To consider the Council’s performance for the first ten months – to the end of January - against the Annual Operating Plan 2007-08 and national performance indicators used externally to measure the performance of the Council; partnership performance for the first eight months – to the end of November -  in delivering the Local Public Service Agreement, Local Area Agreement and Herefordshire Community Strategy; and performance against revenue and capital budgets and corporate risks, and remedial action to address areas of under-performance. 

(Councillor RH Smith declared a personal interest.)

The Committee considered the Council’s performance for the first ten months – to the end of January - against the Annual Operating Plan 2007-08 and national performance indicators used externally to measure the performance of the Council; partnership performance for the first eight months – to the end of November -  in delivering the Local Public Service Agreement, Local Area Agreement and Herefordshire Community Strategy; and performance against revenue and capital budgets and corporate risks, and remedial action to address areas of under-performance. 

Performance against Performance Indicators

The Corporate Policy and Research Manager (CPRM) presented this section of the report.

He reported that the number of red (not on target) Council-led indicators from the annual operating plan had increased from 23 to 25 since the last report.  The number of indicators marked green (on target or met target) had increased from 24 to 27. 

Referring to the 7 red indicators relating to teenage lifestyle he said that some proxy indicators had now been developed and were awaiting approval by the Children’s Trust.  Once approved these could be used in-year in 2008/09.

He noted that there had been an increase in social worker turnover which had implications for performance against target HC 89b (completion rate of initial assessments of children in need within 7 days of referral) and said that intensified efforts were being made both to retain and recruit social workers.

In the ensuing discussion the following principal points were made. 

·         Concern was expressed that the number of red Council led indicators from the annual operating plan continued to rise.

·         It was suggested that the fact that the teenage lifestyle indicators had still not been signed-off suggested poor management of the process.  The CPRM said that local authorities generally were finding it challenging to develop robust performance management processes for partnerships. The Comprehensive Area Assessment preparation programme provided for the effectiveness of current arrangements to be reviewed.

Disappointment was expressed that despite frequent expressions of concern by the Committee the desired upturn in performance against the partnership targets was not forthcoming.

·         It was asked in relation to social worker retention and recruitment whether the Council was benchmarking with other authorities to see how they were coping with these issues.  The CPRM said that the Head of Safeguarding and Assessment was taking vigorous action to manage the situation but it was and would remain a difficult challenge, as it was for local authorities generally. 

·         It was noted that performance against indicator 83a HC - principal roads condition, had moved from amber (some progress/or data not yet available so not possible to determine trend) to red.  Concern was expressed by Members at the perceived condition of both principal and non-principal roads based on their personal observation.  However, noting that the target against the indicator for non-principal roads was on track to be exceeded it was proposed to formally record concern only about performance against the indicator on the condition of principal roads and highlight the need for improvement.

·         In response to concern about the large number of indicators marked amber the CPRM said that the principal reason was that data for the majority of these targets was only available at the year end or was reliant on the results from surveys.  The new Corporate Plan would seek to identify ways of monitoring performance against these indicators in-year (for instance in terms of key actions) so that performance could be better managed.  He noted that the targeted actions being taken to improve performance meant that the number of indicators against which performance was set to improve on last year had risen from the 62% noted in the report to 65%.

Revenue and Capital Budgets and Corporate Risks

The Head of Financial Services (HFS) presented this section of the report.

The projected overspend on the revenue budget had reduced to £698,000.  He noted that the social care contingency fund of £1.3 million had not yet been applied, its application being dependent on a review of the causes for the overspend and assurances that mitigating action was taken.  The projected year end outturn included an estimated £2.8 million underspend on the invest to save monies included in the budget to modernise social care services.

He noted the Council’s claim of £2.392 million under the Bellwin Scheme for damage caused by the July 2007 floods had been met in full by the Government Office West Midlands after deducting the threshold limit of £408,526.  However, items that had not been insured but were viewed by the Government Office as insurable were ineligible for compensation under the Scheme, resulting in a shortfall of £620,000 against the estimate for the damage.

He commented on the summaries of expenditure as set out in Appendix C to the report.  He drew attention to an increased overspend on adult social care; the potential implications in Community Services of the audit by the Government Office of the Actively Regenerating Communities in Herefordshire Programme; continuing discussions with HALO over the cost of implementation of single status and job evaluation.  He expected that the overspend on Corporate and Customer Services in large part due to Community Network costs would reduce.  He noted also the potential risk that additional costs could be incurred under the waste contract if the volume of waste rose beyond a certain point.

He commented briefly on the Capital Programme as set out at Appendix D to the report and on the corporate risk log as set out at Appendix E to the report.

He noted a reduction in the number of risks in the log but highlighted risks CR28, relating to benefits from Herefordshire Connects, CR29 relating to the location of the Council’s data centres and CR30 relating to legacy systems where the suppliers would no longer support systems.

In the ensuing discussion the following principal points were made:

·         A question was asked in relation to the contract with Shaw Homes for the management of older peoples homes, questioning the reference on pages 51/52 of the report to action being taken to mitigate the risk to the contractor.  The HFS clarified in reply that the first priority was to protect the Council’s interests.  However, it was pragmatic in order to preserve the stability of the contract to work in partnership with the contractor to safeguard provision.

·         The reference on page 52 of the report to writing off “some debt due from the PCT” was questioned.  The HFS said that there was a high level of transactions between the Council and the PCT.  At one time a considerable sum had been outstanding However, following discussions the amount owed by the PCT had reduced to £50,000.  Members expressed the hope that this would be addressed by the two authorities.

·         It was asked what action was being taken to manage the overspend on the ICT trading account.  In reply it was stated that there were regular meetings between the acting Head of ICT and the HFS.  There was rigorous questioning of expenditure with a particular focus on reducing expenditure on contractors.  The aim remained to achieve a balanced budget at the year end.

·         Clarification was sought on progress on the Community Network Upgrade.  The Director of Corporate and Customer Services commented on work being carried out.  The Chief Executive said that a report was due to go to Cabinet providing an update on action in response to the Crookall report on financial governance issues in ICT.  This would include reference to the recent report by SOCITM on the Community Network Upgrade.  Cabinet would have a number of issues to consider, some of which the Committee may also want to consider.

·         An assurance was sought that procurement procedures were being adhered to.  The HFS outlined improvements that had been made to the procurement process, including refining the financial procedures and providing training.  He commented on the role of the Strategic Procurement and Efficiency Review Officer in overseeing central procurement, noting the workload pressures on that post, and informed the Committee of discussions with the West Midlands Centre of Excellence to try to support that role.   In response to a further question about the reporting of procurement activity the HFS said that a section would be included in future versions of the Integrated Performance and Finance Report.

It was proposed that the strategic and operational importance of the procurement process be formally recognised by the Committee and, given the report that there were capacity issues within this function, the expansion of this role be supported with the expectation that a proposal should be brought forward in the near future.

·         In response to a question about the projected overspend of £2.9 million on learning disabilities and whether the 2008/09 budget took account of this pressure the HFS explained that a sum of £2.7 million of invest to save monies, of which £600,000 was for learning disabilities, was included in the base budget.  However, until the new model of care was introduced there would be pressure on this service area.

·         A question was asked about the references on page 54 of the report to higher than expected pupil numbers, suggesting this contradicted the information supporting the schools review.  The HFS said that the Dedicated Schools Grant was paid in response to an annual return, so there was a one year time lag.

·         In response to a question about central education service costs and the position on the schools budget as a whole the HFS said that quarterly budget monitoring reports were made to the Children’s Services Scrutiny Committee and the Schools Forum was also advised of the expenditure on central services.

·         Asked whether there was additional budgetary provision for concessionary travel given the implications of new legislation the HFS said that following discussion with the Director of Environment no specific additional provision had been made in the 2008/09 budget.

·         In response to a question the HFS said that the assessment had been made by the previous Head of Human Resources that there was a low risk to the Council of back payments for equal pay claims.

·         Concern was expressed about the risks highlighted in relation to ICT matters. The Director of Corporate and Customer Services said that there were some 400 legacy systems about half of which were managed by ICT, the remainder having been commissioned by Directorates.  ICT did not have details of all the systems run by Directorates.  This was being investigated as part of business continuity planning.

It was proposed that a report be made as a matter of urgency on the position, having regard also to issues referred to the Committee by the Audit and Corporate Governance Committee.

·         A question was asked about the recruitment strategy and the level of use of agency staff and whether the recruitment of staff with no local expertise or experience presented a risk.  It was noted that a written answer would be sought from Human Resources.

·         Clarification was sought on expenditure on the capital programme and the extent of any slippage.  The HFS said that the position was more fluid than was the case with revenue expenditure. He advised that £29.7 million of expenditure was on the financial system at the end of February.

RESOLVED:

That    (a)        dissatisfaction be expressed at performance against indicator 83a HC: the condition of principal roads, and the need for improvement be highlighted;

            (b)       the strategic and operational importance of the procurement process be formally recognised by the Committee and given the report that there are capacity issues within this function the expansion of this role be supported with an expectation that the executive address this in the near future; and

            (c)        that a report on ICT issues highlighted in the corporate risk log be made to the Committee as a matter of urgency, having regard also to issues referred to the Committee by the Audit and Corporate Governance Committee.

(The Committee adjourned from 11.50 – 11.55.)