Cabinet: June 2010

Last Monday night's Cabinet was a very different animal.

It was Cllr David Eaves first Cabinet as Chairman - and what a different atmosphere prevailed.

Gone was the Alpha-male 'A Type' behaviour of the Commissar, and in was a much more collegiate and encompassing style.

Although seasoned watchers would have detected a note of nervousness in his manner, overall, it was a very much more relaxed and friendly meeting. It even had occasional flashes of humour.

So what was decided?

Well, as we set out in Snippets June 10, the first items were the reports from the Scrutiny Committees, then the additional spending on decorations at the Crematorium was approved (as expected) whilst it is out of action having the cremators replaced.

1). Draft Housing Strategy
The first of the main items was the Draft Housing Strategy which we thought needed a dose of looking at because so many of the issues it was based on have changed.

Well, there was more to come.

Queen Elizabeth Oades had asked a question. She wanted the draft to include a definitive statement that Fylde was not going to be part of the Growth Point Scheme. (This is the scheme where Blackpool wants to develop land within Fylde's boundary to help generate cash to improve the run down parts of Blackpool).

counterbalance broke news of this scheme back in Plans to Expand in November 2007, where it was slipped in to a Cabinet meeting as a late item, and the Commissar and his deputy said it was essential we got on board what was then the Growth Point Bid with Blackpool.

Since then we've tracked its progress with regular reports for readers, and we've watched the subtle changes taking place as Queen Elizabeth and Cllr Trevor Fiddler saw the threats this posed to Fylde and started to back-pedal on the idea.

The Commissar charged on blindly with his 'vision' to support the Growth Point Scheme of course.

We have no doubt that if he was in charge at last night's Cabinet, Queen Elizabeth would have been given short shrift and told (politely) to go play in the traffic.

But things have changed, and the Chairman referred it to Cllr Fiddler for reply.

He said he was very pleased that Cllr Mrs Oades had asked the question because it gave him the opportunity to make the position clear. He said the letter sent by (counterbalance's best mate) Eric Pickles telling all Councils  to disregard the housing numbers in the (now discredited) Regional Spatial Strategy had opened up a whole new ball-game.

He said we needed to make it clear to all concerned that we were not *allowed* (let alone willing) to have FBC land used by others for their benefit, and we would no longer be participating in the Growth Point Scheme.

We're pretty sure that, although it has never been published, the turning point in Fylde's position on this was when Cllr Fiddler insisted on having a top planning barrister's opinion as to whether it was lawful for FBC to allow Blackpool to benefit from development in Fylde, and got a "No" as the answer.

The Cabinet Chairman, Cllr David Eaves, then spoke to say in his view, Fylde's land was Fylde's land, and it would be developed by the decisions Fylde Council makes.

He too very much welcomed the changes being made by Eric Pickles and added that some had thought that the Growth Point and Multi Area Agreements were a prelude to something akin to the City of the Fylde (We have reported this several times as being what we believed to be the intent of the Commissar).

Cllr Eaves said he wanted to make something very clear. After expressing his passion for Fylde, he said: "The City of the Fylde is not going to happen on my watch"

Spontaneous applause broke out from the public gallery and from Council members of all parties who were listening to this, his first meeting as Council Leader.

A good start; we thought.

Cllr Eastham also had questions and comments. He said he supported the idea in the plan that there was a single housing market on the fylde coast and added there were thousands of low cost and affordable houses in south Blackpool within half an hour's travel of most of Fylde, and he felt this meant that we didn't need to go overboard on the affordable housing in Fylde.

Once again Cllr Fiddler weighed in with the argument that counterbalance has advanced for some time now, saying that the 'ridiculous' Housing Need / Demand Survey from Fordham Research has misguided the Council into believing that the need for affordable housing was greater than it really was, and that situation needed to be rectified.

He made the point that Fylde needed to provide houses for business leaders, citing examples of Manchester based businesses that have relocated here because Fylde provided a good environment for their homes and their businesses, and he indicated that he expected Fylde's new planning policies to reflect this approach.

If he manages to do this, it will be final closure on the policy that Ken Lee introduced to try and change the population profile of Fylde to something more - to use Lee's term - "balanced". (We'd describe it as more egalitarian)

Cllr Fiddler concluded the item by saying the Housing Strategy was a draft, and was still to be changed. He made one change himself when he proposed an additional bullet point to say that young people who are economically active are equally deserving of support when it come to housing.

This seemingly innocuous statement could potentially pave the way for future policy to support housing subsidies to young couples in work - perhaps from the Section 106 monies paid to FBC by developers.

2). Financial Strategy: Budget Outturn 2009/10
Cllr Small (Finance Portfolio Holder) was unable to attend the meeting, so Finance Officer Bernard Hayes presented the report. He said it showed, to their good fortune, an underspend of over £1.5m.

As we said in Snippets June 10, this isn't the good news that it appears. There's typically £400k - £500k underspend every year (in essence, spending departments believe they can get things finished that they run out of time for every year), and a cute decision-maker would allow for that in their budgeting, but to be fair Fylde has been in such a mess with its money that you couldn't be sure what was going to happen. But (on a budget of £11m), £1.5m is far too big an underspend for sense. It means a lot of things that have been budgeted for were not done, or the estimating was absolutely rubbish in the first place.

Mr Hayes deflected questions on this issue by majoring on the threat from Government of a 25% cut in Government grant that will be announced in October and saying that it was not yet clear whether it would be 25% overall, or whether the small part of the business rates returned to Fylde by Government would be cut as well.

He also noted there were 4-6 options being prepared as alternative ways of handing the OAP Bus concessions to LCC's control and that some would be better than others for Fylde.

Then he said FBC had budgeted for a 2.5% Council Tax increase, and a zero rate increase as headlined in the Coalition Government's Emergency Budget would give them problems, so he proposed putting £520k into an Earmarked Reserve to soften the impact of any cuts from Government.

He also confirmed they were working on ways to get all Fylde's spending above £500 published online (as we reported would happen in 'COINS for Cash')

Cleverly (we thought) he ended his report by saying that one of the biggest problems he had at present was finding places to invest any cashflow surplus that FBC had in its accounts using a Triple-A-Rated body. (We were going to suggest he could lend any spare cash to tiny Little Eccleston with Larbreck Parish Council, whose legendary housekeeping and prudent financial management enabled them to offer to make a loan to FBC when it was strapped for cash at the worst point in the Commissar's reign - but we thought better of it).

We think this was a clever move because it was a novel situation, and it distracted the attention of most of the Cabinet from the underspend. (Whether this was intentional or not we simply couldn't say)

But one Cabinet Member was awake.  Princess Karen Buckley.

She gently asked Mr Hayes when he first became aware of the underspend

 He replied that it "had started to show in the last quarter" and then proceeded to dance around on a pinhead trying to explain why this potential underspend had not been picked up in the budget monitoring and before the budget was set last year.

Despite our sometimes disagreement with her performance, we're happy to report that this time Princess K was on the ball, and with the countenance that has earned her the epithet of the 'Smiling Rottweiler' amongst some people of our acquaintance, she went for the jugular by saying "When we were setting our budgets we were not aware that things were so favourable, and if we had been we might have done things differently" and with a sweet smile, she turned away from him.

Members have to feel able to trust their officers and there's not enough of that sometimes at Fylde.

We're not saying here that any officer is setting out to deceive, but it's not unknown for local authority officers to think it's better if they (the professionals) are in charge of things, and councillors should just do what the officers recommend.

Usually this sort of thing is effected in long and complicated reports where, as a councillor, you lose the will to live before you're halfway through, and although all the information you need is there, it's presented in such a way that it is difficult to make sense of.

Some of the following might be a surprise to Councillors. It shouldn't be, because both they, and we, have had the figures in the reports. But to make them 'work', you might have to look at several sources and compile them as one information set to see the full picture

We'll start with a quick primer.

Fylde Council has two sorts of spending: Capital - which is intended for purchases that will last for longer than a year. (Typically this is purchases of land or buildings or vehicles or equipment that will last from 5 to 50 years). Capital Spending often funded by borrowing (like a mortgage when you buy a house) and the principal sum and its interest is paid by the taxpayers who 'enjoy' the benefit of that purchase over the years it will last.

Secondly it has Revenue spending. This is the 'housekeeping' money, and covers the day to day spending on wages and materials and transport and so on, to provide the services that we get, for the taxes we pay.

We're going to disregard the Capital side of things here, and focus on the Revenue.

Each year, officers work out what they need for their departments for the following year. This August, they will begin to think about the budget they need from 1st April 2011 to 31st March 2012 and they'll start to assemble costs and quotations etc.

By November, this year, that will be a pretty firm figure, and by Christmas, it will have been bounced around inside the Council offices, with finance people saying "you can't have that" or you have to take at least 5% off or whatever.

In December/January Members of  (as was Council, as is now) the Cabinet will get first sight of the draft budget, and will come to a view as to what they want to change. Finally, in March 2011, it goes to Council to be approved, and officers start spending from it on 1 April 2011.

But officers don't always 'spend up' on what they have been allocated for that year.

In fact, they mostly don't spend it all, because they always think they're going to get jobs finished before 31 March, but some always run out of time. That means there is (usually) an underspend.

So when the accounts close for the year, there is an adjustment to be made.

Some of this money is what is known as 'slipped forward' ie it's put into the next year's accounts to let the unfinished job be completed, but accountants generally don't like doing this, and officers often have to fight to get 'their' money slipped forwards into the next year's accounts.

But when there is a surplus, most Councillors think its paid into something called 'Balances' or 'Reserves' - and it is. But the thing many don't realise is that there is more than one 'reserve'.  There are quite a few of them. With (now) quite a lot of cash in them, and these are in addition to any money in the 'normal' revenue accounts.

In fact, since Mr Hayes came to Fylde, the range of 'reserves' and 'provisions' and such has increased.

Helpfully (or not) 'Reserves' are those sums set aside for purposes falling outside the definition of 'Provisions' and they include 'Earmarked Reserves' set aside for specific policy purposes, and 'Balances', which represent resources set aside for purposes such as general contingencies and cash flow management.

Because they don't appear on the normal spending papers, we've been tracking these Reserves since 2004, and we thought our readers might like to know the up to date position with them. The balance figures given below are as at April 2010. First off is the:

GENERAL RESERVE
This is defined as 'Unallocated monies potentially available for several purposes' and is also called 'Balances' There is a minimum recommended level (currently) of around £850,000, and last year's underspend of £152,000 has grown this reserve to £1,500,000.

Then there are the Earmarked Reserves - comprising.....

CAPITAL PROJECT RESERVE (Bus Money)
Just to confuse the issue, this is a Capital reserve, and is described as: Reserved from the revenue receipts on the sale of the Bus Company allocated to each area of the Authority. Balance to be expended in Lytham and St. Annes on schemes to be identified. But the location of expenditure was changed to "...schemes to be identified in Ansdell" in 2007/08 accounts. This reserve has not changed during 2009/10 and currently contains £22,000

BUILDING CONTROL REGULATIONS RESERVE
This is described as "A fundamental principal of the Building Regulations Scheme introduced 15 April, 1999, is that there is a three year rolling accounting period over which costs should equate with charge income. This reserve will assist in achieving that aim in future periods."  There was an overspend of £25,000 in this department during 2009/10 leaving a current balance of £3,000

REPLACEMENT SYSTEMS RESERVE
This is described as "Central Government has set targets for Electronic Service Delivery, 25% of services capable of electronic delivery by 2002 and 100% by 2005. The introduction of both new and replacement IT systems will involve significant implementation costs which must be met in the year as additional revenue expenditure." This reserve has not changed during 2009/10 and keeps its former balance of £84,000

PARKS & OPEN SPACES RESERVE
This is described as: "Developers who seek the adoption of areas of open space by the Council are required to deposit a commuted sum that is used to support additional grounds maintenance expenditure incurred by the Council following adoption." This reserve has not moved during 2009/10 and keeps its former balance of £39,000

BUSINESS IMPROVEMENT GRANT
This was split from a similarly named grant in 2007/08. It is now classed as a 'Revenue Reserve'. Its purpose is not defined. This reserve has not moved during 2009/10 and keeps its former balance of £34,000

REVENUES & BENEFITS SHARED SERVICE RESERVE
First appeared in 2008/09 as a reserve of £63,000. "The Council's revenues and benefits service is provided by Blackpool Council under a shared service arrangement. The shared service delivered an underspend during 2008/09, of which Fylde Borough Council's share was £63k. This reserve has been established to support continuing delivery of this service". This £63,000 reserve was spent during 2009/10 and now has a balance of £0

VEHICLE MAINTENANCE RESERVE
This  was created with £27,000 in 2008/09 and is described as: "to contribute towards the cost of vehicle maintenance repairs."  This reserve has not moved during 2009/10 and keeps its former balance of £27,000

LAND CHARGES RESERVE
This  was created with £28,000 in 2008/09 and is described as: "Surpluses generated on land charges set aside for reinvestment into the service."  This reserve had £14,000 spent during 2009/10 and now has a balance of  £14,000

ECONOMIC PROMOTION AND RECOVERY RESERVE
This reserve was established in order to support and promote economic recovery. Its balance is £40,000

COMPREHENSIVE SPENDING REVIEW RESERVE
Created at Cabinet on Monday, this is "a voluntary set aside established to enable the Council to prepare for future financial pressures in a planned and cost effective way."   Its balance is £520,000

CONCESSIONARY FARES RESERVE
Created at Cabinet on Monday, this is "a voluntary set aside in respect of the concessionary fares scheme for the potential repayment of an additional reimbursement rate which is still subject to a legal challenge from Bus Operators." Its balance is £177,000

PERFORMANCE REWARD GRANT RESERVE
This looks like the money we couldn't find when the sums didn't add up in the Cabinet Agenda report. It is detailed in last Tuesday's Audit Committee report, where it is described as "a voluntary set aside of performance reward grant (PRG). Although Fylde Borough Council is the Accountable Body for the Fylde PRG, the Fylde Local Strategic Partnership are the appointed decision making body in relation to the allocation of the PRG" We're still a bit unsure exactly what it is, but it looks as thought its on Fylde's accounts, but it's going to be spent by the 'Fylde Local Strategic Partnership' Quite how it comes to arrive in Fylde we're not sure, but the balance held is  a whopping £479,000

That's the end of the Earmarked Reserves. Next  are the "Provisions."

PLANNING DELIVERY GRANT EXPENDITURE
For the fulfilment of obligations relating to Planning expenditure. This held £113,000 in March 2009 which was all spent during the year. Current balance: £0

HOMELESSNESS
For the cost of potential repairs to fulfil obligations to private sector properties used for temporary accommodation. This held £20,000 in March 2009 which was all spent during the year. Current balance = £0

Finally, we have the

LONG TERM CREDITORS
This heading now holds what is known as the "Section 106 Money" which was a 'Provision' in 2007/08 and was reclassified. It is for "the fulfilment of obligations under Section 106 Agreements following Planning Approvals. During 2008/09 these were reclassified as Long-Term Creditors, in line with the requirements of the Statement of Recommended Practice 2008 (SORP 2008)." which to you and I means chiefly the money that was paid to the council by developers in lieu of on-site "Affordable Housing"

It's current balance is £2,456,000

As you can see, the financial situation is improving since the Commissar stood down.

Dated:  29 June 2010