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NOTICE OF MEETING

Meeting:

Overview and Scrutiny Committee

Date and Time:

Tuesday, 17 July 2018 at 7.00 pm

Place:

Committee Room 1, Civic Offices, Fleet

Telephone Enquiries to: 01252 774141 (Mrs Gill Chapman) committeeservices@hart.gov.uk

Members: Axam, Burchfield, Collings, Crookes

(Chairman), Delaney, Drage, Harward, Quarterman, Wheale, Worlock, Wright

Joint Chief Executive CIVIC OFFICES, HARLINGTON WAY

FLEET, HAMPSHIRE GU51 4AE

AGENDA

COPIES OF THIS AGENDA ARE AVAILABLE IN LARGE PRINT AND BRAILLE ON REQUEST

1 At the start of the meeting, the Lead Officer will confirm the Fire Evacuation Procedure.

2 The Chairman will also ask if anyone intends to record

proceedings, and will announce that anyone remaining at the meeting has provided their consent to any such recording.

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1 MINUTES The minutes of the meeting of 19 June 2018 are attached to be confirmed and signed

as a correct record. Paper A 2 APOLOGIES FOR ABSENCE 3 CHAIRMAN’S ANNOUNCEMENTS 4 DECLARATIONS OF INTEREST To declare disclosable pecuniary, and any other, interests. 5 PUBLIC PARTICIPATION (ITEMS PERTAINING TO THE AGENDA) Anyone wishing to put a question or statement to the Committee should contact the

Committee Services Officer by phone or email (see front page of this Agenda) at least two clear working days prior to the meeting. Further information can be found at https://www.hart.gov.uk/sites/default/files/4_The_Council/Council_meetings/Public%20Participation%20leaflet%202018%20A4.pdf

6 FEEDBACK FROM SERVICE BOARDS 7 DRAFT TREE RISK MANAGEMENT STRATEGY

To consider and comment on the revised Tree Risk Management Strategy (TRMS) before this is recommended to Cabinet. Paper B RECOMMENDATION

Committee recommends to Cabinet that the proposed revised Tree Risk Management Strategy attached at Appendix 1 be adopted.

8 TREASURY MANAGEMENT OUTTURN 2017/18

To consider the Council’s Treasury Management activities during the 2017/18 financial year, prior to consideration at Cabinet. Paper C

RECOMMENDATION

To forward any comments it wishes to make to Cabinet for consideration at its meeting on 2 August 2018.

9 2017/18 OUTTURN POSITION

This report contains details of the final position on the Council’s accounts for 2017/18. The Committee is asked to consider the report and to make any recommendations to Cabinet which will consider the report at its meeting on 2 August 2018. Paper D

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RECOMMENDATION

1 That the 2017/18 outturn position of a £184k underspend for the General

Fund Revenue account be noted. 2 That the 2017/18 outturn position for Capital expenditure be noted. 3 That the carry forward of the unspent revenue budgets as detailed in

paragraph 6.1 be supported.

10 COMMERCIALISATION AT HART

To present a ‘strategic business case’ for progressing the Commercialisation project across the Council as part of its project management programme, and the proposed scope of what will be considered for ‘commercialisation’ and the key principles for capturing the resultant financial benefits. Paper E

RECOMMENDATIONS That Overview and Scrutiny Committee considers the following draft recommendation to Cabinet

“That Cabinet agree the following framework for the Council’s commercial strategy:

1. That the commercial strategy has three key themes:

a. To increase income broadly via asset based investments; b. To reduce costs through such approaches as the LGA insurance mutual,

better utilisation of the civic offices and a review of the value of shared services;

c. To improve efficiency of services, decreasing current or future costs e.g. through digitalisation and demand reduction.

2 That the asset based commercial strategy is to see long term revenue returns,

as opposed to capital growth.

3. That the revenue returns should exceed current or anticipated returns (with three year view) available through financial institutions and would aim for a 4% rate of return.

4. That commercial asset based investment should be within the local region e.g.

within the M3 Enterprise LEP area, Solent LEP or Thames Valley Berkshire LEP and that residential asset based investment should be within the district.

5. That any asset purchased for the purpose of commercial strategy is held for

revenue gain only. Revenue received from the asset can then be allocated according to the priorities of the Council.

6. That an £500k ‘invest to grow’ budget is allocated to the Joint Chief

Executives, for use to: (a) utilise specialist expertise or resources, and/or

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(b) increase commercialisation capacity within the organisation; (c) instil commercial principles in management; (d) increase commercial awareness throughout the Council and thereby

increase opportunities.

7. To authorise the Joint Chief Executive, in consultation with the Leader, the Chairman of Overview and Scrutiny Committee, and the Section 151 Officer to take all further decisions in respect of property acquisitions and disposals pursuant to this Commercialisation strategy, irrespective of value, and on conclusion of the matter to report back to Cabinet at the earliest opportunity.

8. To recommend to Council that the Financial Regulations in the Constitution be

amended to facilitate the speedy acquisition of property transactions and to amend Article 12 of the Constitution to exclude property transactions pursuant to this Commercialisation strategy from the definition of a ‘Key Decision’”.

11 CABINET WORK PROGRAMME The Cabinet Work Programme is attached for information. Paper F 12 OVERVIEW AND SCRUTINY WORK PROGRAMME The Overview and Scrutiny Work Programme is attached for consideration and

amendment. Paper G Date of Despatch: 10 July 2018

O&S.1

OVERVIEW AND SCRUTINY COMMITTEE Date and Time: Tuesday, 19 June 2018 at 7pm Place: Committee Room 1, Civic Offices, Fleet COUNCILLORS Axam, Burchfield, Collings, Crookes (Chairman), Delaney, Drage, Harward, Quarterman, Wheale, Warlock, Wright In attendance: Councillors Neighbour and Forster Officers: Patricia Hughes Joint Chief Executive Andrew Vallance Head of Corporate Services Paul Howe Biodiversity Officer Ian Gardener DWP Ian Bartlett Capita Sally Plank Chief Officer, Hart Citizens Advice Bureau

1 ELECTION OF VICE CHAIRMAN Councillor Burchfield was elected as Vice Chairman for the forthcoming municipal

year. 2 MINUTES The minutes of the meeting of 17 April 2018 were confirmed and signed as a correct

record. 3 APOLOGIES FOR ABSENCE None received. 4 CHAIRMAN’S ANNOUNCEMENTS

The Chairman asked the Joint Chief Executive to provide a summary of the role of Overview and Scrutiny. The Joint Chief Executive also provided extracts of the relevant sections of the Constitution. Councillor Forster made a recommendation to attend the LGA course on Overview and Scrutiny.

5 DECLARATIONS OF INTEREST None declared. 6 PUBLIC PARTICIPATION (ITEMS PERTAINING TO THE AGENDA) None.

O&S.2

7 UNIVERSAL CREDIT - ROLL OUT

Ian Gardener, Senior Employer and Partnership Manager for Wiltshire Swindon and North Hampshire, informed Members of the Universal Credit roll-out. • Universal Credit combines six forms of benefit types into one single benefit,

for new claimants (existing claimants will migrate over, when a change of circumstances occur or when the government decide to move all over).

• Claim process is ‘digital by default’ via the .GOV website and once a claim is made and being paid, all information is available online.

• Payment is monthly, which is a shift from the existing benefit system, to encourage people to get used to the sort of family budgeting that would be necessary if they were in work.

• Around 60% of claims are being made on a mobile phone, and there are banks of computers at our Job Centres

• £4K given to Local Authorities by DWP is to help with digital assistance. • Roll out has been based on the geography linked to Job Centres, so

Basingstoke and Reading have already gone live. Bulk of the rest of Hart will go live in October, Alton, Aldershot and Farnborough Offices in October, and Camberley in November. Confirmation is needed whether these post codes have been laid in front of Parliament ahead of further communication with residents

• Reference was made to the Audit Commission report and the difference between the findings within that document and the narrative on the positive elements of Universal Credit. The new system was described as much more flexible, one which positively encourages people to undertake work, without the need to make new claims.

• Members asked whether a bank account was necessary, and whether this has been an issue. Members were advised that simple accounts, which don’t provide an overdraft, are available for such residents.

Mrs Plank and Mr Bartlett gave the local context including • To put the local position in context, in Hart we have 3600 households on

either housing benefit or council tax support, 1800 of these households of working age. However, with this wider collation of other benefits, the number claiming Universal Credit may be much higher.

• The Council did, during the recent refresh of the reception, provide p.c.’s to help residents to access the system (with reception staff trained to help).

• A new element on the Hart website will be called “Entitled to”. Add in your details to this system and it will provide a ‘ready reckoner’ identifying which benefits you may be entitled to. Timescale for this will be within the next couple of months.

• CAB have looked at demand and it appears demand peaks tend to be a month to two month period, and can lead to a doubling of demand. We will be encouraging our outreach officers to be out and about, and recruiting additional resources to help people on the digital journey.

• Examples were provided of unintended consequences e.g. currently you currently cannot claim Universal Credit if you have more than two children.

O&S.3

8 HART BIODIVERSITY ACTION PLAN

Paul Howe provided a short presentation to Members on the work of Biodiversity and the draft Biodiversity Action Plan. Members considered the draft Biodiversity Action Plan (BAP) 2018-2023, prior to it being submitted to Cabinet for approval.

Members made the following comments and suggestions: • Could further information on the achievements (the timescales) from the

existing plan be provided • Could we supply further information on what resources we need to deliver

this new draft plan. • There could be further narrative about the positive impact of trees in the

urban environment • Confirmation was sought on how the Biodiversity Action Plan relates to the

Management Plans as they are not referenced • Whether the impact of sea gulls on biodiversity, particularly at Fleet Pond had

been considered and they may be inhibiting songbirds • When grazing at Hazeley Heath, will occur • When will Management Plans will be updated

DECISION That the draft Biodiversity Action Plan 2018-23 be noted.

9 NOMINATIONS TO SERVICE BOARDS To nominate members to Service Boards, meetings as detailed on the schedule.

Members were asked to contact Committee Services the dates they were intending to attend noting that the Chairman intended to attend each. Members noted that the CCTV visit clashed with the first Community Services Service Board, and sought clarification if the meeting could be held there.

The Boards would consist of the following Overview and Scrutiny Committee

members: Environment & Technical Services – Cllrs Delaney , Collings, Harward, Worlock,

Wright Community Services – Cllrs Burchfield, Axam, Collings, Drage, Wright Regulatory Services – Cllrs Collings, Harward, Wheale, Wright Corporate Services – Cllrs Collings, Quarterman, Wright

O&S.4

10 QUARTER 4 AND ANNUAL PERFORMANCE INFORMATION 2017/18

Members were updated on the Council’s performance indicator results for the final quarter of 2017/18 (1 January 2018 - 31 March 2018). Members suggested changes to various KPI’s, to be discussed in the first instance at the respective Service Boards.

DECISION

That the information be noted. 11 CABINET WORK PROGRAMME The Cabinet Work Programme was considered. The addition of a paper on

Commercialisation and Agency Agreements with Hampshire County Council further to the T19 transformation was noted.

12 OVERVIEW AND SCRUTINY WORK PROGRAMME The Overview and Scrutiny Work Programme was considered and amended as

follows:

• Addition of Flytipping Strategy - August • Commercialisation • Monitoring of the Peer Review - December/January

The meeting closed at 21.30

PAPER B

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OVERVIEW AND SCRUTINY COMMITTEE DATE OF MEETING: 17 JULY 2018 TITLE OF REPORT: DRAFT TREE RISK MANAGEMENT STRATEGY REPORT OF: Head of Environment and Technical Services

CABINET MEMBER: Councillor David Neighbour, Leader and Finance 1 PURPOSE OF REPORT 1.1 To consider a revised Tree Risk Management Strategy (TRMS) before this is

reported to Cabinet.

2 OFFICER RECOMMENDATION 2.1 Committee recommends to Cabinet that the proposed revised Tree Risk

Management Strategy attached at Appendix 1 be adopted. 3 BACKGROUND INFORMATION 3.1 The current TRMS needs to be updated in light of new case law and best practice

attached. The revised TRMS attached at Appendix 1 provides a balanced approach to tree management. It will enable the Council to discharge its duties under the Occupiers Liability Act 1957 and 1984, and the Health and Safety at Work Act 1974.

4 TREE RISK MANAGEMENT STRATEGY 2018-2028 4.1 The updated document has been streamlined to provide details on the Council’s

position on tree management. It is accompanied by a document (attached at Appendix 2) which details how the TRMS was developed and provides details on how case law, best practice and other guidance has shaped the TRMS.

4.2 The revised TRMS differs from the original Strategy for the following reasons: - It advises how frequently trees in different ‘risk zones’ should be inspected. - Example key performance indicators have been included to monitor compliance. - A Failure Log has been provided. - A system of review has been incorporated. 5 FINANCIAL AND RESOURCE IMPLICATIONS 5.1 The draft Tree Risk Management Strategy is linked to the agreed budget for 2018/19.

The revised TRMS will be delivered predominantly by the Tree Officer working in conjunction with the Senior Ranger.

PAPER B

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6 Action 6.1 The comments of this Committee together with the attached draft TRMS will be

recommended to Cabinet for approval in August. CONTACT: Adam Maskill, Ext 4159, Adam.Maskill@Hart.gov.uk APPENDICES: Appendix 1 – Draft Tree Risk Management Strategy 2018 Appendix 2 – Development of the Tree Risk Management Strategy

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Tree Risk Management Strategy Hart District Council

Issued 31 May 2018 Last reviewed n/a Next review 1st June 2019 Author Adam Maskill Version V1.0

PAPER B Appendix 1

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Contents 1.0 Policy Statement ............................................................................................................................ 3

2.0 The Risk ........................................................................................................................................... 4

3.0 Service Scope and Standards – Objectives .............................................................................. 4

4.0 Site Zoning – risk zoning and mapping ..................................................................................... 5

5.0 Level of Inspection ........................................................................................................................ 5

5.1 Personnel .................................................................................................................................... 5

5.2 Training ........................................................................................................................................ 6

5.3 Summary of Risk Zones and Responsibilities...................................................................... 7

5.4 Recording .................................................................................................................................... 7

5.5 Basic Survey Template - example .......................................................................................... 9

6.0 Failure Log .................................................................................................................................... 10

7.0 Remedial Works .......................................................................................................................... 10

8.0 Responding to enquiries ............................................................................................................ 11

8.1 Traffic Light Trees ................................................................................................................... 11

8.2 Enquiry Logging ........................................................................................................................ 11

9.0 Review ........................................................................................................................................... 12

10.0 Bibliography .................................................................................................................................. 13

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1.0 Policy Statement

1.1 Hart District Council manages approximately 550 hectares of public open space including nature reserves, commons, car parks and amenity spaces. All is freely accessible by the public and is often in close proximity to major roads and property boundaries.

1.2 The Council has a common duty of care under Occupiers Liability Act 1957 and 1984 to ensure that they act as a reasonable and prudent landowner. This means that they must ensure that they avoid acts or omissions that could cause a foreseeable risk of harm to persons or property. This is reinforced in criminal law within s3 of Health and Safety at Work Act 1974. Section 3 of the Management of Health and Safety at Work Regulations 1999 states that employers are responsible for making suitable and sufficient assessment of the risks posed to their employees and persons not in their employment.

1.3 The Council recognises that the risk from falling trees is low however as a large, public landowner, it has specific legal and moral responsibilities to visitors to its land and members of the public in general.

1.4 The Council has implemented a Tree Risk Management Policy since 2009 and has subjected this to review. This document has been revised in accordance with current industry best practice, court precedent and statute. This document should be read in conjunction “Development of the Tree Risk Management Strategy” which provides an overview of key legal decision, national policy and industry best practice.

1.5 The Council will continue to proactively manage its tree resource while balancing this against the benefits that they provide:

Aesthetic Ecosystem services A sense of place

Green space accessible to all Reduced levels of stress

Inspires and encourages recreation Improved physical and mental wellbeing

Green infrastructure Carbon sequestration

Wildlife habitat Cooling and shading Flood alleviation

Reduction of air pollution Climate change mitigation

Cultural Prosperity

A link to the past Historic landscapes

Increased property values A pleasant and inspiring place to work

Encouraging investment

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2.0 The Risk

Risk of death caused by falling trees: 1 in 10 million per annum1

Average number of Accident and Emergency admissions per annum: 55

2.1 The risk of death or injury attributable to trees is low. The HSE2 describe the general level of risk as “broadly acceptable” within the Tolerability of Risk Framework. Despite the low risk to society in general, it is necessary for the duty-holder to ensure that the level of risk is as low as reasonably practicable (ALARP3). This principle implies that a balance must be made between the cost and benefits of risk reduction.

2.2 Despite the low level of risk, tree failures resulting in death or serious injury are likely to make headline news. As such, the public perception of risk is that it is high. The cost of defending against claims can be high and there may be pressure to carry out unnecessary tree-works. It is important for the duty holder to ensure that they do not carry out unnecessary works which will reduce tree-related benefits and put pressure on the limited tree management budget.

2.3 Overall, this justifies the need to carry out routine, proactive safety surveys of trees on land owned or maintained by the Council.

3.0 Service Scope and Standards – Objectives

3.1 This strategy covers the management of risk from falling trees only on land owned or otherwise under the responsibility of Hart District Council. It does not provide guidance on the management of privately-owned trees.

3.2 The management of trees in relation to subsidence is not covered within this document.

3.3 Pruning trees to reduce shading, improve satellite reception or views is not related to risk and is beyond the scope of a tree risk strategy. However, guidance will be provided as to how to respond to customer enquiries on such matters.

3.4 The objectives for tree risk management must strike a balance between the level of risk, the benefits and the resources available to the duty-holder. For a tree risk strategy to be effective, the following objectives4 must be applied:

1 Centre for Decision Analysis and Risk Management Middlesex University (2009). Report for the National Tree Safety Group - Trees and the Risk of Harm. 2 SIM 01/2007/05 3 Edwards v National Coal Board, advises HDC of standard to which they would be held to account and reminds that they must strike a balance between resources and tree benefits. 4 NTSG, 2011

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1. To enable corporate objectives to be achieved.

2. To identify and control the risk

3. To comply with relevant legal and regulatory requirements

4. To assure the public that trees on public land are appropriately managed.

3.5 It is necessary to set key performance indicators so the Council can confirm whether objectives are being met. This will highlight any weaknesses in the delivery of the Strategy and will inform where additional resources are necessary. Key performance indicators should include, but not be limited to:

- Risk zone maps to be reviewed for all HDC land within 6 months of implementation - 100% of trees within high and medium risk zones will be inspected within their designated timescales - 100% of remedial works within high and medium risk zones will be carried out within their designated timescales

4.0 Site Zoning – risk zoning and mapping

4.1 Hart District Council shall divide its landholding into three risk zones dependent on certain site characteristics which reflect how an area is used, how frequently it is occupied and the nature of the tree population. The Clerk or other member of staff with a working knowledge of site usage shall be responsible for reviewing each site and plotting risk zones onto maps of a suitable scale.

4.2 It is unrealistic to assess each tree in every risk zone on an annual basis. The benefits of doing so would be outweighed by the financial costs. Resources must be allocated so that high risk zones are prioritised.

4.3 A practical approach to tree inspection would be to view trees with leaves on and leaves off in alternate surveys. This enables the inspector to note physiological issues with the tree e.g. sparse or chlorotic (yellowing) foliage in summer while allowing clear view of crown architecture and fungal fruiting bodies in autumn/winter.

5.0 Level of Inspection

5.1 Personnel Level 1 – Informal inspection: Carried out by a member of staff or contractor with a basic understanding of trees. Because of their training, experience and site knowledge, they will be able to notice common defects and abnormal growth in trees and will understand how to pass on their concerns to more experienced

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personnel. Inspection will be aided by using a probe, nylon-faced mallet and binoculars.

Level 2 - Formal inspection: The inspector will visit the tree(s) for the specific purposes of performing an inspection. The inspector will be a competent arboriculturist with training and experience of managing trees for safety balanced with other site-specific requirements. Inspection will be aided by using a probe, nylon-faced mallet and binoculars. Resulting recommendations may include the use of ‘Detailed Inspection’ e.g. where the extent of decay may require assessment.

Level 3 - Detailed inspection: May be required to provide assessment of decay or tree stability by using specialist equipment e.g. Resistograph or tomography. This level of inspection will usually be reserved for high value trees within high risk areas; it would be grossly disproportionate to apply it beyond this due to the lack of benefit in overall risk reduction. Experts should be selected from the Arboricultural Association’s list of Registered Consultants: www.trees.org.uk ‘find a professional’ > ‘Registered Consultant’.

5.2 Training Those carrying out formal, recorded inspection of trees will be required to demonstrate competence appropriate to the level of inspection. As a minimum, staff and contractors with this responsibility will hold the following certificates and/or qualifications as appropriate to the level of inspection:

Level 1 - Informal inspection: LANTRA Basic Tree Inspection certificate, although LANTRA Intermediate Tree Inspection certificate is desirable.

Level 2 – Formal inspection: Minimum RCF Level 3 Arboriculture with modules covering tree inspection and the recognition and treatment of defects, LANTRA Professional Tree Inspection.

Level 3 - Detailed inspection: Minimum RCF Level 6 Arboriculture e.g. BSc or Professional Diploma, LANTRA Professional Tree Inspection.

All members of staff and contractors with responsibility for surveying trees must undertake refresher training and/or continuing professional development in the field of arboriculture.

Copies of certificates of competency and records of attendance at training courses must be retained with survey documents.

Note: All external contractors and consultants must hold Professional Indemnity Insurance.

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5.3 Summary of Risk Zones and Responsibilities Risk Zone Site Characteristics Frequency of Inspection Level of Inspection High Frequently occupied.

Within falling distance of property. Beside trunk roads, adjacent to play areas/sports facilities, property or car parks. Mature or over-mature population tree population Species of tree with a higher risk of failure e.g. poplar or willow.

Every 18 months5 and after F8 or above winds and/or heavy snow.

Routine Level 2 inspection6. Walkover Level 1 inspection after bad weather.

Medium Adjacent to footpaths in parks or cemetery, within falling distance of gardens. Occupation may be influenced by weather. Early-mature to mature tree population.

Every 2.5 years. Level 1 – Informal inspection. Level 2 – Competent inspection once every 5 years.

Low Infrequent public access and no property of value. Early-mature tree population

Every 5 years7 Level 1 – Informal inspection

5.4 Recording All inspection records must be retained to evidence that trees have been subject to systematic inspection. Should an accident occur, the burden of proof to provide this information is on the duty-holder. As a local authority, this should be recorded on a GIS-based computer management system, with records captured electronically on site8.

Records must be stored in a central location. Paper records may be scanned onto a computer system and then recycled however must be backed up in a suitably secure location. Records must be kept for at least 7 years.

All recorded trees must be plotted on a map of a suitable scale and with a north arrow. 1:500 will usually suffice. The map must be annotated with the date of inspection.

It is only necessary to make a formal record of every tree subject to Detailed inspection. It is not necessary to plot every tree as part of other levels of inspection9. It is acceptable to record groups of trees with no significant defects, making reference to their general characteristics as per the example “G1”, overleaf. Where it is decided to retain a tree with structural defects, an individual record must be made with reference to remedial action taken and any deviation from the standard inspection interval.

5 Steer taken from Cavanagh v Witley Parish Council allowing for 1.5 year cycles to allow trees to be inspected in and out of leaf at consecutive inspections. 6 Poll v Bartholomew and Government Circular 52/75 7 Although not presenting significant risk while early-mature, periodic inspection will allow formative pruning to be specified thereby reducing risk in longer term. 8 NTSG ‘Reasonable, Balanced Tree Safety Management’ table for rural local authority 9 SIM 01/2007/05 Appendix 1

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Where remedial work is recommended, this must be recorded on the tree survey sheet. The work may be to fell the tree, crown reduce all or part of the tree, exclude the public or specify a higher level of inspection.

The following record sheet shows the minimal amount of information that must be recorded during formal, detailed and expert-level inspection:

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5.5 Basic Survey Template - example

Hart District Council Basic Tree Survey data sheet

Inspection date 01 Jan 2018 Location Anypark Page 1

Name of surveyor A Surveyor Viewing

conditions Clear, dry, sunny

Ref No. Species Age

Ht m

Dia cm

Crown Spread N E S W

Target Physiological Condition

Structural Condition Condition Comments Is Risk

ALARP? Management

Time scale Review

T1 Lime M 19 70 5 4 4 4 Road Footpath Good Fair Fungus at base N

Crown reduce by 3m in all directions

3 mths 1.5

T2 Oak M 16 65 6 7 7 7 Play area Good Good Est.25cm diameter x 8m long hanging failed limb to south

N Remove hanging limb 3 mths

1.5

G1 Oak and sweet chestnut

M # 16 40- 65 Internal footpath

Good Good n/a Y 1.5

A1 Oak, sweet chestnut, birch and pine

EM-M

7 - 18 10- 80 Internal footpath

Fair - Good Good n/a Y 2.5

HEADINGS & ABBREVIATIONS REF -Reference for Tree, Group or Area SPECIES - Common names of species AGE: EM – Early mature – Not yet grown to full height or spread M – Mature – At, or close to full height of species and growing environment OM – Over-mature - Beyond normal lifespan for species, reduced/declining growth HT - Height: estimated height in metres (# = average in group or area) DIA – Stem diameter in cm, measured at 1.5m above ground level. May be shown as range. CROWN SPREAD - estimated distance to edge of crown from tree stem in metres. May be range. PHYSIOLOGICAL CONDITION: Normal: Outwardly healthy; Reduced: Minor dieback, thin crown, reduced growth rate; Poor: Extensive dieback, chlorotic or small leaves; Dead: no signs of life.

STRUCTURAL CONDITION - GOOD – No significant structural issues FAIR – Minor structural issues that may be remedied by tree surgery but may reduce safe useful life expectancy POOR – Significant structural issued, may be irremediable and will drastically reduce its safe useful life expectancy – DEAD – Dead tree. CONDITION COMMENTS - Note of physical aspects of tree that may present a hazard IS RISK ALARP? - In its current state is the risk of harm from the trees defects or hazards as low as reasonably practicable? If yes no further action required; if no then remedial action must be specified to reduce the risk to the lowest practicable level. MANAGEMENT - Works proposed to reduce risk TIMESCALE - Suggested timeframe for remedial work REVIEW - Period (years) to next inspection

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6.0 Failure Log

6.1 A record shall be kept of all tree failures, regardless of whether they resulted in harm or damage where they occur in High or Medium Risk Zones. This log will help inform duty holders of patterns which may influence resource expenditure and future management. This will also establish the ‘real’ risk that trees pose, as well as allowing trends and patterns to be noticed.

Table 2: Example Failure Log

Date Species Age class

Location Weather conditions

Type of failure

Type of loss

Cost Contributing factors

Foreseeability Action

1.2.17 Oak M HW Common

Stormy, F8 SW

30cm diameter branch shed at collar

Fence panel

£30 Heartwood decay, likely caused by Laetiporus sulphureus

Not foreseeable, no outward signs of decay.

Climbing inspection to probe point of failure and establish extent of decay.

2.9.17 Raywood ash

M Du Maurier Close

Still, clear Bark inclusion failure, 30cm diameter branch shed onto footpath

None Nil Inherent structural weakness, exasperated by tree being in full leaf with heavy seed crop.

Foreseeable, bark inclusion readily viewable from ground inspection.

Discuss with surveyor at next meeting.

7.0 Remedial Works

7.1 Where a tree poses an unacceptable level of risk, it will be necessary to carry out remedial works to reduce the risk to an acceptable level. The timescale for implementing such works will be identified by the inspecting officer.

7.2 Remedial works should not be confined to tree surgery; it may be acceptable to modify how the public uses a site perhaps by relocating benches or fencing off ‘target’ areas with shrub planting or dead hedges. Similarly, there may be circumstances where the growing environment may be improved through the use of soil aeration or mulching. This may be effective where a significant tree has been assessed to be in declining health and likely to pose an increasing risk in the near future.

7.3 The Council should prepare a list of reputable tree surgeons who will be on hand to carry out routine and emergency works. The Council must be assured that the contractors they use are competent to carry out the work i.e. they are fully trained and experienced in the work that they are undertaking. The work must be carried out in accordance with current arboricultural best practice and with the safety of staff and the public in mind. They must hold Public Liability Insurance to at least £10m and Employers Liability Insurance commensurate with the size of their

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business. It is strongly recommended to obtain copies of this information before appointing a contractor.

7.4 The Arboricultural Association run the ARB-Approved Contractor scheme, providing a list of companies who have been assessed in terms of their understanding of current arboricultural practice, their compliance with legislation and health and safety requirements, and their business practices. This list provides a good foundation for contractor selection and may be found on their website: www.trees.org.uk > Find a Professional > Find a Tree Surgeon.

7.5 The inspecting officer and contractor must make consideration to the likely presence of protected species. Bats, birds and other species and their habitats are afforded statutory protection under the Wildlife and Countryside Act 1981, as amended by the Countryside and Rights of Way Act 2000 and the EU Habitats Directive 1992.

8.0 Responding to enquiries

8.1 Traffic Light Trees The Council has a finite resource for maintaining its trees. It has a legal and moral obligation to manage trees to prevent and reduce risk and so it follows that resources shall be targeted in this manner. In order to provide straight-forward advice as to what works may be carried out and under what timescales, “Traffic Light Trees” may be used;

Table 3: Traffic Light Trees summary

Traffic Light Trees Summary of categories

Traffic Light Colour

Target date for tree works

Type of work likely to fall within category

Red 12 weeks Essential works such as: • Removing standing dead trees from public areas. • Removing fallen trees where they present an obstruction. • Removing significant deadwood. • Work for health and safety reasons.

Amber 6 months Where resources allow, may include the following: • Removing less significant deadwood. • Tipping back branches in contact with property. • Formative pruning

Green

N/A The Council will not fell or prune trees solely for the following reasons: • Disruption of light structures such as footpaths and fences. • Reduced light levels. • Interference with television and/or satellite reception. • To alleviate problems caused by seasonal and/or natural phenomena.

8.2 Enquiry Logging A record must be made of all enquiries and action taken. However, the Council is advised to ensure that the level of information that they keep complies with the

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General Data Protection Regulation (GDPR). An example record sheet is provided here:

Table 4: Enquiry and Action Log

Date of enquiry

Location of tree (e.g. nearest address)

Enquiry Action taken Date closed

1.9.17 Calthorpe Park, adj. 25 Tavistock Road

Silver birch fallen on fence Tree inspected and confirmed to have fallen; contractors removed tree and repaired fence.

9.9.17

9.0 Review

9.1 In order to monitor the effectiveness of the Strategy, it is necessary to subject it to periodic review. It is particularly important to ensure that the Council are meeting legally-required standards in ensuring public safety. The Strategy shall be reviewed on an annual basis to highlight any procedural issues and in response to any change in legislation, case law or best practice. The Senior Tree Officer shall be responsible for collating and reporting this information.

9.2 This policy must be subject to external review once every 5 years. This will ensure impartiality in terms of compliance and budget. This may be carried out by an Arboricultural Consultant qualified to RCF Level 6 Arboriculture e.g. BSc or Professional Diploma, or above.

9.3 Performance against KPI’s and the Failure Log will be communicated to the Health and Safety Officer on a 6 monthly basis.

9.4 As site use may change over time, it is necessary to subject all Risk Zones to periodic review. This must be no less than once every 3 years. The Site Manager is advised to review specific areas if new play equipment or site furniture is installed or removed, new development occurs on adjacent land or there is a change of land use.

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10.0 Bibliography

Cloud, K. 2017. Hart District Council Tree Risk management Strategy. Technical Arboriculture.

Ellison, M. Quantified Tree Risk Assessment – licensed user manual. QTRA limited.

Health and Safety Executive (HSE). 2007. Management of the risk from falling trees. Sector Information Minute 01/2007/05 Inspection of highway trees; Department of Environment Circular 52/75 (1975) Lonsdale, D. 1999. Principles of tree hazard assessment and management. Department of Communities. National Tree Safety Group, 2011. Common sense risk management of trees. Forestry Commission Visitor Safety in the Countryside Group. Managing Visitor Safety in the Countryside – principles and practice.

Issued 31st May 2018 Last reviewed n/a Next review 1st June 2019 Author Adam Maskill Version V1.0

Development of the Tree Risk Management Strategy

Hart District Council

Paper B Appendix 2

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Contents 1.0 Introduction ....................................................................................................... 2

2.0 Review of Legal Decisions ............................................................................... 2

3.0 The Health and Safety Executive’s View .......................................................... 3

3.1 SIM 01/2007/05 Management of the risk from falling trees. .......................... 3 4.0 Published Guidance ......................................................................................... 5

4.1 The National Tree Safety Group Common Sense Risk Management of Trees, 2011 ............................................................................................................ 5 4.2 Hazards from Trees (Forestry Commission, 2000) ....................................... 6 4.3 Government Circular 90/73 Inspection, maintenance and planting of roadside trees on rural roads .................................................................................. 6 4.4 Government Circular 52/75 - Inspection of highway trees ............................. 6

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1.0 Introduction

1.1 The following section provides an overview of the development of the Council’s Tree Risk Management Strategy. It is intended to be subject to periodic review in light of new legislation, case law and best practice. This will inform how the Strategy will evolve over time.

2.0 Review of Legal Decisions 2.1 Key legal cases have an impact upon tree risk management in the United Kingdom. A

summary of key cases up to the release of the current version of this policy is included below. As new cases emerge over time these may change the current thinking on aspects of tree management, survey regimes, recording and training such that revisions to the Strategy may be required.

Shirvell v Hackwood Estates Co Ltd [1938] 2 K.B. 577 It was held that the owner of a tree standing in a remote location where no public access could reasonably have been foreseen was not liable for the death of a person which resulted from the tree’s collapse.

Edwards v National Coal Board [1949] All ER 743 (CA) This case gave rise to the concept of reasonable practicability in relation to risk reduction, as set out by the Court of Appeal: ““Reasonably practicable” is a narrower term than “physically possible” … a computation must be made by the owner in which the quantum of risk is placed on one scale and the sacrifice involved in the measures necessary for averting the risk (whether in money, time or trouble) is placed in the other, and that, if it be shown that there is a gross disproportion between them – the risk being insignificant in relation to the sacrifice – the defendants discharge the onus on them.”

Chapman v Barking & Dagenham LBC [1997] 2 E.G.L.R. 141; [1997] 48 E.G. 154 It was held that a local authority was liable for serious injuries caused to a member of the public due to a falling branch, in that the authority could not show that the tree in question had been subjected to “systematic expert inspection”. Tomlinson v Congleton Borough Council [2003] 1 AC 46; [2004] UKHL 47 The House of Lords ruling in this case held that natural features with inherent but obvious dangers could be left available for public access at the discretion of the users, rather than at the liability of the owners, providing that the features were no more dangerous than would normally be the case for others of their type. Thus, if harm to a user results from an activity that elevates the risk, and not the state of the premises, liability would not necessarily attach to the owner. However, the danger may not be equivalent for all types of user, e.g. fit and active adults compared to children or the disabled, with this, in turn, affecting whether liability for harm suffered might attach to the owners of the features concerned.

Poll v Bartholomew and Bartholomew [2006] EWHC The preliminary judgement in this case held that tree inspections should be undertaken by suitably competent inspectors. In the case of trees by highways, the expert witnesses agreed that trees by highways should be subject to ‘competent inspection’ as per Circular 52/75. This means that the Inspector must have formal qualifications in arboriculture with modules covering the identification and treatment of tree defects. This equates to ‘Level 2 Inspection’.

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Atkins v Scott [2008] Held that an informal system of tree inspection worked adequately in this particular case but stated that such informality has the obvious disadvantage that it makes it more difficult to resist claims based on an inadequate system of inspection. Selwyn-Smith v Gompels [2009] The trees at the Rotherfield Estate were inspected by employees with extensive experience in estate maintenance and tree management however they lacked formal arboricultural qualifications. It was held that the employees were suitably experienced and knowledgeable to carry out tree inspection at this site. Micklewright v Surrey County Council [2010] Held that although the tree survey system in place was inadequate, the defect was not foreseeable. Bowen, Farley, Farthing and Mullinger v The National Trust [2011] Established that risk assessment is by its very nature liable to be proved wrong by events. The tree inspectors used all the care to be expected of reasonably competent persons doing their job, and the defendant had given them adequate training and instruction in how to approach their task. Alas the judgement of the inspector was proven wrong with disastrous consequences. However, the court held that the defendant had acted reasonably and was not negligent. Middleton v Surrey County Council [2015] Held that although there was a system of tree inspection in place, that it had been carried out negligently as there was no evidence of an assessment being made of vitality. Cavanagh v Witley Parish Council and Shepherd Tree Surgeons [2017] The judge found that a 3-year inspection regime was inadequate for the particular tree in its situation. 2 years would have been reasonable, and the developing fruit body of a decay fungi would have been discovered and action taken to reduce or remove the risk. The judgement is due to be reviewed in the Court of Appeal in June 2018.

3.0 The Health and Safety Executive’s View 3.1 SIM 01/2007/05 Management of the risk from falling trees.

Whilst the document is aimed at a target audience of those in a health and safety enforcement role it does provide some good information which is relevant to this policy. The following paragraphs are extracted from SIM 01/2007/05: Employers, persons carrying out undertakings or in control of premises all have duties under the HSW Act. In particular, there is the duty to do all that is reasonably practicable to ensure that people are not exposed to risk to their health and safety. Doing all that is reasonably practicable does not mean that all trees have to be individually examined on a regular basis. A decision has to be taken on what is reasonable in the circumstances and this will include consideration of the risks to which people may be exposed Around half of all fatalities due to falling trees occur in public spaces, such as a park or beside roads, so Section 3 of the Health and Safety at Work Act (HSWA) may be applicable. Whilst HSE may regard the average risk as extremely low, the law requires that where reasonably practicable

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measures are available in individual cases they should be taken. Whilst the risk of such incidents puts them outside HSE’s and local authority's [as health and safety inspector] main proactive priorities, inspectors may be called upon to investigate serious incidents, including fatalities.

In addition to duties under the HSWA there are a number of reasons why local authorities (as duty holders) and others may want to manage their tree stocks, for example responsibilities under other legislation and the risk of civil liabilities to:

• reduce the risk of property damage from subsidence;

• maintain stocks to preserve their amenity, conservation, and environmental value;

• prevent personal injury through trips and falls on footways disturbed by tree roots; and

• prevent vehicle damage and personal injury from obscured sightlines on the highway.

For these and other reasons, some duty holders may undertake inspection of trees in a manner well beyond the reasonably practicable requirements of the HSW Act. HSE believes that public safety aspects can be addressed as part of the approach to managing tree health and tree owners should be encouraged to consider public safety as part of their overall approach to tree management. A sensible approach will ensure the maintenance of a healthy tree stock, the sound management of the environment and will usually satisfy health and safety requirements. An effective system for managing trees should meet the requirements set out in the Management of Health and Safety at Work Regulations 1999 and associated guidance contained in HSG 65 Successful health and safety management and INDG 163 Five steps to risk assessment. The system should therefore seek to address the following:

1. An overall assessment of risks from trees, particularly identifying groups of trees by their position

and degree of public access. This will enable the risks associated with tree stocks to be prioritised, and help identify any checks or inspections needed.

2. As a minimum, trees should be divided into two zones: one zone where there is frequent public access to trees (e.g. in and around picnic areas, schools, children’s playgrounds, popular foot paths, car parks, or at the side of busy roads); and a second zone where trees are not subject to frequent public access. As a rough guide ‘trees subject to frequent public access are those that are closely approached by many people every day. Maps may be useful here as individual records for individual trees are unlikely to be necessary if zones and the trees in the zones are clearly defined.

3. For trees in a frequently visited zone, a system for periodic, proactive checks is appropriate. This should involve a quick visual check for obvious signs that a tree is likely to be unstable and be carried out by a person with a working knowledge of trees and their defects, but who need not be an arboricultural specialist. Informing staff who work in parks or highways as to what to look for would normally suffice. Duty holders should ensure that any system that is put in place for managing tree safety is properly applied and monitored.

4. A short record of when an area or zone or occasionally an individual tree has been checked or

inspected with details of any defects found and action taken.

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5. A system for obtaining specialist assistance / remedial action when a check reveals defects beyond the experience and knowledge of the person carrying out the check.

6. A system to enable people to report damage to trees, such as vehicle collisions, and to trigger

checks following potentially damaging activities such as work by the utilities in the vicinity of trees or severe gales.

7. Occasionally a duty holder may have responsibility for trees that have serious structural faults but which they decide to retain. Where such a condition is suspected and the tree also poses a potentially serious risk because, for example its proximity to an area of high public use, a specific assessment for that tree and specific management measures, are likely to be appropriate.

8. Once a tree has been identified by a check to have a structural fault that presents an elevated

risk, action should be planned and taken to manage the risk. Any arboricultural work required should be carried out by a competent arboriculturist; as such work tends to present a relatively high risk to the workers involved. Duty holders should not be encouraged to fell or prune trees unnecessarily.

9. Inspection of individual trees will only be necessary where a tree is in, or adjacent to, an area of

high public use, has structural faults that are likely to make it unstable and a decision has been made to retain the tree with these faults.

10. Monitoring to ensure that the arrangements are implemented in practice.

4.0 Published Guidance

Freely available, published guidance will be summarised below. Full copies are expected to be retained alongside this document.

4.1 The National Tree Safety Group Common Sense Risk Management of Trees, 2011

This document has been written to provide a common standard for tree risk management. It acknowledges that trees should not be managed solely to reduce risk, but to maximise the benefits that they provide us with. This is a careful balance which must be considered on a local basis due to the differing benefits associated with particular trees and locations. “Trees form part of the overall landscape and their presence has many different benefits depending on how the land is used. Not all trees are managed and, even for those that are, such management forms a component of overall land management. Human safety is one part of that management. Risk management can be undertaken only by understanding the trees and their value to people in the context within which they grow. The requirement under health and safety legislation is to have a suitable and sufficient risk assessment, and to apply measures that are reasonable and practicable”. “In its position statement, the NTSG argues that it is reasonable that sufficiently large organisations that own or manage trees develop a management strategy (in line with practice in other sectors). This strategy may strike a balance between risks present and benefits accrued. An organisation that publishes and maintains a tree strategy or management plan, part of which includes information on their risk management plan for the trees they own, is much better placed to demonstrate they have fulfilled their duty of care”. This document is currently under review.

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4.2 Hazards from Trees (Forestry Commission, 2000)

This document provides guidance on commonly encountered features of trees which would often justify detailed inspection. It also advises on how to plan and carry out tree inspection. Critically, it directs the duty holder to assess the need for remedial action where a problem can be foreseen i.e. to assess the likelihood of failure, the likely consequence and whether it is reasonable to protect against it.

4.3 Government Circular 90/73 Inspection, maintenance and planting of roadside trees on rural roads

This reproduces relevant text from the Government Circular 90/73 Inspection, Maintenance and Planting of Roadside Trees, for information purposes: Inspection and road safety 7) The Secretaries of State wish to draw your Council's attention once again to the need for regular inspection of roadside trees in order that any considered to be a danger to road users can be made safe or felled. The Secretaries of State are advised that an authority or any person responsible for the safety of a tree is under a duty to have it inspected by a competent person at reasonably frequent intervals so that any indication of disease or possible disease present at the time of inspection can be noted and acted upon. The frequency of investigation will depend on age, kind, condition and circumstances of each tree; inspections should be made preferably when the trees are in leaf and symptoms of disease most apparent. There have been serious accidents over the last few years caused by trees falling on to cars; some of these accidents might have been avoided by regular inspection, proper maintenance and felling where necessary. 8) Accordingly the Secretaries of State request their trunk road agent authorities to pay special attention to the inspection of trees on trunk road slopes and verges. The importance of preserving both horizontal and vertical visibility must also be borne in mind during inspections and pruning work. It is particularly important to preserve vertical visibility by preventing sightlines across sag curves in the road being interrupted by overhanging trees. Where inspections reveal that important specimens or numerous trees require felling, this should be drawn to the attention of the Department of the Environment's Horticultural Advisers; any work should be carried out in accordance with the British Standard “Recommendations for Tree Work”. It is suggested that local authorities should act similarly in respect of trees on their own roads.

4.4 Government Circular 52/75 - Inspection of highway trees

This reproduces relevant text from the Government Circular 52/75 Inspection, Maintenance and Planting of Roadside Trees, for information purposes. In summary, it advises of the standard to which highway trees should be inspected by way of regular inspection by a competent person.

1) General advice on the inspection and maintenance of wayside trees and hedges is given in DOE Circular No. 90/73 which, together with a Circular to be issued later relating to trees in urban areas, replaces an earlier Circular ROADS on this subject. The timing of these inspections and the detail in which they should reasonably be carried out have presented highway engineers with some problems, and the purpose of this Circular, which replaces Circular ROADS 34/74, now cancelled, is to help in resolving them.

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2) Trees growing within the highway are a most important amenity feature, but they can also present very real danger to persons using the highway. For this reason the trees should receive adequate attention to preserve healthy growth, and they should also be examined regularly for any signs of injury or decay which could lead to their becoming a hazard. 3) During the course of his work the road inspector should make a note of any obviously dead, dying or dangerous trees, whether within the highway itself or within falling distance of the highway. If he finds there has been any accident or damage to a tree, that it is unstable in any way, large branches have been broken or, if in leaf, there is any sign of wilting or die-back, then the facts should be reported to the County Engineer, who will arrange for further examination by a competent person and. for any follow-up action found to be necessary. 4) In addition the County Engineer should arrange for examination of the trees by a competent person at regular intervals, preferably when they are in full leaf, in order to make sure that they are safe and are likely to present no danger to road users before the next inspection takes place. If further action is considered necessary, this should take place urgently. The period between these inspections and the degree of examination will depend on the age and history of the trees, surgery, disease, accidents, etc. It would be helpful to the examining officer if a record could be kept of any previous damage or work done etc. on wayside trees, and brought up to date at subsequent inspections. The officer should also pay attention to trees growing on private land which are within falling distance of the highway, and examine any which are suspect. The highway authority has a right of access for this purpose, and may require the owner or occupier of land on which there is any tree which is dead, diseased, damaged or insecurely rooted to be out or felled in order to remove the likelihood of danger (Sec. 10 Highways (Miscellaneous Provisions) Act, 1961). 5) Points which should particularly be noted during inspections are those related to general symptoms of debility. Thinning of the foliage and dying back of the branches is an indication of ill health in a tree. Trees in this state will need close inspection. Wounds where branches have been removed should be checked, as it is often through these that disease enters a tree. Areas where bark has peeled off should be examined, as they indicate dead wood beneath. Galls and cankerous lesions are a sign of fungal or bacterial disease and the presence of toadstools or brackets usually indicates an advanced state of fungal decay. Any moisture issuing from the trunk of the tree, or staining by water running down the trunk, may also indicate the presence of internal rot. When symptoms such as these have been spotted, either they should be further investigated with an auger, or the advice of a tree surgeon should be sought. 6) Regard should also be paid to works carried out by statutory undertakers near trees in the highway, and. consideration given to felling if it is ascertained that so many of the roots have been severed that the tree may become unstable. Similar consideration should also be given to mature trees remaining after roadworks or statutory undertakers works have removed the protection afforded by other trees, or where root systems have been damaged either by the works or by alterations to the soil level. Inspection should also cover the possibility of damage to footways, carriageways and street furniture by roots. As a rough guide root spread is usually about 1 1/3 times height. Any such damage should be reported to the County Engineer or other officer responsible.

5.0 Review 5.1 As further information becomes available, it should be included in this document and then incorporated into the Strategy as necessary. A record of additions and amendments is found below:

PAPER C

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OVERVIEW AND SCRUTINY COMMITTEE DATE OF MEETING: 17 JULY 2018 TITLE OF REPORT: TREASURY MANAGEMENT OUTTURN 2017/18 Report of: Head of Corporate Services & Section 151 Officer Cabinet Member: Councillor David Neighbour, Leader and Finance 1. PURPOSE OF REPORT 1.1 To report the Council’s Treasury Management activities during the 2017/18 financial

year, prior to consideration at Cabinet. 2. OFFICER RECOMMENDATION 2.1 To forward any comments it wishes to make to Cabinet for consideration at its

meeting on 2 August 2018. 3. BACKGROUND 3.1 This Council is required by regulations issued under the Local Government Act 2003

to produce an annual treasury management review of activities and the actual prudential and treasury indicators for 2017/18. This report meets the requirements of both the CIPFA Code of Practice on Treasury Management, (the Code), and the CIPFA Prudential Code for Capital Finance in Local Authorities, (the Prudential Code).

3.2 During 2017/18 the minimum reporting requirements were that the Council should

receive the following reports: • an annual treasury strategy in advance of the year (Cabinet 01/02/2018) • a mid-year (minimum) treasury update report (Cabinet 07/12/2017) • an annual review following the end of the year describing the activity compared

to the strategy (this report) 3.3 The regulatory environment places responsibility on members for the review and

scrutiny of treasury management policy and activities. This report is, therefore, important in that respect, as it provides details of the outturn position for treasury activities and highlights compliance with the Council’s policies previously approved by members.

3.4 This Council confirms that it has complied with the requirement under the Code to

give prior scrutiny to all of the above treasury management reports by the Cabinet. 4. THE ECONOMY AND INTEREST RATES 4.1 During the calendar year of 2017, there was a major shift in expectations in financial

markets in terms of how soon Bank Rate would start on a rising trend. After the UK economy surprised on the upside with strong growth in the second half of 2016, growth

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in 2017 was disappointingly weak in the first half of the year which meant that growth was the slowest for the first half of any year since 2012. The main reason for this was the sharp increase in inflation caused by the devaluation of sterling after the EU referendum, feeding increases into the cost of imports into the economy. This caused a reduction in consumer disposable income and spending power as inflation exceeded average wage increases. Consequently, the services sector of the economy, accounting for around 75% of GDP, saw weak growth as consumers responded by cutting back on their expenditure. However, growth did pick up modestly in the second half of 2017. Consequently, market expectations during the autumn, rose significantly that the MPC would be heading in the direction of imminently raising Bank Rate. The minutes of the MPC meeting of 14 September indicated that the MPC was likely to raise Bank Rate very soon. The 2 November MPC quarterly Inflation Report meeting duly delivered by raising Bank Rate from 0.25% to 0.50%.

4.2 The 8 February MPC meeting minutes then revealed another sharp hardening in MPC

warnings on a more imminent and faster pace of increases in Bank Rate than had previously been expected.

4.3 Market expectations for increases in Bank Rate, therefore, shifted considerably during

the second half of 2017-18 and resulted in investment rates from 3 – 12 months increasing sharply during the spring quarter.

4.4 PWLB borrowing rates increased correspondingly to the above developments with the

shorter term rates increasing more sharply than longer term rates. In addition, UK gilts have moved in a relatively narrow band this year, (within 25 bps for much of the year), compared to US treasuries. During the second half of the year, there was a noticeable trend in treasury yields being on a rising trend with the Fed raising rates by 0.25% in June, December and March, making six increases in all from the floor. The effect of these three increases was greater in shorter terms around 5 year, rather than longer term yields.

4.5 The major UK landmark event of the year was the inconclusive result of the general

election on 8 June. However, this had relatively little impact on financial markets. 5. OVERALL TREASURY POSITION AS AT 31 MARCH 2018 5.1 At the beginning and the end of 2017/18 the Council’s treasury (excluding borrowing

by PFI and finance leases) position was as follows:

31 March 2017

Principal Rate /

Return Average

Life

31 March 2018

Principal Rate /

Return Average

Life £'000 % Years £'000 % Years Total Debt 9,849 2.19 25 14,596 1.43 24

CFR 20,566 - - 21,165 - -

Under Borrowing 10,717 - - 6,569 - -

Total Investments 13,089 0.61 <1 19,000 0.67 <1

Net Investments 3,240 - - 4,404 - -

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6. THE STRATEGY FOR 2017/18 6.1 The expectation for interest rates within the treasury management strategy for

2017/18 anticipated that Bank Rate would not start rising from 0.25% until quarter 2 2019 and then only increase once more before 31.3.20. There would also be gradual rises in medium and longer term fixed borrowing rates during 2017/18 and the two subsequent financial years. Variable, or short-term rates, were expected to be the cheaper form of borrowing over the period. Continued uncertainty in the aftermath of the 2008 financial crisis promoted a cautious approach, whereby investments would continue to be dominated by low counterparty risk considerations, resulting in relatively low returns compared to borrowing rates.

6.2 In this scenario, the treasury strategy was to postpone borrowing to avoid the cost of

holding higher levels of investments and to reduce counterparty risk. 6.3 During 2017/18, longer term PWLB rates were volatile but with little overall direction,

whereas shorter term PWLB rates were on a rising trend during the second half of the year.

7. THE BORROWING REQUIREMENT AND DEBT 7.1 The Council’s underlying need to borrow to finance capital expenditure is termed the

Capital Financing Requirement (CFR). 31-Mar-17 31-Mar-18 31-Mar-18

Actual (£’000) Estimate (£’000) Actual (£’000)

Capital Financing Requirement 20,566 22,325 21,165 8. BORROWING RATES IN 2017/18 8.1 PWLB certainty maturity borrowing rates

As depicted in the graph and tables below and in Appendix 1, PWLB 25 and 50 year rates have been volatile during the year with little consistent trend. However, shorter rates were on a rising trend during the second half of the year and reached peaks in February / March.

8.2 During the year, the 50 year PWLB target (certainty) rate for new long term borrowing was 2.50% in quarters 1 and 3 and 2.60% in quarters 2 and 4.

8.3 The graphs and tables for PWLB rates show, for a selection of maturity periods, the average

borrowing rates, the high and low points in rates, spreads and individual rates at the start and the end of the financial year.

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9. BORROWING OUTTURN FOR 2017/18 9.1 Borrowing – there were no new loans taken out in 2017/2018

The following loans were taken during 2016/2017: -

Lender

Principal

Type Interest Rate (%)

Maturity

(£m) (Total Years)

PWLB 10.000 Fixed Interest rate 2.19 25

HAMPSHIRE CC 5.290 Interest free 0 7 9.2 Repayments PWLB– on 04/07/2017 & 04/01/2018 the council paid via direct debit

payments of £260,787 to repay this PWLB loan (payments started 04/01/2017) 9.3 Repayments HCC- We were due to pay £250,000 principal back in 2017/18 but

this payment has been delayed until 2018/19 10. INVESTMENT RATES IN 2017/18 10.1 Investment rates for 3 months and longer have been on a rising trend during the second

half of the year in the expectation of Bank Rate increasing from its floor of 0.25%, and reached a peak at the end of March. Bank Rate was duly raised from 0.25% to 0.50% on 2.11.17 and remained at that level for the rest of the year. However, further increases are expected over the next few years. Deposit rates continued into the start of 2017/18 at previous depressed levels due, in part, to a large tranche of cheap financing being made available under the Term Funding Scheme to the banking sector by the Bank of England; this facility ended on 28.2.18.

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11. INVESTMENT OUTTURN FOR 2017/18 11.1 Investment Policy – the Council’s investment policy is governed by MHCLG

guidance, which has been implemented in the annual investment strategy approved by the Cabinet on 2nd February 2017. This policy sets out the approach for choosing investment counterparties, and is based on credit ratings provided by the three main credit rating agencies, supplemented by additional market data, (such as rating outlooks, credit default swaps, bank share prices etc.).

11.2 The investment activity during the year conformed to the approved strategy, and the

Council had no liquidity difficulties. 11.3 Investments held by the Council - the Council maintained an average balance of

£23,501,821 of internally managed funds. The internally managed funds earned an average rate of return of 0.54%.

12. OTHER ISSUES 12.1 Revised CIPFA Codes - In December 2017, the Chartered Institute of Public Finance

and Accountancy, (CIPFA), issued a revised Treasury Management Code and Cross Sectoral Guidance Notes, and a revised Prudential Code.

12.2 A particular focus of these revised codes was how to deal with local authority

investments which are not treasury type investments e.g. by investing in purchasing property in order to generate income for the Authority at a much higher level than can be attained by treasury investments. One recommendation was that local authorities should produce a new report to members to give a high level summary of the overall capital strategy and to enable members to see how the cash resources of

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the Authority have been apportioned between treasury and non-treasury investments. Officers will report to members when the implications of these new codes have been assessed as to the likely impact on this Authority.

12.3 Markets in Financial Instruments Directive II (MiFID II) - The EU set the date of 3

January 2018 for the introduction of regulations under MIFID II. These regulations govern the relationship that financial institutions conducting lending and borrowing transactions will have with local authorities from that date. This has had little effect on this Authority apart from having to fill in forms sent by each institution dealing with this Authority and for each type of investment instrument we use, apart from for cash deposits with banks and building societies.

13. CONCLUSION 13.1 This report provides Members with information on the level of investment and interest

earned during the last financial year and demonstrates the Council’s compliance with the Treasury Management Strategy.

Contact Details: Andrew Vallance Telephone: 01252 774207 Email: andrew.vallance@hart.gov.uk BACKGROUND PAPERS: Budget Report Council

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Prudential and Treasury Indicators During 2017/18, the Council complied with its legislative and regulatory requirements. The key actual prudential and treasury indicators detailing the impact of capital expenditure activities during the year, with comparators, are as follows: 2016/17 2017/18 2017/18

PRUDENTIAL INDICATORS Actual Original Actual

£'000 £'000 £'000

Capital Expenditure 20,741 11,185 1,715

Gross Debt 9,856 9,541 14,596

Capital Financing Requirement (CFR)

Brought Forward 1 April 904 20,566 20,566

Carried Forward 31 March 20,566 22,325 21,165

Change in CFR 19,662 1,759 599

Ratio of financing costs to net revenue stream 0.50% 2.45% 2.61%

Incremental impact of capital investment decisions

Increase in council tax (band D) per annum £1.58 -£9.03 £5.51 2016/17 2017/18 2017/18

TREASURY MANAGEMENT INDICATORS Actual Original Actual

£'000 £'000 £'000

Authorised Limit for External Debt

Borrowing 30,000 30,000 30,000

Other long term liabilities - - -

Operational Boundary for External Debt

Borrowing 25,000 25,000 25,000

Other long term liabilities - - -

Actual External Debt 9,856 9,541 14,596

Upper limit for fixed interest rate exposure

Net principal re fixed rate borrowing /

investments 100% 100% 100%

Upper limit for variable interest rate exposure

Net principal re variable rate borrowing /

investments 100% 100% 100%

Upper limit for total principal sums invested for over 364 days 5,000 5,000 5,000

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Maturity structure of borrowing during 2017/18

Lower %

Upper %

Under 12 months 0 50

12 months to 2 years 0 50

2 years to 5 years 0 50

5 years to 10 years 0 100

10 years to 20 years 0 100

20 years to 30 years 0 100

30 years to 40 years 0 100

40 years to 50 years 0 100 UK, US and EZ GDP growth

Inflation UK, US, Germany and France

PAPER C Appendix 1

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PWLB borrowing rates

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00PWLB certainty rate variations April 2017 - March 2018

3-Apr-17 29-Mar-18 Average

1 1-1.5 2.5-3 3.5-4 4.5-5 9.5-10 24.5-25 49.5-501 month variable

3/4/17 0.850% 0.870% 1.000% 1.120% 1.250% 1.930% 2.620% 2.370% 1.100%29/3/18 1.470% 1.520% 1.670% 1.760% 1.850% 2.230% 2.570% 2.290% 1.090%High 1.510% 1.600% 1.790% 1.900% 2.010% 2.530% 2.930% 2.640% 1.310%Low 0.800% 0.820% 0.940% 1.030% 1.140% 1.780% 2.520% 2.250% 1.040%

Average 1.107% 1.143% 1.276% 1.384% 1.503% 2.083% 2.688% 2.415% 1.157%Spread 0.710% 0.780% 0.850% 0.870% 0.870% 0.750% 0.410% 0.390% 0.270%

High date 21/03/2018 21/03/2018 21/03/2018 21/03/2018 15/02/2018 15/02/2018 15/02/2018 15/02/2018 21/03/2018Low date 03/05/2017 03/05/2017 30/05/2017 15/06/2017 15/06/2017 15/06/2017 08/09/2017 08/09/2017 04/04/2017

PAPER C Appendix 1

10

Money market investment rates 2017/18

1 Year 5 Year 10 Year 25 Year 50 Year1/4/17 0.85% 1.25% 1.93% 2.62% 2.37%31/3/18 1.47% 1.85% 2.23% 2.57% 2.29%

Low 0.80% 1.14% 1.78% 2.52% 2.25%Date 03/05/2017 15/06/2017 15/06/2017 08/09/2017 08/09/2017High 1.51% 2.01% 2.53% 2.93% 2.64%Date 21/03/2018 15/02/2018 15/02/2018 15/02/2018 15/02/2018

Average 1.11% 1.50% 2.08% 2.69% 2.41%

PAPER D

1

OVERVIEW AND SCRUTINY COMMITTEE DATE OF MEETING: 17 JULY 2018 TITLE OF REPORT: 2017/18 OUTTURN POSITION Report of: Head of Corporate Services & Section 151 Officer Cabinet member: Councillor David Neighbour, Leader and Finance

1 PURPOSE OF REPORT 1.1 This report contains details of the final position on the Council’s accounts for

2017/18. The Committee is asked to consider the report and to make any recommendations to Cabinet which will consider the report at its meeting on 2 August 2018.

2 OFFICER RECOMMENDATION 2.1 That the 2017/18 outturn position of a £184k underspend for the General Fund

Revenue account be noted. 2.2 That the 2017/18 outturn position for Capital expenditure be noted. 2.3 That the carry forward of the unspent revenue budgets as detailed in paragraph 6.1

be supported. 3 TIMETABLE 3.1 The Head of Corporate Services has signed the provisional Statement of Accounts,

which had to be presented to the external auditor by 31st May. 3.2 The Audit Committee will receive the audited Statement of Accounts together with

the Annual Governance Report for signing and approval at its meeting on 24th July. 4 PROVISIONAL REVENUE POSITION 4.1 When the Council set its budget for 2017/18, it anticipated that the result would be a

net contribution to general reserves of £61k. In the event the total underspend on services is £184k.

4.2 The main areas of under and over spend are detailed in the attached Appendix 1. 5 CAPITAL POSITION 5.1 Total capital spending in 2017/18 was £1,715k, an under spend of £4,808k against the

approved budget of £6,523k. The following table summarises the position by service area. Details are shown in Appendix 2.

PAPER D

2

Approved Budget

Actual Expenditure

Variation

£000 £000 £000 Corporate Management 573 (1) (574) Housing and Customer Services 630 533 (97) Leisure 651 367 (284) Environmental Promotion 2,690 624 (2,066) Technical Services 1,979 193 (1,786) Total capital programme 6,523 1,715 (4,808)

5.2 The capital expenditure in 2017/18 has been funded as follows:

Financed By: £’000s Useable Capital Receipts 79 Developers’ Contributions 407 Internal Borrowing 757 Disabled Facilities Grant 453 Environment Agency 19 Other contributions 0 Total 1,715

6 REVENUE BUDGET CARRY FORWARDS 6.1 Officers have requested that a number of unspent budgets in 2017/18 are carried

forward to the current year to allow them to complete planned expenditure programmes. The amounts requested to be carried forward are detailed below and have been included in the draft statement of accounts provided to the external auditors. The Head of Corporate Services is happy that these are justified slippages.

Type of Expenditure Amount Reason £'000 Lesiure – Sports Hall 1,339 S106 Developer Contribution towards

the cost of the new Sports Hall S106 Management Fee 41 Additional 10% Management Fee on S106

applications for planning projects Neighbourhood Planning Grant

58 Grant from Government in respect of Local Neighbourhood Plans

Homelessness Reduction 133 Earmarked DCLG Grant for Homelessness Reduction

Self Build & Custom Build Register

30 Earmarked Grant for New Burdens

Domestic Abuse 118 Earmarked DCLG Grant Homelessness Trailblazer 63 Earmarked DCLG Grant Harlington Re-Development Options

10 Unspent budget approved by Cabinet 2/3/17

Waste Re-Tender 32 Budget still required to continue with work on the Waste Contract and Mobilisation.

PAPER D

3

7 GENERAL FUND RESERVE 7.1 The General Fund Reserve at 31 March 2018 was £5.508m. This is a healthy balance

and necessary because there is still much uncertainty around future financial settlements from the Government.

7.2 A summary of the estimated movement on reserves is:

£000 Balance at 31 March 2017 5,325 Underspend on service budgets transferred to reserves 183 Balance at 31 March 2018 5,508 Budgeted contribution to reserves 2018/19 28 Projected Balance at 31 March 2019 5,536

Contact Details: Andrew Vallance, x 4207, andrew.vallance@hart.gov.uk APPENDICES Appendix 1 - Revenue Budget Outturn 2017/18 Period 12 March Appendix 2 - Capital Programme Budget Monitoring 2017/18

Paper D Appendix 1

Controlable Current Budget

Year to Date Controlable

Actuals

CORPORATE SERVICESCivic Function & Chairman 9,140 9,533 393 Corporate - Apprentices 26,320 28,553 2,233 Corporate Communication 168,060 143,981 -24,079 One off savings in Licence fees £8k, Saving in publicity due to delay in

Business Mentoring £11k, LGPS saving on staff take up £5k

Leadership Team 550,335 624,857 74,522 Project Management £87k, Advertising and Recruitment Support £41k off set by £50k saving in Consultants for Unitary Options

Corporate Performance Team 59,244 56,141 -3,103 External Audit 66,660 58,660 -8,000 Refund from previous yearsNon Distributed Costs 0 0 0 Climate Change 18,870 18,990 120 Hart Development 54,717 45,490 -9,227 Temporary cover - Scanning Assistant Neighbourhood Planning -57,637 -57,637 0 Strategy & Policy 51,743 53,011 1,268 Hart Lottery 0 -1,655 -1,655 Customer Services Contract 248,675 234,096 -14,579 Saving on the actual Historic Capita Contract and Xmas coverIT Contract 151,885 153,364 1,479 HR Contract 8,978 44,862 35,884 Effect of the delay in the Lot 1 contractInternal Audit 94,880 100,897 6,017 Appointment of new in house Internal AuditorLegal Services 290,840 298,038 7,198 Reflects unbudgeted charge in 17/18 deed £8k, and an estimated

shortfall in fee income £13k off set by savings in Consultants £13k.

Customer Services Client 55,102 52,501 -2,601 IT Client 167,300 178,678 11,378 Checkpoint Support £5k unbudgeted but assumed we didn’t need for 5

Councils. Tape Mgt £2k, unbudgeted Covalent £4kHR Client 31,200 10,473 -20,727 Saving on Corporate Training £12k and Fees for Services £5k5 Council Contract - Lot 1 1,322,238 1,354,554 32,316 Effect of the delay in the Lot 1 contract and pension advice and

contractor support 5C's5 Council Contract - Lot 2 292,428 257,412 -35,016 Unspent Lot 2 contract costs for Oct17 - Mar 18.Planning Policy 548,031 519,551 -28,480 Staffing and Contractor saving £22k. Saving against budgeted travel

and subsistence costs£6k4,159,009 4,184,350 25,341

Rechargeable Elections 0 -18,108 -18,108 Income owing from rechargeable electionsRegister Of Electors 117,633 132,424 14,791 Additional cost of canvassingElection Expenses 93,148 97,906 4,758 Support To Elected Bodies 297,995 316,677 18,682

508,776 528,900 20,124

Revs & Bens Contractor Costs 309,000 671,930 362,930 Effect of the delay in the Lot 1 contract and additional works see client

Revs & Bens Client Costs -275,770 -339,672 -63,902 Additional works done by Capita charged in Contractor Costs. Refund due from Northgate £12k, reduction in court cost actuals £4k, additional one of grant income £47k

Housing/Council Tax Benefits 152,300 -188,138 -340,438 Reduction in provision for bad debts £10k and additional overpayment recovered £326k and reduction in Subsidy payments £20k

Bank Charges 53,000 50,108 -2,892 Finance Client 111,575 121,125 9,550 Insurance premiums £7kFinance Contract 237,535 229,256 -8,279 Saving on the Finance Contract

587,640 544,609 -43,031

Leisure Centre Maintenance 0 2,779 2,779 Leisure Strategy -1,338,686 -1,336,686 2,000 Leisure Centre Contract -334,000 -256,264 77,736 Budget slippage of EA Contract year 2 Leisure Centre Client 60,126 48,111 -12,015 Lesiure 365 Card IncomeHart Leisure Centre (Client) 228,400 194,476 -33,924 NNDR and Insurance charge higher than budget £9k off set by £18k

R&M savings, £5k cleaning contract, £7k utilities, £10k contractor spend and £2k Equip.

Frogmore LC (Client) 3,200 693 -2,507 Lesiure Centres (Re-Billing) 0 -2,892 -2,892

-1,380,960 -1,349,782 31,178

COMMUNITY SERVICESCommunity Safety - Shared Service 178,889 145,078 -33,811 Staffing Saving as advised by RBCPrivate Sector Housing 201,590 135,680 -65,910 HIA budget saving now included in Capital and vacancy saving flexible

retirement change in hours. Off set by Interim CoverStrategic Housing Services 130,818 127,455 -3,363 Housing Needs Service 497,442 463,694 -33,748 Additional rent deposit income collected £8k. Consultant saving £2k.

Additional income recovery of costs from Sentinal for the Housing Register £6k. Housing Options Officer vacancy £23k.

Help for Single Homelessness 8,000 8,000 0 Domestic Abuse -117,697 -117,967 -270 Homelessness Trailblazer -63,071 -62,989 82 Flexible Homelessness -111,488 -111,488 0

724,483 587,461 -137,022

REVENUE BUDGET OUTTURN 2017/2018 PERIOD 12 MARCHActual Year

End VarianceCommentary

Paper D Appendix 1

Controlable Current Budget

Year to Date Controlable

Actuals

REVENUE BUDGET OUTTURN 2017/2018 PERIOD 12 MARCHActual Year

End VarianceCommentary

REGULATORY SERVICESDog Warden 48,770 47,109 -1,661 Pest Control 710 4,943 4,233 Env Health Commercial 143,250 138,976 -4,274 Environmental Protection 166,090 177,903 11,813 Agency fee to end of June £6k. Agency Finder Fee £4kChurchyards 7,500 4,430 -3,070 Out Of Hours Noise Service 25,420 22,361 -3,059 Health & Safety 27,630 23,777 -3,853 Licences -9,200 -8,212 988 Hackney Carriages -21,830 -21,313 517 Health & Policy 50,692 52,442 1,750 Business Support Unit 299,259 300,410 1,151 Maternity Cover and 0.22fte increase in HoursBusiness Support Non Staff 189,251 239,864 50,613 Dispute with IT provider over extension agreement - to be resolved.

Print Room & Photocopying 19,300 45,136 25,836 Unbudgeted licences for Photocopiers and rolling monthly contract as originally thought this was covered by Lot 2.

Local Land Charges -159,000 -137,663 21,337 Payments to outside suppliers not included in the ForecastAdmin Bldgs - R & M 296,169 339,053 42,884 NNDR Refund for the Harlington from 2005-2010 £53k off set by

additional spend above budget for toilet tefurbishment £10k. Unbudgeted air conditioning fitting £19k and general maintenance £9k. Amendments to budgets for Lot 2 Oct 17 - Mar 18 maintenance £6k, cleaning £20k, staff £22k, supplies and services £11k.

1,084,011 1,229,216 145,205

Planning Development -229,539 -313,814 -84,275 Cost of Appeals, Bramshill, Nether House More Copse and Cross Farm £644k. Additional contractor spend on Hartland and Hollywood £56k Additional staffing and pressures £128k. Additional income from s106 agreements £468k and additional income from Planning application charges £399k and recovery of cost income £16k

Building Control - Fee Earning -137,720 -119,692 18,028 Income lower than forecast due to refunds.Building Control - Non-Fee 78,660 81,058 2,398 Street Naming & Numbering -3,905 -18,103 -14,198 Additional fee income above budget

-292,504 -370,551 -78,047

TECHNICAL & ENVIRONMENTAL MAINT.Emergency Planning 40,330 38,651 -1,679 Waste Client Team -759,826 -858,699 -98,873 Staffing Maternity Cover and staff evaluations costing £16k, off set by

additional garden waste clients, now 10,500, generating additional income of £53k, garden waste bin sales £35k, revised estimated recycling credit income £11k and saving in Publisity £9k

Waste Contract Split Orders 0 0 0 Hart Drainage 83,370 78,639 -4,731 delays in obtaining consent for works have produced a contract saving

for 17/18Waste Contract 1,682,209 1,658,130 -24,079 Effect of inflation on first 6 months of the contract £25k. Default

settlement agreed £50k from 2013/14.Grounds Mtn Contract 325,770 283,025 -42,745 As per draft outturn provided by BDBCStreet Cleaning 542,550 536,759 -5,791 As per draft outturn provided by BDBCClinical and Bulky -6,420 -19,446 -13,026 Increased usage of the clinical and bulky waste collection service

Basingstoke Waste Contract 0 544 544 Street Furniture 10,700 8,324 -2,376 Highways Traffic Management 49,020 45,386 -3,634 Additional equipment requirement £5k, staff Honorarium £1k. Reduction

in advertising spend £9kHighways Agency - Development 13,930 17,305 3,375 Estates/Asset Management 39,520 64,691 25,171 Unbudgeted NNDR for toilets £6k. Effect of the delay in the Lot 2

Contract £10kOff Street Car Parking -557,568 -543,051 14,516 Pressure due to a 6 month delay in the lot 2 Contract off set by

additional parking income £42kOn Street Car Parking 5,363 37,775 32,413 Pressure due to a 6 month delay in the lot 2 Contract.CCTV 168,860 170,076 1,216 Flood repairs & Maint work 0 0 0 Fair Trade 2,000 -480 -2,480

1,639,808 1,517,631 -122,177

Land Repossessions 4,480 3,850 -630 Fleet Pond 64,480 56,170 -8,310 Staffing re-apportionment in line with Bramshot Farm implementation

plan, which is capitalised.Commons 44,120 35,838 -8,282 Staffing re-apportionment in line with Bramshot Farm implementation

plan, which is capitalised.Odiham Common 53,220 27,236 -25,984 Staffing re-apportionment in line with Bramshot Farm implementation

plan, which is capitalised.Elvetham Heath Nature Reserve 49,590 43,288 -6,302 Staffing re-apportionment in line with Bramshot Farm implementation

plan, which is capitalised.Parks/Play Areas Outside Fleet 0 0 0 Edenbrook Country Park -874,170 -889,371 -15,201 Saving in Staffing Contractors as site not yet adoptedQE II Fields 8,280 7,776 -504 Biodiversity 27,113 21,326 -5,787

Paper D Appendix 1

Controlable Current Budget

Year to Date Controlable

Actuals

REVENUE BUDGET OUTTURN 2017/2018 PERIOD 12 MARCHActual Year

End VarianceCommentary

Bramshot Farm -419,970 -769,566 -349,596 Staffing saving as funded from Capital Landscape & Conservation 58,230 55,173 -3,057 Environmental Promotion - Stra 157,885 154,227 -3,658 Tree Preservation Orders 134,260 117,152 -17,108 Staff saving, reduction in working hours.

-692,482 -1,136,901 -444,419 Total excluding Accounting Treatment 6,337,781 5,734,933 -602,848

Adjustment for Accounting Treatment, Controllable Costs and transfers to reserves 419,228

Grand Total -183,620

PAPER DAppendix 2

Corporate Services 523 50 0 573 (1) (574)Housing & Customer Services 560 70 0 630 533 (97)Leisure 0 472 179 651 367 (284)Environmental Promotion 5,286 (2,608) 12 2,690 624 (2,066)Technical Services 1,422 437 120 1,979 193 (1,786)TOTAL CAPITAL PROGRAMME 7,791 (1,579) 311 6,523 1,715 (4,808)

Service Area SchemeOriginal Budget 2016/17

Carried Forward 2015/16

In Year Budget

Additions 2017/18

Current Available Budget

Actual To Date Variance

CCTV-Rushmoor 0 50 0 50 22 (28)Rural Broadband 23 0 0 23 (23) (46)Upgrade to IT infrastucture 500 0 0 500 0 (500)Civic Office Refurbishment 0 0 0 0 0 0Door Entry System 0 0 0 0 0 0

523 50 0 573 (1) (574)Private Sector Renewal - Minor Works Grants(Home trust Loan 60 0 0 60 9 (51)Grant for 13x 4 bed dwellings. 0 70 0 70 70 0Disabled Facilities Grants 500 0 0 500 453 (47)

560 70 0 630 533 (97)Fleet Area Football (S106) 0 180 0 180 183 3Leisure Centre SCAPE project appraisal 0 0 0 0 0 0Strategic Leisure 0 0 0 0 0 0Leisure Centre Pre Construction Stage 0 53 0 53 15 (38)Frogmore leisure Re-Development 0 42 0 42 24 (18)Leisure Centre Construction 0 85 179 264 144 (120)Leisure Centre Consultants & Fees 0 112 0 112 0 (112)Sports Hall - Transfer to revenue 0 0 0 0 0 0

0 472 179 651 367 (284)Fleet Pond Project-Restoration 0 0 0 0 1 1Edenbrook Country Park (S106 SANG) 0 0 0 0 0 0Fleet pond Nature Reserve Visitor Strategy (S106) 0 17 0 17 5 (12)Odiham Common (S106) 0 15 0 15 9 (6)Odiham Signs 0 0 0 0 0 0S106 Leisure Parish Funded Projects 0 2 12 14 12 (2)Fleet Pond Access Track 0 150 0 150 9 (141)Fleet Pond Visitor Enhancements 0 20 0 20 59 39Hazeley Heath Grazing Project 0 80 0 80 0 (80)Hazeley Heath Notice Boards 0 15 0 15 0 (15)Hazeley Heath Access Improvments 0 77 0 77 0 (77)HW Central Common Enhancement 0 22 0 22 5 (17)HW Central Common Access Improvements 0 80 0 80 0 (80)HW QEII Fields Improvements 0 35 0 35 0 (35)Edenbrook CP Play Tree 0 0 0 0 0 0Edenbrook CP History Walk 0 0 0 0 0 0Cricket Hill Pond Phase 2 0 8 0 8 0 (8)Service Vehicles 0 65 0 65 0 (65)Countryside Workshop 0 0 0 0 0 0Bramshot Farm 5,286 (3,194) 0 2,092 525 (1,567)Edenbrook CP - Skate/Bike Park 0 0 0 0 0 0Edenbrook CP - Teen Health 0 0 0 0 0 0Edenbrook CP - Visitor Improvements 0 0 0 0 0 0

5,286 (2,608) 12 2,690 624 (2,066)Technical Services Fernhill Road, Pedestrian Facilities (S106) 0 13 0 13 0 (13)

S106 NEHTS Parish 0 9 0 9 6 (3)Forgmoor Day Centre Roof Repairs 0 0 0 2 2Church Road (Victoria Road) Car Park - Pay on Foot 0 0 0 0 0 0Church Road Improvements 0 257 120 377 47 (330)Post Payment Parking 0 120 0 120 118 (2)Phoenix Green, Hartley Wintney 0 18 0 18 12 (6)Mill Corner, North Warnborough 0 20 0 20 (2) (22)Kingsway Flood Alleviation Scheme 22 0 0 22 8 (14)Refuse Vehicles 1,400 0 0 1,400 0 (1,400)

1,422 437 120 1,979 193 (1,786)TOTAL CAPITAL PROGRAMME 7,791 (1,579) 311 6,523 1,715 (4,808)

Corporate Services

Housing & Customer Services

Leisure

Environmental promotion

Capital Programme Budget Monitoring 2017/18

Original Budget 2017/18

Carrried Forward 2016/17

In Year Budget

Additions 2017/18

Current Available Budget 2017/18

Actual To Date 2017/18

Variance 2017/18

PAPER E

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OVERVIEW AND SCRUTINY COMMITTEE DATE OF MEETING: 17 JULY 2018 TITLE OF REPORT: COMMERCIALISATION AT HART Report of: Joint Chief Executive Cabinet Member: Councillor David Neighbour, Leader 1. PURPOSE OF REPORT 1.1 This report presents a ‘strategic business case’ for progressing the

Commercialisation project across the Council as part of its project management programme.

1.2 It presents the proposed scope of what will be considered for ‘commercialisation’

and the key principles for capturing the resultant financial benefits. It does not provide a specific breakdown at this stage of exactly how and where the net commercialisation additional income will be achieved as this will be developed from the detailed work which will follow across a diverse range of activities as part of the project. However, it does show some initial areas where a more commercial approach could reap dividends.

1.3 An important element of this report however is to allow the Council to be bold and

to increase income through strategic property investment, in response to the current financial pressure, reducing the reliance on Government grant by building asset and investment portfolios that provide a commercial return.

2 OFFICER RECOMMENDATION

2.1 That Overview and Scrutiny Committee considers the following draft

recommendation to Cabinet

“That Cabinet agree the following framework for the Council’s commercial strategy:

1. That the commercial strategy has three key themes: a. To increase income broadly via asset based investments; b. To reduce costs through such approaches as the LGA insurance mutual,

better utilisation of the civic offices and a review of the value of shared services;

c. To improve efficiency of services, decreasing current or future costs e.g. through digitalisation and demand reduction.

2. That the asset based commercial strategy is to see long term revenue

returns, as opposed to capital growth.

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3. That the revenue returns should exceed current or anticipated returns (with three year view) available through financial institutions and would aim for a 4% rate of return.

4. That commercial asset based investment should be within the local region e.g.

within the M3 Enterprise LEP area, Solent LEP or Thames Valley Berkshire LEP and that residential asset based investment should be within the district.

5. That any asset purchased for the purpose of commercial strategy is held for

revenue gain only. Revenue received from the asset can then be allocated according to the priorities of the Council.

6. That an £500k ‘invest to grow’ budget is allocated to the Joint Chief

Executives, for use to: (a) utilise specialist expertise or resources, and/or (b) increase commercialisation capacity within the organisation; (c) instil commercial principles in management; (d) increase commercial awareness throughout the Council and thereby

increase opportunities.

7 To authorise the Joint Chief Executive, in consultation with the Leader, the Chairman of Overview and Scrutiny Committee, and the Section 151 Officer to take all further decisions in respect of property acquisitions and disposals pursuant to this Commercialisation strategy, irrespective of value, and on conclusion of the matter to report back to Cabinet at the earliest opportunity.

8 To recommend to Council that the Financial Regulations in the Constitution be

amended to facilitate the speedy acquisition of property transactions and to amend Article 12 of the Constitution to exclude property transactions pursuant to this Commercialisation strategy from the definition of a ‘Key Decision’”.

3. BACKGROUND 3.1 This report is set against the context of anticipated negative revenue support grant

next year of £500K and the expected phased reduction in New Homes Bonus from 2020/2021 (i.e. 20% of the Council’s revenue) ca. Although not yet confirmed it is anticipated that the phased loss of New Homes Bonus will need to be replaced by an alternative income stream of at least £2.2m by 2023.

3.2 Commercialisation can have a range of definitions. However in the local government

realm, it is normally identified as an action or range of actions, which leads to • an increase in income, • a reduction in costs (e.g. overheads) • improved efficiency of service which decreases current or future costs

3.3 The Council has, over a series of years, taken some bold decisions which have

helped reduce costs and increase service sustainability. Most notable amongst these have been the approach to Shared Services, with almost 60% of Council spend within shared services arrangements and the delivery of the new Leisure Centre and

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outsourcing of Leisure Services, which has provided benefits to both community and financial sustainability.

3.4 These actions have historically been considered as isolated projects. At its

September 2017 meeting, Cabinet however, considered a paper which set out a broad framework on the approach to be adopted towards commercialisation for Hart. This document set out some of the key drivers for commercialisation, focussing on the clear risks to long term sustainability due to the anticipated financial position by 2020/2021.

3.5 Having established this framework, the Council requested that the Local

Government Association (LGA) Peer Review look in some detail at the Council’s approach to Commercialisation.

3.6 The Review found that the Council had positively recognised the importance of

taking a more commercial approach. However the Review team felt that it would be useful for the Council to clarify the priority given to commercialisation, further define its approach and ensure this is widely understood and support this work with appropriate resources.

3.7 The Review went on state that ‘commercial activities often require initial ‘invest to

save’ funding and the Council should consider providing resources (from reserves) to support commercial or other transformational activity. This could take the form of a ‘transformation fund’ under the control of the senior management team’.

4. KEY CHOICES 4.1 Having gained an external validation of the commercialisation approach taken to date

via the LGA Peer Review, it is clear that the Council is now in a healthy position to take the next steps in articulating the journey.

4.2 To achieve financial stability and long term service provision to our communities,

further commercialisation is required and there are a number of key choices for the Council to make:

• Identification of key strands to the commercial strategy – what key

narrative does the Council wish to provide key stakeholders, staff and residents on its proposed approach to commercialisation; on what key themes does it wish to focus?

• Revenue v Capital Income – does the Council intend to focus on capital receipts or long term revenue income?

• Criteria for investment – will the Council set a target rate of return, above current returns available within the financial sector, and how will this be balanced against risk?

• Where to invest – will the Council constrain itself on the location of asset based investments and if so, will it consider commercial and residential assets in a different way?

• Commercial return v social return – will the Council seek social benefit from each asset based investment or seek to invest for the greatest rate of

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return, enabling income to be focussed on the key priorities of the administration?

• Invest to Save Approach – does the Council want to invest (from reserves or through borrowing) to enable the prioritisation of the commercial approach?

• Governance – will the Council seek strong and effective decision making which will support commercial decision making?

4.3 To make these choices the Council will need to consider a number of factors:-

• The balance between risk and reward it wishes to strike • The balance between commercial and social return it wants to achieve • The balance between control and choice it wishes to exercise in the location

of asset based investments • The amount of flexibility and commercial capacity it wishes to retain and

the governance structures required to enable this Identification of key strands to the commercial strategy 4.4 Councils may focus on a range of key approaches when considering

commercialisation. The LGA in their report ‘Enterprising Councils – supporting Councils’ income generation activity’ highlight a range of options including charging, trading, and asset investment.

4.5 For Hart, we have been on a journey which has seen us move towards a ‘buyer pays’

approach for those services where there is flexibility of charging at a local level. This should mean that (in most cases) the cost to serve is covered by the cost to the resident. We have also utilised shared services as a key method to reduce service costs, whilst enhancing service resilience. Essentially many of the ‘low hanging fruit’ that many councils would take up through commercialisation, have already been used at Hart.

4.6 Therefore in focussing on the future, the following key themes are suggested:

4.6.1 Income generation To focus on income to be achieved broadly via asset based investments (see paragraphs 4.9 and remainder of paper below by way of rationale)

4.6.2 Cost Reduction

To continue to strive to reduce costs (including overheads) through such approaches as the LGA insurance mutual, better utilisation of the civic offices, and as proposed by the LGA Peer Review, to take stock of the shared services we have with partners, to ensure that they remain value for money. This will be subject to a separate paper in due course, to Cabinet.

4.6.3 Improve efficiency This theme has two limbs, the first is to improve the productivity of our staff through the use of improved work process flows and mobile working (in cloud based environments) to improve functionality, reduce duplication of work, and improve integration between systems.

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Recognising that Hart is the least deprived local authority in the country, with high educational attainment and hence high levels of customer expectation the next limb is to use technology to reduce demand on our services. By enhancing and improving functionality to our website, interoperability with our other databases, we should be able to establish significant enhancements in customer experience enabling our residents to ‘self serve’ at any time of the day or night

This area of innovative technology is being explored and will be subject to a separate paper to Cabinet.

Recommendation1: That the commercial strategy has three key themes a. To increase income broadly via asset based investments b. To reduce costs through such approaches as the LGA insurance

mutual, better utilisation of the civic offices and review of value of shared services.

c. To improved efficiency of service which decreases current or future costs e.g. through digitalisation and demand reduction through service delivery.

Revenue v Capital Income

4.7 As outlined in the Cabinet report in September 2017, the Council has seen a

substantial reduction in Government Grant and at present, is predicted to move into negative grant in 2019. In addition, New Homes Bonus, which has equated to 20% of the Council’s revenue budget, is due to be phased out from 2020/2021 (noting that this is subject to further consultation).

4.8 At a time of dwindling revenue, the Council’s capital position has been improving.

Currently the Council’s unallocated reserves are £5.5m (current allocated reserves are £20.96m making a total reserve of £26.46m). The Council’s Treasury Strategy sets out how the Council will act to maximise benefit from these reserves, balancing risk and reward. However even with careful management, the level of returns from investments are currently significantly lower than 2% or the rate of inflation. This would suggest that there is a need to use the opportunity to invest capital to secure improved revenue returns.

4.9 It must be recognised that significant investments may require use of external

funding options, such as the Public Works Loan Board, or alternative provider. As with the other key decisions, such as to build the Leisure Centre, the cost of borrowing would need to be factored, long term, into any business case for asset based investment.

Recommendation 2: That the commercial strategy is to see long term revenue returns, as opposed to capital growth.

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Criteria for Investment 4.10 The September 2017 report considered and agreed the principle that the Council

would “seek appropriate rates of return for commercial projects that deliver a margin over and above costs, including those associated with professional support and funding”. It also recognised the need to “continue to review risk as part of the Council’s broader risk management regime”.

4.11 Whilst there is limited risk associated with retaining capital with financial institutions,

it also delivers limited returns. This provides ample opportunity to increase return on investment. Diversifying investments into new areas/assets should be a positive in spreading and thereby reducing risk.

4.12 However, there are two further risks that must be considered:

a. that the highest rates of return are likely to be associated with the greatest level of risk of investment, must be balanced against b. the risk of doing nothing and not managing the inherent issues associated with reductions in Council funding and long term financial sustainability.

4.13 For this reason a full assessment of risks and options, including financial forecasting

will be prepared by the S151 officer to enable informed decision making.

Recommendation 3: That the revenue returns should exceed current or anticipated returns (with a three year view) available through financial institutions and would aim for a 4% rate of return, Where to invest

4.14 The Commercial Strategy established that the Council should “be open minded to

opportunities outside of the district, which may provide greater rewards, without enhanced risks”. In considering the question of where to invest, the Council must be mindful of the local context and the level of choice available for investment.

4.15 Currently the Council does not own any commercial sites and so should look to a

secure appropriate commercial investment where the best opportunities arise – this many not necessarily be within Hart itself. There are good opportunities within the local region

4.16 When considering where the best outcomes can be achieved, the Council must also

consider the availability of funding. One main source of funding (used for the Leisure Centre) is the Public Works Loan Board (PWLB). The Government has recently suggested that it will consider restricting the use of PWLB funding to ensure that Council’s do not “borrow in advance of their needs” solely to profit from the investment of the extra sums borrowed. This may have the effect of limiting PWLB borrowing to projects that provide some other form of social or economic benefit and so would naturally restrict such schemes to the district and its surrounding economic area – e.g. the M3 Enterprise LEP area, Solent LEP or Thames Valley Berkshire LEP area. The options of local joint venture opportunities should also be considered.

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4.17 When considering residential assets, whilst there are opportunities outside of the

district, there are a significant number of currently untapped opportunities within the district which could be explored. Again the option for the Council to look at Joint Venture or similar approaches, would be appropriate where it results in the Council secure long term revenue streams.

Recommendation 4: That commercial asset based investment should be within the local region e.g. within the M3 Enterprise LEP area, Solent LEP or Thames Valley Berkshire LEP and that residential asset based investment should be within the district.

Commercial return v social return

4.18 The Council is here to support and provide services to our residents and this is

clearly set out in the Council’s Corporate Plan. Therefore it could be reasonably anticipated that the Council would seek to implement a commercial approach that would deliver benefits both financially and socially.

4.19 There is, however, a choice to be made between:

a. the Council implementing a purely commercial approach, delivering maximum revenue, which it could then allocate to services, subsidies, grants or other form of funding, based on the priority of the Council or

b. the Council implementing a social commercial approach, which would balance social benefit with financial return.

4.20 The choice between these different approaches depends upon the clarity and focus

that the Council wishes to exercise in its commercial approach. The early focus should be on a primarily commercial approach with the emphasis being on making the Council finically self-sufficient. Only once financial self-sufficiency has been secured then there an added emphasising on securing greater social benefits.

Recommendation 5: That any asset purchased for the purpose of commercial strategy is held for revenue gain only. Revenue received from the asset can then be allocated according to the priorities of the Council.

Invest to Save Approach

4.21 As outlined earlier, it was a conclusion of the LGA Peer Review that ‘commercial

activities often require initial ‘invest to save’ funding and the Council should consider providing resources (from reserves) to support commercial or other transformational activity. This could take the form of a ‘transformation fund’ under the control of the senior management team’.

4.22 It is recommended that this funding could be allocated to the Joint Chief Executives,

to enable delegated decisions to be taken to ensure the appropriate level of resource and expertise are available to the Council, to make informed choices. This should result in an agile and professional approach to the commercialisation agenda.

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To ensure visibility of benefit of this spending, regular monitoring of the commercialisation progress, including budget spend, would be reported to Overview and Scrutiny Committee and Cabinet.

Recommendation 6: That a £500K ‘invest to grow’ budget is allocated to the Joint Chief Executives, for use to

(a) utilise specialist expertise or resources, and/or (b) increase commercialisation capacity within the organisation (c) instil commercial principles in management (d) increase commercial awareness throughout the Council and

thereby increase opportunities

Governance 4.23 Where commercial decisions have to made it is important that the Council has in

place strong governance arrangement that allow quick, transparent, and accountable decision making processes. The commercial market is very quick and decisive and the Council needs to recognise that decisions made to procure commercial opportunities will not necessarily suit standard local authority decision making processes. To ensure both accountability and transparency the recommendation is that Joint Chief Executive, in consultation with the Leader, the Chairman of Overview and Scrutiny Committee, and the Section 151 Officer to take all further decisions in respect of property acquisitions and disposals pursuant to this Commercialisation strategy, irrespective of value, and on conclusion of the matter to report back to Cabinet at the earliest opportunity.

4.24 To facilitate the appropriate form of decision making Council will need to agree to

change the Constitution to amend the Financial Regulations in the Constitution and also amend Article 12 of the Constitution to exclude property transactions pursuant to this proposed Commercialisation strategy from the definition of a ‘Key Decision’.

RECOMMENDATION 7 To authorise the Joint Chief Executive, in consultation with the Leader, the Chairman of Overview and Scrutiny Committee, and the Section 151 Officer to take all further decisions in respect of property acquisitions and disposals pursuant to this Commercialisation strategy, irrespective of value, and on conclusion of the matter to report back to Cabinet at the earliest opportunity. RECOMMENDATION 9 To recommend to Council that the Financial Regulations in the Constitution be amended to facilitate the speedy acquisition of property transactions and to amend Article 12 of the Constitution to exclude property transactions pursuant to this Commercialisation strategy from the definition of a ‘Key Decision’”.

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5. NEXT STEPS 5.1 If the Council is minded to accept these recommendations, work can then start in

earnest on the commercialisation approach for the Council. 5.2 The Council will firstly consider the need for resources to support the approach and

whether this can be resourced externally, or whether there will be an element which will need to be delivered internally.

5.3 Once resources are in place, the commercial approach will be further developed and

deepened. It is anticipated that further reports will be brought forward, during autumn/winter which will outline in greater detail the anticipated work programme in particular associated with themes two and three – reduced costs and increased efficiency.

5.4 Monitoring and reporting on performance will be important to ensure the visibility

and benefit of the commercialisation. It is anticipated that there will be six monthly reports, subject to a three months inception period, to enable resources to be put into place.

6. CONCLUSIONS 6.1 Overview and Scrutiny are asked to provide to Cabinet their views on this report. Patricia Hughes, x4143, patricia.hughes@hart.gov.uk BACKGROUND PAPERS:- Commercial Strategy – Cabinet September 2017

1

CABINET KEY DECISIONS/ WORK PROGRAMME AND EXECUTIVE DECISIONS MADE August 2018 Cabinet is required to publish its Key Decisions and forward work programme to inform the public of issues on which it intends to make policy or decisions. The Overview and Scrutiny Committee also notes the Programme, which is subject to regular revision.

Report Title Ref (Note 1)

Outline/Reason for Report/Comments

Original Due Date

Revised Due Date

Key Decision

Y?

Cabinet Member (Note 2)

Service (Note 3)

Hart Biodiversity Action Plan Feb 18 Update of the Existing Plan June 18 July 18 DN CS

Procurement of Regulatory Services Database

Nov 17 For approval of a new Regulatory Services IT system

Feb 18 July 18 SK RS

Decriminalised Parking Enforcement And Traffic Management Agency Agreement

June 18 To consider a revised agreement with Hampshire County Council

July 18 AO TS

Commercialisation June 18 Commercialisation and Agency Agreements with Hampshire County Council further to the T19 transformation

Aug 18 DN JCX

Revenue and Capital Outturn 2017/18

Annual Annual report on outturn. Aug 18 DN F

Treasury Management 2017/18 Annual Annual report on Treasury Management Activities 2017/18

Aug 18 DN F

Countryside Strategy June 18 For approval Aug 18 AO TS

Tree Policies June 18 Revisions to Policies for approval Sept 18 AO TS

Budget Monitoring Quarterly Quarterly Budget Monitoring Sept 18 Dec 18 Mar 18

DN F

PA

PE

R F

2

Public Space Protection Order - Viability for Fleet

May 18 To consider the viability of a Public Space Protection Order for Fleet town centre

Sept 18 JR CSF

Fly Tipping June 18 Update on managing fly-tipping, enforcement and potential penalties, post consideration by Overview and Scrutiny

Sept 18 AO TS

Employment and Skills Plans: Interim Policy Statement

July 18 Consideration of encouragement of Employment and Skills Plans in larger developments

Sept 18 GC PP

Tenancy Strategy 5 Years Update Dec 18 SB H

Treasury Management Strategy

Annual Approval of 2019/20 Strategy Feb 19 DN F

2019/20 Revenue Budget, Capital Programme and Council Tax Proposals

Annual Approval. Recommendation to Council. Feb 19 DN F

Service Plans Annual Agree Service Plans 2019/20 April 19 DN All Food and Health and Safety Service Plan

Annual For approval June 19 SK RS

Outside Bodies Annual To confirm representatives on Outside Bodies

June 19 DN JCX

Licensing Service July 18 Options for future deliver of Licensing Services

TBC SK RS

Bring Site Review July 18

Review of the Bring Site at Elvetham Heath

TBC AO TS

3

Notes:

1 Date added to Programme 2 Cabinet Members DN Leader and Finance SA Partnerships GC Planning Services SB Housing SK Regulatory Services AO Technical Services JR Contracts & Community Safety 3 Service: JCX Joint Chief Executive CS Corporate Services RS Regulatory Services CSF Community Safety PP Planning Policy TS Technical Services F Finance H Housing Services SLS Shared Legal Services MO Monitoring Officer

EXECUTIVE DECISIONS 2/7/18 Request for an Easement Across Hart Land at Phoenix Green by Kirkby Homes Not called in

1

OVERVIEW AND SCRUTINY COMMITTEE WORK PROGRAMME – July 2018

Issue and Description of

Topic Current Position

Objective Original

Due Date

Revised Due Date

Resources Required

Contact

Treasury Management Outturn

Annual report on outturn Annual July 18 Report Head of Finance

2017/18 Revenue and Capital Outturn

Annual report on outturn Annual July 18 Report Head of Finance

Commercialisation Commercialisaton and Agency Agreements with HCC further to the T19 transformation

July 18 Report Joint Chief Executive

Tree Policies Revisions to consider prior to consideration at August Cabinet

July 18 Report Ecology and Countryside

Public Space Protection Orders

To consider viability of PSPOs in Fleet prior to consideration at September Cabinet

Aug 18 Report Community Safety

Performance Information Quarterly highlight reports. Aug 18 Nov 18 Feb 19

Report Performance and Innovation Officer

Quarterly Budget Monitoring

Quarterly update on budget Aug 18 Nov 18 Feb 19

Report Head of Corporate Services

Fly Tipping Strategy For consideration Aug 18

Report Environment & Technical Services

Annual Review of SANG Performance review Sept 18 Environment & Technical Services / Planning Policy

Capita Contract

Review performance of Capita Sep 18 Sep 18 Report Head of Corporate Services

PA

PE

R G

2

OVERVIEW AND SCRUTINY COMMITTEE WORK PROGRAMME – July 2018

Issue and Description of

Topic Current Position

Objective Original

Due Date

Revised Due Date

Resources Required

Contact

Corporate Risk Management Report

Quarterly update on corporate risk profile Sept 18 Dec 18 Mar 19 June 19

Report Audit Manager

Flooding

Notes from twice yearly meeting of Agencies

Oct 18 Mar 19

Minutes Environment & Technical Services

Fly Tipping Update on managing fly-tipping and potential penalties

Nov 18 Report Environment & Technical Services

Budget 2019/20 (inc Medium Term Financial Forecast )

Annual forecast Annual Nov 18 Report Head of Finance

Peer Review Half yearly monitoring

Dec 18 June 19

Report Joint Chief Executive

Treasury Management Strategy

Annual report setting out the treasury management strategy for the council

Annual Jan 19 Report Head of Finance

Draft Budget 2019/20

Report Annual Jan 19 Report Head of Finance

Service Plans To make recommendations to Cabinet on the Draft Service Plans 2019/20

Annual Mar 19 Report Joint Chief Executive

Annual Review of Commercial Strategy

Consideration of performance of Commercial Strategy

Annual April 19 Report Joint Chief Executive

Body Worn Video Annual monitoring of usage Annual April 19 Report Environment & Technical Services

Outside Bodies

Reports from Representatives on Outside Bodies Annual April 19 Report Joint Chief Executive

3

OVERVIEW AND SCRUTINY COMMITTEE WORK PROGRAMME – July 2018

Issue and Description of

Topic Current Position

Objective Original

Due Date

Revised Due Date

Resources Required

Contact

RIPA Annual monitoring of usage

Annual April 19 Report Monitoring Officer

Annual Review The Chairman’s end of year report from Committee to full Council on the work of the Committee 2017/18

Annual April 19 Report/ Discussion

Committee

Nominations to Service Boards

Member nominations to Service Boards Annual June 19 Chairman O&S Committee

2018/19 Performance Information – Annual Outturn

Annual report on outturn Annual June 19 Report Performance and Innovation Officer

Procurement Process Report on the process and its fitness for purpose

None TBC Joint Chief Executive

Car Park Ticket Machines 6 month review after implementation - meeting objectives, learning lessons etc

None TBC Environment and Technical Services

O&S.5

OVERVIEW AND SCRUTINY COMMITTEE Date and Time: Tuesday, 17 July 2018 at 7pm Place: Committee Room 1, Civic Offices, Fleet COUNCILLORS Axam, Collings, Crookes (Chairman), Dickens (substitute for Burchfield), Drage, Harward, Quarterman, Wheale, Warlock, Wright In attendance: Councillors Forster, Neighbour, Parker (7.30pm), Radley Officers Daryl Phillips Joint Chief Executive Andrew Vallance Head of Corporate Services Adam Green Ecology and Countryside Manager Adam Maskill Tree Officer

13 MINUTES The minutes of the meeting of 19 June 2018 were confirmed and signed as a correct

record. 14 APOLOGIES FOR ABSENCE Apologies had been received from Councillor Burchfield, substituted by Councillor

Dickens. 15 CHAIRMAN’S ANNOUNCEMENTS None. 16 DECLARATIONS OF INTEREST None declared. 17 PUBLIC PARTICIPATION (ITEMS PERTAINING TO THE AGENDA) None. 18 FEEDBACK FROM SERVICE BOARDS Community Service Board had taken place the previous week. Regulatory Service

Board and Corporate Service Board were scheduled for later in the week (Wednesday and Thursday respectively).

O&S.6

19 DRAFT TREE RISK MANAGEMENT STRATEGY

The Committee considered the revised Tree Risk Management Strategy (TRMS) before its consideration at Cabinet. Members discussed the issues associated with trees generally and responsibilities and liabilities – some parishes also have tree responsibilities and may have strategies too. Members suggest that it might be good to raise the commonality of strategies at the next meeting of the Hart District Association of Parish and Town Councils. In terms of the strategy itself members discussed the appropriateness of non-essential works such as blocking of domestic satellite signals – the Officers highlighted that the strategy approach and budget provision was based upon risk based assessment not general works. Members noted the ‘red’ light categorisation for urgent cases but suggested that in the case of emergency that a ‘blue’ light category be introduced. Record keeping was discussed and how this was monitored, also what was the position with regard to replacement trees. Review of tree safety would be carried out and there were circumstances where the policy will need to be updated such as Ash die back or honey fungus outbreaks/ spread. Members suggested the following actions: • That the commonality of strategies be raised at the next meeting of the Hart

District Association of Parish and Town Councils - Joint Chief Executive • The Committee also recommended that a replacement tree policy be

considered for inclusion in any future Council Tree Strategy - Tree Officer

• That a ‘blue’ light policy be considered for emergency cases - Tree Officer.

DECISION

That the proposed revised Tree Risk Management Strategy be recommended to Cabinet for adoption.

20 TREASURY MANAGEMENT OUTTURN 2017/18

Members considered the Council’s Treasury Management activities during the 2017/18 financial year, prior to consideration at Cabinet. The Head of Corporate Services also advised Members that early in the autumn a training session would be run on Council finances.

DECISION

That the information be noted.

O&S.7

21 2017/18 OUTTURN POSITION

The Committee considered the final position on the Council’s accounts for 2017/18. Members discussed the report and went through the Appendices line-by-line. It was noted that there appeared to be an erroneous reference to “Hollywood” in the Development Control outturn in Appendix 1. The Head of Corporate Services agreed to clarify this.

DECISION

1 That the 2017/18 outturn position of a £184k underspend for the General

Fund Revenue account be noted. 2 That the 2017/18 outturn position for Capital expenditure be noted. 3 That the carry forward of the unspent revenue budgets as detailed in

paragraph 6.1 be supported.

22 COMMERCIALISATION AT HART

Members considered the presentation of a ‘strategic business case’ for progressing the Commercialisation project across the Council as part of its project management programme, the proposed scope of what will be considered for ‘commercialisation’ and the key principles for capturing the resultant financial benefits. It was acknowledged that the report set out only an initial approach to set in train the procurement primarily of an asset base with a view to generating sufficient income to meet a potential funding shortfall (£2.2m) in the event of the phasing out of New Homes Bonus by 2020/2021. The approach to commercialisation would have to be kept under constant review and any strategy may need to change in the light of experience, opportunities, and market conditions. Members noted that the thrust of the report related primarily to generating additional income from assets based investment to support the funding and delivery of Council services (Recommendation 1(a)). Members were however keen to see an ethical framework put in place to ensure that only appropriate assets should be procured. As an initial approach members supported the concept that the objective should be to secure a long term income stream (Recommendation 2). The approach to securing income returns should be to secure a 4% net yield taking into account expenses,, management costs, borrowing etc (Recommendation 3). In time it would need to be agreed whether this was on an individual project basis or an average of 4% net yield across the whole of an asset portfolio. Members, as an initial approach, supported investments in the locality where there were functional economic/social links with Hart as recommended in Recommendation 4.

O&S.8

In terms of Recommendation 5 members agreed that, whilst it did not preclude securing some social benefit, the initial approach must be to focus on the objective of securing financial self-sufficiency. Only once this had been secured could some emphasis on greater social benefit be introduced. However, the need for an ethical investment strategy should be maintained at all times. There were particular discussions about the governance arrangements, scrutiny, monitoring, and funding/spend. The £500k start up fund as recommended in Recommendation 6 was a one-off budget provision to buy in approach capacity and expertise – this funding should be used to fund ‘business as usual’ expenditure. Members were therefore reassured that to ensure visibility of the benefits of the £500k budget provision, regular monitoring of the commercialisation progress, including budget spend, would be reported to Overview and Scrutiny Committee and Cabinet. It was agreed that acquisitions, irrespective of value (as this is already limited by the Council’s Constitutional limit on borrowing to £30m in total) should be secured in line with Recommendation 7, but that the disposal of any assets should be removed as there was no reason why disposals could not go through the normal Committee/ Cabinet process. An operating procedure needed to be worked up and the relevant Members, in contributing to any acquisition decisions, would need the appropriate support and advice. A full audit trail of any decision would need to be maintained and Members noted that External Audit has a statutory role in giving an independent view on any decisions made to ensure proper conduct of financial affairs and the management of performance and use of resources. It was also agreed that upon the completion of the first acquisition a reflective review should be carried out to learn from experience, and the findings reported back to Overview and Scrutiny. Recommendation 8 was a necessity to ensure quick and effective decision making, and therefore was supported.

DECISION That Overview and Scrutiny Committee supported the following draft recommendation to Cabinet:

“That Cabinet agree, subject to regular review at appropriate intervals, the following framework for the Council’s commercial strategy:

1. That the commercial strategy has three key themes:

a. To increase income broadly via asset based investments; b. To reduce costs through such approaches as the LGA insurance mutual,

better utilisation of the civic offices and other existing Council owned assets, and a review of the value of shared services;

c. To improve efficiency of services, decreasing current or future costs e.g. through digitalisation and demand reduction.

2. That the objective of the asset based investment strategy is to secure long

term additional income returns rather than capital growth.

O&S.9

3. That any additional income received pursuant to this Commercialisation Strategy should aim for a 4% net yield on any investment.

4. That commercial asset based investment should be within the local region e.g.

within the M3 Enterprise LEP area, Solent LEP or Thames Valley Berkshire LEP and that residential asset based investment should be within the district.

5. That any asset purchased for the purpose of this Commercial Strategy is held

for income gain only. Any income received from the asset can then be allocated according to the priorities of the Council.

6. That, subject to proper scrutiny of any spend, a £500k ‘invest to grow’ budget

is allocated to the Joint Chief Executives, for use to:

(a) utilise specialist expertise or resources, and/or (b) increase commercialisation capacity within the organisation; (c) instil commercial principles in management; (d) increase commercial awareness throughout the Council and thereby

increase opportunities.

7. That the Joint Chief Executive be authorised, in consultation with the Leader, the Chairman of Overview and Scrutiny Committee and the Section 151 Officer, to take all further decisions in respect of property acquisitions pursuant to this Commercialisation Strategy, irrespective of value, and on conclusion of the matter to report back to Cabinet at the earliest opportunity.

8. That it be recommended to Council that the Financial Regulations in the

Constitution be amended to facilitate the speedy acquisition of property transactions and to amend Article 12 of the Constitution to exclude property transactions pursuant to this Commercialisation strategy from the definition of a ‘Key Decision’”.

9. That upon the completion of the first acquisition pursuant to this

Commercialisation Strategy a reflective review should be carried out to learn from experience and the findings reported to Overview and Scrutiny Committee.

10. That an ethical framework should be followed in any asset procurement

pursuant to this Commercialisation Strategy. “ 23 CABINET WORK PROGRAMME The Cabinet Work Programme was noted. It was clarified that the item referring to

“Countryside Strategy” was not a discussion on a Strategy itself but only a budget bid to secure funds to prepare a Strategy.

O&S.10

24 OVERVIEW AND SCRUTINY WORK PROGRAMME The Overview and Scrutiny Work Programme was noted. The meeting closed at 10pm.