Full Cabinet – 8 December 2010
PRESENT: Councillor L Foster (vice-chair) in the chair.
Councillors Carlile, Gosling, Regan and Swift.
Councillors Collinson, Wilson and Whiteley also attended the meeting.
Simon Driver, Will Bell, Mike Briggs, Jenny Couch, Frances Cunning, Keith Ford, Denise Hyde, Neil Laminman, Geoff Popple, Paul Savage, Chris Skinner, Dave Watson, Mike Wedgewood, Mike Wood and Mel Holmes also attended the meeting.
The meeting was held at Pittwood House, Scunthorpe.
909 DECLARATIONS OF PERSONAL OR PERSONAL AND PREJUDICIAL INTERESTS – There were no declarations of personal or personal and prejudicial interests.
910 MINUTES – Resolved – That the minutes of the meeting of cabinet held on 29 September 2010, having been printed and circulated amongst the members, be taken as read and correctly recorded and be signed by the chair.
911 (31) OUTSTANDING ACTION FROM PREVIOUS MEETINGS – The Service Director Legal and Democratic submitted a report which contained a schedule of outstanding issues on which cabinet had requested reports to future meetings.
Resolved – That the report be noted.
- A 26 per cent real terms reduction in revenue grant
- A cash freeze on core school funding per pupil, supplemented by a new pupil premium
- Some additional funding for social care
- The removal of restrictions on how council spends certain ring fenced grants, and
- A 45 per cent reduction in capital funding
This would allow the council to make broad assumptions about the funding it would receive. Detailed figures authority by authority would be part of the local government settlement which was expected in early December. The Service Director update cabinet orally at the meeting.
In essence, the spending review implied a £20m funding gap on net revenue spending, with further reductions in some specific grants.
In June, the Government’s emergency budget set ambitious targets to:
- Bring the public sector deficit into balance
- Start reducing debt by 2014/15
- And to do this largely from spending cuts (77 per cent) rather than tax increases (23 per cent)
It set public spending totals for 2011/2015 to achieve these objectives. The totals set in the June emergency budget were set out at appendix 1 to the report. That appendix also showed the comprehensive spending review totals and the reallocation of £11bn cuts from departments to welfare.
Appendix 2 to the report showed the headline totals for formula grant which was the main general grant to local government, a reduction from £28bn to £22bn over four years. This was a substantial cash cut and would mean local government faring less well from the spending review than most other areas of government. It equated to an average 7.25 per cent reduction each year for four years, but in practice the greater reduction was at the start of the period. There was a £0.7bn grant earmarked for a council tax freeze, to the value of a 2.5 per cent increase. This grant was only available for those authorities which make no increase in 2011/2012. Taking this together, the reduction in formula grant implied a 14 per cent average reduction in net expenditure. This was because local authorities raise part of their funding through the council tax. The actual impact authority by authority would depend on the different extent to which they depend on government grant.
To compensate for lower funding, the government had removed ring fencing from a range of specific grants. These would be rolled into formula grant, totalling more than £4bn. Details were listed at appendix 3 to the report and included supporting people grant, concessionary travel grant and a range of social care grants. There were a number of points to note in relation to these which were detailed in paragraph 2.8 of the report.
The change agenda for schools funding had become clearer with the publication of the White Paper “The importance of teaching”. The report set out how the government would deal with future school funding but indicated that in financial terms schools were relatively protected for 2011/2015. The details for schools funding by authority for 2011/12 would not be released before the local government finance settlement in December, 2010.
The report then referred to the scaling back of capital expenditure over the four year period compared to current investment levels. For local government there was a reduction of 45 per cent in government funding for investment. In the schools’ programme the reduction was 60 per cent. Other potential opportunities and flexibilities remained for local authorities, including North Lincolnshire, and these were detailed in paragraphs 2.13 and 2.14.
The implication of a 26 per cent reduction in the general grant for North Lincolnshire was a £20m cut in net revenue spending. For planning purposes this assumed that the council would freeze council tax in 2011/12 and raise it by three per cent a year after that in line with the current financial strategy. The figures were set out in appendix 2. However what was clear was that the reduction in grant was not over the four years but had been front loaded with a 10.4 per cent reduction in the first year 2011/2012. This would make the challenge of balancing the budget even harder. Additional cuts could be expected in specific grants and these would have to be factored into the council’s planning. Dedicated Schools Grant (DSG) apart, the council received £30m a year in specific grants. Some were educational related grants which would be incorporated into the General Schools Grant (DSG).
Government funding for capital investment would be significantly reduced with the potential for the scheme to upgrade the A160 in support of the South Humber Gateway Development being affected. The Building Schools for the Future Programme for secondary schools in Scunthorpe was proceeding. However, government required the council and its “Local Education Partnership” to identify “savings and efficiencies” for each school that was not yet at “financial close”. It was expected that capital grant for the programme would be reduced by announcements in January 2011.
Resolved – That the implications of government spending plans for the council as detailed in the report be noted with regret and disappointment.
- Reallocate revenue spending between services
- Adjust the capital programme and its financing
- Reconsider its approved treasury policy in the light of market changes which affect council borrowing and cash investment.
The report also considered:
- How far spending pressures had been contained within the cash limit
- Further changes to the capital programme
- An update on treasury performance.
It was good financial management to contain revenue budget changes within the cash limits set by council at the start of the financial year. The council had a consistent record of containing revenue spend within the cash limit each year. It was also important to ensure that the capital programme remained affordable – not least because of the period of austerity in public finances which lay ahead.
In relation to revenue, cabinet in September had asked services which were forecasting overspends or had emerging pressures to consider how these could be contained within the service approved budget for 2010/11 and to report progress to cabinet in December. The position by service was outlined in paragraphs 3.1 to 3.11. These contained details of those service areas with either overspends or emerging budget pressures with potential options as to how to deal with these.
In relation to capital, services had reviewed the current programme for spending in 2010/11 and updated plans for 2011/2015. As was usual technical and funding issues would mean some re-phasing of the programme between 2010/2011 and later years. The changes were listed at appendix 2 and a full revised programme at appendix 3. Paragraphs 3.1 to 3.15 set out details of the issues in relation to capital funding.
The report also considered the current treasury policy with the level of investment of cash balances as shown at appendix 4, a total of £37.6m. It also indicated that the joint action with the Local Government Association (LGA) to defend the council’s priority status as creditors in the Icelandic Courts continued. This covered the council’s £2m investment with Landsbanki. The administrators of Heritable Bank had made a further dividend payment of £0.145m and the outstanding principal was now £1.9m down from £3.5m. Prospects remained good for the ultimate recovery of most of these investments. Finally, the report referred to efficiency and the government’s announcement that it had changed its inspection and performance management with the ending of the Comprehensive Area Assessment and the National Indicator Set. This meant that the council would no longer need to report on efficiency target NI179 or publish efficiency data on council tax bills. In its place there would be a more extensive judgement of the council’s arrangements for value for money which was a separate statutory requirement.
Resolved – (a) That cabinet approve the revised revenue budget as set out in appendix 1 to the report; (b) that cabinet agree the changes to the capital programme at appendices 2 and 3; (c) that cabinet notes the end of efficiency monitoring through NI179, and (d) that cabinet notes the latest treasury management position.
The report indicated that the most exciting aspect of the South Humber Gateway was its potential to become a world leader in renewable energy. One of the great advantages of the SHG was its proximity to the three largest off shore round 3 wind turbine zones. The creation of a wind turbine super cluster on the SHG would provide the lowest costs for delivering wind turbines to these zones in the North Sea in the numbers required. This super cluster and associated proposals, such as the wind turbine facility at Alexandra Dock in Hull, would bring about the renaissance of British Engineering across the Humber. The South Humber Gateway Board had articulated the Humber Vision in some recently produced papers which were available in the political group officers namely:
- The strategic development of the South Humber Gateway
- The Humber Renewable Energy Supply Cluster
- The Humber Ports Paper.
This development of the SHG represented a “once in a lifetime opportunity” to transform the economy of the Humber and provide a world class engineering industry on which the area’s long term prosperity could be based.
The report also considered the latest position with regard to the South Humber Gateway Board which currently comprises the Leaders and Chief Executives of North Lincolnshire and North East Lincolnshire Councils, an Executive Director of Yorkshire Forward together with an independent chair. The Government office for Yorkshire and the Humber was also represented, with a senior official having “observer’s status”. However this office was due to close and it no longer sends a representative to observe board meetings. Yorkshire Forward was also being run down and the Executive Director Finance for Yorkshire Forward, who is currently a board member, would eventually relinquish his membership. In the light of the emerging Local Enterprise Partnerships (LEPs) the South Humber Gateway Board would need to be reviewed in regard to its future role and membership. However, until this was done it was important that the board continued to support the delivery of the development of the South Humber Gateway.
The report then considered the Regional Growth Fund, the A160 Port of Immingham Improvements Scheme, the Killingholme Drainage Improvement Scheme, Able UK’s East Hull and Ports and Logistics Park, Able UK’s Marine Energy Park and the recent opportunity taken by the council to jointly present evidence on the Humber’s priorities to the House of Commons Transport Committee Inquiry into Transport and the Economy which had been held in this area on 2 November 2010. Finally, reference was also made to a delegation led by local Members of Parliament to Ministers in the Department for Transport to seek to agree a commitment to an early start on the A160.
Resolved – (a) That a review of the South Humber Gateway Board be undertaken and a report submitted to cabinet on 2 February 2011, this review to include discussions with North East Lincolnshire Council; (b) that cabinet supports the high level delegation being led by local Members of Parliament to meet Ministers in the Department for Transport to agree a commitment to an early start on the A160 in view of its importance to the economy of the Humber, and (c) that cabinet agrees to work closely with local members of parliament to ensure challenges to the development of the South Humber Gateway are fully addressed.
The Council had secured funding from Yorkshire Forward through the Employability Programme to commission a Skills and Workforce Plan for North Lincolnshire. In November 2009, the council had commissioned consultants ‘Shared Intelligence’, using this funding, to undertake the work which had been completed in September of this year. The purpose of the plan was to identify labour market trends, requirements and business skills needs associated with the growth of a number of sectors that were important to the North Lincolnshire economy both now and in the future. The plan made a number of recommendations for how the council should respond to these needs and ensure that the people of North Lincolnshire were best placed to accept employment opportunities associated with the growth areas and that businesses could benefit from a skilled and responsive workforce. The development of the plan also involved an extensive business consultation exercise to ensure that the recommendations made truly reflected the needs of businesses.
The Employment, Enterprise and Skills (EES) Sub Group of the North Lincolnshire Partnership’s Economic Development Board had been overseeing the commission and had the opportunity to feed their comments into the development of the plan. The group included representatives from organisations including Job Centre Plus, Business Link Yorkshire, The Skills Funding Agency, North Lindsey and John Leggott Colleges, as well as representatives from North Lincolnshire Council’s Strategic Regeneration, Housing and Development and Children and Young People’s Services. In order to support the delivery of the North Lincolnshire Skills and Workforce Plan, a detailed action plan had been produced which was designed to be a working document that could be amended and developed as actions were achieved. The North Lincolnshire EES Group would be responsible for overseeing the delivery of the action plan and partners would be responsible for delivering elements of it.
The report then detailed and summarised the main recommendations arising from the plan which were set out in paragraph 2.5 onwards.
Resolved – That cabinet accepts the recommendations made and adopts the North Lincolnshire Skills and Workforce Plan as the document to guide the council’s approach to developing the North Lincolnshire Labour Market.
The panel had conducted a review into how GPs budgets were allocated and compared these to levels of deprivation and ill health. The panel also compared vaccination rates, treatment outcomes and patient satisfaction rates with levels of deprivation and ill health. The panel found that, generally, GP budgets were lower in areas of deprivation. The panel had therefore made 9 recommendations to address these issues which were outlined in appendix 1 to the report.
The Director also referred to the recent White Paper “Liberating the NHS” which outlined plans to radically overhaul the current NHS system. There would be a National Commission Board responsible for allocating resources to GP Commissioning Consortia and the remuneration of Primary Care Practitioners. GP Consortia would have responsibility for commissioning health and social care services based on patient need. Currently it was not known how the National Commissioning Board would allocate funds to GP’s as Primary Care Practitioners. It was anticipated that the GP Commissioning Consortia would be allocated resources based on a national funding formula, how this money would be allocated within the consortia was not yet known.
The action taken so far in relation to the recommendations was set out in the action plan attached at appendix 1 to the report, but in view of the impending and future changes in health it was difficult to deal easily with all the recommendations. Once the allocations process for GP funding was in place and there had been an opportunity to compare this with current levels, it would be possible to understand whether there was an Inverse Care Law in primary care within the new NHS system in North Lincolnshire. The current actions could then be updated and a process put in place to address them.
Resolved – (a) That cabinet recognises the impact of the NHS reforms on continuing the action plan at this point in time; (b) that cabinet notes the progress made to date on the action plan as detailed in appendix 1, and (c) that cabinet supports the proposal to ensure any residual actions from this report become part of a wider action plan on equalities arising from the review the Healthier Communities and Older People Scrutiny Panel was currently undertaking on health inequalities in North Lincolnshire.
At its meeting held on 13 October 2010, council had considered a report on this matter, had approved it and referred it to cabinet for consideration of the recommendations with a view to the preparation of an action plan.
The report referred to the reasons for the review and attached as an appendix were the detailed recommendations.
Resolved – That the Director of Children’s Services and the Cabinet Member for Children’s Services prepare an action plan in response to the recommendations of the report for submission to a future meeting of cabinet.
At its meeting held on 13 October 2010, council had considered the report of the Economic Development and Corporate Issues Scrutiny Panel in relation to this matter. The report had been approved by council and referred to cabinet for consideration of the recommendations with a view to the preparation of an action plan. A copy of the detailed recommendations were attached as an appendix to the report.
Resolved – That the Service Director Highways and Planning and the Cabinet Member for Highways, Planning and Energy together with other relevant officers and members prepare an action plan in response to the recommendations of the report for submission to a future meeting of cabinet.