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Is financial ignorance bliss for councillors?

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councilTHE COUNCIL’S budget is essentially the same as our household budget: we get a salary and/or pension/benefits out of which we pay our expenses, and with a bit of luck, have some disposable income for non-essential ‘luxuries’ such as holidays, and if we are really fortunate, are able to set aside some savings. The Council gets its income from a variety of sources: Rate Support Grant (our income taxes), Non Domestic or Business Rates (paid by local businesses), Council tax paid by us, and direct charges from “customers” of Council services, for example Car Parking and some Adult Services, e.g. Day Centres and Meals on Wheels. The Council can also receive direct grants for providing specified services. It can increase its income yields by putting up the Council Tax and direct charges. From this collective income, the Council budgets and prioritises how much it can spend on providing our services. Much in the same way that we may be fortunate enough to build up a savings pot, the Council can build up reserves, which are required to even out peaks and troughs of expenditure over a number of years, or to put by for specific purposes or projects. Like us, the Council can also borrow money to fund projects that have a ‘life’ over a number of years. However, unlike us, it is not allowed to finance expenditure in the current year from borrowing.

Leaving it to officers 

It is impossible for Councillors to authorise every payment the Council makes. For day to day operational purposes, the Cabinet therefore authorises or delegates spending powers to unelected officers to incur expenditure during the year on services within the Council, approved Budget allocations. The Cabinet has delegated wider powers to the Director of Finance for the allocation and use of reserves, both Capital and Revenue. Every three months, throughout the year, officers are required to report the financial position to Cabinet and Scrutiny Committees, plus a final outturn monitoring report at the 12 months stage. In theory, these reports enable financial performance to be monitored, by elected Councillors, against the approved annual budget. Any corrective action considered necessary as proposed by officers should be considered and agreed by Cabinet. However, these reports are focussed at Net expenditure level, which masks the true level of services provided and expenditure incurred at Gross Expenditure level. Any specific remedial action necessary is therefore not fully reported for approval. While the position on spending against the Council’s approved budget must be reported to Cabinet and Scrutiny Committees on a three monthly basis, the position on reserves is only reported to Cabinet/Council at Annual Budget time, and annually to the Corporate Governance Committee as Draft Accounts pre-audit, and then as the Final Audited Accounts.

Revealing Reserves 

On September 29, the Council’s Corporate Governance Committee received a report on the Audited 2013/14 Accounts, which included, a table of Usable Reserves on page 64. Page 63 provides description of the individual reserves for those interested. This is the only comprehensive presentation where all reserves are reported on one page. Categories of reserves are subject to different controls. The Council is required to carry annual Working Balances, and the Auditor comments on the adequacy of these reserves, provided specifically in order to meet urgent, unforeseen contingencies or circumstances. The Education Reserves are primarily under the control of individual schools. The Children and Families Overview and Scrutiny Committee November 10, received a comprehensive report providing information on the amount of balances held by schools over the last three years with a commentary on future prospects. The Table shows that the Council had a total Earmarked Capital and Revenue reserve balance of about £50m under its direct control at 1 April 2013, rising to £56million at 31 March 2014, allocated for the purposes shown. To set these amounts in some sort of context: the Council sought to raise £40.5m from Council Tax in 2014/15 (an increase of £1.5million over 2013/14) and £13.4million from its Discretionary Direct Fees and charges, (an increase of £1.6million over 2013/14). Of particular note and significance, is the trail of money movements between The Pay and Grading Reserve and 21st Century Schools Reserve during 2013/14: all happening without councillors being informed but within the delegated authority of the Director of Finance.

Moving money

 Some years ago, in common with other Councils, grants were made by the Welsh Government, staged over a number of years, to fund the likely cost of the Equal Pay/Pay and Grading reviews. In total, by March 31, 2012, our Council had received around £11.5m by grant, which was not hypothecated, and therefore did not have to be used for the purpose for which it was given. During 2012/13, £4.5million was charged against this provision in settlement of Pay Awards, leaving a balance of £7.0million – £5.6m of which was allocated to the Pay and Grading Earmarked Reserve on March 31, 2013 (let’s leave the unallocated amount of £1.4m ‘floating’ for the moment, I have yet to follow this through, suffice it to say that there is another ‘hidden’ category of reserve or Provision). The £5.6million can be picked up on the accompanying table, where the line shows a further contribution of £0.5m coming from revenue accounts, providing a total available Pay and grading reserve of £6.1m. From this sum, a contribution of £2.335million to revenue accounts was made in 2013/14 to meet the cost of further settlement of awards, leaving a balance of £3.765million at 31 3 2014 available for Pay and Grading. In total, an amount of £7.3million has been paid in pay settlements out of the total grant of £11.5million, leaving a balance of Pay and Grading Grant money of £4.2million. We have been told by officers and councillors that the Council could not afford to pay out more. While it may be true that the Pay and Grading Review was conducted fairly, an Appeals process was instigated at the behest of indignant Councillors. I understand that Appeals are still being considered and settled. I am not aware that the financial position on Pay and Grading has ever been explicitly reported or that appropriate questions have been asked by Councillors. I am sure that if I have got this wrong, the Council would be only too pleased to clarify the position.

21st Century Schools 

The table reveals that £2.861million was allocated out of the Pay and Grading Reserve into the 21st Century Schools Reserve, leaving £0.9million available on March 31, 2014 to settle Future Pay and Grading appeal awards. The 21st Century Schools programme represents a significant investment by the Council and has been agreed as a priority. Turning to the 21st Century Schools Reserve, an initial £8.514million reallocation of balances out of other earmarked reserves in order to prime the 21st Century Reserve was approved by Council in February 2011, as part of the 2011/12 Budget. Starting with the £8.514million pump priming, further contributions from revenue service accounts of £4.526million in 2011/12, £0.174m in 2012/13 and £3,519m in 2013/14, which, with the addition of the transfer during 2013/14 of £2.861million from the Pay and Grading reserve, leaves the 21st Century Schools balance on March 31, 2014 standing at £19.594million. With services being under such financial pressure, the intention is to fund the Council’s share of this significant programme from Capital Receipts (proceeds from the sale of Assets) and Borrowing.

No questions asked 

The Council, when setting its budget, rarely, if ever, considers the allocation and level of reserves. With an apparent ability to increase reserves by a total of £6.0million during £2013/14, at a time when targeted budget cuts of £1.6million were also achieved, it is perhaps time that councillors took an interest in the allocation and level of reserves. Perhaps more to the point is the question of how service budgets, under pressure, can make contributions into earmarked reserves. By amending the Council’s Constitution it is possible for the Council to redefine the terms of delegations given to Directors and the Director of Finance, and regain a measure of financial control for themselves. There may well be good arguments for doing this, in the light of the severe financial constraints the Council faces, for the sake of openness and transparency and democracy.

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Five shouts in five days for Lifeboat crews at Angle

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ITS BEEN a really busy week for the crews at Angle with their first tasking to the 39 meter 300 tonne tall ship on Monday evening with engine failure and taking on water.

Crews then paged again in the early hours of Wednesday morning to a 11 meter sailing catamaran becalmed and low on fuel.

The training day Thursday was interrupted just after 12:30 PM with a tasking to a tender with three people on board that had upturned just off St Brides Haven.

Little & Broad Haven Lifeboat was also tasked along with Dale Coastguard.

Little and Broad Haven Lifeboat reached the three casualties and took them to shore where they were passed into the care of Dale Coastguard. Angle Lifeboat was stood down as it was passing through Jack’s Sound.

As the Lifeboat was returning from the shout another tasking request came through. A tanker had spotted an unmanned RIB approximately 10 miles SW of St Ann’s Head. Once on scene, after some investigation the RIB was believed to have come from a mooring and no people were missing. The Lifeboat towed the RIB back to Angle.

The Lifeboat was rehoused shortly after 4:00 PM

The 5th shout for Angle Lifeboat this week.

This was a large multi agency search.

The crew were paged at 09:35 AM to assist Tenby Lifeboats RNLI ALB and inshore Lifeboats to search for a missing person in the water following a report from a fisherman on rocks near Manorbier that he had lost sight of a person that had been rowing a dinghy toward shore and the occupant may be in the water. HM Coastguard Tenby had also been tasked to the search

The dinghy was handed over to Tenby inshore lifeboat crew after being picked up by a Range Safety boat who then brought it into the awaiting police at Manorbier Beach.

Coastguard Rescue Helicopter 187 from St Athan and St Govans Coastguard Rescue Team had now also joined in the search for the missing person.

After several hours searching a man approached police at Manorbier, stating he’d been on the vessel off Manorbier, had got into difficulty and ended up in the water.

With the casualty now safely ashore, all units were stood down at 12:27PM.

Angle Lifeboat then headed to Tenby Harbour to pick up some sustenance, a fizzy drink and a chocolate brownie, before heading back to Angle and rehousing at 2:31PM. The lifeboat was refuelled and given a well earned wash ready for the next tasking.

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A40 closed at Scleddau due to collision between car and motorbike

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EMERGENCY SERVICES have shut the A40 at in Scleddau due to a serious road collision.

The accident happened just before 2pm. The Herald understands that the collision involved a motorcycle and car at a junction near The Gate Inn public house.

Police said: “Emergency services are currently on scene and dealing with the incident. Please find an alternative route if possible. Update to follow.”

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Moley’s Ambassador March to support those who have lost a child

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ON SATURDAY (Jun 19), Andrew Cole (aka Moley) will set off on a 24 hour walk around Pembrokeshire with the aim of doing as many miles in as little time as possible. 

Moley is proud to have recently been made ambassador of the charity ‘2 Wish UponAa Star’ an organisation dedicated to supporting families that have lost a child under 25 years of age.

He will be setting off at 6am in the morning from Neyland and walking all day and night, finishing at 6am the following morning.

2 wish upon a star was set up by Rhian Mannings, who set up the charity after losing her own son.

By celebrating the lives of those lost, and offering support to families through their grief; Rhian and her team offer an essential service to the community and those families who have suffered the devastation of losing a loved one.

Appealing for support from the people of Pembrokeshire he said: “Please give generously to support the wonderful work of Rhian and her team. Also, if you happen to see me in the day, feel free to give me a beep of encouragement’

“If you would like to donate to Moley, and support the charity, you can visit his JustGiving page.”

https://www.justgiving.com/fundraising/moleycole

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