Policy And Resources Committee - 20/08/2018

At a MEETING of the POLICY AND RESOURCES COMMITTEE held at Dundee on 20th August, 2018.

Present:-

BAILIES

COUNCILLORS

Councillor John ALEXANDER, Convener, in the Chair.

The minute of meeting of this Committee of 25th June, 2018 was held as read.

Unless marked thus * all items stand delegated.

I DECLARATION OF INTEREST

No declarations of interest were made.

II MINUTES

(a) PENSION SUB-COMMITTEE AND THE PENSION BOARD - 4TH JUNE, 2018

(b) PERSONNEL APPOINTMENTS SUB-COMMITTEE - 7TH AND 26TH JUNE, 2018

The minutes of meetings of the above Sub-Committees, copies of which are appended hereto, were submitted for information and record purposes (Appendices I and II).

III PERFORMANCE MANAGEMENT FRAMEWORK

On a reference to Article VII of the minute of meeting of this Committee of 21st August, 2017, there was submitted Report No 252-2018 by the Chief Executive seeking approval for a Performance Management Framework.

The Committee:-

(i) approved the Performance Management Framework 2018-2022 appended to the report; and

(ii) approved the provision of a training session for elected members on the Performance Management Framework.

IV COUNCIL PLAN 2017-2022 PROGRESS REPORT

On a reference to Article II of the minute of meeting of this Committee of 11th December, 2017, there was submitted Report No 251-2018 by the Chief Executive providing the first progress report on the Council Plan 2017-2022.

The Committee:-

(i) noted the progress being made on the Council Plan 2017-2022; and

(ii) remitted the report to the Scrutiny Committee for further consideration.

V BREXIT UPDATE

On a reference to Article VII of the minute of meeting of this Committee of 12th February, 2018, there was submitted Report No 234-2018 by the Chief Executive updating members on the latest development on the Brexit process, outlining the work done by the Political Cross-Party Working Group and the officers' Brexit Advisory Team, and seeking agreement to lobby the UK Government on continued participation in the Interreg programme.

The Committee:-

(i) noted the latest developments with Brexit and the work being done by the Political Cross-Party Working Group and the Brexit Advisory Team to mitigate the impact on the Council and the city; and

(ii) remitted the Chief Executive to write to the Secretary of State for Exiting the European Union to highlight the importance of the Interreg programme for Dundee, the wider city region and Scottish local authorities in general, and asking the UK Government to continue participation in the Interreg programme after the UK had left the European Union.

VI NEW 24/7 SAFETY AND ALARM RESPONSE CENTRE (SARC) - FIT OUT TENDERS AND ALLOWANCES

On a reference to Article IX of the minute of meeting of this Committee of 8th June, 2015, there was submitted Report No 255-2018 by the Executive Director of Neighbourhood Services detailing tenders received and requesting decisions on the acceptance thereof.

The Committee approved the tenders detailed below:-

VII TRANSFORMING PUBLIC PROTECTION PROGRAMME

There was submitted Joint Report No 257-2018 by the Chief Executive and Chief Social Work Officer seeking approval to implement a Transforming Public Protection Programme aimed at improving services provided by the Council and other key partners for vulnerable children and adults in the city. The two year action plan would build on recent self-evaluations conducted by the Dundee Partnership and the findings of external inspection which indicated that, although public protection services were performing well, there was a need to improve support systems, increase the use of digital technology, ensure that professional practice was consistently strong and that learning and development had a higher priority in this important area.

The Committee:-

(i) approved the establishment of a Transforming Public Protection Programme as outlined in the report and the Appendix thereto;

(ii) approved the commitment of Dundee City Council resources to support the establishment of the Transforming Public Protection Programme; and

(iii) directed the Chief Executive and Chief Social Work Officer to provide a further update to Committee no later than 28th February, 2019.

VIII REVENUE MONITORING 2018-2019

There was submitted Report No 231-2018 by the Executive Director of Corporate Services providing elected members with an analysis of the 2018/2019 projected revenue outturn as at 30th June, 2018 monitored against the adjusted 2018/2019 Revenue Budget.

The Committee:-

(i) noted that the overall General Fund 2018/2019 projected revenue outturn as at 30th June, 2018 was projecting a breakeven position against the adjusted 2018/2019 Revenue Budget;

(ii) noted that the Housing Revenue Account as at 30th June, 2018 was projecting a breakeven position against the adjusted Housing Revenue Account 2018/2019 Revenue Budget;

(iii) agreed that the Council Management Team would take every reasonable action to ensure that the 2018/2019 revenue expenditure was below or in line with the adjusted Revenue Budget; and

(iv) instructed the Executive Director of Corporate Services, in conjunction with the Council Management Team, to continue to monitor the Council's 2018/2019 projected revenue outturn.

IX CAPITAL EXPENDITURE MONITORING 2018/2019

There was submitted Report No 248-2018 by the Executive Director of Corporate Services appraising elected members of the latest position regarding the Council's Capital Plan 2018-2023.

The Committee noted the contents of the report.

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 and 9 of Part I of Schedule 7A of the Act.

X 219-245 BLACKNESS ROAD

There was submitted Report No 246-2018 by the Executive Director of Neighbourhood Services relative to the above.

The Committee noted and approved the content of the report, including promotion of a Compulsory Purchase Order, if required.

John ALEXANDER, Convener.

At a JOINT MEETING of the PENSION SUB-COMMITTEE of the POLICY AND RESOURCES COMMITTEE and the PENSION BOARD held at Dundee on 4th June, 2018.

APPENDIX I

Present:-

BAILIES

PENSION SUB-COMMITTEE

COUNCILLORS

PENSION BOARD

Bailie Willie SAWERS, Convener, in the Chair.

I DECLARATION OF INTEREST

There were no declarations of interest.

II MINUTE OF PREVIOUS MEETING

The minute of meeting of 5th March, 2018 was submitted and approved.

III TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 192-2018 by the Executive Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee and Board approved the updated Quarterly Risk Register for Tayside Pension Fund and noted the following changes to the risk profile from previous report:

(i) RISK NO 1 - FAILURE TO PROCESS PENSION PAYMENTS AND LUMP SUMS ON TIME

This risk had been previously heightened due to system downtime in respect of the Councils Payroll system and also issues with completeness of information received from the system. Whilst these systems issues had now been resolved, the risk remained heightened due to the effect of new staff undertaking duties, and additional workload. Whilst this experience curve was temporary, this risk would remain high. Controls were however in place wherever possible to minimise risk.

(ii) RISK NO 14 - FAILURE TO KEEP PENSION RECORDS UP-TO-DATE AND ACCURATE

This risk was linked to No 1 above, and this was also associated with the additional risk of new staff undertaking duties, the effects of the experience curve, and the increased risk of error. Controls were however in place wherever possible to minimise risk.

(iii) RISK NO 15 - LACK OF EXPERTISE ON PENSION COMMITTEE, BOARD, OR AMONGST OFFICERS

This risk had previously been heightened due to the inexperience and knowledge of new members on both the Pension Sub-Committee and Board following the local elections in 2017. New members had now undergone training, and thus the risk had been reduced accordingly.

IV PROCUREMENT OF INVESTMENT CONSULTANT COVENANT REVIEW SERVICE

There was submitted Report No 193-2018 by the Executive Director of Corporate Services seeking approval to grant delegated authority for the Executive Director of Corporate Services in respect of the procurement exercise for Investment Consultancy Services, and providing key information in relation to the procurement exercise for an Employer Covenant Review.

The Sub-Committee and Board agreed to:-

(i) delegate authority to the Executive Director of Corporate Services to appoint an Investment Management Consultant for the Pension Fund for a period of three years commencing 2nd July, 2018, with an option to extend for a further two years, following the outcome of a National LGPS Framework mini-competition. The outline details of the mini-competition were contained within the report; and

(ii) note the content of the upcoming procurement exercise for an Employer Covenant Review about to be undertaken. Approval for this appointment would be presented to the Sub-Committee and Board at their meeting of September, 2018.

V ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE POLICY

There was submitted Report No 194-2018 by the Executive Director of Corporate Services reviewing the Funds current policy on Socially Responsible Investing (Article V of the Minute of Meeting of the Pensions Sub-Committee of the Pension Sub-Committee of the Policy and Resources Committee of 9th June, 2017, Report No 195-2017 refers).

The Sub-Committee and Board approved the Environmental, Social and Corporate Governance Policy for the Tayside Pension Funds.

VI PENSION ADMINISTRATION PERFORMANCE - QUARTERLY UPDATE

There was submitted Report No 195-2018 by the Executive Director of Corporate Services providing information on the recent quarters operational performance in relation to Pension Administration.

The Sub-Committee and Board noted the content of the report.

VII TAYSIDE PENSION FUND ANNUAL GOVERNANCE AND GOVERNANCE COMPLIANCE STATEMENTS

There was submitted Report No 196-2018 by the Executive Director of Corporate Services presenting the Annual Governance Statement and Governance Compliance Statement for approval and inclusion into the unaudited Annual Accounts for the year ended 31st March, 2018. The report also set out the governance arrangements of Tayside Pension Fund and the extent to which it complied with regulations.

The Sub-Committee and Board agreed to:-

(i) approve the Annual Governance and Governance Compliance Statements which were included as an Appendix for this report; and

(ii) instruct the inclusion of the statements in the Annual Accounts for the year 31st March, 2018.

VIII TAYSIDE PENSION FUND ANNUAL REPORT AND ACCOUNTS 2017/2018

There was submitted Report No 197-2018 by the Executive Director of Corporate Services providing some additional commentary on the unaudited Annual Accounts 2017/2018 which were being submitted to the Sub-Committee along with this report.

The Sub-Committee and Board agreed to:-

(i) note the content of the covering report;

(ii) note the unaudited Annual Accounts which had been submitted along with this report;

(iii) instruct the Executive Director of Corporate Services to arrange for the unaudited Accounts to be signed as necessary; and

(iv) instruct the Executive Director of Corporate Services to submit the Annual Accounts to the Funds external auditor.

IX ANNUAL TREASURY MANAGEMENT ACTIVITY 2017/2018

There was submitted Report No 198-2018 by the Executive Director of Corporate Services reviewing the Treasury Management activities for the period 1st April, 2017 to 31st March, 2018.

The Sub-Committee and Board noted the information contained within the report.

X SCHEME ADVISORY BOARD CONSULTATION ON REVIEW OF STRUCTURE OF SCOTTISH LGPS

There was submitted Agenda Note AN38-2018 advising the Sub-Committee and Board that the Scottish Local Government Pension Scheme Advisory Board was about to consult on options on possible changes to the structure of the Scottish LG Pension Schemes. This followed work which the SAB has undertaken to consider the pros and cons of options for change, which were reported to the Cabinet Secretary for Finance and the Constitution, Derek Mackay. Having considered the options presented, the Cabinet Secretary had now given the go ahead for the SAB to consult on these, with a view to doing further work around developing options, in light of the responses received from stakeholder. The SAB had appointed consultants from the Pensions Institute to run the consultation which would commence from Monday, 18th June to Friday, 7th December, 2018. The SAB would report on the outcome of the consultation in April, 2019.

To support the consultation launch, an event was being arranged for Wednesday, 27th June from 10am to 1pm at COSLA Offices, Verity House, Edinburgh, to allow employers and employee representative groups an opportunity to hear more about the SABs work and the consultation process.

The Sub-Committee and Board noted accordingly.

XI THE LOCAL GOVERNMENT PENSION SCHEME (SCOTLAND) REGULATIONS 2018

There was submitted Agenda Note AN39-2018 advising the Sub-Committee and Board that new regulations were coming into force on 1st June, 2018, however they remained in draft at this stage. They clarified existing provisions or arose from changes suggested by stakeholders and to which Scottish Public Pensions Agency had agreed. There were changes which relate to the Taxation of Pensions Act 2014 and were in relation to AVC provision, the Annual Allowance (scheme pays) and to Auto-enrolment. These regulations would also introduce further flexibility to assist fund authorities and employers to address funding liabilities when a body ceased to be a scheme employer. Full details would be provided in a later report.

The Sub-Committee and Board noted accordingly.

XII LGPS NATIONAL TRAINING DAY - 10TH SEPTEMBER, 2018, COSLA OFFICES, EDINBURGH

A verbal update on arrangements for the day was given to members.

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 for the undernoted items of business 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.

XIII TAYSIDE PENSION FUNDS

(a) TAYSIDE PENSION FUND PERFORMANCE SUMMARY

There was submitted Report No 199-2018 by the Executive Director of Corporate Services reviewing the investment performance of the Funds seven Fund Managers for the quarter 31st March, 2018. The report compared investment performance of the Fund with the Funds specific benchmarks which consisted of various stock and security market indices.

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

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 185-2018 by the Executive Director of Corporate Services reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 31st March, 2018.

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

The Sub-Committee and Board noted the information contained therein with regard to the activities of the Tayside Pension Fund and its Fund Managers.

(c) QUARTERLY FUNDING REPORT

There was submitted Report No 200-2018 by the Executive Director of Corporate Services which considered a report by the Fund Actuary which reviewed the current level of the Fund.

The Sub-Committee and Board noted the report by the Fund Actuary.

XIV SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 201-2018 by the Executive Director of Corporate Services reviewing the progress by the Fund Managers regarding positive engagement in line with the Policy on Environmental, Social and Corporate Governance approved by the Sub-Committee (Article V of the minute of meeting of the Pension Sub-Committee of the Policy and Resources Committee of 5th June, 2017, Report No 195-2017 refers).

The Sub-Committee and Board noted the information contained within the report with regards to the activities of the Fund Managers during the six month period ended 31st March, 2018.

XV PRESENTATION

Tom Wright and Claire Erskine-Murray from Baillie Gifford gave a short presentation.

The Sub-Committee and Board noted that the investment philosophy of Bailie Gifford had remained unchanged, and that the long-term approach to investment would lead to share price outperformance. Volatility within the market due to political and economic uncertainty however the long-term prospect of the fund remained very positive.

After they had answered questions from members, the Convener thanked Tom and Claire for their presentation.

Willie SAWERS, Convener.

At MEETINGS of the PERSONNEL APPOINTMENTS SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 7th June and 26th June, 2018.

APPENDIX II

Present:-

On 7th June, 2018:-

BAILIES

COUNCILLORS

On 26th June, 2018:-

BAILIES

COUNCILLORS

Councillor John ALEXANDER, in the Chair.

Unless marked thus * all items stand delegated.

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 for the undernoted items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraph 1 of Part I of Schedule 7A of the Act.

I DECLARATION OF INTEREST

No declarations of interest were made.

II APPOINTMENT OF EXECUTIVE DIRECTOR OF CITY DEVELOPMENT

At the meeting held on 7th June, 2018, there were submitted details of the applications received and the Sub-Committee agreed the candidates to be invited for interview on 26th June, 2018.

At the meeting held on 26th June, 2018, the Sub-Committee interviewed the candidates. Following an exchange of views, and after hearing the officers, the Sub-Committee unanimously agreed to offer the post to Mr Robin Presswood who intimated his acceptance.

John ALEXANDER, Convener.