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Agenda Item 8

Cabinet Member Councillor Metin Huseyin, Cabinet Member for Finance, Performance and Risk

Strategic Management Team Lead Officer

Nick Gray, Deputy Chief Executive Jasvir Chohan, Executive Head of Service, People and Transformation

Author Danae Fiedler, Financial Services Manager (Interim) Jane Nottage, Risk Management and Performance Manager

Telephone Danae Fiedler: 01306 879149 Jane Nottage : 01306 879188

Email danae.fiedler@molevalley.gov.uk jane.nottage@molevalley.gov.uk

Date 5 February 2019

Ward (s) affected The Business and Budget Report covers the whole District

Subject Month 9 (December) – 2018/19 Business and Budget Monitoring

RECOMMENDATIONS

That the Cabinet:

notes the Council’s performance and financial position for the period April toDecember 2018

EXECUTIVE SUMMARY

This report provides the Cabinet with progress made so far in 2018/19 to deliver on

our priorities, and provides the financial context. It summarises performance and,

where performance has fallen below the target set, outlines the reasons and the

actions taken in response.

The report is set out as below:

1.0 Introduction

1.1 Projects and Strategies

1.2 Performance Indicators

1.3 Finance Monitoring

1.4 Strategic Risk

There are three appendices:

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Appendix A - projects and performance indicators dashboards

Appendix B - revenue position by business area

Appendix C - summary of the progress on capital schemes

CORPORATE PRIORITIES This report is an update on the Council’s progress in implementing the priorities contained in the Corporate Strategy.

The Cabinet has the authority to determine the Recommendations

1.0 INTRODUCTION Mole Valley’s Corporate Strategy 2015-2019 is framed around three priority outcomes:

Environment – a highly attractive area with housing that meets local need

Prosperity – a vibrant local economy with thriving towns and villages

Community Wellbeing – active communities and support for those who need it.

This report includes a ‘dashboard’ summary for each of the three priorities, highlighting

progress on the current status of key projects, strategies and performance indicators relating

to each priority theme.

1.1 PROJECTS AND STRATEGIES

Successful delivery of the Council’s key projects and strategies is fundamental to achieving

the Corporate Strategy priority outcomes. Each of the three themed dashboards provides a

snapshot of progress against the relevant projects and strategies. An overview of progress is

included against each project and strategy. Commentary is provided where progress is below

target.

1.2 PERFORMANCE INDICATORS

There are 18 performance indicators (PIs) for which a target has been set. Progress against

these targets is included in the relevant themed dashboard. Comments are included where

performance is below target (Appendix A). At the end of December 2018, performance is

assessed as follows:

o PIs on or above target (green): 12 (66.7%)

o PIs slightly off target (amber): 5 (27.8%)

o PIs off target (red): 0 (0.0%)

o PI data to be confirmed 1 (5.6%)

Further information on our suite of PIs can be found on the MVDC website.

Comparing this year’s performance with the same period last year, 13 of the 16 PIs for which

we have 2017/18 data have either performed better or stayed at similar levels.

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1.3 FINANCE MONITORING Revenue The Council’s net revenue budget is £9.1 million and the month 9 projection is a £116,000 net underspend (1.3%). The significant variances on revenue budgets not previously reported are as follows:

£000 Reasons for the variance

256 Parking, this is an increase of £62k on the previous monitoring report, and was due to the decision to extend free parking in the run up to Christmas and additional expenditure on maintenance.

(173) Asset Investment Strategy variance relates to additional income expected from additional rental and dividend income.

(124) The projected underspend of £124k for ICT is on software support, new software acquisition and hardware maintenance costs which were lower than forecast due to a combination of negotiations on price and some costs being lower than anticipated. Delivery of new laptop estate (as ICT Capital Minor Works Project) has avoided a significant amount of hardware and software spend (from Revenue) which would otherwise have been incurred.

The revenue budgets for Waste and Parking will be actively monitored over the forthcoming months to determine the actual performance against budget of the new Joint Waste Contract that came into effect on 6 August 2018 and the increased parking charges that came into effect on 1 August 2018. Further detail of the revenue financial position is included in Appendix B. Capital The Council has a capital programme of £140.2 million and the month 9 projection is a £452k net underspend (0.3%). The significant variances on the capital programme not previously reported are as follows:

£000 Reasons for the variance

(63) Estates Minor Projects – net underspent mainly due to the Changing Places Toilets project being deferred (£45k) and two projects completed under budget (£20k).

(50) ICT Minor Works Projects – underspent due to significant costs savings obtained when purchasing the hardware.

Further detail of the financial position on the capital programme is included in Appendix C.

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1.4 STRATEGIC RISK The Senior Leadership Team has the responsibility to undertake an annual review of strategic

risk. This review took place in December 2018.

As a result the following changes were made:

Deleted risks:

C1 Asset Investment Strategy: The annual report on the Investment Strategy required in accordance with the revised statutory guidance issued last February on Local Government Investments under section 15 Local Government Act 2003 will set out the risks that relate to the Asset Investment Strategy, now that it has been effectively implemented.

Additional risks:

C1d Loss of rental income from key properties

MVDC receives significant levels of income from rental. Market changes, particularly in the retail sector, have increased uncertainty in future income to be generated. A new strategic risk relating to property rental income has therefore been added to the register which applies across the MVDC property portfolio.

C4d Document Management System

The current Document Management and Customer Relationship Management system is provided by a small supplier who has stated that the system will become unsupported at an unspecified date in the short to medium term. A new CRM system is therefore being implemented and the solution to Customer Relationship Management for all service areas and provides the DMS solution for most of them. However, it will not provide a DMS solution for the Benefits, Revenues and Planning teams and an alternative solution is required. If we fail to have a DMS in place for Benefits, Revenues and Planning it could lead to reduced levels of customer service in these areas and the inability to access certain information and documents.

C8 Safeguarding

Safeguarding is a key area of strategic responsibility for MVDC. The Chief Executive and the Senior Leadership Team agreed to include safeguarding as a strategic risk to ensure continued oversight of arrangements in place across the organisation to ensure that children and vulnerable adults are effectively safeguarded.

The risk scoring of existing risks was reviewed and the following changes were made to the

residual risk scores:

C5 Data Protection/Information Governance

The introduction of the General Data Protection Regulations have increased the probability and potential impact of potential breaches of data security.

There are now eight strategic risks that are being closely and actively managed. The matrix

summarises these risks, and shows the risk rating for each after mitigation. All risks are below

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the Council’s approved risk tolerance level. Further information on the Strategic Risk Register,

and actions being taken to mitigate each risk, is available on the MVDC website.

IM

PA

CT

Catastrophic 5

Major 4

C3, C4b C5

Moderate 3

C1d, C4c C7, C8

Minor 2

C4d

Insignificant 1

Remote

1 Possible

2 Likely

3 Probable

4 Highly

Probable 5

PROBABILITY

C1d Loss of rental income from key properties C3 Health and Safety C4b IT – hacking C4c IT – resilience C4d Document Management System C5 Data Protection/Information Governance C7 Organisational capacity to deliver C8 Safeguarding

Financial implications The Council’s net revenue budget is £9.1 million and the month 9 projection is a £116k net underspend (1.3%). This will be closely monitored over the next months to establish whether any corporate action will be needed. Any net underspend at outturn would increase the level of the General Fund Balance. The Council has a capital programme of £140.2 million and the month 9 projection is a £452k net underspend (0.3%). This will be monitored on a monthly basis. Any underspend at outturn will mean that less capital financing will need to be applied for this financial year. For any part of the underspend that is a result of slippage, the capital financing would need to be retained for application in future years when the capital spend is incurred. Any remaining underspend that is not slippage would reduce the level of capital financing that needs to be applied in 2018/19 and would release that financing for future Council spending. The Council’s sources of capital financing are capital receipts, capital grants, reserves etc. Legal implications

There are no direct legal implications regarding the request to note this report: legal advice will be provided on the projects referred to as appropriate.

OPTIONS

The Cabinet has 2 options for consideration.

Option 1: note the Council’s performance and financial position for the period April to December 2018 (subject to any comments made) or:

Option 2: note the Council’s performance and financial position for the period April to December 2018 (subject to any comments made) and requests further work by officers

CORPORATE IMPLICATIONS

Monitoring Officer commentary In producing and reviewing this report the Council is meeting its legal obligations to monitor its financial position.

S151 Officer commentary

The report covers the key financial issues. It is anticipated that the 2018/19 outturn will be broadly in line with the budget set. No areas have been identified that will have a material on-going impact on the development of the Medium Term Financial Strategy.

Risk Implications

This report is presented to Cabinet for information and noting. There are therefore no specific risks arising from agreement of either option.

Equalities Implications

There are no equalities issues arising as a direct result of this report.

Employment Issues

There are no employment issues arising as a direct result of this report.

Sustainability Issues

There are no sustainability issues arising as a direct result of this report.

Consultation

Not applicable

Communications

This report will be posted on the Performance page of the Council’s website

BACKGROUND PAPERS

None

Progress Overview Commentary (when amber or red)

ENV1: Complete evidence gathering and community engagement in readiness for submitting the Future Mole Valley Local Plan

Future Mole Valley Local Plan: Work is progressing on developing preferred options for brownfield and greenfield development . This includes detailed discussions with landowners, developers and infrastructure providers. A revised Local Development Scheme setting out a new timetable for completion of the Local Plan was agreed in November 2017. It indicates that the a draft Plan setting out MVDC’s preferred options is scheduled for consultation in June 2019 .

ENV2: Explore new opportunities for delivering affordable homes in Mole Valley

Affordable Housing Strategy: The content of the

Affordable Housing Strategy will be informed alongside

the development of the Local Plan. The strategy will

address options for different methods for the delivery

of affordable housing including working with partners

and joint ventures.

ENV3: Implement plans for the regeneration of the eastern end of Dorking High Street

East Dorking regeneration: CHiP (Community Hub In Pippbrook) are continuing to develop proposals for Pippbrook House. Regular meetings are continuing with officers to provide support to them in developing proposals.

There was a slight budgetary

impact as a result of inviting

external consultants to

Member and community

meetings in September.

ENV4: Ensure a smooth transition from existing contract arrangements for waste collection to the new joint waste contract

Joint Waste Contract: The performance of the household waste collection contract is generally satisfactory. Joint Waste Solutions who manage the contract on behalf of MVDC make sure that any problems with missed bins are resolved promptly. The street cleansing part of the contract is mobilised on 1st April 2019.

ENV5: Develop a co-ordinated approach prevent and tackle environmental anti-social behaviour (ASB)

Joint Enforcement Team: Development and delivery

of the Joint Enforcement Team is moving through the

Council’s budget setting process for 2019/20 with a

view to launching the service in April 2019. The Police

and Crime Commissioner has agreed an initial

investment to fund the start up costs.

Net increase in number of dwellings

Number of affordable homes

Number of missed bins* TBC

Waste recycled, reused and composted

Commentary (when amber or red) Net increase in number of dwellings and number of affordable homes will remain amber until end of year performance against target is known.

* In order to ensure that the definition of themissed bin KPI is consistently applied and that the data being used for the calculation is accurate JWS are currently auditing the KPI reports provided by Amey. Once the audit has been completed, backdated KPI data will be provided.

Recycling rate is slightly below target due to higher number of rejected loads at the MRF. JWS are looking to tackle this with a contamination campaign planned for early Spring.

ENVIRONMENT DASHBOARD APPENDIX A A highly attractive area with housing that meets local need

Tim

e

Co

st

Ob

j.

= Green = Amber = Red

Performance Indicators

Council tax collected

Non-domestic rates collected

Cost of services

Major applications processed in time

Non-major applications processed in time

Major development decisions overturned on appeal

Non-major development decisions overturned on appeal

Commentary (when amber or red) There is a focus on recovery of both council tax and non–domestic rates as we move into the final quarter of the year.

Performance Indicators

= Green = Amber = Red

PROSPERITY DASHBOARD A vibrant local economy with thriving towns and villages

Progress overview Commentary (when amber or red)

PRO1: Implement a new strategic approach to economic prosperity in the District

Economic Prosperity Strategy: North Downs Line feasibility study completed (assessing the improvements to level crossings required to enable a third hourly service). The market strategy is at the fact finding stage, and will be informed by meetings with two experienced and successful market operators in January 2019. A project inception meeting is being scheduled in relation to the implementation of the business directory.

In relation to the business support programme, MVDC is awaiting confirmation of government funding to enable this to progress.

PRO2: Enhance prospects for Mole Valley’s rural communities and businesses

Rural Community Strategy: A venue and date have been secured for the Rural Summit ,the 26th February. The summit has been developed to ensure rural businesses and the community have an opportunity to network and discuss the opportunities /challenges faced. The summit will be facilitated by Nicholas Owen (tv presenter) .

PRO3: Continue working with partners to transform Leatherhead into a modern market town

Transform Leatherhead: Phase 2 of the refurbishment works to the Swan Centre scheduled to commence January 2019. Heads of Terms agreed with tenants for 21 and 23 High Street. Outline planning application for Claire House and James House was submitted 15 November 2018 . Cabinet approved the delivery strategy for Claire House and James House on 28 November, and the proposed project team has the inception meeting on 30 January.

PRO4: Pursue the car park improvement programme

Parking Strategy: The design specification for phase 1 of the refurbishment (Ashtead Peace Memorial Hall ) is now complete and will, after consultation, go out to tender in spring. The review of permit schemes and charging options is underway. Initial inspections for phase 2 which includes Dorking South Side and St Martins Walk have been completed with a view to produce a specification for the consultants in Feb/March 19.

PRO5: Continue to develop innovative measures to maintain a balanced budget including investing in commercial property to generate income to support services

Asset Investment Strategy: No further acquisitions undertaken since the last reporting period. Significant volatility in cost of borrowing from PWLB together with no opportunity coming forward which meets the AIS criteria and lot size. Officers are finalising the report on the AIS for Full Council on 12 February 2019 to note as required by the revised statutory guidance published in February 2018.

The implications for 2019/20 of not investing the full £100m and slightly higher than modelled borrowing costs were considered in the financial ‘Scene Setting’ report (Cabinet November 2018).

Co

st

Tim

e

Ob

j.

Progress overview Commentary (when amber or red)

CWB1: Maximise the potential of the new community-based sports facility at Meadowbank Park in Dorking

Meadowbank Park sports facility: The ground is now established as the home of Dorking Wanderers FC, including first team, age groups and their academy. Bookings through Surrey FA continue to grow and facility is well regarded in community football circles. The soft-play facility continues to be very popular.

n/a n/a

CWB2: Working with partners, continue to explore options for enhancing community transport

Community Transport Strategy: Enhancing the close

working with Community Car scheme providers, Mole

Valley Community Transport hosted a voluntary car

schemes Christmas buffet sponsored by the Rotary Club.

CWB3: Provide help to anyone at risk of becoming homeless in Mole Valley, intervening early

Homelessness Strategy: Progress of the Strategy was

reported to the Council’s Scrutiny Committee and Cabinet

meeting in November. The key feature of the Strategy was

the achievement of the Gold Standard for Homelessness

Services which was secured this year. This makes Mole

Valley District Council one of only 16 Councils nationally to

be able to boast this achievement.

CWB4: Continue delivering wellbeing initiatives

Wellbeing Strategy: Arts Alive 2018 came to an end with the last event on 9th December 2018. The Arts Alive Festival this year had over 100 events between September to December for people of all ages to take part in. Feedback has been incredibly positive. A diabetes ‘Walk and Talk’ is being developed with Diabetes UK and Active Surrey, it will include an hour long walk followed by an advice session for sufferers of diabetes.

CWB5: Develop a destination management plan for rural Mole Valley

Destination Management Plan: The consultants appointed to produce the DMP are currently scoping a proposed delivery partnership.

CWB6: Develop a Customer Service Strategy to deliver an enhanced customer experience

Customer Service Strategy: The internal consultation has been completed and the strategy is now out for external consultation, to be concluded by 18th January. External consultation includes drop in sessions with members of the public and a social media campaign. The Strategy will be presented to Cabinet in March.

n/a

Telecare calls answered within 60 seconds

Families in temporary B&B for longer than 6 weeks

16 or 17 years olds in temporary B&B for longer than 6 weeks

Food businesses with ‘Scores on the door’ of 3 or over

Community transport customer satisfaction (annual survey)

Day Centre customer satisfaction (annual survey)

Telecare service customer satisfaction

Performance Indicators COMMUNITY WELLBEING DASHBOARD Active communities and support for those who need it

Tim

e

Co

st

Ob

j.

= Green = Amber = Red

REVENUE BUDGET MONITORING APPENDIX B MONTH 9, 2018/19

Base budget ProjectionBudget v

projection£k £k £k

Waste, Street Care & Sustainability 2,889 2,815 (74)Councillor Wiltshire Environmental Health & Licensing 461 446 (15)

3,350 3,261 (89)

Parks & Landscapes 494 494 0Councillor Hawksworth Community Support Services 275 260 (15)

Community Safety & Wellbeing (265) (297) (32)Parking (1,978) (1,722) 256

(1,474) (1,265) 209

Dorking Halls 159 151 (8)Councillor Yarwood Property : Asset Management (1,628) (1,517) 111

ICT 1,081 957 (124)(387) (409) (22)

Planning Policy 470 416 (54)Councillor Harper 470 416 (54)

Building Control (77) (42) 35Housing Development Management 464 424 (40)Councillor Hunt Planning Support 278 237 (41)

Housing 623 645 22Benefits 396 398 2

1,684 1,662 (22)

Strategic Leadership Team 755 739 (16)Risk Financial Services 472 622 150Councillor Huseyin Corporate Costs 1,053 1,053 0

Revenues & Exchequer 433 418 (15)Legal Services 294 310 16Risk Management & Performance 282 286 4

3,288 3,428 140

CSU 482 440 (42)Rural Mole Valley Human Resources 358 354 (4)Councillor Osborne-Patterson Democratic Services 957 950 (7)

Communications 220 241 21Strategic Corporate Support 300 236 (64)Corporate Projects 15 4 (11)

2,332 2,225 (107)

Economic Development 201 173 (28)Councillor Edge Property : Regeneration & Investment Team 403 433 30

Asset Investment Strategy (800) (973) (173)(196) (367) (171)

Total net services revenue 9,068 8,951 (116)

Transform Leatherhead Transform Leatherhead 2018-19 Allocation 1,630 1,630 0

(funded from reserves) Transfer from Transform Leatherhead reserve (1,630) (1,630) 00 0 0

COMMENTARYPlease note that the commentary only includes explanations for the significant variances and also outlines any areas where there is some uncertainty on the projected spend

Prosperity

Environment

Wellbeing

Strategy & Assets

Planning Policy

Finance, Performance &

Planning Services &

People &

Summary by Cabinet Portfolio

The Council's net revenue budget for 2018/19 is £9.1 million and the month 9 projection is a £116k net underspend (1.3%).

Environment is projecting an underspend of £89k, mainly due to a cautious approach beinggiven to the financial effect of the new waste collection contract that is projecting an underspend of £74k.

Wellbeing is projecting a £209k net overspend, the car parks budget is showing anoverspend/under recovery of income of £256k for month 9. Free parking was enhanced to offer 3 full days on Saturdays in December therefore decreasing the anticipated income in December. However, month on month income from parking is increasing with a £70k (for October and November) over the same period for 2017 and it is anticipated that the year end income will be in excess of £2.2m bringing in over £500k more than 2017/18. There have been a number of items of urgent expenditure on car parks in the last 2 months which have seen expenditure rise and income from Penalty Charge Notices (PCN's) is below expectation due to resource issues.

Strategy & Assets is projecting a net underspend of £22k which includes a £111kprojected overspend on Property: Asset Management and a £124k projected underspend for ICT. The projected overspend on Property: Asset Management is due to lower projected income from vacant units (including one in the Swan Centre), as well as rent free periods and rent reductions that have been offered to new tenants. There have also been additional costs relating to interim and consultancy staff which have been required in the team due to illness.The projected underspend of £124k for ICT is on software support, new software acquisition and hardware maintenance costs which were lower than forecast due to a combination of negotiations on price and some costs being lower than anticipated. Furthermore, the rapid and ongoing delivery of new laptop estate (as ICT Capital Minor Works Project) has avoided a significant amount of hardware and software spend (from Revenue) which would otherwise have been incurred.

Planning Policy is projecting an underspend of £54k, which is due to unexpected receipt ofGovernment grants for self-build and brownfield registers; and neighbourhood development plan completions. These are one-off payments.

Planning Services & Housing is projecting a net underspend of £22k, with no significantvariances in any of the individual business areas.

Finance Performance & Risk is projecting a £170k net overspend, mainly due toFinancial Services, which is projecting £150k overspend, due to the level of interim staff needed to cover vacant posts A review of the Financial Services structure has been completed and recruitment to fill the vacant permanent posts is now underway.

People & Rural Mole Valley is projecting an £107k net underspend. This is mainly due toa number of vacancies within the CSU and Strategic Corporate Support, following staff turnover during the year.

Prosperity is projecting a £171k favourable variance which mainly relates to the AssetInvestment Strategy. The increased income is attributable to the service support income of £116k and dividend income of £451k not in the budget. This is offset against an unfavourable variance of £359k due to the actual yield on the Asset Investment being lower than budget on MVDC properties (5.62% actual vs 5.75% budget).

CAPITAL PROGRAMME APPENDIX C MONTH 9, 2018/19

Approved budget

Projected spend

Budget v projection

£k £k £k

Major ProjectsAffordable Housing 1,375 1,375 - Car Park Enhancement (5 year project) 1,000 1,000 - Deepdene Trail/Hope Springs 929 929 - Dorking Halls External Refurbishment Works 270 270 - Emergency Accommodation 1,100 1,100 - Joint Waste Services 4,000 4,000 - Leatherhead Bypass 135 172 37 Leatherhead Youth Football Club 942 966 24 Meadowbank Centre, Dorking 6,502 6,502 - Meadowbank - land decontamination 2,000 2,000 - Property Projects 150 150 Swan Centre Development Initiatives 885 885 - Swan Centre Car Park Refurbishment 330 330 - Major Projects - completed this year 16,852 16,717 (135)

Annual capital expenditureAffordable housing 500 500 - Capitalised salaries 175 175 - Community Grants 74 74 - Dial-a-Ride Vehicle Replacement 50 50 - Disability Adaptations 665 665 - Playground Refurbishment 60 60 - Telecare Equipment 50 50 -

Total Major Projects 38,044 37,846 (198)

Minor ProjectsCommunity Support Services (6 projects) 180 169 (11) Depot (3 projects) 95 78 (17) Dorking Halls (4 projects) 129 129 - Estates (14 projects) 307 244 (63) Housing (1 project) 12 12 - ICT (3 projects) 701 651 (50) Minor Works Contingency (0 projects) - - - Parking, Parks & Landscapes (12 projects) 448 448 - Planning (1 project) 45 45 Minor Projects - completed this year (6) 217 104 (113)

Total Minor Projects 2,134 1,880 (254)

Asset Investment StrategyPhase I 48,530 48,530 - Phase II 51,470 51,470 -

Total Asset Investment Strategy 100,000 100,000 -

Total Capital Programme 140,178 139,726 (452)

COMMENTARYPlease note that the commentary only includes explanations for the significant variances and also outlines any areas where there is some uncertainty on the projected spend

SummaryThe Council has a restated capital programme of £140.2 million and the month 9 projection is a £452k net underspend (0.3%).

Once a project has been reported as complete it will be moved to completed projects in the next monitoring report.

Major Projects

Major projects totalling £16.9 million have been completed in this year and are underspent by £135k (0.8%).

Minor ProjectsCommunity Support projects are £11k underspent, due to savings on purchase costs, therefore releasing this budget to fund other Minor projects

Depot projects are £17k underspent due to savings on the purchase price of four replacement vehicles, therefore releasing this budget to fund other Minor projects.

Estates projects are £63k underspent, mainly due to Changing Places Toilet Project being deferred (£45k). The following projects Park House Structural repairs (£12k) and Cemetary Lodge Archway and roof repairs (£8k) are now complete and have come in £20k under budget, therefore releasing this budget to fund other Minor projects

ICT projects are £50k underspent. Phase 2 of the New Ways of Working project is on plan to complete by the end of the year, with significant savings in purchase cost of equipment, therefore releasing this budget to fund other Minor projects.

Minor Works Contingency projects have been reallocated.

New minor projects that have been added to the capital programme since the last monitoring report are: Estates - Digital AV Equipment, Dorking Halls - Additional work to ceilings following indepth survey.

Minor projects totalling £217k have been completed in the year and are underspent by £113k (52.1%)

Asset Investment Strategy Phase I is complete.

Phase II is in progress and three properties have been acquired.