Society of District Council Treasurers

Society of District Council Treasurers
Minutes of the Executive Committee held on 20th October 2017
At the Goring Hotel, London
SDCT Website: www.cipfa.org/partners/society-of-district-council-treasurers


In Attendance: Jill Penn (President), Nick Eveleigh (VP), Simone Hines (2nd VP), Angela George (Secretary), Bob Palmer, Alan Peach, Peter Stuart, Kevin Jaquest, Steve Hearse, Ian Knowles, Adrian Rowbotham, Chris Brewer, Jason Vaughan, Jo Wagstaffe, Simon Freeman, Shelagh McGregor, Jenny Poole.
Welcome: The Executive welcomed Homira Javadi (East Suffolk) to her first meeting of the Executive.
Also in attendance: Nicola Morton (LGA), Guy Clifton (Grant Thornton), Joanne Pitt (CIPFA).

1. Apologies:
Apologies were received from – Mark Dickenson, Sal Khan, William Jacobs, Paul Deal.
Also: Aileen Murphie, David Aldous (NAO), Sally Marshall (DCEN), Jon Hayes (PSAA), Katy Baldwin (DCLG), Lisa Quinn (Capita), Michael Hutchison (Zurich).

2. Minutes of Previous Meeting and matters arising

The draft minutes of the previous meeting of 8th September (on the SDCT website) were agreed.
Actions have either been completed or picked up elsewhere on the agenda.

3. Local Government Finance Settlement 2018/19 – Technical Consultation
The consultation deadline is 26th October and Jill Penn had previously circulated a copy of the draft SDCT submission. She requested Executive member input into the HRA issues. The submission was agreed including the opposition to changes to the NHB allocations and distributions.
Nicola Morton reported that the LGA response to the consultation was being circulated and that they were taking a firm line to not making any changes to the NHB.
Action – Jill to finalise and submit the submission (now on SDCT website).

4. Business Rate Retention

Jill Penn provided an update on Steering Group issues and Nick Eveleigh provided an update on the Fairer Funding work (see below). They both reported that there was a new impetus from DCLG officials into the various groups. Jill stressed the importance of having a joined up approach to the groups albeit recognising the differing needs of Districts and other tiers.

Nicola Morton reported that:
- 100% BRR needs primary legislation and according to DCLG officials there is insufficient parliamentary time for this and so implementation in 2019/20 is not possible.
- The Responsibilities working group is going to meet to reconsider its position on rolling in specific grants. A decision on the future of the group will be made by the Steering Group when it has reviewed this work.
- A further consultation paper from DCLG is due out shortly (date not yet known).

Fairer Funding Review group:
Nick had attended the Needs and Distribution Group on 29th September – The first item of business was to change the name to the Fair Funding Review technical working group.
At the meeting the DCLG said that Ministers are looking for an implementation of Fair Funding in 2020/21 however it currently looks as though we won’t have completely updated data sets by that time for Highways, Children's Services or the Index of Multiple Deprivation and that any results would need to be amended once the 2021 Census data had been released.
The DCLG acknowledged that whatever changes are introduced under Fair Funding there will need to be some transitional arrangements put in place although at this stage it is not clear what form these will take. There will be a consultation probably in late October for 3 months on Fairer Funding focusing on relative needs and key cost drivers. The DCLG are keen to get as much feedback as possible from the various stakeholders on this.
There will be a Children's services research project commencing this week to collect localised data to identify information on Children's Services activities working closely with the DfE. The aim is to gather information to feed into the relative need model which could then be added to the Fair Funding Formula.
The main papers considered at the meeting were firstly a DCLG paper on the Area Cost Adjustment. The main issues were centred around which earnings data to take into account, whether to adjust for rents and rates and should other classes of expenditure such as insurance costs be included. The meeting were keen to keep the factors to salaries and rents and rates however there was a view that we should start with a blank piece of paper and the rural authorities group put forward a paper suggesting that scarcity needs to be considered as the costs in rural areas are greater than urban. There was no consensus on these points.
There was some discussion around including income in the needs calculation in particular parking income however it was mentioned that there is often a significant cost involved in generating new income which may include borrowing costs and these would have to be taken into account. The SDCT view is that we should push back on this as Districts have generated a large amount of discretionary income in order to balance their budgets and we don't want to be penalised through the grant system for doing so.
There were two papers on deprivation one from the DCLG and one from County Councils. The DCLG feel that deprivation represents a very strong cost driver. There was a lot of discussion about the existing indices of deprivation most centred around adults and children and they were asked to include Homelessness as for Districts this is the fastest emerging issue. The Counties paper tended to focus on the disparity between Counties and London Boroughs although not surprisingly the London Boroughs disagreed with this interpretation.
Overall the consensus was that it was a good meeting but we need to decide what our line is as Districts and whether there are any specific areas that we want raised. It is difficult representing all 203 districts to find issues that we can raise that will be of benefit to us as a group but Nick requires some input so that he can highlight the emerging issues from a District perspective without getting drawn into regional differences.

Nicola Morton reported that the LGA are developing tools to assist LA’s in assessing the impact of different options which could include council tax equalisation, transition and needs.
The next meeting is on 16th November.
BRR – Pilots 2018/19
There was a discussion on the Pilots and subsequently to the meeting:
- It has been confirmed that a no detriment clause would be included in the 2nd round of BRR Pilots for 2018/19.
- A joint letter has been sent to DCLG by the SDCT and SLT setting out a number of concerns with regards to the prospectus for the pilots.
Action – All to consider issues and feed back to Jill, Nick, Kevin or Alan who will make contact as lead advisors before the relevant meeting dates

VOA Engagement Workshop
Steve Hearse had circulated a presentation from the VOA Engagement he attended on 21st September. The points raised will be considered as part of the VOA’s plans for developing its local authority engagement.
Action – Steve to feed back to the Executive.


5. Audit Update

Bob Palmer reported that the PSAA Advisory Board were considering 7 appeals against the appointment of their Auditor of which one is a District.
The final allocation of Audits is as follows:
GT- 40%
EY – 30%
Mazars – 18%
BDO – 6%
Deloittes – 6%
Moores Stephens – no guaranteed value but available where all other firms are unable to act.

A member of the Executive reported that he had received increased fees from his auditor without any consultation. Bob requested details be sent to him and he will follow the issue up.

6. Advisor Reports
6.1 Universal Credit / Housing Benefit
Simone reported that there would be an NAO study out by Christmas. She requested as much evidence as possible on the additional costs to be sent to her as soon as possible.
The template that had been completed by 38 authorities had been sent to the DWP but no feedback had been received.

7. Reports from External Bodies / Sponsors:
7.1 LGA

Nicola Moron reported:
Autumn Budget
This will be on 22nd November.

Planning Fees
The 20% increase comes into force on the 28th day after the day on which the regulations were laid. As the regulations were laid last Thursday, they will come into force on Thursday 16 November.

Exit caps
According to HMT this is still happening. Consultations on this are due late this year or early next again according to HMT. It needs primary legislation and regulations so we don’t expect to see anything in force by first quarter of 2018. We continue to chase HMT for a firm date on consultations.
Private Member’s Bill
The Local Authorities (Borrowing and Investment) Bill 2017-19 has its Second Reading on Friday 1st December and is fifth on the order paper on that day. The first Bill on the order paper that day covers Parliamentary constituencies so it is anticipated that will take up most of the 5 hour slot. The LGA will brief further if needs be.

High Value Council Homes
Essentially the LGA don’t know whether this will go ahead or not. It is looking very unlikely for a number of reasons – lack of parliamentary time, post-Grenfell Tower issues, rising homelessness, shift in narrative around council housebuilding. The LGA is pressing DCLG to provide certainty that they will not progress it, so that councils can begin investing. DCLG and Ministers are hearing this from local government regularly.

7.2 CIPFA
Joanne Pitt informed the group that the 2 consultations were closed and were being finalised.
The Housing roundtable event was held on 21st September and further briefing s will be given.
CIPFA have a Brexit Commission chaired by Julia Goldsworthy. They have met with DCLG who want a dialogue with the LG Sector.

7.3 CAPITA
Lisa Quinn was unable to be present but had sent the following update:
Business Rates – planning further workshops in the spring, taking care with timing and availability of Council officers
Client Network – planning another event first week in December, aiming to cover topical subjects such as commercial activity and hoping to have a practitioner case study presentation
Capital Strategy – This will be circulated to the Executive.
MIFID II – should be a priority, LAs should be approaching relevant institutions rather than wait to be contacted. We are also urging potentially eligible clients to complete the ‘Elective Professional Client Assessment (Treasury Solutions)’ form that we sent out on 26th September, to be returned by 31st October.
Multi asset funds – we are starting to see more marketing of multi asset funds to LAs – key message is make sure that LA does a comparison with other similar instruments rather than going straight in if a particular product looks attractive on the face of it.

7.4 Grant Thornton
Guy Clinton reported on the following:
o Link to the GT latest report, on Combined Authorities:
http://www.grantthornton.co.uk/insights/combined-authorities-signs-of-success/
o Grant Thornton are involved in a global survey and report which takes place every two years. This relates to the International Consortium on Governmental Financial Management (ICGFM). The 2015 report is here:
http://www.icgfm.org/wp-content/uploads/2017/06/ICGFM-GTI-PFMSurveyReport12-2015_Final.pdf
The survey for the latest report, which is due to be published later in 2017 is here: https://gti.qualtrics.com/jfe/form/SV_egSpNzqT3ghr701
In addition we are looking for someone to be interviewed to potentially feature in the report – SDCT members to approach Guy if interested.
o There have been some developments with CFO Insights, our joint venture with CIPFA. These are the launch of CFOi 2.0 (greater user functionality), CFOi Pro (including forecasting functionality) and the CFOi app. We would be happy to present on these at a future SDCT meeting.

8. January AGM Agenda
The Executive discussed options for the January AGM Agenda

Action – Angela George to progress

9. Date of Next Meeting – 1st December 2017 at 10.30am at the CIPFA Offices.