Agenda, decisions and minutes

There were no apologies.

There were no Declarations of Interest.

The minutes of the meeting held on 13 November 2019 were confirmed as a true record. 

The Leader presented the report which outlined the 2020/21 draft budget report for consideration and agreement.  The Leader reminded her Cabinet colleagues that this is the draft budget and wanted to impress on the meeting that the proposals contained in the report will be going out for public consultation prior to finalising the budget at the February 2020 meeting.

Due to the late publication of the draft revenue grant settlement, the report had been compiled on planning assumptions since the report had to be published prior to the announcement of the settlement figure.  The report confirmed the planning assumptions were:

-          That Newport City Council would get a 1% increase in its revenue grant settlement and growing tax base – approximately £2.1m;

-          That the Council would also get a further £5.7m of either permanent or continuation of specific grants to cover the costs of teachers’ pay/pensions and social services sustainability (funding which the Council is currently receiving this year as one-off grants).

The draft settlement confirmed the Council will receive more than envisaged – in total further funding of £7.1m. This allows some flexibility to either:

(i)            invest in more budget investments and priorities and/or;

(ii)           reduce/take out some of the budget saving proposals identified in the report.

The Council’s revenue support grant, in cash terms, will increase by approximately £14m; to £228m in total.  After taking account of current specific grants transferred into it, mainly related to the teachers’ pay/pensions grant mentioned above, the increase is c£9m. 

Newport had the highest increase of any Welsh Council – the first time this has happened.  All councils will be receiving relatively high cash increases in their grant funding next year. There are particular reasons for this:

-          The substantial increase in the overall Welsh Government Budget has meant it has been able to continue to invest in the NHS but not at the expense, this year, of other parts of the public sector.  Therefore, Welsh Government were able to increase the overall revenue grant settlement budget by about £200m for 2020/21- to a total of nearly £4.5bn.  This has benefited all Councils in Wales who receive a share of this. This kind of increase has not happened for many years and is very welcome.  The Leader expressed Cabinet’s thanks to Welsh Government for taking Newport’s situation into account and making this increased allocation.

-          Newport has received a better settlement this year as funding, like all councils, is determined by a complex formula which distributes that total revenue grant settlement of £4.5bn to every council.  Key ‘needs based’ data drives that and includes things such as population numbers, the number of school aged children, older people numbers, etc.  This year, the Welsh Government took account of some significant changes in population estimates which confirmed that in previous years Newport’s population estimates were too low and some others too high.  The update and re-basing of this, alongside the continued increase in pupil numbers, ‘shifted’ more of the available funding to Newport.  ...  view the full minutes text for item 4.

The Leader presented the report which provided a review of the Council’s Treasury Management activities, i.e., the management and planning of its ‘cash resources’, including loan and investing activities, for the first half of this financial year.

The report had already been reviewed by the Audit Committee, and reported to Cabinet for information; following the Cabinet meeting it would go to full Council for approval.

The report confirmed all borrowing and investments undertaken during the first half of the year were expected and within the Council’s agreed limits.

Key points of note are: 

·         The Council’s £40m Bond was re-financed in April - this saved the Council a very significant amount of money which was taken as a saving in this year’s budget, as the interest rate on the loan taken out was substantially lower than the interest paid on the Bond.  The Council’s ‘internal borrowing’ strategy meant this had to be re-financed as opposed to paid off and this strategy is currently saving the Council over £2m annually in interest charges, it was noted the Council’s capacity to be internally borrowed will reduce in relation to future spend of the PFI and other reserves.

·         The report confirmed the Council borrows funds from the Public Works Loan Board – essentially the Government.  During this period interest rates were suddenly increased by an unprecedented 1%.  The Head of Finance and the finance team are reviewing options with the Council’s Treasury Advisers on other borrowing alternatives and this will be reported in future reports as required.   

Decision:

Cabinet noted the content of the report and agreed to provide comments to Council.

The Leader presented the report which provided an update of the Corporate Risk Register for the end of Quarter 2 (30^th September 2019). 

Cabinet was asked to consider the content of the report and note the changes to the risk register for the end of quarter 2.

The report confirmed the Council’s Risk Management Strategy and Corporate Risk Register enables the administration and its officers to effectively identify, manage and monitor those risks which could prevent the authority from achieving its objectives set out in the Corporate Plan 2017-22 and its Statutory Duties as a local authority.

The report further explained that every year, as part of the Council’s planning arrangements, service areas review their current risks and look at new or emerging risks that would prevent the administration from achieving its objectives as part of the Council’s Corporate Plan.

The Quarter 2 risk report will be presented to the Council’s Audit Committee in January 2020; Audit Committee review and monitor the risk management and governance arrangements.

The report noted 12 risks have been escalated to the Council’s Corporate Risk Register requiring monitoring from Cabinet and the Senior Leadership Team.

The remaining risks will continue to be monitored through the Council’s service areas and Corporate Management Team.  Mechanisms are in place to escalate any new or existing risk to the Corporate Risk Register. 

At the end of Quarter 2 (1^st July 2019 to 30^th September 2019) the Council had 9 High risks (15 to 25) and 3 Medium Risks (5 to 14).  In comparison to quarter 1, there were no new risks and no risks were closed.  However, 2 risks had increased from Medium to High level risks. The scores of risks that increased were:

·         Demand for Additional Learning Needs (ALN) and Special Education Needs (SEN) support (Risk score increased from 12 to 20)

§  This risk relates to new legislation being introduced and unknowns in relation to its potential impact on Education services and school support in the city.

§  ALN funding models were reviewed in a local authority and headteacher working group during quarter 2. It was evident that due to a rise in the general school population there has been an increase in ALN pupils which has put additional pressure on the existing ALN funding. 

§  There is an expectation that schools supplement their allocated ALN funding, however, due to the increase of statemented and funded pupils the per pupil ALN funding does not reflect the amount required. 

§  A one year funding model was agreed with further meetings to take place during summer 2020 to develop a long term funding model.

·         In-year financial management (Risk score increased from 8 to 12)

§  The Council’s Finance Service at the end of September shows a forecast overspend of £700k.

§  Whilst the impact of an in-year overspend will have a detrimental effect on the level of reserves, it is not something the Council could not cover in the short-term. 

§  These overspends continuing in the  ...  view the full minutes text for item 6.

The Leader presented the report which confirmed this is the second certificate of compliance which is issued by the Wales Audit Office (WAO) following an audit of the Council’s 2018/19 performance in accordance with the Local Government (Wales) Measure 2009.

The Wales Audit Office are the Council’s external auditors and have a duty to ensure that public bodies, such as Newport Council, have the necessary arrangements in place for securing economy, efficiency and effectiveness in the use of its resources to deliver Council services.

The work completed by the Wales Audit Office also supports the Well Being of Future Generations (Wales) Act 2015 by ensuring that public bodies are undertaking sustainable developments to meet the needs of future generations and adhering to the five ways of working principle.

The Leader welcomed Gareth Jones, Performance Audit Lead WAO to the meeting.  Mr Jones provided an overview of the work required by the Council to receive the second certificate of compliance and confirmed the requirements had been met and the certificate had been issued.

The Leader thanked the WAO for their partnership approach and work with Newport City Council.

The Leader proposed that Cabinet accept the conclusion contained in the Auditor General’s Certificate of Performance Assessment.

Decision:

Cabinet accepted the conclusion contained in the Auditor General’s Certificate of Performance Assessment.

The Leader presented the report which set out proposals to update and make changes to the Council’s Contract Standing Orders.  Full Council will make a final decision on the report but Cabinet’s view is required before it’s finalised and sent through to the next available Council meeting.

Contract Standing Orders (CSOs) form part of the Council’s Constitution and are the rules for buying goods, services and works that have to be adhered to by all employees.

The report confirmed that CSOs are required to be reviewed every three years to take account of changes to legislation, Council policy and strategic direction, as well as wider Welsh Government Policy that needs to be incorporated into the Council’s rules.  The  proposed  CSO’s, which were appended to the report,  introduce  changes  designed  to  improve  the  Council’s procurement  practices  and  ensure changing  legislation, other Council Policy and procurement  practices are adhered to. 

The review had been undertaken in consultation with the Head of Law & Regulation, Head of Finance and the Chief Internal Auditor, as well as the Strategic Leadership Team and Corporate Management Team.

As a result of that consultation key changes have been made in a number of areas, most noticeably around;

1.    Compliance - a new section covering responsibilities around probity, standards, compliance with regulation and Codes of Conduct.

2.    Social Services - a new section covering individual service contracts for clients which may be awarded under a set of certain circumstances within Social Care.

3.    Procurement Tendering Process - in particular more flexibility to be able to approach local and other Welsh suppliers for tenders up to £75k in value, up from the current £25k.

4.    Code of Practice, Ethical Employment in Supply Chains - a new section covering the Council’s commitment to consider a range of actions to ensure our internal and external supply chains operate under legal and ethical employment practices.

5.    Contract Management - a new section to cover how contracts should be managed following award of such contracts, to ensure the contract remains effective in delivering its required outputs for its full duration.

6.    Waivers - a new section to ensure officers understand the process should it be deemed necessary to request that CSO’s be set aside in certain circumstances.

The report further confirmed the importance that the Council’s processes and rules reflect the latest developments which affect local authorities; the Leader specifically referred to confirmation that the Council is embedding important updates such as the ethical employment in its supply chains and changing process which makes it easier to engage local and Welsh suppliers, whilst still ensuring value for money in how the Council purchases its goods and services.

The Leader commended the report to Cabinet and also that the updated CSO’s are reported to Council for approval. 

Decision:

Cabinet approved the report and for it to be reported to the next Council meeting.

The Leader introduced the report and confirmed the Regulation and Inspection of Social Care (Wales) Act 2016 (R&I) and the Social Services and Wellbeing (Wales) Act 2014 (SSWB) sets out the requirement for the Director of Social Services to produce an annual report setting out the performance of Social Services.

The intention of the report is not to detail process but to provide information for publication to a wide audience.  The report covered the year 2018/19 and set out the Director’s assessment of how well the Council had promoted and delivered social care services for Newport’s citizens and carers in need of care and support.

The Leader introduced the Cabinet Member for Social Services to talk through some of the headlines of the report to demonstrate the progress being made in the development of early intervention and prevention services and the work around integrating health and social care to build much needed additional capacity.

The Cabinet Member was pleased with the report which highlighted a lot of positive initiatives that Newport has made over the past year.

The Leader asked the current Director of Social Services, Chris Humphrey for her thoughts.  Mrs Humphrey confirmed the report showed the continuing journey that Social Services has been on for the last few years.  She commended the performance by all staff which reflects a huge amount of hard work that has been undertaken.

Cabinet Members applauded the hard work of all staff.

The Interim Chief Executive commended the collaborative work carried out with Education and Health to ensure joined up services to make lives better for some of the most vulnerable people in our society.

The Leader thanked the Cabinet Member for the leadership shown in this role and the Leader emphasised the difficult and challenging circumstances people find themselves in, Social Services colleagues work at the frontline of this. 

The Leader confirmed she had attended the Looked after Children’s Christmas Party; she congratulated the staff, all of whom show such empathy and compassion in the work they do.

Decision:

Cabinet endorsed the report.

Date of Next Meeting:  15^th January 2020, 4 pm, Committee Room 1, Civic Centre

The Leader presented the Cabinet Work Programme.

Decision:

Cabinet agreed the updated programme.