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MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
09 June 2010 |
INFORMATION STRATEGY 2010 - 13
Issue for Decision
The review of the Council's Information Strategy (formally the ICT Strategy), an annual review of the rolling 3 year program.
Decision Made
1. That the Information Strategy 2010-2013 be approved.
2. That it be noted that the Information Strategy 2010-2013 will be updated on an on-going basis as the strategy is more firmly embedded within the service planning process and the Council’s information management needs become more apparent.
3. That the change in title of this annual review from the ‘ICT Strategy’ to the ‘Information Strategy’, which reflects the shift in focus for the strategy from hardware and infrastructure to that of information management and business improvement, be noted.
Reasons for Decision
Citizens want to see better value, more choice and improved response from the Council. The Government wants to see efficient, streamlined services which are designed around the Customer. The Council wants all of this at a lower cost. Technology has a major contribution to make in enabling us to meet these increasing expectations and rise to the challenges, now and in the future. The Information Strategy is therefore a key document that ensures that technology underpins the Council’s priorities and core themes, supports and enables the Council’s efficiency and transformation agenda, and provides a framework for the corporate control and management of its resources.
The Council’s Information Strategy is a rolling three year document, reviewed annually to ensure it remains relevant. In presenting the Strategy for 2010 – 2013 it is important to recognise that the Council’s investment in technology has continued to transform the way in which the Council provides services to citizens, partners, businesses and communities.
This year’s review of the Strategy is set against the national context of a continued drive for greater efficiency and more customer focused services. Using technology to deliver better public services is therefore the key focus of this strategy term, and to achieve this we will:
· continue to promote and encourage the take-up of our e-services by customers;
· encourage customers to use communications channels which have a lower transaction cost;
· engage with managers and service providers to exploit the efficiencies available from existing and new systems;
· improve business processes through the introduction of technology, and encourage staff to make modern and efficient ways of working part of “the day job”;
· enable Members and partners to access the Council’s information and services electronically and encourage their constituents to do the same;
· exploit the full potential of partnership working and pursue opportunities for ICT to support shared services in Mid Kent, and across Kent.
This will provide real benefits in terms of efficiency and effectiveness. Over the next 12 months the Council will further exploit the opportunities provided by modern technology to improve services through business improvement initiatives.
This Information Strategy represents a major departure from the ‘traditional’ ICT Strategy as it attempts to describe the Council’s use of Information as a strategic tool, rather than just describe how we use technology. As such, the strategy will be further informed and amended as the Council’s understanding of its own information needs mature.
Alternatives considered and why rejected
It is inconceivable that the Council should not use technology as a strategic tool with which to develop its role within the community, and meet the aspirations of its stakeholders.
Background Papers
None
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 18 June 2010 |
MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
09 June 2010 |
TREASURY MANAGEMENT PERFORMANCE FOR 2009/10
Issue for Decision
To agree Treasury Management performance for 2009/10 and to consider revisions to arrangements for 2010/11 in accordance with the CIPFA Code of Practice on Treasury Management
Decision Made
1. That the review of the financial year 2009/10 which has been compiled in accordance with the Code of Practice on Treasury Management as adopted by this Authority be noted.
2. That no amendments be made to current procedures as a result of the review of activities in 2009/10, with the exception that the prudential indictors be amended to incorporate the adjustment reported by the Head of Finance regarding Long Term Liabilities and detailed in the revised Appendix A attached.
Reasons for Decision
The Council has adopted and incorporated into its Financial Regulations, the CIPFA Code of Practice on Treasury Management in Local Authorities. This Code covers the principles and guidelines relating to borrowing and investment operations.
In February 2009 the Council approved a Treasury Management Strategy for 2009/10. The strategy was based upon guidelines in CIPFA’s Code of Practice on Treasury Management. The Code requires that a report be presented reviewing the strategy that was approved, the previous year’s activities and endorsing or amending current procedures for the forthcoming year.
The Strategy for 2009/10 set out the following objectives:
a) Keep investments short term (up to 1 year) to help fund the existing capital programme when needed and to make funds available to invest if rates increased;
b) The counterparty list was amended due to the banking structure changing with nationalised and part nationalised banks, banks with Government backing and Sovereignty stability coming under attack for bailing out the banking industry;
c) There was to be no planned borrowing, other than for short term cashflow purposes. The Council is currently debt-free.
d) That the prudential indicators detailed in Appendix C to the Record of Recommendation of the Cabinet was approved;
e) That the Head of Finance had been given delegated authority consultation with the Cabinet Member for Corporate Services) to make use of alternative investment instruments should it be considered prudent to do so and should it be of advantage to the Council;
f) That the Council’s Treasury Management Practices be amended to reflect those decisions.
Since the adoption of the Treasury Management Strategy for
2009/10, CIPFA has published a revised code which incorporates guidance on
additional reporting of activities to Cabinet, Audit Committee and Council.
This revised code is in operation for the 2010/11 strategy and will be used for
year end reporting of 2009/10 activity.
2009/10 Overview
Economic Overview – The Bank of England cut its base rate to
0.5% over 2008/09 and it has remained at this level since. Despite the low
base rate, the Bank of England has found it necessary to provide “quantative
easing” to the market in order to maintain the economy. Inflation was not a
major concern during 2009/10 although it increased dramatically in the last
quarter. RPI increased to 3.5% following the reinstatement of a 17.5% VAT
rate. Since that time it has continued to increase. At April 2010 it was
5.3%. The Bank of England forecasts it to fall back to below 2% by the end of
2010.
MBC Overview – The revenue and capital outturn position of
the Authority was reported separately. The overall theme of these reports is
that, notwithstanding the fact that some projects have been contractually
committed or are near to implementation. The amount of slippage within this
financial year has reduced which means that balances are being spent and less
funds, along with the low interest rates, has led to low investment income.
All investments have been on a short-term basis in line with
the Strategy.
Throughout 2009/10 the level of investments had an average
balance of £23.5m invested over the course of the year. This covers investment
of balances, capital receipts and other balance sheet assets. However it is
higher than anticipated as a consequence of slippage in both revenue and
capital expenditure, as reported to Cabinet in various budget monitoring
reports.
Investments at the start of the year totalled £23m, and the
Treasury Management Strategy for 2009/10 anticipated year end investments of
£7m. However, the actual year end investments totalled £8.7m. The main
differences between the estimated and actual outturn figures are summarised
below:
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Reason |
£000 |
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Additional Capital Slippage (over assumption) |
500 |
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Fleming Claim VAT Re-imbursement |
1,200 |
Compliance with Treasury Limits
The Treasury Limits were agreed at Cabinet in February 2009
and by Council in March 2009. The outturn for Prudential Indicators was shown
at Appendix A of the report of Head of Finance. The Council operated within
these limits through 2009/10. A revised Appendix A was distributed at the
meeting by the Head of Finance detailing an adjustment to the prudential
indicator for external debt. This indicator includes the value of other long
term liabilities and was estimated at £100,000 for the year 2009/10. On advice
from the External Auditor, the Council intends to account for the works at the
Leisure Centre as a long term financing arrangement which is an arrangement
that should be measured by this indicator. The long term liability created by
the Leisure Centre arrangement is valued at £6.4m as at 31st March
2010 which is significantly above the approved level for 2009/10. This value
will require amending in the approved indicators for 2010/11.
Debt Management
At 1st April 2009 the Council had no outstanding
long term borrowing. The only borrowing during 2009/10 was for short-term
cashflow purposes only.
Cash Management
The major element of the Council’s Treasury Management function is the management on a daily basis of the cash requirements of the Council. The policy objectives in this respect are:-
a) The minimisation of the daily credit bank balance, subject to the clearance of monies overnight;
b) Interest earned on investments should be maximised subject to the security of the funds being paramount;
c) Interest paid on borrowing should be minimised;
d) Adequate funds should be available to meet precept payments and other payments as they fall due;
e) Cash management activities are carried out in accordance with the agreed Treasury Management Strategy.
As detailed above, the Council continues to have a positive
cash flow pattern which has resulted in the investment activities detailed
below during 2009/10. All investments made were in accordance with the agreed
Treasury Management Strategy.
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Institution |
Number of Transactions |
£m |
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Building Societies |
47 |
56.1 |
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Call/Notice Accounts/Money Market Funds |
174 |
136.8 |
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TOTAL |
221 |
192.9 |
There was continued use made in 2009/10 of Call/Notice Accounts
and the Money Market Fund Account. These accounts continued to offer short
term competitive rates in comparison with those on the money market, as well as
offering some improved flexibility in terms of cashflow management.
No alternative investment instruments were utilised in
2009/10.
The average interest rate received during 2009/10 on short
term investments (less than 1 year) was approximately 1.87%. The average
interest rate on call/notice deposits was approximately 0.65%. The overall
rate achieved on all investments was 3.69%. This compares with the average
seven day rate in 2009/10 of 0.45% and the average three monthly rate of 0.73%.
The financial benefit from investment income of £735k was
partly secured by the long term investments made at higher rates in prior years
and the remaining Eurosterling Bond taken out in 2004, which had matured within
the year. The decline in short term rates throughout the year was effectively
controlled by this.
Approved Lending List
The criteria adopted in the investment of surplus funds are
the security of the capital and the avoidance of risk which can be associated
with maximising returns.
For 2009/10 Members had approved a lending list to govern
the investment policy of the Authority and had stipulated that a maximum of £4m
be lent to any one institution from resources temporarily available. The
current approved lending list covers British clearing banks and their wholly
owned subsidiaries (including the HSBC Bank which is owned by a foreign institution)
and the top 30 building societies (ranked by asset size). A decision was taken
by the Head of Finance to reduce the risk of exposure to Building Societies by
reducing the lending list from top 30 to top 20. This was decided after market
intelligence advised that the continued problem with the housing market and the
downgrading of building societies within the ratings may have a detrimental
effect. Local Authorities and a selected list of overseas institutions were
also included.
There is also a maximum limit of £10m to be lent to any one
institution from resources available to be invested for periods greater than
one year. This covers issuers of Eurosterling Bonds and the UK Government.
The primary criteria for assessing the suitability of an institution
to be on the list are its credit rating and the rating of its Sovereignty,
which is supplied by the Council’s Treasury Management advisors. Part and
wholly Nationalised Banks were also included along with banks that had taken up
the offer of Government backing.
Current Issues
The CIPFA Prudential Code was introduced on April 1st
2004. In broad terms, the code allows, subject to prudential, sustainability
and affordability issues, authorities to borrow whatever resources they need to
fulfill their capital spending priorities. This has now been updated by
CIPFA’s Code of Practice on Treasury Management 2009 (Revised). There is no
current plan to borrow at the present time, however, the option of borrowing
will be reviewed at least annually in planning to fund key priority spending
and will possibly have an impact in the medium term.
There continues to be the potential for future developments
in terms of accounting for investment instruments, as well as the introduction
of new and alternative instruments into the market. The likely impact of these
will continue to be monitored in conjunction with the Council’s Treasury
Management advisors.
External Fund Managers
The Council does not currently use external fund managers.
Delegation
The decisions on the investment and borrowing activities described in the report of the Head of Finance have been performed under authority delegated to the Director of Regeneration and Communities (formerly the Director of Resources and Partnerships).
Alternatives considered and why rejected
It would be possible for the Council to amend its practices to enable investment at higher rates by increasing the number of institutions on the approved lending list. This action would increase risk by reducing security of the capital sums invested. Such a change to the strategy would require approval of Cabinet, Audit Committee and Council and is contrary to the recommendations of CIPFA and is therefore not recommended.
Background Papers
Previous reports to the Cabinet on Treasury Management, especially the Treasury Management Strategy 2008/09.
CIPFA Code of Practice on Treasury Management in Local Authorities.
Accountancy Summaries of Loans and Investments.
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 18 June 2010 |
MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
09 June 2010 |
Final Accounts 2009/10 and Summary Statement of Accounts
Issue for Decision
Summarises the actual revenue and capital Final Accounts position for 2009/10
Decision Made
1. That the revenue final accounts position 2009/10 be noted as being substantially in line with that provisionally reported to the previous meeting.
2. That the uncommitted level of balances available as at 31March 2010 at £3.7m, an overall increase of approximately £0.7m compared to the position as agreed by Council in February 2010 be noted.
3. That the revised financing of capital expenditure as detailed in Appendix C of the report of the Head of Finance be agreed.
4. That the draft income and expenditure account, balance sheet, cashflow statements and Collection Fund accounts for 2009/10, as amended and attached, be noted.
5. That the final accounts position for 2009/10 is a strong base on which to monitor the agreed spending programme for 2010/11 and consideration of the budget strategy for 2011/12 onwards be agreed.
Reasons for Decision
The provisional outturn position, for revenue and capital
spend, overall balances and the impact of the final accounts position on the
projected balance sheet was reported to the last meeting of Cabinet. The
Accounts and Audit Regulations require the full Statement of Accounts to be
agreed by Audit Committee by the end of June 2010 and the final accounts
position as detailed in this report is an essential element of the Statement of
Accounts.
The full Statement of Accounts is to be reported to the
Audit Committee on 21 June 2010. These accounts will include the Annual
Governance Statement which was agreed by Cabinet at the last meeting. At the
meeting of Council on 19 May 2010, a recommendation from Standards Committee to
enhance the role of Audit Committee was agreed. This included the approval of
the annual Statement of Accounts. At this meeting on 21 June 2010, Audit
Committee will be asked to consider and approve the statements for the first
time.
Revenue
The revenue final accounts for 2009/10 have now been completed
and the summarised position is set out in Appendix A to the report of the Head
of Finance. This is substantially in line with the provisional figures
reported to the last meeting of Cabinet.
Appendix B to the report of the Head of Finance is the Statement
of Balances as reported to the last meeting of Cabinet. The statement has been
amended to reflect the value of carry forwards agreed at the last meeting of
Cabinet. Members will note that the total level of balances at 31 March 2010
is £8.3m, with an uncommitted level of balances of £3.7m, after taking into
account approved carry forwards of £4.6m and other future commitments.
Capital
Appendix C to the report of the Head of Finance is a revised statement of capital expenditure for 2009/10. There have been minor changes to this statement and the capital financing since the report to Cabinet dated 20 May 2010. There is therefore a need to approve the revised capital financing as set out in the summary at the start of the appendix. This statement is a fuller version and expenditure varies from the previous report as follows:-
a) Capital expenditure on Renovation Grants has increased by £124,000 following a review of grant’s accrued;
b) Capital expenditure on Gypsy sites has been correctly identified as renovation grant and has been moved as part of the adjustment given in item a) above;
c) Capital
expenditure on the museum included incorrectly allocated marketing cost which
have been adjusted.
Statement of Accounts
The full Statement of Accounts will be reported to the Audit
Committee on 21 June 2010, in accordance with the Terms of Reference for that
Committee as agreed by Council in December 2006. However, it is important the
Cabinet are aware of the major statements included within the overall Statement
of Accounts and these are detailed as follows and updated copies of these
appendices were circulated at the meeting and are attached to this Decision:-
a) Income and Expenditure Account – Appendix D
b) Balance Sheet – Appendix E
c) Cashflow Statement – Appendix F
d) Collection Fund – Appendix G
The Income and Expenditure Account attached at Appendix D is
in the format for the Statement of Accounts and presents the revenue position
as required under financial reporting standards. This statement is formatted
to allow comparisons with other businesses required to report under financial
reporting standards and shows a year end deficit of £5.3m. In order to
calculate the balance attributable to Council tax a series of adjustments to
figures such as depreciation and pension costs are required. These adjustments
are detailed in the full statements which confirm the overall level of balances
at £8.3m as fully detailed in Appendix B to the report of the Head of Finance.
Appendix E attached reports the Council’s assets and
liabilities. Members should note the balance of usable capital receipts stands
at £2m. Members should also note the pension fund liability has been valued as
at 31 March 2010 as £64.3m a 70% increase in liability from 31 March 2009.
This value has been calculated by the Actuaries to Kent County Council’s
pension fund and is based upon a set formula that is not compatible with KCC’s
actual investment strategy.
The cashflow statement at Appendix F (attached) identifies
that, in overall terms, the revenue activities of the council produced a
marginal increase in cash resources of approximately £0.9m. On capital
activities the income from capital receipts and grants was approximately £6.7m
which is less than the capital expenditure funded from these sources. This net
outflow of cash resulted in the reduction in investments held by the Authority
of £10m.
Appendix G (attached), relating to the Collection Fund, identifies that there is an overall reduction in the balance of the fund from £110,000 to £83,000 which is in line with projections in December 2009. As in previous years the position of the Collection Fund during 2010/11 will be reported to the Cabinet in the quarterly monitoring report.
Alternatives considered and why rejected
The alternatives are included above.
Background Papers
Previous reports to Cabinet relating to 2009/10 budgets, particularly in the report to Cabinet in May 2010.
The Accountancy reports summarising revenue expenditure 2009/10.
Statement of Accounts, which will be reported to Audit Committee on 21 June 2010.
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 18 June 2010 |