’s priorities. 5 Report Detail 5.1 The detailed draft portfolio budget is attached at APPENDIX 1. 5.2 Indicative budgets for 2020/2021 and 2021/2022 were prepared as part of the
2019/2020 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022/2023.
5.3 An analysis of variations between the indicative budgets for 2020/2021 and
2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budgets for 2021/2022 and 2022/2023 is attached at APPENDIX 2.
5.4 Details of the overall proposed real terms / efficiency variations are attached
at APPENDIX 3. 5.5 Material variances include:
• Waste dry recycling gate fees and reduced green recycling credits reflecting the final year of the four year phased reduction agreed with Staffordshire County Council
• Waste property growth (2022/23) • Removal of bring sites 2020/21 • Implementation of blue bag scheme 2020/21 • Introduction of chargeable garden waste from 1 January 2021 • Reduced bereavement income
5.6 An analysis by budget page of the variations between the indicative budgets for 2020/2021 and 2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budget for 2021/2022 is attached at APPENDIX 4.
5.7 On 29 January 2019, the Council approved a capital programme to 2021/2022
which has been updated to include approved changes, re-profiled to reflect current spend estimates and it also includes additional resources for an existing scheme. The proposed Capital Programme 2019/2020 – 2022/2023 incorporating provision for the rolling programme and additional demand for replacement wheeled bins in 2019/2020 to 2022/2023 within the Environment Portfolio is attached at APPENDIX 5.
204
6 Implications 6.1 Financial The potential loss of external core/incentive
funding from the Government and other sources is a risk which can impact on the Council’s future ability to deliver the service.
Legal Human Resources Any resourcing implications of continuing loss
of external funding will be considered in line with Council policies and consultation with staff groups affected and recognised trade unions
Human Rights Act Data Protection Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers – File available in Financial Services.
205
Environment
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Management & Support1
284,830 308,980 319,970 331,250 Employee Expenses
8,080 5,420 5,420 5,420 Transport Related Expenditure
30,180 30,180 30,180 30,180 Supplies & Services
323,090 344,580 355,570 366,850 ExpenditureTotal
(2,650) (2,700) (2,750) (2,810)Income
(2,650) (2,700) (2,750) (2,810)IncomeTotal
320,440 341,880 352,820 364,040 Management & Support Net Expenditure
Regulatory Services2
494,470 508,770 525,620 544,420 Employee Expenses
3,800 3,880 3,960 4,040 Premises Related Expenditure
36,110 36,240 36,240 36,240 Transport Related Expenditure
SUBMISSION BY COUNCILLOR C V TROWBRIDGE LEISURE PORTFOLIO
CABINET 5 DECEMBER 2019
Leisure Portfolio - General Fund Revenue Budget 2019/2020 - 2022/2023 and
Capital Programme 2019/2020 - 2022/2023
This report is not subject to the call in procedure and will be referred directly to the Scrutiny Committee for consultation.
1 Purpose of Report 1.1 To set out the draft detailed Leisure Portfolio revenue budget for 2019/2020 -
2022/2023 and the draft Leisure Portfolio Capital Programme for 2019/2020 - 2022/2023.
2 Proposal of Cabinet Member 2.1 That the detailed draft portfolio revenue budget for 2019/2020 - 2022/2023
and the draft Capital Programme 2019/2020 - 2022/2023 be approved for submission to the Community Wellbeing Scrutiny Committee for consultation.
3 Key Issues and Reasons for Recommendation 3.1 To set out the detailed portfolio revenue budget. 3.2 To set out the variations between the indicative budgets for 2020/2021 and
2021/2022, as set last year, and the proposed budget for 2020/2021 and the draft budget for the following years to 2022/2023.
3.3 To set out the proposed Capital Programme 2019/2020 - 2022/2023.
217
4 Relationship to Corporate Priorities 4.1 The revenue budget and capital programme reflect the Council’s priorities. 5 Report Detail 5.1 The detailed draft portfolio budget is attached at APPENDIX 1. 5.2 Indicative budgets for 2020/2021 and 2021/2022 were prepared as part of the
2019/2020 budget process and have been updated as part of this year’s process with the budgets then being extrapolated to create a new budget for 2022/2023.
5.3 An analysis of variations between the indicative budgets for 2020/2021 and
2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budgets for 2021/2022 and 2022/2023 is attached at APPENDIX 2.
5.4 Details of the overall proposed real terms / efficiency variations are attached
at APPENDIX 3. 5.5 Material variances include:
• Transfer From Items to be allocated on Resources portfolio in respect of contract inflation
• Provision for continued operation of Alleynes dryside (2020/21) • Revenue bid: Victoria Park safety resurfacing falling out 2022/23
5.6 An analysis by budget page of the variations between the indicative budgets
for 2020/2021 and 2021/2022 (as set last year) and the proposed budget for 2020/2021 and draft budget for 2021/2022 is attached at APPENDIX 4.
5.7 On 29 January 2019, the Council approved a capital programme to 2021/2022
which has been updated to include approved changes, re-profiled to reflect current spend estimates and additional resources for an existing scheme . The proposed Capital Programme 2019/2020 – 2022/2023 for the Leisure Portfolio is attached at APPENDIX 5.
218
6 Implications 6.1 Financial The potential loss of external core / incentive
funding from the Government and other sources is a risk which can impact on the Council’s future ability to deliver the service.
Legal Human Resources Any resourcing implications of continuing loss
of external funding will be considered in line with Council policies and consultation with staff groups affected and recognised trade unions
Human Rights Act Data Protection Risk Management 6.2 Community Impact
Assessment Recommendations
The Borough Council considers the effect of its actions on all sections of our community and has addressed all of the following Equality Strands in the production of this report, as appropriate:-
Age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, sexual orientation.
Previous Consideration - Nil Background Papers – File available in Financial Services.
219
Leisure and Culture
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Leisure Section1
80,550 95,090 98,750 102,520 Employee Expenses
3,180 3,180 3,180 3,180 Transport Related Expenditure
24,000 10,150 10,150 10,150 Supplies & Services
107,730 108,420 112,080 115,850 ExpenditureTotal
(45,370) (31,560) (31,560) (31,560)Income
(45,370) (31,560) (31,560) (31,560)IncomeTotal
62,360 76,860 80,520 84,290 Leisure Section Net Expenditure
Allotments2
3,520 3,590 4,450 4,540 Premises Related Expenditure
13,080 13,420 14,040 14,040 Supplies & Services
16,600 17,010 18,490 18,580 ExpenditureTotal
(1,160) (1,180) (1,200) (1,200)Income
(1,160) (1,180) (1,200) (1,200)IncomeTotal
15,440 15,830 17,290 17,380 Allotments Net Expenditure
Stafford Gatehouse Theatre3
7,240 7,590 - -Supplies & Services
7,240 7,590 - -ExpenditureTotal
(7,240) (7,590) - -Income
(7,240) (7,590) - -IncomeTotal
- - - -Stafford Gatehouse Theatre Net Expenditure
Ancient High House4
9,840 10,040 10,440 10,650 Premises Related Expenditure
9,840 10,040 10,440 10,650 ExpenditureTotal
9,840 10,040 10,440 10,650 Ancient High House Net Expenditure
Broadeye Windmill5
1,920 1,950 1,980 2,010 Premises Related Expenditure
70 70 70 70 Supplies & Services
1,990 2,020 2,050 2,080 ExpenditureTotal
1,990 2,020 2,050 2,080 Broadeye Windmill Net Expenditure
Alleynes Sports Centre6
37,140 37,140 - -Premises Related Expenditure
200 200 - -Supplies & Services
41,750 42,590 - -Third Party Payments
79,090 79,930 - -ExpenditureTotal
79,090 79,930 - -Alleynes Sports Centre Net Expenditure
Izaak Walton Cottage7
11,830 8,230 8,400 8,570 Premises Related Expenditure
11,830 8,230 8,400 8,570 ExpenditureTotal
11,830 8,230 8,400 8,570 Izaak Walton Cottage Net Expenditure
220
Leisure and Culture
Outturn
2019-2020
Budget
2020-2021
Budget
2021-2022
Budget
2022-2023
£ £ £ £
Appendix 1
Stafford Castle8
12,340 12,340 12,840 13,090 Premises Related Expenditure
12,340 12,340 12,840 13,090 ExpenditureTotal
12,340 12,340 12,840 13,090 Stafford Castle Net Expenditure
Tourism9
18,520 16,640 16,640 16,640 Supplies & Services
18,520 16,640 16,640 16,640 ExpenditureTotal
18,520 16,640 16,640 16,640 Tourism Net Expenditure
Leisure Management Contract10
102,860 70,380 92,950 160,590 Supplies & Services
1,007,190 861,260 692,760 669,490 Third Party Payments
