Apologies were received from Councillor PGH Cutter, Miss E Lowenstein and Mr P Sell.

To receive details of any Member nominated to attend the meeting in place of a Member of the Committee.

There were none.

There were none.

To approve and sign the Minutes of the meeting held on9 December 2011. (To follow)

It was agreed that the names of officers present at meetings and their titles should be recorded in the Minutes as a matter of course.

RESOLVED: That the Minutes of the meeting held on 9 December 2011 be approved as a correct record and signed by the Chairman.

To consider suggestions from members of the public on issues the Committee could scrutinise in the future.

(There will be no discussion of the issue at the time when the matter is raised.  Consideration will be given to whether it should form part of the Committee’s work programme when compared with other competing priorities.)

There were no suggestions from the public.

To note questions received from the public and the items to which they relate.

(Questions are welcomed for consideration at a Scrutiny Committee meeting so long as the question is directly related to an item listed on the agenda.  If you have a question you would like to ask then please submit it no later than two working days before the meeting to the Committee Officer.  This will help to ensure that an answer can be provided at the meeting). 

A number of questions had been received from Mrs E Morawiecka relating to agenda item 8: Budget Update.

It was reported that it was intended to provide a written answer.  Members requested and were provided with copies of the questions.

The questions and written answers are appended to the Minutes.

To advise the Committee on the key contractual mechanisms currently in place to manage performance within the contracts with Amey Herefordshire.

The Committee considered a report on the key contractual mechanisms currently in place to manage performance within the contracts with Amey Herefordshire.

The Assistant Director – Place Based Commissioning (ADPBC) reminded the Committee that negotiations on a contract extension with Amey Herefordshire were ongoing.  It was intended to send supplementary information to Members on current performance.  The performance of the service areas delivered through Amey were reported through the Council’s Integrated Corporate Performance Report.  He confirmed that the performance measures included measures from the former Best Value Performance Indicators set, where these were considered to be relevant.

The Head of Highways and Community Services (HHCS) presented the report.  He commented on the current performance framework and the development of a future framework.

In discussion the following principal points were made:

·         Some concern was expressed that the report did not provide the Committee with the information necessary to assess and test performance and the assurance that there was a sufficient level of independent challenge to performance. 

·         The HHCS gave an example of how there had been a significant improvement in performance in the management of highway defects since the introduction of the Managing Agent Contract, driven by challenge from the Council as client, through the mechanisms established in the contract.  The ADPBC assured the Committee that in his opinion strong mechanisms were in place to manage performance.  The HHCS commented that whilst Amey was required to manage its own performance additional checks were provided by the Client Management Team.  He described the work of the team and how it audited works and sought to achieve performance improvement.

·           In response to questions about the stated savings achieved under the contract it was confirmed that the Council’s service budgets were reduced to account for the guaranteed annual saving delivered through the contract.  Further cashable savings were driven by the client team and had resulted in managed reductions in the budgets allocated to Amey Herefordshire for the delivery of services.  Directorates had been required to make significant savings over the past year.  Whenever they had been generated from a service area delivered through Amey Herefordshire these savings had also been taken into account in the budgets allocated to Amey.

·           In response to a question about the fact that no dividend had been paid to the Council as a shareholder in Amey Wye Valley Ltd, the Leader of the Council commented that when Amey had taken over the contract a deficit had had to be repaid.  He was mindful of the need to ensure that the Council received its fair share of any future profits. In response to further questions about the transparency of arrangements and the closeness of the relationship between the contractor and the Council under the current contract the Leader commented that he was seeking assurance that the current contractual model was to the Council’s benefit.

·           Members expressed a number of concerns about whether the contract represented value for money.  In response to a specific concern about the cost of work sub-contracted  ...  view the full minutes text for item 52.

To seek Overview and Scrutiny Committee’s view on the budget for 2012/13 and the principles underlying the Medium Term Financial Strategy (MTFS).

The Committee was asked for its views on the budget for 2012/13 and the principles underlying the Medium Term Financial Strategy.

The report to Cabinet on 19 January had been circulated separately to the Committee.

The Leader of the Council introduced the report highlighting the following issues:

·         That the provisional Local Government Settlement for 2012/13 meant a £5.7m reduction in formula grant for the Council.

·         The Government’s payment of a grant to authorities who agreed to freeze their Council tax for 2012/13 equated to a 2.5% increase in Council Tax but was for one year only.

·         The budget proposals involved savings of £9.3m in 2012/13.  This followed on from savings of £10.3m in 2011/12. 

·         A reduction in some services was inevitable but the Council had sought to maintain frontline services.

·         The Council was increasingly a commissioning organisation transferring service delivery to other organisations.

·         The funding picture after 2012/13 was unclear. There were a number of significant changes ahead.

The Chief Officer – Finance and Commercial Services (CFO) highlighted the following additional points:

·         He emphasised that for 2011/12 the Government had offered a grant to those who froze Council tax for four years up to and including 2014/15.  A further council tax freeze grant was now being offered for 2012/13 only.  It was proposed to use this one-off sum for transformation (£1.2m) and budget contingency (£1m).

·         Additional funding for social care within the formula grant was proposed to be passported to that service area.  A sum of £2.3m was also to be transferred from the NHS to support social care.

·         He also noted provision for a 1% increase in pay from 2013/14; income proposals; the provision of £1m for a change management reserve; savings proposals for directorates as set out in the appendix to the report; the capital programme; and the implications of the transfer of public health responsibilities to local authorities.

In the course of discussion the following principal points were made:

·         Paragraph 5.2.3 of Section 5 of the Medium Term Financial Strategy on the Council’s financial context noted the extent to which the Council’s funding settlement from the Government was below average.  The CFO commented that the national funding formula was complex and not transparent so the reasons why the authority fared so poorly were difficult to establish.  Members considered that Cabinet should be encouraged, with the Committee’s support to make representations to the Government to seek to address the apparent unfairness of the Council’s settlement.

·         The CFO informed the Committee of the Council’s investment policy and provided assurance on the arrangements in place to manage risk to the Council’s resources.

·         The relationship between NHS and Council funding for social care was discussed.  The CFO commented that joint arrangements were in place and national incentives encouraged an appropriate use of funds.

·         A Member sought clarification on the proposed use of the council tax freeze grant of £2.2m for 2012/13.  It was noted that the Cabinet decision in December had been that the sum would be used for transformation measures.  ...  view the full minutes text for item 53.

To consider the Committee’s work programme.

The Committee considered its work programme.

A range of concerns were expressed about the work programme, including the balance of items within it; whether all relevant aspects of the Council’s work were being scrutinised; the extent to which all eligible Councillors were engaged within scrutiny since the implementation of the new scrutiny model; the scale of the current programme and the need to focus effort and set priorities within it; and the format in which the programme was presented.  The Chairman invited Members to write to him with any observations they had on the operation of the current scrutiny model.

The following proposed additions to the programme were discussed in detail:

·         Provision of ICT Services – It was noted that a review of ICT Strategy was to be undertaken and suggested that the most effective work the Committee could undertake would be to contribute to work on the development of that Strategy.

·         Legal Services – It was noted that an Improvement Plan for the Service was being prepared and suggested that the Committee might usefully consider progress with implementation within 6-9 months.

·         Performance Monitoring of Amey, Hoople and Waste contracts  – It was suggested that as there were contract monitoring arrangements in place the Committee might add more value by testing the effectiveness of the arrangements rather than seeking to undertake detailed monitoring itself.

It was noted that the Chairman and Vice-Chairman would give informal consideration to prioritising

RESOLVED:

That    (a)        the following additions to the Work Programme be added to the Work Programme, details and timing to be confirmed:

·         ICT Strategy

·         Performance Reports on Amey, Hoople and Waste Management.

·         Legal Services Improvement Plan Monitoring

·         Operation of Hereford Futures

            (b)        the Local Development Framework and Local Transport Plan should be the subject of separate scrutiny exercises.