To submit the report of the Head of Finance.
Minutes:
Submitted - the report of the Head of Finance Department noting that in
accordance with the requirements of the Local Government (Wales) Measure 2011, that
the Audit Committee was expected to scrutinise some financial matters including
budget monitoring reports, when appropriate.
The Cabinet Member
for Resources set out the context and elaborated on the content of the report submitted to the Cabinet on 22 November 2016. Attention was drawn to
the following decisions for the attention of the committee to scrutinise -
“To accept the report on the second quarter
review of the Revenue Budget (position as at 30 September 2016) and consider
the latest financial situation regarding the budgets of each department /
service, and ask the Cabinet Members and the relevant heads of department to
take the appropriate steps regarding matters under their leadership/management.
·
To
transfer (£135k) from a corporate budget to the Adults, Health and Well-being
Department to finance the additional costs resulting from the change in
charging for the first six weeks of residential and nursing care.
·
To allow
the Regulatory Department to use (£200k) of their underspend
to finance specific plans to improve the condition of car parks.
·
To
transfer (£300k) from the Regulatory Department to the Corporate Redundancy
Fund to assist with the changes facing us as a Council.
·
To
harvest (£300k) from the favourable Council Tax collections, and (£290k) from
the Benefits underspend, together with (£200k) of the underspend included
within 'Other', and transfer as follows:
- use (£20k) of the underspend as a financial
contribution to the independent Harlech Swimming Pool
as a one-off bridging payment for the period to 31 March 2017, in accordance
with the Cabinet decision on 4 October 2016.
- use (£135k) to finance the financial
obligations of the change in the Care Act 2014 by the Adult, Health and
Well-being Department.
- the remainder of (£635k) to
be set aside in the Transformation Fund”
The Head of
Finance Department explained that finance harvested was used for Council
priorities. The Departments and Cabinet Members were thanked for their
budgetary management.
During the ensuing
discussion officers responded to members' enquiries as follows:
·
In terms of the fact that closing tourist
information centres could affect the income received in car parks, a
substantial impact was not anticipated as there was a movement towards booking
accommodation on-line;
·
In terms of the Maritime Service's overspend of
£108,000, Hafan Pwllheli
had been taken in-house in 2007 prior to the financial crash in 2008, and it
could not be anticipated whether or not the financial position would have been
better if Hafan would have remained within the
management of a private company as there was less demand with more supply. The
Economy and Community Department could be asked to examine the option of externalising
Hafan, but the situation had become more complicated
since the time of transfer, as the management of Hafan
and the Harbour had been combined, and the emergence of Plas
Heli;
·
That parking fees made up most of the income under
the 'Parking and Parking Enforcement Services' heading rather than parking
fines. After increasing the number of car parks where a fee was charged, as
well as the high number of visitors, income had increased;
·
Following the permanent appointment of the new Head
of Department and Senior Managers, that the Adults, Health and Well-being
Department was re-designing its savings programme. It
was ensured that the underachieving situation was being addressed;
·
That underspend was anticipated under the Post-16
Services heading in the Children and Supporting Families Department following a
current reduction in the demand for Post-16 support plans.
A discussion was
held on Hafan Pwllheli
noting that the Economy and Community Department should be asked to provide
information on the situation prior to when it was taken in-house and on the
current situation in terms of the financial position, user numbers and
moorings. The Audit Manager noted that an audit was being held in Hafan Pwllheli and one element
considered was the arrangements for paying fees and the difficulties in terms
of establishing a direct debit payment arrangement which was likely to have an
impact on income.
A member noted
that the situation should be examined in terms of taxing caravans as some
caravan sites were open throughout the year and that their owners used services
but did not contribute bearing in mind that the Council was considering
charging a premium of 50% on second homes. In response, the Head of Finance
Department noted that the Council had the right to tax a property that was a
second home but in terms of caravans they were included in the caravan site's
assessment in its entirety in terms of business rates. It was added that a
letter had been sent requesting powers for the Council to charge a different
tax but only powers in terms of second homes had been received. The Council was
operating within the regulations.
The Cabinet Member
for Resources noted that the business rates system was a national system. A
member noted that a scrutiny investigation should be held in relation to
caravan site tax arrangements similar to the one undertaken on holiday homes.
In response, the Head of Finance Department noted that the Holiday Homes and
Taxes Scrutiny Investigation had suggested that the Council used powers to
charge a premium on second homes and that the Council used a proportion of the
income tax to provide affordable housing. It was noted that this would assist
the Welsh Government to ensure more affordable housing for local people and it
would be attempted to convince them with other aspects of the rateable agenda
asking for planning powers for the Council in respect of domestic housing used
as holiday homes rather than the existing arbitrary system.
In response to members'
concerns in terms of charging a premium on second homes, the Cabinet Member for
Resources noted that the Holiday Homes and Taxes Scrutiny Investigation had
investigated the concerns in detail.
The Senior Manager
- Revenue and Risk explained that caravans that had been granted planning
permission to be used as a home were taxed in accordance with Council Tax
arrangements and a premium could be charged, whilst a premium could not be
charged on any caravan where a planning condition prevented individuals from
living there for at least 4 weeks a year.
RESOLVED:
(i) to note the situation and the relevant risks in the
context of the Council’s budgets and its departments;
(ii) to ask the Economy and Community Department (with
support from the Finance Department) to submit information to the Committee on Hafan Pwllheli prior to when it
was taken in-house and on the current situation;
(iii) to ask the Corporate Scrutiny Committee to consider
undertaking a scrutiny investigation in relation to caravan site tax
arrangements.
Supporting documents: