Policy And Resources Committee - 13/12/2010

At a MEETING of the POLICY AND RESOURCES COMMITTEE held at Dundee on 13th December, 2010.

Present:-

BAILIES

COUNCILLORS

Councillor Ken GUILD, Convener, in the Chair.

The minute of meeting of this Committee of 8th November, 2010 was held as read.

Unless marked thus * all items stand delegated.

I MINUTE - SUPERANNUATION INVESTMENT SUB-COMMITTEE

The minute of meeting of the Superannuation Investment Sub-Committee of 15th November, 2010, a copy of which is appended hereto (Appendix I), was submitted for information and record purposes.

II REVENUE MONITORING

There was submitted Report No 696-2010 by the Director of Finance providing the Committee with an analysis of the 2010/2011 Projected Revenue Outturn as at 31st October, 2010.

Councillor Guild, seconded by Councillor Duncan, moved that the Committee:-

(i) note that the overall General Fund 2010/2011 Projected Revenue Outturn as at 31st October, 2010 shows an overspend of 669,000 against the adjusted 2010/2011 Revenue Budget;

(ii) note that the Housing Revenue Account as at 31st October, 2010 is projecting a breakeven position against the adjusted HRA 2010/2011 Revenue Budget;

(iii) instruct the Director of Finance to take every reasonable action to ensure that the 2010/2011 revenue expenditure is below or in line with the adjusted Revenue Budget; and

(iv) instruct the Director of Finance, in conjunction with all Chief Officers of the Council, to continue to monitor the Council's 2010/2011 Projected Revenue Outturn.

As an amendment, Councillor Keenan, seconded by Bailie Regan, moved approval of the above subject to the Administration in conjunction with officers bringing an action plan to keep this budget under control to the next Policy and Resources Committee and that focus must be kept up to ensure, as far as possible, there is no further overspends in light of the future financial position facing this Council.

On a division, there voted for the motion - Councillors Guild, Barrie, Black, Bowes, Andy Dawson, Will Dawson, Duncan, Fordyce, Hunter, Lynn, Melville, Roberts, Ross, Hay, Macpherson, Dick, Bailies Sawers, Wallace, Scott, Lord Provost Letford and Depute Lord Provost Borthwick (21); and for the amendment - Councillors Keenan, Asif, Bidwell, Ferguson, Gordon, McCready, Bailies Regan and Wright (8) - whereupon the motion was declared carried.

III CAPITAL EXPENDITURE MONITORING 2010/2011

There was submitted Report No 694-2010 by the Director of Finance appraising members of the latest position regarding the Council's Capital Expenditure Programme 2010/2011.

The Committee noted the contents of the report.

IV THE SCOTTISH GOVERNMENTS DRAFT BUDGET 2011/2012 AND LOCAL GOVERNMENT FINANCE SETTLEMENT 2011/2012

The Committee acceded to a request from The People's Charter for a deputation to be heard on the future of local services. After the deputation had stated its case and answered questions, they were thanked for their attendance and withdrew.

There was submitted Report No 710-2010 by the Director of Finance advising members of the announcement made by the Cabinet Secretary for Finance and Sustainable Growth on 17th November, 2010 in respect of the Scottish Government's Draft Budget for 2011/2012, together with Report No 722-2010 by the Director of Finance updating Report No 710-2010 and advising members of the announcement made by the Cabinet Secretary for Finance and Sustainable Growth on 9th December, 2010 in respect of the Local Government Finance Settlement 2011/2012.

Councillor Guild, seconded by Bailie Sawers, moved that the Committee:-

(i) note the contents of Report Nos 710-2010 and 722-2010;

(ii) note the Council's Revenue Funding Allocation for 2011/2012, as announced by the Cabinet Secretary for Finance and Sustainable Growth on 9th December, 2010, and the associated implications;

(iii) note the updated position on the Council's Provisional 2011/2012 Revenue Budget;

(iv) accept the terms of the agreement reached between the Scottish Government and COSLA's Leadership and now being recommended to individual Councils, and authorises the Council Leader to write to the Scottish Government by 21st December, 2010 to indicate Dundee City Council's agreement to the full package;

(v) agree the procedures to be followed for setting the 2011/2012 Revenue Budget and Council Tax level, as set out in Section 8 and Appendix 3 of Report No 710-2010; and

(vi) note that the financial information included in Report No 722-2010 will be updated, as necessary, and included in the Council Tax proposals to be submitted to the Special Policy and Resources Committee on 10th February, 2011.

As an amendment, Councillor Keenan, seconded by Bailie Regan, moved approval of the undernoted.

Council condemns the SNP Finance Secretary's late introduction of the disgraceful draconian sanctions which were imposed on Councils if they do not accept the budget settlement as produced in the Finance Secretary's letter dated 17th November, 2010.

Council criticises the SNP Finance Secretary for failing to produce a three year spending review but instead proposing a one year election budget, resulting in the Council being unable to plan ahead financially for local communities.

Council further criticises the SNP Finance Secretary for breaking yet another SNP manifesto promise by re-introducing a form of financial ring-fencing to local authorities.

Council therefore agrees under protest to conditionally accept the SNP Finance Secretary's budget settlement grant with the caveats that come with it and instructs the Leader of Dundee City Council to write to the SNP Finance Secretary advising him of this decision and dissatisfaction.

On a division, there voted for the motion - Councillors Guild, Barrie, Black, Bowes, Andy Dawson, Will Dawson, Duncan, Fordyce, Hunter, Lynn, Melville, Roberts, Ross, Bailie Sawers and Lord Provost Letford (15); and for the amendment - Councillors Keenan, Asif, Bidwell, Ferguson, Gordon, McCready, Hay, Macpherson, Dick, Bailies Regan, Wright, Wallace, Scott and Depute Lord Provost Borthwick (14) - whereupon the motion was declared carried.

V DUNDEE COMMUNITY REGENERATION FUND 2010/2011 - 2012/2013

There was submitted Report No 711-2010 by the Assistant Chief Executive relative to the above.

The Committee approved the funding process and the proposals contained in Section 5.2 of the report appended hereto (Appendix II).

VI TREASURY MANAGEMENT ACTIVITY 2010/2011 (SIX MONTHS TO 30TH SEPTEMBER, 2010)

There was submitted Report No 701-2010 by the Director of Finance reviewing the Treasury Management activities for the period 1st April, 2010 to 30th September, 2010.

The Committee noted the information contained therein.

VII CONTINUOUS PROFESSIONAL DEVELOPMENT FRAMEWORK FOR ELECTED MEMBERS

There was submitted Report No 702-2010 by the Assistant Chief Executive providing information on the recently launched Continuous Professional Development Framework for elected members and Scottish Local Government.

The Committee:-

(i) agreed to adopt the Continuous Professional Development Framework for elected members which was recently launched by the Improvement Service;

(ii) agreed that individual members be encouraged to make use of the Framework, with support being provided by the Corporate Planning Department; and

(iii) noted that, although the Improvement Service had also launched a separate Caseload Management Portal, the Council was continuing to develop an in-house system which would assist members in the recording, monitoring and analysis of constituents' enquiries.

VIII DUNDEE CITY COUNCIL ACCOUNTS 2009/2010

(a) STATEMENT OF ACCOUNTS

The above report was submitted and noted (Report No 698-2010).

(b) EXTERNAL AUDITOR'S REPORT

The above report was submitted and noted (Report No 699-2010).

(c) EXTERNAL AUDITOR'S REPORT - RESPONSE FROM DUNDEE CITY COUNCIL

There was submitted Report No 700-2010 by the Director of Finance in response to the report by the Council's External Auditor on the Audit for Dundee City Council for the year to 31st March, 2010.

The Committee endorsed the report as the Council's formal response to the External Auditor's report and noted the completed Action Plan appended to the report.

IX COMPLIANCE VISIT BY HER MAJESTYS REVENUE AND CUSTOMS

There was submitted Agenda Note AN158-2010 intimating that Her Majesty's Revenue and Customs (HMRC) had conducted a recent compliance visit to this Council. This involved a review of procedures to identify liability for Pay As You Earn (PAYE) and National Insurance (NI) through the payroll system and ensure the correct collection and payment to HMRC.

It also reviewed the Council's Value Added Tax (VAT) procedures to ensure proper accounting treatment of all items within the scope of VAT and that VAT returns were completed accurately and timeously.

It was noted that HMRC had assessed the Council as low risk over all five sub-headings and therefore the Council was viewed as not requiring any specific future compliance visits from HMRC.

X IMPACT OF VAT INCREASE FROM 17.5% TO 20% IN DEPARTMENTAL CHARGES

There was submitted Report No 720-2010 by the Director of Finance appraising elected members of the impact on the Council's charges, of the rise in VAT from 17.5% to 20% with effect from 4th January, 2011.

The Committee approved the VAT related increases in departmental charges as detailed and proposed in the report, it being noted that the impact of the increase in VAT on car parking charges had been considered separately (City Development Committee, 6th December, 2010, Article IV refers).

XI RELIEF OF RATES - CHARITY RELIEF

There was submitted Report No 697-2010 by the Director of Finance seeking authorisation to grant charity relief on the undernoted non-domestic properties.

The Committee approved accordingly.

XII COUNCIL TAX DISCOUNT ON UNOCCUPIED PROPERTIES

There was submitted Report No 721-2010 by the Director of Finance relative to the above.

The Committee:-

(i) agreed to modify the level of Council Tax discount from 50% to 10% on Second Home and long-term empty properties for all parts of the area with effect from 1st April, 2011; and

(ii) remitted to the Director of Housing to develop budget proposals for investment in new Council house building, acquisition of sites for affordable housing or to bring back empty properties into housing use going forward from 2012/2013 dependant upon actual revenues raised in 2011/2012.

The Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the press and public be excluded from the meeting for the undernoted item of business on the grounds that it involved the likely disclosure of exempt information as defined in paragraphs 6, 8 and 9 of Part I of Schedule 7A of the Act.

XIII DUNDEE ICE ARENA

On a reference to Article I of the minute of meeting of the Leisure, Arts and Communities Committee of 22nd March, 2010 and after considering Agenda Notes AN157-2010 and AN159-2010, the Committee approved the recommendation detailed therein.

Ken GUILD, Convener.

APPENDIX I

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 15th November, 2010.

Present:-

Bailie Willie SAWERS

Councillor Jimmy BLACK

Councillor Alan ROSS

Councillor Kevin KEENAN

Bailie Willie SAWERS, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I APOLOGIES AND SUBSTITUTES

Apologies had been submitted by Bailie Regan, Bailie Wallace and Councillor Dawson.

II PROPOSED TIMETABLE OF MEETINGS FOR 2011

There was submitted Report No 673-2010 by the Director of Finance proposing a suggested programme of meetings of the Superannuation Investment Sub-Committee to cover investment performance and issues arising in 2011.

The Sub-Committee agreed the proposed programme of meetings.

III SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 674-2010 by the Director of Finance reviewing the progress by the Fund Managers regarding the positive engagement policy on Environmental, Social and Corporate Governance approved by the Sub-Committee on 17th November, 2008.

The Sub-Committee noted the information contained within the report with regard to the activities of the Fund Managers during the six month period ended 30th September, 2010.

IV STATEMENT OF INVESTMENT PRINCIPLES REVIEW

There was submitted Report No 676-2010 by the Director of Finance reviewing Statements of Investment Principles for the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee noted the information within the report and approved the Statements of Investment Principles for both the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the press and public be excluded from the meeting in order that the undernoted items of business be considered in private on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

V TAYSIDE SUPERANNUATION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 671-2010 by the Director of Finance relating to Performance Summaries for quarter, twelve months and three years to 30th September, 2010 reviewing the investment performance of the Main Fund's four Fund Managers (excluding Property) for the quarter to 30th September, 2010. It also considered the performance of the Transport Fund which shared two of these managers.

The report compared investment performances of the Funds with the Funds' specific benchmarks which consisted of various stock market indices.

The Sub-Committee noted the information contained therein with regard to the performance of the Tayside Superannuation Fund and Tayside Transport Superannuation Fund and their Fund Managers.

(b) PERFORMANCE SUMMARY (PROPERTY PORTFOLIO)

There was submitted Report No 672-2010 by the Director of Finance relating to performance for the quarter, twelve months and three years to 30th September, 2010 reviewing the investment performance of the Property Portfolio for the periods to 30th September, 2010.

The report compared investment performances with an appropriate benchmark, the IPD Pooled Property All Balanced Funds Median.

The Sub-Committee noted the information contained herein with regard to the performance of the Property Portfolio.

(c) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 668-2010 by the Director of Finance summarising investments and transactions during the period 1st July, 2010 reviewing the investment activities of the Main Fund's five Fund Managers for the quarter to 30th September, 2010. The Transport Fund shared three of these managers and their transactions are included.

The report summarised the transactions of each Fund Manager and showed the market values of the Main and Transport Fund.

The Sub-Committee noted the information contained therein with regard to the activities of the Tayside Superannuation Fund and Tayside Transport Superannuation Fund and their Fund Managers.

(d) QUARTERLY FUNDING REPORT

There was submitted Report No 670-2010 by the Director of Finance which considered the report by Barnett Waddingham reviewing the current funding of the Funds as assessed by the Fund Actuary.

The Sub-Committee noted the report.

VI FUND MANAGER REVIEW

There was submitted Report No 675-2010 by the Director of Finance reviewing the position of a Fund Manager given the recent performance which had been significantly below benchmark.

The Sub-Committee agreed to review the Fund Manager's performance for the one year to 30th September, 2011 and recommend a change of manager as part of a wider review of structure if this performance was below benchmark.

VII REVIEW OF PERFORMANCE

David O'Hara of Hymans Robertson reviewed the performance of the Funds and the individual managers over the year.

The presentation covered the performance of both Funds and the five individual managers. It was noted that over the last year results had been mixed but, overall, the Fund had performed well.

VIII PRESENTATION

Tom Wright and Fiona MacLeod of Baillie Gifford gave a short presentation.

It was noted that Fund performance had shown positive results and the Sub-Committee were taken through what had helped/hurt the Fund, risk to performance and outlook for the following year.

Willie SAWERS, Convener.

APPENDIX II