Mr P B Carter, Leader of the Council; Mr N J D Chard, Cabinet Member for Finance; Mr P Gilroy, Chief Executive; and Ms L McMullan, Director of Finance, will attend the meeting from 10.15 am to 11.15 am to answer Members’ questions on this item.
Minutes:
The Chairman welcomed Mr A King, Deputy Leader of the Council, Mr N J D Chard, Cabinet Member for Finance, Mr P Gilroy, Chief Executive, Ms L McMullan, Director of Finance and Mr Ben Smith, Group Finance Manager, to the meeting.
Mr Chard introduced the report, stating that the current 3-year settlement was welcome in terms of financial planning, but it was agreed before the impact of the current global economic situation had been realised. Accordingly, the Council was facing challenging decisions to maintain all services at their current levels against increased demands. Specifically, he mentioned the impact of the housing market and developer contributions on the growth agenda; Dedicated Schools Grant; and the as yet unresolved issue of asylum costs. Mr Chard also drew the Committee’s attention to the interaction of services with the NHS, financial planning risks, key assumptions and the adequacy of the Council’s reserves.
In response to a question from Mr Chell, Ms McMullan confirmed that, with the exception of asylum, there were no other significant sums outstanding to be paid to KCC that she didn’t expect to be settled in the current financial year.
In response to a question from Mr Northey, Mr Chard stated that KCC had moved very quickly to address the impact of the global economic situation on the Council’s services and the PEF2 would assist in maintaining essential capital investment, which put KCC in a fortunate position in that regard. He added that the additional costs facing the authority, because of the fluctuating oil price for example, would be equalised over the medium term. Ms McMullan stated that action had already been taken to address some of the inflationary pressures following the Cabinet meeting on 4 August, but that further action would be necessary as part of the forthcoming budget and medium term planning round. She added that the Council’s policies on treasury management were being examined to ensure that any potential risks were minimised and the Superannuation Fund Committee was currently examining the impact of the current economic conditions on the pension fund.
With regard to Asylum, Ms McMullan stated that the Government’s commitment to fund KCC’s asylum costs in writing was still awaited. She added that if KCC did not receive its full settlement for previous years, the Council’s exposure would be up to £4m in the current year. Mr Gilroy stated that he had written to the Home Office following recent meetings and added that he was certain that the Minister wanted the matter resolved to the satisfaction of all parties.
Mr Gilroy commented that price inflation had to be responded to quickly as there was a serious impact on the Council’s procurement activity. Suppliers were also feeling the pinch and KCC needed to address those issues constructively and responsibly. He also stated that the wider community of government in Kent would be coming together at a summit meeting in November to discuss ongoing and future strategies to work together to ameliorate the situation as best as possible, both in respect of short term and strategic issues.
In response to a question from Mr Smyth, Ms McMullan stated that the current formula for the Dedicated Schools Grant left little room for changes to reflect local needs and circumstances. Mr Smyth accepted that the situation needed watching very carefully. Mr Chard stated that the four-block formula was less transparent compared to the previous FSS system and harder to explain to stakeholders. KCC had used an FOI enquiry to try to fully understand the Government’s decisions on KCC’s settlements, but it remained difficult to see exactly how certain needs were matched with grant. Ms McMullan stated that she would provide a worked example to demonstrate the difficulties.
In response to a question from Mr Truelove on appendix 2 (key pressures), Mr Chard stated that the Policy Overview Committees would get an opportunity in the November cycle of meetings to consider budget proposals for the forthcoming year, in relation to external pressures and how KCC should respond. Mr Gilroy stated that the local government family has to be more radical about overhead and transaction costs and this would be a key feature of the budget proposals.
Mr Gough stated that he was increasingly concerned about the financial burden on local authorities because of the impact of new legislation and the extent to which this was properly funded. Ms McMullan agreed that, whilst the Government’s original statement about new burdens was welcomed, the reality is often different, e.g. asylum costs.
Miss Carey stated that District and Borough Councils in Kent were waiting for written confirmation from KCC that the additional funding associated with the Kent Concessionary Travel Scheme would be provided to them, specifically in relation to the cost of the extension of the scheme to cover the period from 9.00am to 9.30am, as agreed by the Cabinet earlier this year. Ms McMullan stated that the Leader had reiterated the Council’s commitment to provide these additional costs at a meeting earlier in the week of the Leaders and Chief Executives of the Kent authorities. She added, however, that the precise costs of the extension were still being calculated.
Mr Simmonds asked whether the huge uncertainty on schools funding and whether DSG was retained in its current form or not, would mean that KCC’s funding priorities would need to be reassessed. Mr King stated that decisions on priorities would be made collectively by the Cabinet, but that it remained the responsibility of each portfolio holder to work closely together with their relevant officers to challenge budget options in relation to those priorities. He added that the Policy Overview Committees would have a key role to play in those budget discussions. Mr Gilroy stated that KCC also made use of a peer review of budget proposals by officers, before information was presented to Members.
Mrs Dean asked how the authority could deliver its key objectives in the light of such a large number of senior officers leaving the authority within a short space of time and the consequent changes that were having to be made to the Council’s senior management structure. She asked specifically what the arrangements were in the Highways Service and to whom should elected Members contact in relation to enquiries and complaints from constituents about highways matters. She sought further clarification of what KCC was seeking to do in relation to freedom to trade. She made reference to the volume of HGVs in the County and why KCC was seeking to support a further lower Thames crossing and if the proposed crossing included rail facilities. She welcomed the peer review process for budget proposals and asked that the results of these should be shared with Policy Overview Committees. She asked whether KCC would be seeking to become involved in the oil market, given the volatility of the oil price recently. She also asked for further clarification of what was meant by the phrase “little, if any, room to manoeuvre” in paragraph 50 of the report.
Mr Gilroy stated that Mr Badman’s departure had been known about for some time and that the interim arrangements to be put in place in CFE were robust and offered stability to the authority. He added that there would a national advert for a successor to the Managing Director and it was hoped that an appointment would be made before the end of the calendar year. Mr Wilkinson had decided to leave his post for personal reasons and confirmed that appointments would be made to this and other senior posts in the Environment and Regeneration Directorate within the next 21 days.
With regard to the purchase of fuel, Mr Chard stated that the Council was merely seeking greater surety on price, if fuel could be purchased in units of 100,000 litres or more.
Ms McMullan stated that the clarification needed on freedom to trade related to access to information and the ability of Commercial Services to retain information that would not be available to KCC in relation to private companies. With regard to paragraph 50, Ms McMullan drew Mrs Dean’s attention to the explanation given in paragraphs 3 to 14 of the report that dealt with the economy and public expenditure.
Mr Chard stated that discussions with Essex County Council regarding a further Thames crossing were at an initial stage, but that he believed there would be great benefit in incorporating rail facilities.
In response to a question from Mr Chell, Mr Gilroy confirmed that the cost of Kent TV was approximately £1 per household and that KCC had also saved approximately £1m on publications since Kent TV was introduced.
In response to a further question from Mrs Dean, Mr Gilroy stated that Members should write to him if they had any concerns about the highways service.
The Chairman asked for clarification about the role of Healthwatch (paragraph 62), specifically, how it was meant to be stronger than LINKS, which was a statutory body. Mr Gilroy stated that Healthwatch would be more effective for local residents because it would have an advisory role in relation to health, social care and children’s services. In addition, Healthwatch would provide a monitoring service and would be able to present objective monitoring information to the Health Overview and Scrutiny Committee, the relevant PCT or relevant KCC Directorate, if, for instance, response times or other service standards were not being met.
The Chairman referred to paragraph 56 of the report and asked which jointly funded projects had been affected adversely in Kent as a result of NHS trusts being in deficit. Ms McMullan stated that the reference in paragraph 56 was to a national report produced for the LGA by Price Waterhouse Coopers and that she was not aware of any project in Kent where one of the NHS Trusts had withdrawn funding.
RESOLVED: That: