Agenda and minutes

The Council was requested to determine that the following item of business, which contained exempt information as described in Schedule 7(A) of the Local Government (Scotland) Act 1973, be taken in private:-

Outline Business Case - Externalisation of Corporate Governance - Report by Director of Corporate Governance

Councillor Young moved as a procedural motion, seconded by Councillor Graham:-

            That the Council consider the item in public.

On a division, there voted:-

For the procedural motion  (11)  -  Councillors Adam, Allan, Cassie, Collie, Cooney, Crockett, Graham, Hunter, Ironside, Laing and Young.

Against the procedural motion  (31)  -  Lord Provost Peter Stephen; Depute Provost Dunbar; and Councillors Boulton, Clark, Corall, Cormack, Cormie, Dean, Donnelly, Farquharson, Fletcher, Greig, Jaffrey, Kiddie, Leslie, McCaig, McDonald, Malone, May, Milne, Noble, Penny, Reynolds, Robertson, John Stewart, Kevin Stewart, Wendy Stuart, John West, Kirsty West, Wisely and Yuill.

The Council resolved:-

(i)                 to reject the procedural motion; and

(ii)               in terms of Section 50(A)(4) of the Local Government (Scotland) Act 1973, to exclude the press and public from the meeting during consideration of the aforementioned item of business (Article 5 of this minute refers) so as to avoid disclosure of exempt information of the classes described in paragraphs 6 and 8 of Schedule 7(A) of the Act.

Replacement version of the report

Following significant work to examine two new options for Social Care and Wellbeing, which will deliver significant benefits to the Council if accepted, the General Fund Budget Report has been re-issued and now includes these options in Appendix 3 of the report.

The Council had before it (1) a report by the Director of Corporate Governance which presented a draft General Fund Revenue Budget for 2011/12; and (2) a further report by the Director of Corporate Governance which proposed a General Fund Capital Programme for 2011/12 and an indicative programme for 2012/13 to 2014/15.

The Council also had before it (1) by way of remit, the decisions of the Finance and Resources Committee of 1^st February 2011 (Articles 11 and 32 of the minute of that meeting refer) in respect of (a) an emergency motion by Councillor Kevin Stewart regarding voluntary redundancies; and (b) the roll out of the Accord Card, as well as a supplementary paper which the Finance and Resources Committee had requested; and (2) a further report by the Director of Corporate Governance which presented the business cases, or additional information requested, on the service options that had been presented to the Finance and Resources Committee on 2^nd December 2010, for those options that had been designated amber.

The report on the General Fund Revenue Budget had attached as appendices (1) an illustration of the Council’s five year position based on the data that had been derived from the Priority Based Budgeting (PBB) exercise; (2) the budget movement for each Directorate; (3) a full breakdown of the service options from Directorates, with the options categorised as either green (approved), amber (further detail required) and red (not taken any further); and (4) the position on working balances as at 1^st April 2010 after taking account of the known commitments, as per the period 8 monitoring position for 2010/11.

The report advised of the updated current position, as per Appendix 1 to the report, highlighting that total projected expenditure less total funding was £6.137million. Further savings proposals, as contained within Appendix 3 to the report, totalled £8.209million. Appendix 2 to the report showed how the previously reported 2011/12 position had moved since reported to Council in December 2010.

The report touched upon additional growth items and highlighted that there was no pay award built into the base budget for staff in 2011/12, in line with national policy, however the budget did include an allowance for staff increments which was now related to performance.

In regard to funding, the report stated that the total funding available to the Council would be £450.311million, assuming Council Tax levels were frozen. The Council’s settlement figure from the Scottish Government was £336.715million, however £15.272million of that figure was dependent on a number of conditions being met which were summarised within the report. The report emphasised that Aberdeen City Council continued to be one of the lowest funded Councils in Scotland on a per head of population basis. The Scottish average was currently £1,907.70 per head compared to Aberdeen City Council receiving £1,579.31 per head. The report stated that if the Council were to receive the same level of funding as the local authority placed immediately above it in the league table, it would  ...  view the full minutes text for item 2.

The Council had before it a report by the Director of Housing and Environment which provided members with information to allow the setting of the rent level for the financial year 2011/12 as well as provisional rent levels for the financial years 2012/13 and 2013/14, explaining that this would allow a capital programme for 2011/12 to be set as well as a provisional programme for 2012/13 to 2013/14.

The report advised (a) that the current estimated out-turn for the HRA for 2010/11 showed a balanced budget with increased capital from current revenue; (b) that the draft budget for 2011/12, 2012/13 and 2013/14 (as attached as Appendix 1 to the report) showed gross expenditure of £75.407million, which included a contribution to capital expenditure referred to as Capital Financed from Current Revenue (CFCR) of £13.925million and income of £75.407million which reflected and included a proposed rent increase of 5.7% based on feedback from the annual tenants consultation; (c) that the budget included the capital financing charges to fund a programme of £50.276million (the details of the potential projects to be included in this programme were contained within Appendix 1 to the report); (d) that the budget detailed in Appendix 1 to the report also required the miscellaneous rents and service charges to be set, and the report gave indicative increases that the Council may wish to consider, along with what these meant as a percentage (the Council would have to decide on any possible increment to these charges in line with its rent setting strategy); (e) that working balances as at 31^st March 2011 were estimated at £5.336million, and it was considered that working balances should be set at 5% of final gross expenditure; (f) of the minimum working balances over the next three financial years subject to final budget approvals; (g) that in setting a capital programme, the level of capital investment was determined at local authority level, and the base programme, subject to the rent setting process, was £50.276million as set out in Appendix 1 to the report; (h) in terms of an outline budget for 2012/13 and 2013/14, also set out in Appendix 1 to the report, which included an assumed a rent increase of 2.9% in 2012/13 and 3% in 2013/14; (i)  in terms of the average rents of all other local authorities in 2010/11, noting that if the Council were to approve the rental increase of 5.7% and all other local authorities were to maintain their rent at 2010/11 levels, the Council’s average rent would not be the highest in Scotland; and (j) that included within Appendix 1 to the report was a schedule of savings that could, and should, be made to reduce controllable costs - these savings had not been built into the base budget for 2011/12 onwards and were part of the continuing drive to ensure that rental income was used effectively, costs were reduced and efficiency increased whilst at the same time improving the service.

The report recommended:-

that the Council -  ...  view the full minutes text for item 3.

The Council had before it a report by the Director of Corporate Governance which presented the draft Common Good Budget for 2011/12, along with indicative budgets for 2012/13 and 2013/14.

The report advised (a) that in preparing a draft Common Good Budget for 2011/12 to 2013/14, the strategy approved by the Finance Monitoring Sub-Committee on 24^th August 2004 had been applied (the calculation of an indicative cash balance using the Consumer Price Index (CPI) as part of the budget setting process had been adopted as an underlying principle); (b) that the CPI figure had been taken at 3.0% for 2011/12, 1.8% for 2012/13 and 2.3% for 2013/14 in accordance with forecast figures supplied by the Bank of England, it being estimated that the level of cash balances required to maintain the value of the Common Good would be £4.9million as at 31^st March 2012, £5million on 31^st March 2013 and £5.1million on 31^st March 2014; (c) of the origin, history and purpose of the Common Good; (d) that an outline of indicative budgets for 2011/12 to 2013/14 was appended to the report, and that in building these figures a number of broad assumptions had been made; (e) that the projected out-turn for 2010/11 was £5.3million, which was a favourable movement of £21,000 compared to budget; (f) on the most significant variances between the 2010/11 budget and the 2011/12 budget; (g) that several items had been referred to the budget process, the details of which were appended to the report; and (h) on the cash balances within the budget, with details provided on the recommended minimum cash balances to be held on the Common Good after they were adjusted for inflation.

The report recommended:-

that the Council -

(a)              consider the detailed Common Good Budget for 2011/12, as detailed in Appendix 1 to the report, and the forecast cash balances position; and

(b)              approve a Common Good Budget, taking into consideration any proposals to amend the draft budget (as detailed at Appendix 1 to the report), any decisions arising out of consideration of items referred to the budget process (as detailed in Appendix 7 to the report), Council’s approval of the General Fund budget, and the impact of the above on cash balances.

The Council resolved:-

(i)                 to accept the Common Good Budget as proposed within the report, excluding the additional contribution to the Gomel Trust of £4,200; and

(ii)               to instruct officers to undertake a Best Value audit of the Common Good Fund.

In accordance with the decision recorded under Article 1 of this minute, the following item of business was considered with the press and public excluded.

The Council had before it a report by the Director of Corporate Governance which presented the outline business case for the externalisation of Corporate Governance.

The report advised that the outline business case, which had been prepared by KPMG and was appended to the report, presented indicative benefits and costs, and set a direction of travel which would allow Corporate Governance to deliver greater quality services and savings in line with the Council’s Business Plan. The business case looked at the feasibility of externalisation, the potential benefits and scope, and considered the following three options for transformation (1) Internal Transformation; (2) Shared Services; and (3) Partner with third party Business Process Outsource (BPO) providers.

The report expanded upon each option and concluded that the preferred option was partnering with a third party BPO provider, which was based on an analysis of different options for transformation; a financial appraisal of anticipated costs and benefits; benchmarking data; and soft market testing. This type of transformation would involve the Council contracting with a third party to provide processes and outcomes. The report explained that the BPO market was mature and there were many examples where services were being provided more cost effectively than in-house.

The report went on to provide a detailed financial appraisal and summarised the benchmarking data that had been utilised. Soft market testing had generated strong interest from a number of BPO providers. In regard to procurement, the report recommended issuing an Official Journal of the European Union (OJEU) notice that would cover the entirety of services currently provided by Corporate Governance, and detailed the rationale behind the recommendation.

The report recommended:-

that the Council -

(a)              approve the commencement of a competitive dialogue procurement process, including issuing an OJEU contract notice and Pre-Qualification Questionnaire for externalisation of services currently provided by Corporate Governance; and

(b)              (1) approve the commencement of a tendering process for the procurement of external consultancy to assist with the competitive dialogue procurement process;  and (2) delegate power to the Director of Corporate Governance, the Head of Legal and Democratic Services, the Head of Finance and the Head of Procurement, in consultation with the Convener of the Finance and Resources Committee, to award a contract to the preferred tenderer for the external consultancy subject to a preferred tenderer being identified.

Councillor Kevin Stewart moved, seconded by Councillor Dean:-

That the Council approve recommendations (a) and (b)(1), and instruct that officers report to the Finance and Resources Committee seeking approval to award a contract to the preferred tenderer for the external consultancy, arising from recommendation (b)(1), subject to a preferred tenderer being identified.

Councillor Cooney moved as an amendment, seconded by Councillor Young:-

That the Council do not enter into the procurement process for outsourcing Corporate Governance operations and these services be kept in-house.

In response to questions from members, the Director  ...  view the full minutes text for item 5.

Introduction

Lord Provost and Members of Aberdeen City Council, I am pleased to present the Administration’s proposals for the 2011/12 Housing Revenue Account (HRA) and the Housing Capital Account.

Housing investment and service remains a priority for this administration and sustaining a sound financial basis for delivering our Housing Landlord responsibilities and objectives remains a priority.  Efficient Management of our housing assets and other resources allows us to continue with confidence to develop the Housing Revenue Account and Housing Capital budgets for financial years 2011/12 indicative programme for years 2012/13 and 2013/14. 

For eight years now we have maintained our goal to achieve a sustainable financial plan and deliver the Council’s commitments to improving Service and quality of our homes. This investment has allowed us to provide our tenants with warm modern homes and has created and sustained employment in the construction and manufacturing industry both in Aberdeen and throughout the country. 

We continue to work closely with officers to identify ways of delivering better services, and houses for our tenants.  A great deal has been achieved over the last eight years although much more still requires to be done both in terms of financial investment and service improvement. Prudent financial management together with the modernisation of our housing service will remain a key priority for this Administration.  Housing plays a key role in providing stability for families and is fundamental to the economic success of this city.   As such therefore it is right that we give housing investment within the city significant priority. 

In setting the rent level for the financial year 2011/12, as well as the provisional levels for 2012/13 and 2013/14 we have carefully balanced the need for continuing financial investment in the houses as well as ensuring we deliver our services in an efficient and effective way as possible.  High quality service delivery as well as warm and well maintained houses will deliver best value for our tenants. 

In line with previous years of practice by this Administration, we sought the views of our tenants as to whether maintaining the Rent Policy at inflation plus 1% was still appropriate. The majority of responders agreed with maintaining this policy

This would mean a rent increase of 5.7% for 2011/2012.

This increase would still compare favorably with other local authorities and with the City’s RSL’s.

The Administration is aware that during this economic climate many families would find a rent increase of 5.7% difficult.

We therefore suggest that the Rent Policy of inflation + 1% is not appropriate for this year and propose a inflation only increase of 4.7%

These are difficult times and I ask the Director to find the 1% loss through a reduction in cost base within the management and administration budget. To report to Housing & Environment on the 10^th May with detailed proposals on these savings. I also instruct the Director to provide a detailed report to committee on the 10^th May on the price deferential on car parking charges between  ...  view the full minutes text for item 6.