AGENDA ITEM 10

BOROUGH OF POOLE

REPORT TO COUNCIL

21st SEPTEMBER 2004

REVISIONS TO THE CONSTITUTION

REPORT OF THE CHAIRMAN OF THE REVIEW OF STANDING ORDERS WORKING PARTY

  1. PURPOSE OF THE REPORT

1.1 To consider recommendations of the Review of Standing Orders Working Party with regards to the Council’s Constitution.

2.DECISIONS REQUIRED

That Council:

(i)Agree that the financial limit of key decisions be increased from £100,000 to £250,000;

(ii)Agree that, in addition to the Government prescribed definition of a key decision, i.e.:

…to be significant in terms of its effect on more than one ward…

as a local choice definition, provision be made in the Constitution that decisions be recognised as key, by virtue of their significance on any single ward in the Borough;

(iii)Agree that responsibility for the consideration of audit matters be delegated to the Service Provision Scrutiny Committee, mindful of the following suggestions:

(a)that the Service Provision Scrutiny Committee be renamed the Service Provision Scrutiny & Audit Committee;

(b)that, if so minded, the Service Provision Scrutiny & Audit Committee delegate the consideration of audit matters to a Sub-Committee; and

(c)that all Overview Groups be informed of the decision.

(iv)Agree revised Virement rules, as in Appendix A;

(v)Agree revised paragraphs 2 (a) and 2 (b) of the Budget & Policy Framework Procedure Rules, as in Appendix B;

(vi)Agree revised financial regulations regarding Petty Cash Limits; and

(vii)Note the recommendation of Cabinet on 7th September 2004 that a sub-group of the Environment Overview Group be formed to oversee the administration and strategic allocation of recreational contributions from planning obligations, but suggests that this change to the Constitution be further considered by the Cabinet when the Council has approved the Supplementary Planning Guidance (SPG) and Open Spaces Strategy (OSS).

3.BACKGROUND/INFORMATION

3.1The Review of Standing Orders Working Party have considered a number of issues over the summer months and now recommend that these matters be determined by Council. Other matters will be submitted to the Council in due course.

3.2For Members information, a full list of the background papers relating to the recommendations is included at the end of this report.

4.KEY DECISION REVISIONS

4.1The Review of Standing Orders Working Party unanimously agreed that recommendations (i) and (ii) be submitted to Council, based on the following reasons:

  • a £250,000 key decision limit was in line with other Unitary Authority Constitutions;
  • to assist in changes in ward boundaries and to more accurately reflect the practise carried out in other neighbouring authorities;
  • the magnitude of the impact of decisions on any given community, in addition to its impact on any geographical area should be a determining factor in whether or not the Council regarded the decision as key or not;

5.AUDIT MATTERS TO BE CONSIDERED BY THE SERVICE PROVISION SCRUTINY COMMITTEE

5.1The Working Party considered a recommendation from the District Auditor that the Council set up a Committee to deal with audit matters, i.e. that:

a Committee be given the responsibility for the consideration of detailed internal audit reports on systems of internal control, and internal audit performance reports.

5.2The Working Party noted that the Audit Commission had agreed to the suggestion that this responsibility be delegated to the Service Provision Scrutiny Committee

5.3If recommendation (iii) is agreed, the Working Party has requested that Council be mindful of its suggestion that the name of the Service Provision Scrutiny Committee be suitably amended, that, if so minded, this Committee delegate the new responsibility to a sub-committee and that all Overview Groups be informed of this decision.

6.REVISIONS TO THE BUDGET & POLICY FRAMEWORK PROCEDURE RULES

6.1The Head of Financial Services has requested that revisions be made to the Virement rules and to the paragraphs providing guidance associated with the process for developing the budget and policy framework.

6.2The Working Party expressed unanimous support for these revisions, noting that, with respect to the Virement Rules, the revisions would assist in clarifying current ambiguities and ensure that the rules were in line with good practise.

7.PETTY CASH LIMITS

7.1Currently Financial Regulations 3.111 and 3.114(g) read as:

3.111 / To provide employees of the authority with cash or bank imprest accounts to meet minor expenditure on behalf of the authority and to prescribe rules for operating these accounts. Minor items of expenditure should not exceed the prescribed amount £20.
3.114 (g) / To ensure that employees operating an imprest account ensure the float is used only for minor items of expenditure up to a value of £20.

The revision is proposed as follows:

3.111 / To provide employees of the authority with cash or bank imprest accounts to meet minor expenditure on behalf of the authority and to prescribe rules for operating these accounts. Minor items of expenditure should not exceed the prescribed amount. £50.
3.114 (g) / To ensure that employees operating an imprest account ensure the float is used only for minor items of expenditure up to a value of £50.

7.2The Working Party gave unanimous support for this requested revision.

8.PLANNING OBLIGATIONS FUNDING – RECREATIONAL CONTRIBUTIONS SUB GROUP

8.1The Cabinet agreed at its 7th September 2004 meeting that a sub group of the Environment Overview Group be established to oversee the administration and strategic allocation of recreational contributions from Planning Obligations Funds.

8.2The Working Party has considered the revisions which would need to be made to Part 3 of the Constitution as a result of this decision, and recommends that these revisions be deferred until Council has considered the forthcoming proposals to amend the SPG and OSS for the following reasons :

  • the Constitutional change will remove this particular decision making power from Area Committees, based on a premise that these funds are better allocated on a revised catchment based system, as opposed to a ward-based system, yet to be approved as part of the revised SPG and OSS;
  • the distribution of planning obligations funds needs to be in line with the legal agreement held between the Council and the developer, and therefore the central allocation of these monies will need to be carefully administered;
  • the Council would be better informed to indicate its views following its consideration of the revised SPG and OSS.

Councillor Neil Sorton

Chairman of the Review of Standing Orders Working Party

10th September 2004

Contact Officer: Bob Harris, Head of Democratic Services 01202 633021

Background Papers

Borough of Poole Constitution:

  • Article 13 – Decision Making
  • Part 3 – Responsibility for Functions
  • Part 4 – Budget & Policy Framework Procedure Rules
  • Financial Regulations

Review of Standing Orders Working Party Reports & Minutes:

  • 13th July 2004
  • 3rd September 2004

APPENDIX A

5. Virement

Reference should be made to Financial Regulations. However, for ease of reference, a summary is shown here.

Virements are intended to allow staff to manage budgets with a degree of flexibility within the overall policy framework determined by the full council, and therefore to optimise the use of resources.

a) The Council shall have the following budget heads

In approving the budget framework for the year the Council will allocate resources to budget heads as follows:

  • Statements of Service (General Fund Revenue Budgets)
  • Individual Capital Projects (block allocations approved by Council within the capital programme will require further approval from Cabinet (Portfolio Holder Decision) for individual projects in excess of £50,000)
  • An income or expenditure category within the Housing Revenue Account

b) Virements

These are transfers of funding, either within a budget head or between budget heads

i) Virements within a budget heads

Service Unit Heads are entitled to vire within a budget head.

However any virement which increases or decreases the gross expenditure total within the budget head supported by income or grants will need to adhere to the following process; -

  • amounts over £50,000 and up to £250,000, the prior approval of Cabinet (Portfolio Holder Decision) will be required or/and the virement can be highlighted as part of the monthly Corporate Financial Monitoring report.
  • amounts over £250,000, the prior approval of full Council will be required.

ii) Virements between budget heads

Service Unit Heads are entitled to vire up to £50,000 provided that any virement which impacts upon a budget head for which the Service Unit Head is not responsible has the prior agreement of the other Service Unit Head.

Virements between budget heads over £50,000 and up to the value of £250,000 will be subject to the prior approval of the Cabinet, following a joint report between the relevant Service Unit Head (or Heads) and the Head of Financial Services. A separate report will be required as part of the monthly Corporate Financial Monitoring report.

Virements in excess of £250,000 will be subject to the prior approval of full Council.

In both cases the key requirements of virement are:

  • The proposed expenditure and source of funding are clearly specified.
  • No overall additional budget liability is created including any costs which will fall on another budget head of the authority (i.e. superannuation back-funding)
  • That Service Unit Heads exercise responsibility and prudence. For example, recurring expenditure (employee costs) should not be supported from one off sources of savings or additional income, or create future commitments for which they have not identified future resources.
  • The Head of Financial Services is duly notified via the Service Unit Heads liaison with their Accountancy representative.
  • Virements involving employee costs will only be implemented after the adjustment has received the support of the Vacancy Clearance Panel.

APPENDIX B

Budget & Policy Framework Procedure Rules

2. Process for Developing the Framework

a)Five months (October) before a budget plan needs to be adopted (11th March), the Cabinet will publish initial proposals for the budget and policy Framework. The Cabinet will carry out consultation with all stakeholders, the public, local businesses, Area Committees and all other Forums as stated in the Forward Plan.

b)The Cabinet’s initial proposals shall be referred to the relevant Scrutiny Committee(s) for consideration. The proposals will be referred by sending a copy to the Head of Legal and Democratic Services who will forward a copy to the Chairman of the relevant Scrutiny Committee(s). If there is no such Chairman, a copy will be sent to every member of that committee(s). The Scrutiny Committee(s) shall report to the Cabinet on the outcome of its deliberations. The Scrutiny Committee(s) shall have at least six weeks (December) to respond to the initial proposals of the Cabinet unless the Cabinet considers that there are special factors that make the timescale inappropriate. If it does it will inform the Scrutiny Committee(s) of the time for responses when the proposals are referred to it.

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