Meeting documents

Shared Services Joint Committee
Monday, 24th January, 2011

Place: Cross Room, Civic Centre, West Paddock, Leyland PR25 1DH

 Present: Councillor Mr K Joyce (Chorley BC) (in the Chair)

Councillors Mr C J Clark (South Ribble BC), Mr A Cullens (Chorley BC), Mr P Mullineaux (South Ribble BC) and Mr S Robinson (South Ribble BC)
 In attendance: Garry Barclay (Head of Shared Assurance Services), Susan Guinness (Head of Shared Financial Services), Gary Hall (Director of Transformation-Chorley BC), Andy Houlker (Senior Democratic Services Officer-South Ribble BC) and Mike Nuttall (Chief Executive-South Ribble BC)

Also in attendance: Fiona Blatcher (Auditor/Engagement Lead (Audit Commission))
 Public attendance: None
 Other Officers: None

Item Description/Resolution Status Action
25 Apologies for Absence

There were no apologies for absence.
26 Declarations of Interest

There were no declarations of interest.
27 Minutes of the Last Meeting
Minutes attached

That the minutes of the meeting held on 18 October 2010 be signed as a correct record.
28 Annual Audit Letter 2009/10
Annual Audit Letter 2009/10 attached

Fiona Blatcher (Auditor/Engagement Lead (Audit Commission)) presented the Annual Audit Letter 2009/10 which was the formal signing off of the committee?s accounts. This was the second such report and the first for a full 12 month period which had again received an unqualified audit opinion. Looking ahead there was recognition of the impacts of the Comprehensive Spending Review and the change of Financial Management System.

In response to an enquiry whether there would be any comments by the Auditor on the savings achieved by the two councils through the joint committee, this might be referred to under the Key Lines of Enquiry but the Auditor felt it was important to show how the committee served the two councils.

The committee felt that the report showed that the councils were doing the right things well which was a credit to the staff involved.

That the committee notes the Annual Audit & Inspection Letter 2009/10 and thanks the Auditor/Engagement Lead for her attendance.
29 Audit Fee & Opinion Plan 2010/11

Fiona Blatcher (Auditor/Engagement Lead (Audit Commission)) then gave a verbal update commenting that normally the committee would have received a detailed plan indicating how the audit for 2010/11 would be conducted. Whilst there had been a possibility that Audit Commission rule changes would have removed the external audit requirement this would not take effect for 2010/11 but may have consequences for the 2011/12 audit.

There would be a small rebate from the Audit Commission to principal local authorities (not joint committees) in recognition of the change in work on Value for Money (VFM). Whilst there would be no reduction for 2010/11 for 2011/12 there wouldn?t be a requirement to provide a VFM conclusion for bodies under ?6.5M and the fee for the audit of the joint committee was expected to be ?6200 (as opposed to ?7600) subject to consultation and amendment to the councils? shared services agreement.

Whilst it had been announced the Audit Commission would disband in December 2012, its abolition required legislation as did the creation of a new audit framework. Therefore it might be December 2013 before the Audit Commission ceased.

Mrs Blatcher added that she needed to inform the committee about the contents of the audit for 2010/11. The committee felt this could be verbal at the meeting and if subsequently decided appropriate a report be submitted to the next meeting. The action plan would include:
 Audit fee ?7645
 Identify and bring to attention any specific risks
 Approach to the audit (as to that for the respective councils)
 Check financial figures for the joint committee
 VFM (slightly changed criteria)
 Reliance on the councils? Internal Audit Service
 Application of the concept of ?materiality? during the audit

In response to an enquiry Ms Blatcher commented that at present to remove the requirement for an audit in 2011/12 there needed to be a change in the how the joint committee discharged the relevant services under the shared services agreement. At present the committee had delegated responsibility to deliver those services, determine the budget indicating to the two councils their respective contributions and ability to generate reserves (albeit not used or envisaged). Mike Nuttall (South Ribble BC) commented that whilst not loosing the spirit of the role of the committee a draft amendment to the agreement was being drafted for submission to the Joint Committee and both councils? Executives. Whilst this would probably remove the need for a formal audit in the future it was important for there to still be an independent check/balance of this agreement and its services.

That the committee notes the update and thanks the Auditor/Engagement Lead for her attendance.
30 Performance Management Report
Performance Management Report attached

The committee received the third performance management report for the current financial year, as at the end of November 2010. It illustrated the progress made so far against the key service developments, performance indicators in the 2010/11 Business Improvement Plan (BIP) and the 2010/11 budget.

There were 25 of the 34 key projects for this year had been completed or were on track and plans were in place to put those remaining to be brought back on course. Similarly only 8 of the 40 performance measures had ?red? status (more than 5% off target) for which there were mitigating circumstances in each case. Full statements on performance and targets were detailed in Appendices 1 and 2 to the report. The partnership was still in line to deliver a balanced budget for the year (2010/11) which included a savings target of ?50,000.

Work was progressing well on the Workforce Development Plan and the Customer Survey, whilst there had been a shift in Shared Financial Services of the completion of two projects that had moved from Amber to Red (due to other additional work not originally foreseen). In view of the impact of the Comprehensive Spending Review both councils? budgetary processes had been started very early. Both councils had detailed budgets prepared when the CSR was announced to make sure they were ahead of the game to make savings.

In response to an enquiry regarding the higher than target figure of credit notes as a percentage of total customer invoices raised, it was explained this was largely due to allotment invoices. Apparently when a tenant reached a certain age the fee due reduced but the age had not initially been known and credit notes had been raised for the whole amount and replacement invoices issued. It was not known at the meeting why this had arisen this year but details could be provided.

The cost of the ISO 9001 accreditation was approximately ?2-3000 but provided a huge benefit across Assurance Services.

Arrangements to procure a single insurance broker under a combined agreement for the two councils had been completed (Jardine Lloyd Thompson). Whilst there were currently separate policies, both would be reviewed at the end of the financial year and whilst risks will continue to be profiled separately there was scope to combine the totality in one tendering exercise and reduce the fee (and its administration).

The committee was advised that the ?red? project/task to review the option to apply VAT to land and property transactions had been completed.

In response to a comment regarding approval of the re-structuring of the Shared Financial Services, this had been approved by all relevant committees at both councils and posts had been selected and those staff who had expressed an interest would shortly be interviewed. Also the project on re-structuring the councils? revenues and benefits services was progressing well for completion by 1 April 2011.

That the committee notes the progress made and looks forward to receiving a further update at the next meeting.
31 Business Improvement Plan & Budget 2011/12
Business Improvement Plan & Budget 2011/12 attached

The committee received the Business Improvement Plan & Budget 2011/12. 2010 had been a challenging year set against the financial climate. However, the vast majority of the service development projects for the year had been completed or on track and, almost all the key performance targets were on course to be achieved.

The services had achieved significant savings during the year and against a worsening national financial climate and had identified ways of reorganising the services from 2011/12 onwards. This would deliver ongoing greater efficiency improvements and savings whilst maintaining current service levels. The main service level successes in 2010 were indicated on page 5 of the report which included:
 closure of accounts and production of three statutory Statements of Accounts to he most earliest timescales
 successful development of the Financial Management Information System and significant progress implementing this across the partnership
 significant procurement savings achieved exceeding set targets

Whilst the majority of original risk issues had been mitigated, the updated risk register detailed in Appendix 1 to the report showed those were action was still in progress along with emerging risks and opportunities. The key risks and opportunities at this stage were listed on page 6 of the report and included:
 developing the Management Accounting Function at both councils adding value
 developing the Workforce Development Plan
 workforce succession planning and developing managers and staff
 increased focus on exploring opportunities to grow the service

In response to a comment that whilst salary costs from 2010/11 to 2011/12 had reduced this did not appear to be reflected in the leasing/insurance costs, it was explained that a member of staff had decided to take up the option of car leasing and the insurance costs was a matter of the timing of renewals (which should reduce).

It was noted that councils had a duty to promote business continuity and emergency planning in the local business community and it was wondered how it was proposed to do this. The committee was advised that previously this had been reported through community business groups, local strategic partnerships and the internet. Whilst councils had this responsibility under the Civic Contingencies Act, it was only advisory. The councils were increasingly working in partnership and needed those partners to also have good governance arrangement in place and were included in the terms of contracts.

In response to an inquiry on page 22 of the report regarding ?achievement of industry investment benchmarks? the committee was advised that the partnership would raise its game to achieve this key measure.

In respect of page 10 of the report and ?failure to embed the new financial systems at both authorities? whilst this project was nearing conclusion this was still a high risk because of the high impact any problems with its implementation would have on both councils. Whilst Chorley BC had now been working with this system for a number of years there would also be a cultural change in addition to a process change for South Ribble BC. There would be greater self service by those using the system involving a different way of operating and this carried a risk which was being managed as best as possible.

1. That the committee recommends the Executives of both Chorley and South Ribble councils adopt the draft Business Improvement Plan and Budget for implementation by the partnership in 2011/12; and
2. That the Chief Executive and the Director of Transformation in consultation with the Chairman and Vice-Chairman of this committee be given delegated authority to incorporate any residual information or amendments to the Business Improvement Plan and Budget.
32 Forward Plan
Forward Plan (2M/bytes) attached

The committee received a copy of the Forward Plan.

That the committee's Forward Plan be noted.
33 Exclusion of Press and Public

RESOLVED: that the press and public be excluded from the meeting during the consideration of the following item of business as they involve the discussion of information which was defined as exempt from publication under paragraph 4 of Part I of Schedule 12A of the Local Government Act 1972.
34 Shared Assurance Budget 2011/12

The committee considered a report following changes to the councils? obligations as a result of the change of government, such as the abolition of Comprehensive Area Assessment and Use of Resources Assessment. This had given the councils? an opportunity to re-assess and concentrate on core audit activities and around risk.

That the recommendations as detailed in the report be recommended to the Cabinet of South Ribble BC.

  Published on Friday 4 February 2011
(The meeting finished at 4.39pm)