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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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News

Search efforts continue for missing teenager Luke Stephenson

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THE family of missing teenager Luke Stephenson have issued a heartfelt plea to the public to aid in the search for their son.

Luke, 19, was reported missing on April 13 after last being seen near Pembrokeshire’s Hobbs Point. Despite the multi-agency search operation being called off on April 19, efforts by police divers and helicopter searches have continued around the Cleddau sporadically.

The teenager’s disappearance triggered a huge emergency services, involving local police, the National Police Air Service, and coastguard teams.

Luke was last noted wearing a distinctive long grey coat, black trousers with a white stripe, and black trainers, also with a white stripe. The family have this week circulated a new photograph of the grey coat to assist in identification efforts.

While the formal search has been scaled back, the police remain committed to following up on any leads. “Whilst this is an extremely difficult decision to make, we are satisfied that we have done absolutely everything we possibly can to try and locate Luke,” a police spokesperson stated. Periodic searches have since been conducted around the area he was last seen, based on ongoing reports and sightings.

Luke’s family continues to hold on to hope, describing him as jovial, kind, and humorous—”a typical 19-year-old lad.” Beth Parker, a family friend, has been particularly active in rallying support from the community. “Calling all dog walkers, fishermen, and anyone able to help,” she posted on social media, encouraging those who frequent the coast to remain vigilant and report any potential clues.

The family has also requested the public to check personal CCTV and doorbell footage, especially from the night of Luke’s disappearance. This initiative aims to gather more information about his movements or possible whereabouts after he was last seen.

Several reported sightings, including a potential sighting of a person in the water near Valero and subsequent alerts, have unfortunately not led to any substantial findings.

Authorities urge anyone with information, no matter how minor it may seem, to come forward. Contact can be made via the Dyfed-Powys Police’s dedicated online portal, email, or phone line. There is also a provision for those who are deaf, hard of hearing, or speech impaired to text the non-emergency number.

The police said to The Pembrokeshire Herald on Tuesday (Apr 30): “While the multi-agency search for Luke was concluded on the April 19, periodic searches of the area around Hobbs Point and the river have been completed by the National Police Air Service and the force Dog section over the last week. Further enquires or searches will be led by any information received.

Anyone who has any information is asked to contact police , either online at https://bit.ly/DPP101Online, by emailing [email protected], or by calling 101. If you are deaf, hard of hearing or speech impaired text the non-emergency number on 07811 311 908.”

As the search enters another week without resolution, the community and authorities alike hold onto hope, spurred by the family’s resilience and the continued efforts of search teams.

The focus remains finding Luke, a much-loved young man whose absence has left a void in the community.

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Family allowed to stay living at ‘Love Shack’ near Narberth

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A FAMILY can stay in their Pembrokeshire ‘Love Shack’ built without permission after being given the go-ahead by county planners.

Estelle Burton and family had applied for a certificate of lawfulness for her daughter, son-in-law and their three children to stay at The Love Shack, Middle Redford Farm, Princess Gate, near Narberth; the family having lived on site for many years.

An application for a certificate of lawfulness allows applicant to stay at a development if they can provide proof of occupancy over a prolonged period, normally in excess of four years.

A supporting statement by agent Hayston Developments & Planning Ltd says: “The land in the client ownership totals circa 20 acres and includes a farmhouse to the north (where Mr and Mrs Burton live), several farm sheds, outbuildings and the [application], which is lived independently by Mr and Mrs Dean and Kimberley Bethel and their three children. The farmhouse only has four bedrooms and as such there is no room for any other family members.”

It adds: “The purpose of this application is to establish the fact that an adapted four-bedroom dwelling structure which is fixed to the ground has been the permanent home of Mr and Mrs Bethel for a period in excess of four years prior the date of this submission. If that is the case, the dwelling would remain immune from enforcement action.”

The statement provides witness statements and letters setting out a timeline of occupancy “and the various incremental works which had been made to the lodge to effectively create a fixed structure and permanent dwelling on the site”.

“The overall aim of the works were to make it more structurally stable, particularly during poor and windy weather, and to provide a warmer internal living environment with the existing log burner plus the addition of full cladding. And furthermore, the addition of more internal space through the installation of the two extensions.”

It lists a timeline of works going back as far as 2006 with a wooden chalet, with the later static mobile home, known as the ‘Love Shack’ on site in 2018, being used for day-to-day living, followed by works including satellite TV and phone connection, a second chalet adjoining, and two extensions.

An officer report recommended the certificate of lawfulness be granted on the basis it had “been on the site and occupied as an independent dwellinghouse for a period of time in excess of four years or more preceding the date of the application for this certificate”.

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Community

Community pub hopes for closed Pembrokeshire inn dashed

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HOPES a closed south Pembrokeshire inn could become the latest community pub in the county have been dashed after a lack of funds were raised; the owner now planning to turn it into two homes.

Earlier this year, The Parsonage Inn, St Florence closed its doors to the public, and a public meeting – at the behest of St Florence Community Council – was held in early February with hopes it could be run as a community venture.

Western Telegraph: The Parsonage Inn, St Florence. Picture: Google Street View.
In the last 20 years has seen eight tenants, with the closure coming about “due to the prolonged and sustained pressures faced to both the economy though the cost-of-living crisis with less trade, along with increases in utility, food and alcohol bills, as well as increases in business rates, minimum wage increases and further legislation on waste disposal”.

Local county councillor Rhys Jordan, who supported the meeting, said there was a strong desire to see The Parsonage Inn reopen its doors, but there was a need to temper enthusiasm with realism.

Western Telegraph: The packed meeting to discuss The Parsonage Inn, St Florence.
However, hopes the Parsonage would become a community pub have come to no avail, as just three per cent of the funds needed were raised.

Owner Daniel Scriven is now hoping, in a recently submitted application, to turn the pub into two homes.

Referring to the hopes The Parsonage could become a community pub, an application before Pembrokeshire planners says: “Following its closure in January 2024 a community meeting was held on February 5 in the village hall to discuss its future, during the meeting the challenges facing the hospitality industry were discussed and the community reviewed raising funds to take the Parsonage Inn into community ownership.

“Regrettably we understand following the meeting it has become evident that only three per cent fundraising of the asking price has been raised and no offer or approach to the applicant/owner has been made by the community to the owner to put forward a viable proposal, it would therefore appear unviable.

“Following its closure in January 2024, in March 2024 the final tenant along with some members of the community have opened a small community social club in the village hall during evenings on a more ad-hoc basis which would appear more reflective in scale and usage to the community it serves, alongside The [nearby] Sun Inn.”

The application will be decided by county planners at a later date.

Community pubs have become something of a Pembrokeshire story, with the Tafarn Sinc, Rosebush becoming community-owned after a huge fund-raising effort that attracted worldwide interest – including support from Hollywood star Rhys Ifans.

Other community pubs include The Cross Inn, Hayscastle, and the Tafarn Crymych Arms, Crymych, where volunteers raised more than £200,000 to buy the pub.

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