Agenda and draft minutes

Apologies for absence were received from:

Councillor G Nicolson

Councillor W Patterson

Councillor D Ryland – Councillor M Clark (deputising)

Councillor D Wicks

To sign the minutes FSc/11/10/22 to FSc/18/10/22 of the meeting of this Committee held on the 25^th October 2022 as a correct record of those proceedings (copies previously circulated).

Proposed by Councillor P Dew

Seconded by Councillor P Baker

andRESOLVED that the minutes FSc/11/10/22 to FSc/18/10/22 of the meeting of this committee held on the 25^th October 2022 be confirmed and signed as a correct record of those proceedings.

To receive any declarations of the existence and nature of any private interests, both disclosable pecuniary and any other registrable interests, in any matter to be considered or being considered.

There were no declarations of interest declared.

To consider report no: DCE54/22 of the Deputy Chief Executive, which seeks to provide an update on the achievement of the project objectives for the Voreda House project and a construction programme and budget progress report.

RECOMMENDED:

It is recommended that the Finance Scrutiny Committee note the report.

Members considered report no: DCE54/22 of the Deputy Chief Executive, which sought to provide an update on the achievement of the project objectives for the Voreda House project and a construction programme and budget progress report.

The Interim Director of Resources, Paul Sutton, provided an update to Members regarding the construction programme and reasons for changes to the projected figures.

The following developments were highlighted:

·       The single site project was based on the need to provide a focal point for resident’s services, public sector partners and local government operations.

·       The building further reduces the long-term operating costs borne by the Council due to its passivhaus design and carbon neutrality.

·       Voreda House will serve as an anchor building, which was confirmed by the Westmorland and Furness Shadow Authority decision, which ensures that local jobs are retained in Penrith. Utility cost savings are estimated at £4.8m contributing to all inclusive savings of £10.7m over 25 years.

·       The original asbestos survey established a small amount of asbestos which was dealt with on the date of the building’s acquisition by the Council.

·       The extra costs were identified after further detailed investigations permitted post-acquisition, and after the removal of materials had been carried out, further asbestos was discovered in the under croft and that the structural integrity of the building had been compromised due to contaminated material, carbonisation of the concrete and the removal of concrete in specific locations for wiring. The original lifts, which were fit for purpose, would further not match the lifespan of the building and new lifts would need to be installed.

·       Inflationary pressures on building costs in the construction sector estimated at 40 percent, placed further financial pressure on the projects original costs forecasts.

·       The original cost was £3.09 million - increased cost of £1.47 million (27 percent inflation) = revised cost of £4.56 million

Members asked the following questions of the Interim Director of Resources:

·       Is the building (Voreda House) likely to be completed by the 31^st March 2023?

Response: Yes

·       With regard to the Town Hall Development, how confident are you that the proposed capital schemes will be completed in 2023/2024? Is the funding for the Town Hall ring-fenced?

Response: Where there are contractual commitments in places they will be fulfilled. In cases where there are no contractual commitments in place, the new authority could look at the rationalising of the capital programme. There is funding of £725 000 in the capital programme for the Town Hall Development, although this is not ring-fenced.

·       Is there a reserve/contingency fund for Voreda House?

Response: There is still a contingency left within the contract.

·       Do the figures this evening reflect the ongoing costs?

Response: The figures are based on the current level of energy costs and the utility savings drawn over a longer period of time.

The Interim Director of Resources noted that had the Council had the information that it now possessed it would have likely continued with the project purely from a financial perspective.

Proposed by Councillor P  ...  view the full minutes text for item FSc/22/11/22

To consider report no: DoR88/22 of the Interim Director of Resources, which seeks to provide information on the spend and income compared to budget, up to the 30^th September 2022, including highlighting any pressures, risk and savings.

RECOMMENDED:

It is recommended that the Finance Scrutiny Committee note the report.

Members considered report no: DoR88/22 of the Interim Director of Resources, which sought to provide information on the spend and income compared to budget, up to the 30th September 2022, including highlighting any pressures, risk and savings.

The Interim Director of Resources noted that it was originally intended that the revised budget would be brought to the committee, given the outturn position and that quarter 1 and 2 monitoring were on track. The Interim Director of Resources noted further that the financial figures for the Voreda House Project and GLL contract would be going to Council due to the large financial changes to the budget. The Interim Director of Resources noted that leisure contractors across the country were facing increased energy costs which impacted upon their ability to provide services to residents; the same being true for GLL.

The Assistant Director Finance noted that the figures were slightly skewed as the budget reflects that the LGR reserve was paid this year, when in reality it was paid in March and therefore was part of last year’s accounts. The Q2 revenue monitoring indicates an underspend year to date, but forecasts an overspend overall. This is made up of the LGR figure, but the majority are where corporate priorities were set for the year, but priority launches were delayed over a number of months. There is an expectation that the corporate priority amounts, will be spent, however the uncertainty of LGR and staffing difficulties may exacerbate pressures, notably due to higher agency costs.

The Assistant Director Finance noted that the higher interest rates were allowing for greater income. The budget for the year was also based on the Heart of Cumbria operations moving into Eden towards the start of the year. This was initially delayed, but is back on track for delivery in January 2023. An additional pressure is the staff pay award, which was initially included in the forecast, but has now been confirmed as £1925 per person. This will therefore be included in the revised forecast.

With regard to Capital Monitoring, the Assistant Director Finance noted that this information was contained in 3.1 of the report. Key figures, included the Leisure Centre Equipment Maintenance project, the Castle Park Vision which is on hold due to planning concerns, the Green Homes Exemplar was experiencing delays due to nutrient neutrality, and the electrical vehicle charging points in Appleby which may need to be delayed due to flood prevention scheme works.

Members asked the following questions on the item:

·       What will happen if Castle Park is delayed beyond the financial year?

Response: If it is in contract then it will go ahead.

·       Are Frenchfield stadium and the electric vehicle charging points in contract?

Response: The electric vehicle charging points should progress. Frenchfield stadium is based on a grant scheme reliant upon certain conditions being met, i.e. the installation of the 3G pitch.

·       Is the poover available to the Council for use?

Response: The poover was purchased by Urbaser and is available for our  ...  view the full minutes text for item FSc/23/11/22

There were no urgent items of business.

The date of the next scheduled meeting of the Finance Scrutiny Committee be confirmed as Tuesday, 6^th December 2022.

The date of the next meeting of the committee was confirmed as Thursday, 14^th December 2022.