Overview and Scrutiny Committee - Monday 27 November 2023, 6:30pm - Tunbridge Wells Borough Council Webcasting
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Seat 3
Slide 1
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1 Apologies for Absence
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2 Declarations of Interest and Party Whip
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3 Notification of Persons Registered to Speak
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4 Minutes of the meeting dated 25 September 2023
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5 Items Called- In
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6 Presentation by South East Water
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6 Presentation by South East Water
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Seat 3
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7 Presentation from the Cabinet Member for Finance and Performance
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8 Work Programme
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9 Urgent Business
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10 Date of the next meeting
Disclaimer: This transcript was automatically generated, so it may contain errors. Please view the webcast to confirm whether the content is accurate.
Seat 3 - 0:00:00
good evening, welcome to this meeting of the Overview and Scrutiny Committee on Monday, the 27th of November 2023, I'm Councillor Tom dwellings, and I am the Chairman of this committee before we start, please give your attention to the following announcements, Caroline, thank you good evening everybody. In the event of the fire alarm ringing continuously, he must immediately evacuate the building at walking pace officers will escort you via the most direct available route, and no one is to use the lift. We will make our way to the fire assembly point by the entrance to the Town Hall Yard, car park, on Watson, Way and once outside a check will be made to ensure everyone has safely leftand no one is to re-enter the building to advise it is safe to do so. This is a public meeting and proceedings are being webcast live online. Her recording will also be available for playback on the council's website shortly afterwards. Any other third party may also record or film meetings unless exempt or confidential information is being considered but are requested as a courtesy to others others to give notice of this to the clock.
the Council is not liable for any third-party recordings. Can I remind everyone to use the microphones when speaking and turn them off when you are not? The red light indicates that the microphone is on any comments that are not recorded for the webcast may not be included in the minutes of the meeting. It is very important that the outcomes of the meeting clear at the end of each substantive item, the Chairman will ask whether the matter is agreed in the absence of a clear majority, or if the Chairman decides a full, virtuous desirable. A vote will be taken by a show of hands. Members requesting a recorded vote must do so before the vote is taken.
members who have registered to speak this evening will be asked to come to the microphone and introduce themselves, and they will have three minutes to address the Committee. Thank you Chair.
thank you, Caroline, for the record, we are going to take a roll call, though the clock will call your name and if you are present, please introduce yourself.
Councillor Bland present, thank you, Councillor Currie present, thank you, Councillor Ellis present, thank you, Councillor Hayward present, thank you, Councillor Page, Britton, thank you, Councillor Lewis present, thank you Councillor Morton.
present, thank you, Councillor Palmer present, thank you, Councillor Pope present, thank you, Councillor Knight present, thank you and Councillor darlings.
I should also say we have officers, we have Councillor Chris Hall here, Councillor Hugo Pound, and Lee Collier, as well as I guess from SE Water.
thank you for the benefit of anyone who may be unfamiliar with our meetings, I would like to explain that committee members have had their agendas for over a week and have had the opportunity to ask questions of officers ahead of the meeting.
we have two substantive items on the agenda this evening, both in the form of presentations, the first from SE Water, and I'd like to welcome David Hinton and Joe Swinton to this meeting, the seconds from Councillor Chris Hall, Cabinet Member for Finance and performance, my work and we all to this evening's meeting.
after each presentation, we will move into Member discussion and I will first ask for questions before opening the floor for debate.
at the end of the debate, we will formulate a resolution, or Members should ensure that any proposals or actions are correctly captured.
1 Apologies for Absence
agenda item 1 is apologies for absence.
2 Declarations of Interest and Party Whip
do we have any apologies for absence scanner, yes, we have apologies from Councillor Fitzsimons, so thank you agenda item 2 is to receive any declaration of interest in items or party whip on the agenda, does anyone have any such declarations to make?
I see none.
3 Notification of Persons Registered to Speak
agenda item 3 is notification of non committee members who have registered to speak.
Caroline
yes, tonight we have Councillor Hugo Pound, whose registered speak on agenda item 6, thank you.
4 Minutes of the meeting dated 25 September 2023
item 4 is to approve the minutes of the meeting held on the 25th of September, this is for accuracy, checking only no issues have been brought to my attention in advance, but are there any amendments to these minutes?
I see none are we agreed, agree agreed, thank you.
5 Items Called- In
item 5 is to consider any items called in under Overview and Scrutiny Committee procedure Rule 13, but I confirm that there are no items for this meeting.
6 Presentation by South East Water
item 6.
is a presentation from SE Water
welcome, David Hinton, Chief Executive and Josiah P from the communications area.
I think we've all been affected by supply issues from Southee's water in the last year.
some, perhaps just a hosepipe ban others with perhaps a rather longer term interruption in supply, and that's what prompted the invitation to SE Water, and thank you.
David and Jo,
OK.
I've got quite a lot of steroids, my intention is to leave them with you because if call out context in it, and I don't want to, I don't want it sort of inhibited the right by just me going through a PowerPoint presentation, but I'm going to just touch on what each line contains and there's some really substantive ones around the key issues that I was forewarned and were of interest to the Committee so.
yeah, so I should have said thank you for thank you for being, I am not doing joy and come to these sort of sessions, you might not think I would, but I do like the engagement and end to end to debate where we are and hopefully look for a way forward in a collaborative way where possible.
so this slide just really says how big we are, and I now always use this from Germany to remind people that SE punches, water, only company and always has been old tyranny, company Dunkley siege.
never have done, and that sort of that message is emphasised really by.
by just looking at a history which I think is absolutely fascinating so SE Water is fundamentally a merger after merger after merger, starting with in many cases a single farm with a borehole on it sending water to the local village and indeed the the Tunbridge Wells set-up is one of the more interesting ones that we've actually got, so there's a lot of history in the location of our assets and a lot of this is driven by the geology actually over of the south-east where, with lots of chalk which gives us the opportunity to abstract from those boreholes rather than from rivers,
but most of them want to come from.
so Tunbridge Wells has this kind of set-up, the oldest site on there, I think, the Tunbridge all three months, which is right at the top, and that's again coming out of chalk, mining at geology that allows that to happen as it does across the Hungary's area.
and in the largest one, is the Pembury site, which is near the Pembury hospital, which has got multiple sources, including Springs as well as boathouse again, I'll leave this with you, but it shows the set-up.
we do rely slightly on be all we should see in the bottom right-hand corner, which will work out which way we handle what some right-hand corner, which does support the areas but not where it isn't a direct supply point for this area does help.
we've really had two significant outages in Noreen in or in the SOP, since since mid 22, I guess the biggest one affecting Tunbridge Wells was undoubtedly the December impact we had, and we had another impact in June, didn't cover the Tunbridge Wells areas, no Pottinger another part of our patch but it effectively led to the House Pipe Band described down in.
I will touch on that.
and I'm mostly going to talk about a little bit about how we prepared for these and also more about what we've learned, because I guess if you're familiar with how Holly's events actually came about in the first place, but we are where you won't be surprised to hear this will I'm enormously whether focus business,
your relationship with the weather enormously changes when or when or when you work for a water company, so them, and how we set ourselves up depends on on the forecasts that we've seen in the weather. In terms of do we see a cold snap, do we see a dry period, do you see a hot period and we change how we do things and according to the weather forecast, for example, we set up incident management teams. If we think it's looking more like it's potentially a one in 50 one in 60 year event, as these were so we very much a weather focused business and we stop and start things not flashing programmes, we get ourselves ready
so December.
was unusual, so I have many a meeting with the Met Office to understand by how can we forecast and relationship swing, so first of all how can we forecast weather which in itself is just a tricky enough, but how could we then forecast the relationship between weather and impact on our assets?
we should mainly three ways that the weather does it, so one is wind, blew power lines down, we use powerful water, that's one impact didn't see any of that with the most recent wind, but we did see some impact in storm units, the other one is a warm very dry period demand goes up or our supply dries out effectively, and a third one is a very cold snap where we see bursts occurring in the network and in customers' properties which in effect works a bit like a knock a really high demand period is really high demand on the system.
and that's what we saw one in 2022.
so these are the main improvements that they all sound, quite techie, but I'm gonna talk you through what they roughly do, that we've done since December and they'll come onto later on what we've got planned, both in the next couple of years, but also in the longer term.
the way to make our water system resilient is to use a number of ways, one, whereas you have more storage, so treatable to storage in the system scattered around, and you have seen on the map of Tunbridge Wells, are some service reservoirs and they were designed.
while pre Victorian times and what they effectively do, is they operate a bit like the one in your loft, which is should the supply, the incoming supply to that tank fire, we've still got the tank.
to keep the supply going until that particular thing is resolved, pre the stewardship buys you time to resolve any issues in effect, so storage is a really good way of making sure that there is more resilience in system so we're increasing the storage in overall by two to three hours in Tunbridge Wells area and that might not sound like a lot but 2 3 hours it is enough to mean quite a few instances at first mind does not lead to an interruption to supply.
we have a number of bore holes, I've talked about which deteriorate over time and they just do and we move them around and effectively in the Tunbridge Wells area we've we've riverbed and effectively rescued ones earlier than we normally would to really make sure we maintain the yield that we can get out of that borehole and that that accounts for the for the second and third autumn with upgraded Pembury treatment works which is the main money needed just to get some more demand out of it and also increase its ability to to to pump a peak.
we had a really this was the first week of my.
when I was in the role of CEO, we had we had a 10 million litre, reservoir storage reservoir fall into a sinkhole, it was dramatic.
it was literally service, it was about four or five double-decker buses deep, and I remember getting the call actually the call went something along these lines, someone needs to go and check the reservoir levels in Horsforth because it's just gone from 100 to 0 everything is a proud failure and then the next call was no, it's not the reservoir, it's completely disappeared, so that was so that's said the engineering team have done a great job in getting that void filled.
secured and him rebuilt the 10 minute nativism on which we pretty much put back in about a month and a half ago.
it will talk a bit about this a little bit later, but Equalities which is.
I tend to be a really good text messaging system that we can now use in an event much more frequently than we did in the one we saw in December, and then we've improved boosting a number of our plots, which means customers will go off much much later if not at all when the reservoir levels get lower and in some other bits which are linked to the ones nobody talked about.
I want to talk a bit about some of them are and if I may say so, although didn't overly impact Tunbridge Wells, it was just an interesting, I just an interesting development in a demanding south-east, so I think it's best described actually bodies, growth, so we had you remember they seemed Jimmy had we had a very one very hot week but he's preceded by about six weeks of virtually no right.
which wasn't particularly hot, which is only right.
and we saw record demands of 678 megalitres effectively around the weekend, which was which broke any record we've ever seen, so that was it was exceptionally high and what was all about it was it didn't really drop off as we went into the week in fact you can see from the shortly we'll see more mouse you can see from the you can effectively see from the where the big six forties to the left of that is we start to actually increase midweek to the end of the week, which is unusual.
and that is an important trigger for us, it went above the hosepipe ban trigger for that week and also above our planning trigger, so so we were effectively invested up to a certain level of water to we obviously can't provide an infinite amount of water, so the way that we plan and invest is to a set trigger level or peak period that the is derived from history plus some and this exceeded that design standard in effect which is why we needed to bring the hosepipe ban and so it was caught exception to and really interestingly in September we had an identical week in terms of temperature, you remember the warm part September identical week in terms of temperature those numbers didn't even get in the mid 500 in demand, so 6 7 9 and that's where we are, we believe some of the impact was agriculture, they'd been very, very dry for a very long period in collaboration with some of our farmers,
many of them have said they typically use mains water once in every six years to so effectively support their own supply, with their own local storage, on their farm, in this particular year that in this particular period they use almost the whole way through from my through to July, so it's that kind of increased demand which is forming a big part of our future plans.
so again now we've learned something from the from the summer period as we did from the winter period.
we put actually dedicated dedicated resourcing to dealing with all things, incident response, so and a team, and that includes Butterwood stations.
and provision of new tools and communications around incidents and events.
I'm going to skip out for that emergency planning and this emergency planning section effectively.
describes a legislative framework under which we need emergency plan.
and I just we've just got that in there for four.
for completeness, so, in terms of what we've done so, we bought some tankers which are helping get water into points in the network.
their nanny really ever show a show, a short solution, but if using the rottweiler can definitely limit the amount of interruption we have seen.
we set up even more mutual aid arrangements with our colleagues and third party commercial providers.
we've gotten our dedicated process for dealing with alternative water for livestock, which became one of the bigger issues in the summer and.
pretty much in every event, the ability to supply a large stock becomes a quite stress on the system, and we don't want to be obviously using bottled water as a livestock solution, so we've got tanks, alternative tanks, we don't need drinking water, you can use raw water so we've set those out schools and care homes will also set out plumbing alternatives where we can put a tank on-site pumped directly into the mains and, as I've said, we've got this new message at all Accra alert, which we've got around 75% of our customers.
on mobile phones and we've been using those events.
in recent months, really successfully.
network capacity was initially, you asked me to talk about.
and I think what we should all be doing now and what we're doing as we go forward in effect is reflecting that the demand has changed in the south-east and making sure it's in future planning and watering for uses the water resource management plan process. So that is a statutory process involves tucking into local authorities, understanding population growth, understanding housing ambition and then using a whole lot of day to run and what we think future washing machine uses might be. What do you think the future climate change might be and on demand? I think future climate change might be on our river levels and are robots arisen from all levels. What options have we got to resolve the supply demand balance, if not, so we've got an amount of demand and got them out to supply. What can we use to do that?
and that all goes in and optimise itself, and we do that on a regional level across the whole of the south-east and includes leakage as well, a new plan has smart meters, is a big part of the moment action, it also has a lot more unknown household consumption which is adding go for businesses,
and that includes farms as well.
what we are doing with them, we probably start with them, and then the other key thing is, if we're gonna, connect the network up a bit more interconnectivity, as well as storage which I've already mentioned, is a key resilience tool, so we are able to move votes are from an area that hasn't got much demand to where it's got that has got picked him on or has got more capacity then we can move the water and you'll see from the history.
be surprised to say we would never design it like this because it was effectively lots of different farms joins together, you'd never design none of the water company society if they started again, they'd ever determinedly like that, but a larger larger, particularly in the north.
companies that were built around a local authority did build most of it around the city, and that because that was relatively optimum, the more rural ones less so.
that's morning and I've just mentioned so this, because this was an issue in life Tunbridge Wells and and and it caused to our customers and quite a degree of angst, not surprisingly, I am having no watering him to go and collect it is never the greatest.
experience and we've been working really hard on how we can improve that.
one of the things we've been doing is talking to local authorities and just general property owners about low local locations for portable stations and tanker injection points so pre-planned pre-agreed locations that meet the needs of the local community from from the voices, like local community, telling us that so we so we when we Trump when we try historically pick-up facilities like a location we have to take into account a number of things like can attend to get their access parking.
how is it to refill for us all those kind of things, but we don't understand the area as well as as as as local people do so, understanding that that you wouldn't put it there if it's a Saturday, because is that it is a market is all those kind of information is that we can bring in so we've now got pre plotted areas.
we got this launched are confirming arrangements and is still to come are.
webpages portals to actually effectively book portable to deliveries in the case of vulnerable customers and with massive increase in a tanker fling, to name but two of those.
the future is all about the business plan we work in five-year cycles as a headline.
our business plan, we've just recently submitted to Ofwat, moves our investment from 1.1 billion I before it needs to 1.9 billion I before this I have a really significant investment, includes new reservoirs, much more interconnectivity, leakage reduction,
and smart metering, to name three nice things again, our business plan is on our website is a very long document, but there are short-term versions, and that's the shortest some are you gonna get one slide 1.9 billion?
I was split down here, the important number in here is water resources and saw the 399 million and resilience at 231 million, those two are the ones particularly focused on ensuring we've got enough demand, particularly on the climate change conditions going forward.
and there's a long list of the schemes that are affecting this area that are in a long plan, some of them are longer than others, but this is a significant investment in the year ending Ken and we have brought out reservoir which is near Canterbury but will feed across the whole of came to help supply that in that plan I am not going to talk through each one of those with sufficient societies, more water and more interconnectivity and most stores across the area.
that was a bit longer than I was planning on doing, but thankfully and didn't tell you enough.
David, thank you very much, and from when we last spoke and you've picked up some of the points that I wanted to to ask about, I'm sure that members will have some questions for you, but we have here this evening Hugo Pound, who is the
portfolio Holder for Planning
and and I'm sure that he would like to say a few words and he go, you have the normal three minutes.
thank you Chair, I do wish I was a member of this committee, there are so many things I could ask him how to better I'm not.
I just want to bring to committee members' attention again the fact that the Council responded to consultations both on SE Water's draft water resources management plan and Southern Water's draft resources management plan.
in March 2023.
we commented back to Southern Water that the plan highlights that there will be a deficit of water within Kent region by 2030 Tunbridge Wells Borough Council would query whether this is already an issue when it has been evident that demand exceeds supply and there is limited resilience within the system to cope under certain circumstances. And I have to say that I am not persuaded by what I've heard so far this evening about that resilience. It goes on to say in our responses, noted on the map on page 1 1 5 of the document, which is SE Waters, document, that there are no specific schemes identified within Tunbridge Wells Borough within the period 2025 to 2035 Tunbridge Wells Borough Council does not find this lack of schemes appropriate, taking into account the recent situation referred to above in December 2022
it also says it is noted that schemes are identified within the Borough during the period from 2035 to 2075, and this evening I have just picked up from one of your slides. It actually says the wording was between 2025 and 2040 are preferred plan includes, and then there is a list of actions, but it isn't a confirmed plan and I think that the committee should be exploring more robustly. Just how well made those plans are in relation to our needs here in the borough, so I have three questions, I hope I have time, the first one is you've begun to answer. What are you going to do to address the issues that we faced on several occasions in 2022
I live on a high part of the borough and we were told it was because your booster pumps were inadequate to the task, not because it was overconsumption by residents, my second question is to proper your company's mounting debt, you pay out more in dividends and debt when you do in infrastructure, when is that balance going to reverse?
and thirdly, and most pragmatically, as you know, Pembury Tesco's was a nonsense of allocation for large numbers of people in Tunbridge Wells, you've mentioned this evening pre plotted locations, I think we would like to know where they are.
thank you Chair, that's all I'll say.
thank you, Hugo David, do you want to pick some respond myself, yes, they're taking the first question, which was around supply options within Tunbridge Wells area so they had adult resource management plan uprights, is it effectively up-to-date finds that there is a deficit to solve, so it looks at population growth et cetera and it says is there a deficit to solve?
in the south-east that answer especially was yes.
and then it says you have these options by which to solve it, their options which have an environmental impact, their options which have a cost impact, there's these options, which have a social impact and all those kind of impacts or associated to each scheme, and then we optimise and I won't go through that process amongst amongst all those choices which will produce the biggest net benefit from that activity. Since then the wardship provides the customer provides at an environmental damage it does and social implications are you saying?
this is a longer list than just those four, and it optimises under that under those scenarios and says this is how we themselves deficit in the south-east of England and I'm not just talking it's not just Tunbridge Wells in the south of in East of England, a predominantly selected solution for making sure we can solve the supply want balance is there is reduction in demand.
so across all of the company's plans of or
schemes that contributed to demand reduction by non household in foams, leakage on our network leakage in customers' properties, behavioural change, tariffs that encourage less use, less usage
and those that's large and the solutions across, in fact across the whole south-east England, to be honest, it's across much of England that's the chosen solution, latest solutions.
come in, such as desalination, etc when they supply those demand, solutions have been effectively exhausted, so then, because the environmental impact and cost and all the other impacts of desalination in real environmental policing solution, so that's effectively how the results plan.
Boots itself near Rochester in Tunbridge Wells is there isn't any brand new water coming into Tunbridge Wells airing in that period described, but there is quite a bit of investment, quite a bit of activity, on demand reduction, and so that's not just about asking people to use less than their homes.
providing alternative raw water sources to farmers is about working with local businesses about water use is about simple things like leaky loos, which are the bane of the water industry large since, since they came into manufacture, I'll always remember the Thompson.
if you tolerate data effectively, the oversight went out pop and went on the wall and landed on your head when you walked down the side of your house now they don't know who'll go back in again and no one notices, so one leaky though is about the same as another family for house and so they're buying them lots of corporate investment in in auditing properties, visiting properties repairing on behalf of customers etc etc demand reductions quietly as quite a long list so that's that's the solution.
the UK asserted that the process has driven that we've all submitted to the secretary of state for approval, and the other thing I would add to that is the water resource plan is an adapted plan, so for the first time it's it's been legislated in the why within the regulations it needs to be adaptive and our thinness is one of the really good bits of innovation so,
if that solution that you start.
is not delivering what you hoped it, would you have to change horse, we have the ability to change the route so that the demand reduction isn't occurring.
as planned, supply solutions, albeit the less attractive ones like desalination, can come forward that step two, if the demand does work, there's no need, in the medium or even short, to medium centre, putting those less environmentally.
environmentally damaging solutions.
I'm jumping topic now, so I'm going to dividend.
so dividends, so the dividend question, and not quite I've had a number of times about we've pay more in dividends than we've invested in infrastructure came from the financial times and I've lost oozed, and I've lost count of the number of times have answered this question because it simply isn't it just isn't financially correct so within their group.
we once paid a dividend of rent of 125 million.
in to pay a loan of in the group, so, in other words, it was a movement of money within the group is effectively what businesses do all the time it never left SE Water and the Greek debt, it never went to the shareholder, it was a financial instrument that gets called within the accounting world or special dividends.
so when we set the following financial times, you know that's not a dividend, it's not left, it's not going to the shareholder it still within the organisation, it's effectively been wrapped up in that they were right to say he's described as a dividend because it is, but it isn't. As you know, I would understand the dividend, he didn't leave and didn't get shareholders. Cyprus at our shareholders have taken no dividend out of the business in the last three years and don't plan to in the next to the yield that we've taken that they've taken is a roundabout 3 4%
Over quite a considerable period, so the stories, your hands around dividends, completely misrepresent, certainly SE Water and, to be honest, most of the watch industry numbers, the pressures on dividend are big numbers.
this is not ask, but when they use quotes company examples are used big numbers but they failed to represent some essential investment and who would do that so you've got a fictitious water company might be trying to have 30 million pounds even in the money they might have invested billions in that organisation and then return only 3%, so the returns are pretty much controlled by or for or wise for us about three or 4% really low, so we have not taken dividends at anywhere near the amount we've invested in in infrastructure and to take that point a bit further SE Water has invested everything it's been allowed to within the prices we collect from customers in the infrastructure.
so we are effectively a business plan and said this is what we give me a few infrastructure from offer, this is what you should collect from customers nice, we should invest, we've over the last 15 years invested all that infrastructure to be undertaken any of it now we haven't said when we're going to underspend on infrastructure and give it to the shareholder we've not done that.
so our shareholders are long-term shareholders.
who will accompany for ages and just all they do is encourage investment, and I agree with Tesco's wasn't ideal, so almost there are three or four times it was it had its pluses and it was easy, obviously to get big lorries in, it was quite easy to set up safely. For that reason it definitely minus it's from a travel point of view and we did set up some other ones, which less successfully around the around around. The patch is really hard to find the perfect set of bottled water stations, because this is inevitably can be inconvenient for somebody unless I listened loads and loads and loads of them, and loads and loads and loads of them then come up with issues that people turn up to one and it's empty, so there's always a balance between those different fractures. Now we're much better planned, we want an organisation that was familiar were sent out but to Walter's licence until 2021. I'd never done it. I've been watching for 24 years
I say it's the climate change we've had over the last few years has caused the events.
and then we know when we were slow, if I'm honest, we should have been quicker, getting more geared up to me how to deal with those events, but we very nearly they now, we're one where I want us to be, so that wasn't great or doing it.
and it wasn't pumps, don't if that is the question, but it was now, it was what was going on in the system largely was. The pumps need to have a certain level of water in them for them to be charged and if it's not, if they're not charged in a car pump, so when the reservoirs were dropping and dropping below the level where the pump took water from it, that pumps stop working, so in effect you could say the pump wasn't working, but it needs more in the pump of the pumps work. So there were I had the numbers, a number of people Sox pumps, technically the problem wasn't working but didn't have any watering and that's where the pump wasn't working.
I think that was the three questions plus on asylum pumps.
I will get, I can get back to you, I'm not sure where we are exactly with identifying all your locations, but I'm promised as soon as we've got it, if you haven't already got two together to share the locations that were considering the Tunbridge Wells.
thank you, David, a question we had questions from statements and questions from Hugo invite members to.
put in question, so indicate if you want to ask Margarita.
thank you Chair.
all techniques you haven't mentioned anything about water leaks.
and I think every Councillor in this room will have noted that wherever they went last, particularly as you say last winter was particularly bad.
we had water leaks and they weren't fixed within a day they weren't fixed within two days, a week, three weeks, four weeks, the one in particular on Silverdale Road was was leaking from about.
I think from about 17 in the middle of them.
the autumn,
until spring the following year, we didn't get any response whatsoever, but I've seen plenty of other water leaks, and they've never been.
the company has never been quick to fix them, so now you say that some infrastructure has been improved, can you assure us that on the that these water leaks will be?
fewer in number, and also your response will be much quicker, thank you.
sorry, if I can talk about leakage in general, and then I'll go most specifically into summit, some of the challenges and investment that we've got going with leakage.
so we do offer a really really long, knowing I cannot remember the 9,000 miles of of network and, in itself fighting the leaks it is is often tricky, and sometimes it's easy, sometimes invisible, sometimes it underground and are leaking a lot more.
we have, we have a team of, we ever think, dedicated about finding I am fixing leaks, one thing that is needed is specialist kit to find it, and another same, which we used to fix it once we've wants their family prioritised on a number of different factors, I know said we try and resource the right number of both, I find it and fixes all year round and clearly that changes so so I'm really really cold winter we might get an outbreak.
which requires maybe a hundred gangs are fixing to to fix it within a week and then two weeks later, that we only require 50.
because the outbreak has gone, so we're trying to manage that fluid, now that results in a fluid waist, so it peaks when you pick we're starting to get some leakage peaks as well, now because the summer, particularly the last two summers been so dry ground, has effectively behaved as if it's been frozen so it moves.
is that ground movement of like shrunken and contracting that causes the burst? So so, unfortunately, when we do have a dry spell or cold spell for the period after it, there is always a lag in recovering that leakage, because if we were always resourced all the time for a particular potential peak, we'd have a lot of resource that customers' money would be painful, that would be would be under huge loss most of them, so we try to manage that which I enjoy economically as well, so any link that's running might cost an amount to fix it, and we'd and occasionally we launched a backseat with another one, because the water in itself in a non demand, driven periods a normal period
that just makes it more economic and easier to plan resource around it, so they're the very practical issues imagine leakage in terms of the headline numbers south-east, which is actually quite good comparison compared to the rest industry we've been in the upper quartile for loss 10 years with the exception of last year we put on leakage talk every year about 14 years.
and the UK actually is quite good, performing in terms of leakage as well, despite what you might hear in the press, so compared to the European countries.
certainly well, above average, most better than the EU S.
but it is a hot topic I know for.
before the press, but we do try, we do try and get on them as fast as we can, we try and get the resource right because if ultimately, if we overspend and get a big resource in ultimately that ends up in customers' bills, so we've got to have a duty about keeping the keeping our resource efficient,
and we don't always get it right now I'd love to get on leakage instantly.
not only for the loss of water, which obviously is pretty crucial, particularly in peak periods, but it just yeah, it's inconvenient because it's traffic issues, some of the longer lakes, and we always find this hard to communicate to customers and we need to do a better job of it. Some of the longer links we know they're there, we've seen them and are requiring some other intervention before we can get on them might be a land access, it might be. Traffic management could be been allowed only until there's a school holiday.
it's very hard to label that actually in the right, and that's what's going on, so there are some legitimate delays on some of the longer ones, but in periods of peak I would like to get on them quicker, but we're trying to manage that those conflicts.
I was talking about there, but it is a puppet is a proper priority in terms of water supply is leakage going forward?
we've gone, we've got to target, it, just keeps getting torture and torture.
and so I will move, we're gonna be moving into single digit leakage on our side relatively soon, so and attempts at leakage.
Alan
thank you Chair.
can I ask?
do we a wonderful, Victorian system that you've inherited, that that's grown through devolution?
it is not perfect and led to some of the problems that happened last winter, realistically, how long is it going to be before all the problems are alleviated in that system that?
contributed to the
to the the the the problems in supply that that people suffered in Tunbridge Wells and beyond.
last year, and can I ask what message you've got for the people of Tunbridge Wells as to what's going to happen in the future about their water supply, when events like that happen again?
and thirdly.
I'm not really convinced or happy about what I've heard about the the water stations.
we've been talking about, I mean the the the the the the notion of using Pembury Tescos on, I don't mean I can olive, but I represent South Brook and the the A 26, as it is an awful road to navigate Pembury, Road is just as bad so anybody that thinking that we're thinking of going up Pembury Road to get water.
it in in late-night traffic or in any traffic at any time of the day, but and then to to get to Pembury Tesco's to find that there was no water there just puts the icing on the cake, isn't it, I mean, I think that the to my mind there needs to be a complete change of thinking,
about what happens in the future, about where you put these.
water stations, and I I don't think it's a case of thinking about large tankers, I think you need to think about where people can get to not where tankers can get to.
to be to be perfectly frank and perfectly honest, so I'd like to hear more about that place she also in terms of the
in terms of the House, how soon can the system be resilient, but I think we've put down a lot of steps and make it really now, so that the changes we've made.
but definitely have a positive impact now I think we are all trying to react to the faster climate change that there has definitely been, even over the last three years. No one predicted the government didn't predict it, wasn't we use government forecasting a potential climate change impacts? They could say you can see any amount of weather, I mean, it's one of the probability things, so you could say there hasn't really changed, which has had three years of low probability, weather
but we are our future plan is all about getting ahead of that climate change, it's all about getting the resilience ahead of the impacts of climate change rather than following the previous path of predicting climate change that we effectively, whereas an industry before so the future plans really confident what we've done now would definitely improve it.
yeah, assuming the climate change pot now follows the one that is being anticipated.
in terms of
picking up the Pembury issue, I consider the voice we are getting one way to put the stations now is coming from the local communities and local authorities and we're not deciding ourselves with as we're doing in consultation.
any.
and hopefully using that method will end up with the Butterworth stations in the right places, ambulance to provide the right service. We're also improving the what we call our priority services register customers. Response that we directly delivered say, which was delivered to thousands in a pair, but it wasn't the best process and we are effectively making or modernising. That process looks more like a electronic scheduling process, an electronic organising process. So I've definitely picked up the the message that Pembury Tesco's wasn't we do this, we knew it wasn't perfect, it was, it was, it was, it was
we chose it at the time.
and we managed to get a lot of water to a lots of people, but it wasn't the audio solution, and if it happened again we wouldn't be using only remotely using Pembury Tusk, everybody was saying we certainly wouldn't be the only option, there'd be a scattering of options around around around the patch just to attack them if you do have any ideas or any locations in marked, please do you think them too as bittersweet and want to hear
as many as possible
dealt with at that point and when you say you're liaising with the locally and it is out with parish councils, or it's a mixture actually.
is we've got a group group in each area, kind of dependent on who really, as we look to it and the locations that we don't we that the feedback we received that you could put at Hay, we got quite a few suggestions in the event so some of us with that group of people and all will have to ask who is historically within the Tunbridge Wells area thank you.
yeah
which was?
message message for residents of Tunbridge Wells, and that is yeah, I think I'd like to re begins to emphasise the resilience. I think I should like to round up in the first answer, yeah, so I think we've done a lot to improve the results for the Tunbridge Wells area. The plan that we have going forward is, as I've described, is around logic. Demand reduction measures we should be well-thought out effect are likely to very likely to succeed, but also should they not succeed. The plank becomes adaptive
and then we move, then we move to earlier water supply solutions, I think that's the.
I supremacy followed and that's the message thank you.
I, I don't really want a speech, but if there's a follow up question, please please ask Alan.
thanks to him for giving me another chance.
this business about the water stations, I think it's easy to look at because you just need to see where people are living in Tunbridge Wells and supply the water there, each area in Tunbridge Wells has a central point where you can get the water to it and the Peter people will go there, I think that's that's the nub of it that we do need to look where people are living.
next question, poor, Harry.
thank you Chair.
do excuse the format of my question, it comes from aggregated resident concerns, and you seem like person to ask, there seems to be a perception of competing priorities for yourselves in applications for planning permission. As I understand it, you are a mandatory consultee on planning applications and can submit concerns for your part on applications, yet also, as I understand it, you have a statutory obligation to provide a connection to any new property in your service area.
I am aware that in some larger applications, for example in Paddock Wood, the developers were requested to part fund some new plant to support a large development. But my question is more in regard to smaller developments of one or two homes in areas where the residents perceive that your network is already actively struggling, where you do not raise concerns during that consultation in same hand. As supply is a statutory requirement, it isn't a material planning concern, so residents are rather left wondering who is actually responsible for assuring capacity. I hope you can add some colour to my perceptions there, so we can feedback to residents but interestingly, we're not a statutory consultee
which is it is my personal view now, which we blame them should be, so we were invited to we were invited to invited to.
consult on a number of things, not everything by any means, so and is not a statutory consultation for us.
we often come in when we think they there potentially is an area of stress, and we also just generally like to come in about water efficient homes now that is, of course, why we love water efficient homes so we might come in sunlight.
no homes were built in underground storage homes with they come new, with sufficient water basketball to the garden for weeks, all those kinds of things, we very much in supportive we don't get statutory an opportunity to to contribute to that.
prices.
as a statutory consultee, but in practice Tunbridge Wells planning department would concern you for most planning applications, and what you are saying is that they then have to take on board what you're saying, because you are not a statutory councillor now you then have to ask a voluntary code yeah yeah, so they don't ask us for our opinion and another.
neither does it necessary to our view of to form any part of the decision-making process, as I understand it, certainly that that's what I think you'd get from being a statutory consultee.
thank you Paul, do you want to come back on your question now, okay?
next question, I've got his David Hayward, thank you very much, Mr. Chairman, yes, my question actually stems from an answer you gave to Councillor Pound and it's about the financing, I think the public perception is that shareholders do get a large share of the money and you can understand why that rails people, so obviously we've got a messaging issue there because I didn't know that the financial Times thing was wrong.
so that that actually brings me to the point that if you're effectively paying back a promissory note, a loan notes, I don't know what the financial policies so you have from your profits, repaid a loan from a shareholder, so your what you're saying is you're financing the business with debts effectually effectively.
so I'm just wondering a normal company would need to raise money by issuing more shares, for example, so that the structure, what I'd like to ask you is what is the actual structure of the company?
you do have three massive corporate shareholders.
would they have pre-emptive rights if you were to suggest raising capital by issuing more shares, thank you good questions.
so we are around 75% gates, so since Thomson our funding is through debt and 25%, through equity, of which she mentioned the three shareholders, that's pretty typical infrastructure, businesses and any on wise guides to somewhere between about 15 about 80 something.
and that's because we deal with long lost assets, we borrow money pay interest on that and overall.
the theory will tell you that's cheaper for customers.
because debt is cheap and equity so and its rates are really common worldwide model for infrastructure, because, yes, it's got such a long of slaughterhouse, isn't it, so it's got a mortgage on a house and and that's effectively how we've.
run for the loss or since privatisation, pretty much as as an industry with varying levels of gaming, changing over time, say it, but if there is that if there's a big injection required.
like we sing at 1.00.1 going to the 1.9 in terms of investment, Archer has committed to putting equity into that investment as well, so they're very much, that's very much how the model works, we couldn't find an extra 1.9 billion budget putting more getting because we don't want you on the debt to go to how it is based there's a sort of knock to whomever we got.
amount of equity in amount of debt, and so we are not proposing to just keep leveraging up as they can as we invest further, we've gotten, we've got an extra injection.
in the plan we should make that thing status Finance was it is now.
does that make sense something to worry about?
yes, it is sort of makes sense, but I think where it leads my question, my original question to is, where is the money going to come from from your marvellous plans because if you're keeping it in house, I know you're doing is issuing a low note again, whereas the growth can vary in size both from so bills go up to support the investment so that's revenue, and that's the that's the main source from customers over, then it's funded underneath now they're all borrowing in advance stuff is using the model I describe, so the ultimate revenue comes from customers to invest extra
800 million.
I am not.
thank you press a full openness as well, because I did a bit of analysis from what you do it on your debt ratio of last 10 years, gone up from about 32%, to about 72 73%, now that's how you borrowing nobility, cheap money on bombarded markets as well as everything else.
my concern more about the sustainability of the investment itself, because your moment to 1.9 billion you can invest and, as Councillor Hayward said, we'll see where that money comes from now part of that is obviously going to be potentially for refinance and debt if you look at it this as well, where is it going to come from because the money is going up moment I mean,
what is sustainability, because the moment you, I think, you'll trouble being rated on Sean a and corporate debt itself, I mean, do you feel that the longer term this investment programme is actually sustainable, but that's another graded, good Christian, so the industry has that debate with offer.
around this time and moving to the end of next year, every five-year period, and it's a balance between the revenue coming in right, so forecast cost of debt
going forward which who knows where that's going, but it's focused cost today forecasts of costs and what what the shareholders think is a fair return for them to remain invested in industry or for new people to come into instincts and his government and that's what Ofwat's duty is to make sure that we can finance our functions going forward given the revenue and everything else we've got to do in terms of cost.
in our plan is how we think we're going to do it, which is a mixture of debt and equity and a bill profile of what will take their funding of what types of fungi and they do a determination on how they want to do it, but one of the duties is to keep us as a sustainable financial entity they've got duty to make us finance able to function.
that's how the whole regulatory system effectively works.
I ask him to pull up on, that is therefore because you, you mentioned about bills as well, because, ultimately, of Watts as regulator, it's agent of St George businesses aren't going to fail as a result of that we look at the surplus and debt I mean it is no other source especially violence and it's going to end up on the year.
the customer actually raised up on a theme that subsequently there was a 9.8% increase wasn't there last year, and it's going down as well. It was it lasted a year before that itself, he said in terms of bill increase, the president Biden, wasn't us so we were largely been inflationary, only increases for the last few years, yeah, but I suppose it might have been, that was the inflation 1.8 for all things up, inflation about that level, and also I think you maintain 26 pounds dividend per share onto you over the last few years is welcome. Fairly consistent, but oil crime, Neil
look, I said nothing's gone outside the group to the foreign shareholding in terms of dividend.
if you do, if we do have a year to spend around 2 3% yeah, I mean, has there been any evidence of other companies, I mean, I know that Thames Water have had a similar situation which is slightly worse than the south-east walked itself on how this is going to actually impact on the customers' bills moving forward, particularly now in the cost of living being so high it is only in the plans so every company's view is being set out in a really good point make sure.
so so the bill increases 90% over the five years, which represents is 3 pounds 79 a month more, but when we get to 2020 2030.
the Bill now, because it is quite confusing, build nervous children 31,093.
and it will be 277 pounds 48 and 2030 per year.
and it represents.
talking monthly bills these days that represent 3.79 movement, which is quite cheap.
and we think the way we plan to invest it as men, we've kept views where they are there for that period, but still managed to increase investment by 800 800.800 billion.
I did not gonna be doing in advance corporate finance.
why?
the one thing over the next five years and investment plans for things, so how much of your corporate debt has been refinanced over a period of time? No, I don't know, I mean the maturity, the maturity that that comes at different times, different tranches of debt coming out at different times, so some of its long running down some of its short running debt, so I haven't got that that'd be deep in the business plan, haven't got that, I've got those years, there isn't any for girls, that's one. I do remember
we've got different maturity dates on a number of different instruments.
sorry, we hate you like any business, and I mean by debt different times, different sizes to try and not be overly exposed any one time.
David Knight.
thank you Chair, yes, thanks David, moving away from finance back to the supply issue.
are you absolutely confident with your 1.9 billion investment over the next five years, the ear gonna cope with the existing demand on housing that water's gonna have, and obviously when we have a change of administration next year that will only increase and are you confident that you will be able to cope with the demand for water point 1 and point 2 it seems that your humane plan to help we should increase the supply resilience is to reduce customers demand.
which is something that's forecast, and I'm struggling to see that when you have a leak in the street like we did in Limehouse and I represent lambasts last year there was in the middle of the high street that was leaking actually spewing water out for probably eight months that is and actually that was happening and water was being wasted. It wasn't a projection of what the demands going to be. I feel your emphasis is very much an forecasting as opposed, if I don't understand why there's not more emphasis on leap reduction, I think that's what I'm trying to decide how that makes sense.
the reduction is a big pilot demand reduction I was talking about is a huge part of it, I need to look into that because we should never ever leaked discussion for that longer period there'd be something peculiar about that particular leak we provide some Aussie boys, size is size and safety, so let me look into that particular one.
but, like I said before, leakage is a real priority, is a massive price, it's hugely expensive.
if you do leakage and a cost benefit basis, you'd leave them to run for a lot longer, because if you think about the numbers I'm talking about here in terms of the value of water and what it costs pence per litre, which is it isn't a point arose pence per litre for drinking water and then it runs down the road for a while and some more so that's that's lost 100 litres.
that would be Maria pound,
and never pays 300 pounds so so if you're doing the economics almost saying this is how we think, but if you just do and the economics of that, you would dig them for a lot longer, we we go, we are technically y y moden economic level would dictate, we would introduce to operate when the economic netherland leakage which meant the value of the water you're saving is roughly equal to the cost of repairing.
the cost of repairing leakages y y y by more than the value of the water most of the time now, when that isn't true, is when we're asking customers to use hosepipe bans.
when when we have a demand deficit and we're trying to make that supply in that particular peak area, and we put a lot more effort into it, then we put effort into all year round, but that's where the watching trees in this country is that we're operating way below the economic level, where it is a huge priority, though because it really ruins public confidence, that is then that's another big issue we have and if we want demand to be reduced in the future we need we need public confidence in our ability to respond to those leaks because I completely understand this reaction. If people say why should our safe water, if I see leaked 20 fridges I said in a completely natural reaction,
but we've got to get that balance right and we've got to also communicate to customers where a leak's been running and is a reason for that late running, like I said before, there are quite often read complaints because I do get the complaints directly to me quite a lot of time.
and when I asked the team what's going on here and I said it is a road closure notice in or we need access to that land to be able to access the valve and we've been refused access, we need to police the companies to get access, there's those sort of things unbelievably happen relatively often.
so it is a huge priority, though.
and, like I said before, we've invested everything we've been paid from process, we're not keeping the money by saying, Well, let's just be lazy and leakage, it's such a huge priority for us, because two dedicated things have over 200 people to justify leakage.
so yeah, a supporting someone say.
Brendan can we keep it as a question around when a speech because
I am conscious that we've been going for an hour.
it cannot be very quick, I'll I'll do my very best, I am concerned.
about the modelling for the future and the modelling for now, because the modelling for now because five years ago, in fact, when I was at school, we knew about climate change and global warming, free store has been a thing for decades, leakage has been a thing,
we know there's going to be a predicted growth of population in south-east England and I would have thought he would know about the impact of reduction of usage by putting prices up, so I'm just surprised that five years ago we weren't able to model the situation now rather than having a corrective or corrective measures that you're putting in place and I'm not or I want to know if we can be confident that in five years' time we won't be sitting here managing things that have gone wrong.
thank you.
sorry to bond at 5.00 years ago in that modelling, 12 years ago we didn't have the choice of the three-year chance of the one year that we had actually, when we had all the storms, everything somewhat one in 10,000 on that old modelling right so we've had some very freaky and I'm hoping it's freaky and not I and I'm sure we all do and not I
so immediate acceleration in climate change, so if you go through the events, so say the two summer events we had the first one we had, we've all had these, where the dry swarm is jus, with record temperature in the Jóhanna, Julie down the Joyce period in June,
on record.
if we go through, we had we had one of the warmest Septembers and record the freestyle event was one in 120 year event.
so the so these things are they're not like.
what we would have predicted to happen five years ago.
this many climate change extreme weather events in such a short period of time, the probability of that, if we did then said we want customers' money to make sure we are fully resilient to that kind of year or those kind of two years I think there have been questions about whether we are over again to put in an and taking too much customers' money in investing in it when it was necessary, so there's always that balance.
we were never going to be fully resilient to everything, because that means you need just amazing amount, resilience in every system and there's no system in the world that's fully resilient to everything I am not just on my water system, so you have to say,
so you have to pick a resilient standard by which to be resilient to, and that is effectively, how the water resource management plan works.
and any other processes that were talked about, so I don't think it was predictable now, have we got the future prediction right where we are using and when we do the prediction in the modelling we use the central sources, the that we record to you. So the government's central forecast on climate change forecasts and population growth census data is all central. None of us know that this is my boss. This is all centrally used data and also we do on a regional level, so we're doing in collaboration with all the other water companies.
so I hope the modelling is right, because if it isn't, we're going to difference former climate change and we will on that not decided the one good innovation that was coming relatively recent years is that if the plan is now adaptive, so we have the ability to change from one solution to another solution should they should that seems to be not be working.
OK, thank you.
I've got a David Haywood Alan Lewis, and then we'll close down because I'm really grateful for your time, thank you, thank you very much, Mr. Chelsea is really a sort of a yes or no answer, some medical conditions require a lot more usage of water.
is there a tariff envisaged for people with a recognised medical condition, narrow use when they're already ill, maybe only told you it was a yes or no answer, so thank you.
thank you very much, can I ask, why are 10 million Lisa reservoir?
sunk into a single.
so I wish our news, so the geology Aiken, there's been a few 6,000 now.
this is
there was an outward bombing area of mainstays that spray in that name, as they ran up almost opposite the hospital, which was our worry when it first disappeared, so don't know it's a sinkholes, it's a goal feature and it gets created when there is a flow of something or changing the runoff of the air in those reservoirs. Been there a long time, so because of somebody's go, features and sinkholes are not known and there's been. I'm sure you know, it's been roads and houses, no such hoedown food and other ones have just appeared
there is a risk for sure, but it was, it was a strange day.
thank you, David, thank you, Jo for being here.
I e-mailed you back in now when we met at the beginning of November making a couple of comments on communication, I particularly think that in a low loch, local people do know quite a lot of what's going on and if there are people I mean we're all elected Councillors here there are parish councillors there, they're all elected as well, people do moan to us,
when there's a major problem, you know it's always nice to sound off to someone rather than get blocked by your switchboard, and I think that could be a useful exchange of views rather than the I'm sorry, we're all terribly busy, we can't talk to you, we're all doing our best which I'm sure
I am sure you are on bunk supplies, yeah I mean, I think people have been saying there are some local views on where might be best on bottled water, but also think is you know so many ways as animals and I've got containers I can go along and get some bulk water if only I knew where to go and get it from.
and you know, I think that applies to two other people too, but I am grateful for your time and thank you very much for coming.
I thank you for the going, it was helpful.
yeah, we just pause the webcasts while we get reorganised, thank you.
6 Presentation by South East Water
Seat 3 - 1:10:35
thank you now agenda item 7 is update on finance and performance, so welcome Chris and Leah, thank you for being here.I don't and I'm grateful to you for you to sit through the hour with set with southease water, thank you, thank you for that and thank you for your patience, I don't content and you should have an hour.
can we instead confine this to sort of about half an hour?
each.
yeah, so thank you.
7 Presentation from the Cabinet Member for Finance and Performance
thank you very much Chair, so presentation this evening will be half and half first-half will be me, I'll be covering elements such as what we've achieved so far since I last appeared before the overview and scrutiny committee a year ago, I believe it was savings plan, car parking strategy, surplus assets, town or co-working,
and you know what the what the future might hold and Lisa, which will be all about the draft budget and mid-term financial strategy.
so without further ado, I'll I'll kick off so yeah, it's been extremely busy. A lot has been achieved in this portfolio by the finance team. Finance have been key to a lot of the key decisions that the Council has has made, not least in the achievement, and it isn't appears the purchase of RVP, but I think we're extremely proud as a Council to have finalised our accounts, one of the few in the country to finalise our accounts by the 2022 23 deadline. You'll have read in the news no doubt that many councils are struggling to achieve that and are struggling financially as well. We've now finally got to the point where we've signed off the
tunnel co-working with Town Square, and I'll cover that in a minute there's a slight on that we've introduced a community support fund in 22 23 and we're going to reintroduce again 23 24 and.
embedded in the budget for 2024 25 as well, we haven't come forward with it sooner than than this because we really wanted to look at how the money had been delivered, how the grants had been delivered and how successful it had been before we delivered a second community support fund so roundabout October we got a report back from all the recipients of the grants.
and we were satisfied as Cabinet that it had gone to support some really good work in the community and some of the vulnerable people in our community who are struggling with the cost of living crisis and we believe that cost of living crisis isn't going away anytime soon so we've introduced that and it'll be rolling for the next two years we reduce the budget deficit for 23 24, it was 943,000 I think at full Council in March is now under a just under 200,000.
and probably on course to close that gap by the spring of next year, I would say.
we have delivered a savings plan, I spoke last year about the fact and a Council that over the summer we needed to finalise a savings plan to address gaps that there was in the revenue budget we've we've delivered that it's still ongoing and we'll come to that we're starting to progress assets for disposal and I think a shout out to Ian Hurst here for a and Léa for,
Last year, last December, January, we had one of the largest ever responses to a budget survey, not something that everybody wants to spend their evenings or weekends grappling with, and we usually get about 500 respondents and but we we took the step that we wanted to e-mail, we had Council the e-mail address that Council taxpayers and we sort of wrote them all directly and that doubled the number of respondents to the budget survey I think we've got over 2,500 respondents which makes it technically and more statistically significant sample, so that's been going on since I was last here a year ago.
we still looking at our assets and looking at their income potential, and by that I'm referring to assets like the Assembly Hall, Theatre and the Amelia Scotland you had a presentation with Councillor Rutland. I believe last month looked at business development plans for those two assets to see if we can, we can get more income from them and we currently are. We've reviewed fees and charges for another year, which has gone through the finance and governance CAB. We need to deliver a car parking strategy and how many members have had a lot of feedback as Chair of the Finance and governance committee and elsewhere, many members are really keen to get this delivered, and I'm really pleased to say that we're getting very close to that draft strategy by the end of this month and a lot hinges on that and that will lead to a potential review of the Asset Management Plan. So there are a number of assets on that plan, including car parks that have been listed on the Asset Management Plan, which I
inherited, which we inherited and unaffectedly rolled over from the previous administration, we haven't really changed it or.
tinkered with it, but I think one of the things that we, I will probably do next is depending on the results of the car parking strategies review, some of those assets that are on the asset management plan and decide whether they really need to be there.
we still are developing a digital transformation strategy, one of the things I asked the team to do when I took up.
this role in August last year was to have a rolling two year digital development strategy, so what is our what is our ongoing plan to improve the way we interact with with residents, never digital-only, always a hybrid, because some people will always want to interact with us in person by phone?
but how can we improve simple and easy ways that people book tickets, pay for things, report problems and make that smoother more efficient process residents so that it's easier for them to interact with us, but also perhaps create some efficiencies now that 2 year strategy is rolling and you probably had a previous committee meeting some of the achievements of the the team, but if we're really going to harness some of the the the revolution, that's going to happen in a I over the next 10 years, then we need to be bolder and more ambitious around that, and that will probably require some funding and investment if we're going to try and harness some of those opportunities. And finally, we need to produce a people strategy which is still being worked on to address a recruitment and retention of staff
so tunnel co-working it's be been a while too to get to this point.
but we we've now signed the lease 15 year lease with Town Square, you'll have noticed downstairs that works already begun, capital works are already on underway to.
refurbish the Town Council offices and get them ready for rental to local businesses, so we're expecting the show offices to be open early next year, so we should have some examples of what those officers are going to look like what the offering is going to be with hopefully if all that goes as expected first rentals a little bit later sort of March April.
April time next year we should hopefully get our first tenants coming in, so the benefits, I think, are pretty clear.
I think it really fits beautifully with our economic development strategy. Local businesses are crying out for offerings office space, especially small startups, SMEs and will be we as a Council will be effectively supporting the development of our local economy by providing some extra office spaces for those businesses to grow, so I think it is a great benefit to the town from our point of view or financially as a council, the rent will be used to pay back that outlay on the capital works and that will take eight years where we will benefit financially as this in the is in the cost-saving so that 140,000 pounds a year is reduced.
reduced energy costs, utilities that kind of thing, business rates which will go straight into the savings plan of 140,000 pounds a year which will help towards closing the gap in our revenue budget.
there are a couple of assets at the moment that we are looking at an disposal of Mount Pleasant Avenue car park.
very little used and by the public.
and you really ever had a 4% occupancy rate, it was principally used, as some of you will know, by AXA for employees in the week Monday to Friday and Saturday, you know the public could could park there very, very few people ever park there and you've very low occupancy rate, as I said and,
you know, it made sense when AXA opted to move out of the office building to also look at potential disposal of this asset, so it's been to forgive the acronyms the property asset oversight panel, which is made up of representatives from all the political parties
who agreed that the the best option, was then to proceed to go to the market and see what kind of bids we could attract in a sealed bids process so those bids had been received and were in the process of reviewing them and getting firmer details on any terms and conditions that are attached to them and what kind of developments are proposed to be built on that site and then Leon I have delegation then to accept the the best offer looking for the best value for the taxpayer.
and then we have nine to 10 Calverley Terrace, which has been publicised a lot in local, local media, but
not often referred to as the fact that it has been unoccupied for quite some time, as you can see, we do get a small rent from the ambulance service at about 10,000 pounds a year, but principally it's been occupied and those assets need to be maintained, they're costly to maintain if you just leave them standing around doing nothing.
they still cost the Council and the taxpayer money, so we've looked when we gave her the Civic Society a year to come up with a business case that was that was considered by a range of people and I'll forgive the acronyms again, but that is the the property asset oversight panel and the cross-party working group and a representative of the Town Forum.
and all had the the presentation had the opportunity to ask questions.
of the business case, it was a very thorough going session that lasted a while, but we all decided that we did not believe that the business case for a museum there, Decimus Burton Museum was was viable so
that's the decision making process from there, the property Asset Management Panel have then agreed to seek offers on the open market, we haven't yet got to the point where it's gone to Cabinet to approve delegated authority for me and Leader dispose of the asset, but that's the next stage and not be coming up in in December but we have received offers.
and a little bit like Mount Pleasant Avenue car park.
we are just currently investigating those offers and a little bit more detail
car parking.
we've frozen car parking charges this year, we've made one or two minor amendments just to align one or two car parks, but essentially.
really like to see what the full impact is of a whole year of car parking charges having gone up as a result of the in-year budget review, I think they came in about November 2022, so it makes sense, I think, to just wait wait for things, see how things settle down and then review review them again next year rather than.
increase in this year, car parking income is is performing very well as performing above budget anyway.
we are introducing to support RVP a couple of things, free parking.
on Sundays in December to encourage shoppers, and we also want to support retailers by giving their staff a 20% discount on season tickets, so.
on other, on the other points on there, I think probably the only thing I want to mention on PR, too, is that.
it has been.
successful in that has reduced the flow of traffic. I don't know how you feel about it, but I certainly noticed a huge difference now in crossing that pedestrian area across a mountain road is much much safer. Now I can remember before the reintroduction of this way. You'd see elderly people and parents with children trying to rush across the area of town trying to avoid cars careering round into Monson Road, so I think it's much safer. The number of vehicles has significantly reduced and I will continue to continue to reduce even further from around 100 a day, the revenue that's been generated from parking penalty notices.
it is not going to flow into the revenue budget is not going to help us close the budget deficit, it's not for that. It's important, I think, for anyone watching to clarify that this isn't something that will all benefit my area in terms of the budget. It's ring fenced for transport and environmental schemes only, so it will be a suitable scheme that an improvement scheme that will have to come forward for any of that money raised to be to be spent on improving improving the
perhaps improving the the actual arrangement of the appear to itself, potentially, which I certainly like to see some improvements made to the design of that, if some of that money could be used for that purpose, the parking strategy is finally going to be ready, I'm going to see a draft of it on the 29th of November as will Cabinet and then hopefully we'll have it finalised by spring next year.
and then briefly on the savings plan, this is something that Cabinet.
colleagues and I and senior officers have been working on since October 2022 trying to identify and are cost centres where we might be able to make some savings.
we there are some savings in there that you can see, I'm not gonna pick them all out, but essentially because you can see them on the screen you can see in the blue line if we are going to balance the budget, the savings required,
as a result of those savings, you know, we've been able to close the budget gap for 24 25, but there are still some savings potentially to find in the next financial year and the financial year after that, but it's looking a lot healthier than it would have done if we'd not made those decisions to to make some savings, so I think that that's where we were up to at the moment with savings, we're delivering on that and that there's probably some further reductions that we need to look at. I'm still looking at some potential savings with
Mid Kent services, for instance, which I won't go into here, but certainly looking at saving their and reducing through the performance of the Assembly Hall theatre, for instance, reducing the subsidy that is required for the theatre by supporting there a business plan that business development plan to generate more revenue from shows so.
it's working, it's it's proving to be effective and we're not having to make any severe draconian cuts to to the revenue budget or to services, and that's my part oversaw, now handover to leave for the next bit OK, good evening, thank you I wanted to start off to acknowledge the fact that local government finance has been making the headlines for the wrong reasons.
whilst there are some structural issues on the underfunding of councils and too much decision-making is controlled by central government, I wanted to understand why is it that some councils get into financial difficulty and some dance fan there's no one single indicator that would help us understand that, but one place you would always look to use the statement of accounts and many councils have struggled produce their statement of accounts, but in Tunbridge Wells we've always met that statutory deadline producing those accounts on time and I was quite surprised to see you in the public sector trade press as it were,
that Thomas Wells was in the top 1% in the entire country, have been able to achieve publishing accounts and get it signed off by that statutory deadline. So clear is a huge achievement and that was actually then picked up locally, with the Council being recognised as one of five. An entire country that is able to produce a statutory set of accounts and producing a good set of accounts is important because it provides a sound basis upon which difficult financial decisions need to be taken in terms of the budget, setting timetable, the medium term financial strategy. That model gets updated every time a key report comes forward for setting the budget and there are four throughout the year, the first one you see guarantor finance and governance, and then Cabinet, it's about a protection strategy in July, followed by a budget update in October, and where we are now is. The draft Budget has been produced for consultation and that will be going forward to consideration by Cabinet next week.
after that consultation process is completed, the budget comes back. Cabinet have the opportunity to make some amendments to that and then a final budget is approved in February along with setting the Council Tax but throughout the year there are a number of some other important reports because we need to manage the current year's performance so the Quarter 1 performance was approved in September and we started off the year 4 deficit 943,000 and that came down to a forecast deficit of 526,000 pounds primarily as a result of our inability to recruit and retain staff some very good treasury management and a steady recovery of car parking.
I am cabinet just approved the fees and charges report for next year, an overall increase of 6.4%.
that will generate an extra 219,000 pounds of income to help next year's budget, and next week we will have the quarter to the half year position for the current year and that trajectory about 9 4 3. Improving has come further down to a gap of just 194,000 pounds for the current year in terms of the need to use reserves and against those three key areas which have contributed towards that, so all those improvements around staff savings and car park income recovering trashing, like they're already factored in into next year's Budget. in terms of our thinking, but the big report were all desperate waiting for, is the local government finance settlement probably be the last working day of parliament and that will give us the big numbers we're expecting in terms of,
grants going forward so there that this cycle gets repeated constantly every single year.
I won't go through all of this. You will be relieved to know, but this table was in the draft Budget report and it just highlights the key variances between the current budget and the draft budget for next year. So the big where it says employment costs clearly are struggles to recruit and retain staff and high inflation. We need to put forward a pay award. Another big cost is our premises costs, it's getting more and more expensive to maintain our existing estate, and then we buy services predominately from May's time for Mid Kent services. Again, they are largely staff based and those costs also gone up by 200,000 pounds and then the decision of Cabinet to have a community support fund going forward next year and sitting in the base budget that requires 100,000 pounds of additional funding and then that overall produces a budget gap for next year of just under half a million pound
but that gap that's been reducing over time, so the very first occasion to forecast what next year's deficit was going to be that came up at 1.00.1000000 pound budget projection reporting July, reduce that down to just under 900,000, the budget update
stuck with 900,000, the fees and charges report 200,000 better than we expected.
reduce the gap down even further and where we sat now is a budget deficit forecast at the draft Budget stage of 489,000. So the important thing that is the trajectory, the trajectory is heading in the right direction. Will we get to February 2024 balanced? It's too soon to say so much depends on how Christmas performs our forecasting and also the government settlement day with a revenue budget details. The council also needs to maintain a capital programme. The difference between a capital programme is that the budget relates to the scheme and the scheme can straddle a number of financial years. There aren't many schemes that have come forward. You can see seminal lighting infrastructure, and that's actually parking enforcement van is an electric vehicle and an IT strategy, and then doubting houses, our temporary accommodation unit out in Packwood, no significant work to that and a new roof to the sports centre. So the overall additional capital schemes of 1.6 million pound but the important figure there is the gross cost for next year. 775,000 pounds, however, or that 700 75,000 pounds only 45,000 pounds is funded externally.
for Section 100 6, the rest is having to be met from the Council's reserves if you fund the capital programme dipping into reserves that creates a strain on the Council's reserves, and that's just that's not sustainable going forward, the capital programme should ideally be funded from capital receipts external grants, section 1 0 6 developer contributions or business rate growth by external sources rather than putting strain on the Council's reserves and of speaking to those reserves so the reserves have been pretty steady, around 20 million pound whilst we still have capital programmes in those earlier years,
the reserves didn't necessarily form the impact of those because we had capital receipts funding those schemes, but the reserves now will start to fall off simply because for the past two years there's been no capital receipts, you've had earlier a couple of cases where we're hoping to reverse that, and then the reserves will keep falling. As this Council is required to fund a capital programme, it will only always need to invest in its property. Assets always need to provide IT equipment and would always have plant and vehicles need provided the red line there. That's the minimum level of reserves that a sensible for this Council to to maintain 4 million pound, but you can see there. The reserves are starting to fall quite close to this assumes no capital receipts so clearly, if we do get capital states, the situation improves, but there has been a long-standing requirement to spend four and a half billion pound on Roberto, I Place car park
that decision hasn't been approved yet, but that would need to come off of those reserves.
once that decision is taken just want to pick up on some financial trends, so the government enables this Council to keep what's called a minimum share of its business rates last at 4.00 p in the pound, it's just over 2 million pound this Council gets to keep of its business rates but you can see over the last decade this has remained pretty flat, the government haven't been indexing that at all and why this Council can keep only 2 million pound and others in East Kent, for example, keep 5 million pound is because of what's called baseline needs, the government have decided Royal Tunbridge Wells and its borrower only needs to keep 2 million pounds of the 50 odd million pounds collection from business rates so that's pretty flat but while the gunmen have allowed councils do is to
keep a share of the business rate growth, so the red line added there is the additional share business rate growth, and you can say it shot up Emma writing 19 and then it's levelled off, but if you can look at the year 23 24, this Council is only forecast to receive a share business rate growth of 400,000 pounds. And if you remember previous budget discussions, I've sent it around. Why doesn't? The Council include a million pounds of business rate growth in its base budget? For this very reason, business rate growth is not certain and whilst planning have given consent for a number of large schemes, business park at North Farm Industrial Estate at Paddock Wood
numerous solar farms, none of those are forecast to be fully delivered out in the current year or even next year, so there's a bit of a time like that which.
means that we should continue to be prudent and not include business rate growth within our base budget. Other trends the government gives what's called a revenue support grant and during austerity it was the revenue support grant that was cut quite dramatically right down to 0 in 18 19 and we thought that was the end of the pain. Unfortunately, central government came up with negative grant. We were quite vociferous since I not just wasn't fair. Why? Why should Tunbridge Wells residents lose funding only for it to be redistributed elsewhere in the country and that that campaign was successful, so it's a bit ought to be celebrating no grant, but the situation could have been even worse and we've been constant now in
complaints to government that we're getting no revenue support grant.
the governance documents, any funding to help provide the services which they are required. This Council to deliver, and I think they've listened to, that, not helpfully, but what they've done. They packaged up some existing grants which we already get and rebadged those and called that revenue support grant, so that would explain the 127,000 pounds that we we currently receive also just want to touch on car parking income, so this is gross car parking income, and you can see that pre pandemic years 18 19 and 1,009 22, this Council is getting just under four and a half million from its main car park in income, and then you see that collapsed there in 2021 from the pandemic.
and we didn't know whether the town centre would ever recover to pre pandemic levels, was working from home can be a permanent.
correction to the Council's car parking revenue, but you can see there that we've now recovered to and we've exceeded, pre pandemic levels of car parking income and also season ticket income what we've done we've been advertising to local employers to incentivise their staff, to return to town centres that the council can sell to those employers more season tickets, and that's been successful, so the employers up in purchasing season tickets offer the Council providing free or subsidised parking.
to encourage their staff to return, and it never ceases to amaze me the silver lining there. That's penalty charge notice income, so penalty charge, fixed penalty yard notice are set by central government and they haven't changed for quite some time and of course, if you don't inter index link or charge your car park charges, you get quite close to that level. So in Tunbridge Wells day you can see over 2 million pound of penalty charge notices have now been issued, it has doubled
I saw some drivers taking decision to park where it is convenient to them, because the penalty charges no longer are great enough penalty to make them part where there were they ought to, so we do keep campaign into government that these these things around penalty charge notice planning income should not be set centrally traversing right across the country they would be better taken at a local level and,
this is a crocodile graph, so if you look at the year 24 25 the budget gap for next year 489,000 pounds so the blue line is the Council's income and our income is generally only going up by about 3% 3% on fees and charges and the 3% cap for council tax.
but the red line of our expenditure goes up by much more than that it goes up by by the rate of inflation, the pressure on our contracts and you can see that gap, widening and widening, and it widens significantly in the year 28 29, and that is the point where all our major contracts are up for renewal and factoring in the big increase in costs that other councils have suffered when they procured those same services of waste, leisure and parks that adds a further 2 million pound and you can see there that gap 6.7 million pounds quickly becomes unmanageable unless each year you look to close that gap going forward.
and lastly, from myself, so one Cabinet approves the draft budget next week. They will also be approving it for public consultation over a four week period and that for ratepayer would allow sufficient time for Cabinet if they so decide, to make some adjustments to that draft budget before it becomes finalised, and of course every day we will continue to go through that budget line, trying to find further efficiencies and refined individual budget submissions. Although we've still got a budget deficit, there are a number of risks associated with that deficit. We don't know the government's settlement and there are number specific government grants which we don't yet know how much we're likely to receive and also in inflation. So whilst inflation may be falling, there are other inflationary pressures such as increases to the minimum living wage that impacts on our contractors, and that risk will they will look to pass that onto us and waste collection performance payments. That's what used to be called recycling credits so they recycling
glass bottles and card. They are the amounts of money we get is dependent upon quite a volatile market, so we produce an estimate of how much income we will get from those, but that can vary significantly and I've mentioned they have a previously. There are big contracts that are due to come up for renewal and are also touched on that low business rate growth, but we do need a way of funding the capital programme
in terms of opportunity, and not there's not, that many really the tax base is the number of new dwellings within the borough, and we will be calculating that on the 1st of December, the collection fund surplus, if our recovery rate is greater than we had originally planned.
there will be a small surplus that that we can look to distribute, but again, when we get those quarter 3 figures and Christmas is so important for the town centre of Tunbridge Wells, when we get the call to three petitions we will look again at our projections to see whether there is any scope to start raising further those income lines in next year's budget and that's the end of the presentation channel.
Chris Lee, thank you very much, I have a wonderful balance in having done.
Christmas job, so I do understand an awful lot of everything that that he'd been talking about, and I would also emphasise that this.
this meeting government targets to
have accounts finalised. This is nothing new, it's something that has happened every year. I think it's the 14th consecutive year that not only have we met that target, but we've also had an unqualified audit report, so that shows the level of financial management that the Council has always always followed
so.
questions 4 for Leigh or for for for Chris.
Margarita
OK, thank you Chair, and thank you very much for your presentation and.
very vacant, very clear, and it was very well done so my questions are going to be about the disposal or potential disposal of Decimus Burton 19 Calvi Terrace, because some comments came up.
at the
finance and general purposes, CAB at which I think needs clarification and also.
maybe tea to do too kind of them.
clarify things were which were s, though there may be confusion, or even misrepresentation, I believe, so, if I may just addressed the first three, if I was going to chair, as you have several questions while I've got the first if I could put the previous three together yeah I do
I think this has been quite a long meeting, I think it would be a good idea if you wrote to Lee and Chris about it, we could do it through the clock.
and Chris and Leah will be able to respond to each of the each of the each of the call that I can okay, if I can just add that that can be in topic cupboard round all members, although I can just.
save, say, you know, or at least outline, what, in my main concerns are because I do think it's a public, it's a public, you know greater public interest at a meeting to discuss the sale of an asset, this is a meeting to discuss the Council's financial position.
1 to specifically discuss the so the issue concerning the sale of an asset.
those are questions that can be put and they can be put through the clock, and all the answers can be given to every all members of this group, yes, but I do believe that we should have some proper answers from the officers and from the council because they were made in an open or public.
committee you know
in the week before, and therefore I think you know the public.
are entitled to you know to to know that the the answers to the questions that you put those will be answered publicly, there will be attached to the minutes.
well.
I think I.
this is the sort of problems such as opener, it's no problem, I'm you know my my my my ruling is to say that we're not going to have a series of questions about the sale of an asset tonight we're dealing with bigger financial issues than the specific issue, but what is not specifically about the sale, it's more greeter circumscribe Rita I've made my decision
so we move on to the other questions that I think we want to have to lie, Chris about.
the overall financial position of the Council.
I think it worth the council don't want to be open and transparent, then that's that's that's the Palmer agreed Dudley council would be entirely open and transparent every question that you want to put there will be a public answer to it,
questions for Lee or Chris.
Godfrey.
you forecast.
savings or gains on planning charges.
has that got to work when planning charges are set by central government?
so on the savings plan, we achieved all the items on the saving plan, but one which didn't work out, as we had hoped, was planning charges, we have forecast an additional 150,000 pounds due to the fact that the government was going to increase the planning fee rate I'm 150,000 pounds based on the current number of applications but since that savings farmers put together unfortunately the planning applications have started to reduce.
so we haven't quite achieved the additional income we were expecting from planning fee increase. However, the good news is that planning fee increase is now going to occur every single year. So, rather than have this battle of every five to 10 years a government Tunbridge Wells, you shouldn't be letting fixing the rate from Thomas was the same as you do elsewhere in the country. Our costs are quite different. For the first time, the government is going to index that so every year we avoid this debate because the planning fee that set nationally for next year will then automatically be allowed to be indexed. If this Council chooses to do so, so we can incorporate that fee in our fees and charges report going forward.
clear, thank you.
David, yes, thank you Chair, and just one quick one lie, if I may, I think he said the PR to the 1 million money that we've collected of is being ring-fenced for environmental improvements, I think I wrote that down right that doesn't come to ask though that goes to KCC or do we have that and who actually decides where that money goes in the in the environmental improvements?
so the one point, the 1 million pounds net, so it's net of the costs that we're having to incur in administrator in the scheme were currently seeking legal advice.
on that environmental improvements and highway benefit clause sorry, in the meantime it's going into a specific reserve, we're not spending it, we are seeking legal clarification of what schemes ought to be suitable for that and then we will have that discussion with KCC once we are certain of the suitability of certain schemes to start spending that money against super, thankfully,
Nick,
thank you Chair, and that the cost of the work required and RVP at forehand four and a half million pounds is it is pretty huge.
Anna and the decisions are going to be made on it. I guess like a lot of maintenance of buildings and and infrastructure, but what are the choices because it would suggest that needs to be done, but there are there options that would reduce that or spread it over a longer period. So there are options around timing and then there are options around what are the improvements to the customer experience that structural work will then facilitate, but for a half billion pound? It is a significant sum of money, but we spend that on Crescent Road. Other multi-storey car parks were quite a significant, significant investment at certain points in time, and it was only about five years ago where the income on RVP car park gross was 2 million pound is currently 1 million pounds. So there is an opportunity there if you do, the structural works which are essential, and you then look to make improvements to the customer experience, improve our lighting, improve the safety of the feel of the welcoming this, and when you arrive then there is potential there to grow, that income back up to payback for that that capital, investment,
probably just down to, if I could, you may know this already, the cabinet had a tour of.
I wrote to replace the car park and then seeing the damage for ourselves with our own eyes. In terms of you know, we've had the structural reports and so on, but we wanted to go and see it for ourselves and when you when you see the scale of the work that's needed there and you see the ceiling being in the mother and baby floor being propped up with all these supports all the way down and concrete, literally coming off in chunks, and you can see where it's all, it's all coming away from the the upper structure. It really does bring it home as to the fact that some really important and urgent work that there needs to be done there, but I Grood Leeds its significant sum of money, but it does seem from our point of view and we've not made a decision yet
but, speaking personally, does it does look very necessary to address it?
thank you, I, I know him, I'm one for maintaining things and it's just a quest, just a better understanding, which I think does help two things.
pool.
thank you Chair. The third party contracts coming up for renewal look like quite significant uplift in the future waste recycling grounds. Keeping has there been any investigation around the feasibility and potential savings to bring the services back in house yeah, so you absolutely have 2 million pounds what other councils have experienced when they've gone out to tender on the same specification, the same level of works and what we will do when we start that procurement process, we will need to look afresh. So the market goes in cycles. Traditionally, waste was delivered in house. Then the market change is better to outsource, but the private sector market has contracted significantly. There are far fewer contractors in that
service and many of the risk that those private sector companies have now experience.
they're not prepared to take anymore the exposure to to living wage exposure to inability to to get loaders and HTV drivers, so they factor that in as risk so in attitudes, question yes, we will, we will look again at the specification and you can reduce costs by changing specification frequency quality and the light but also way where you deliver that service from.
it needs to include the market, but if the market is not functioning correctly, then the Council will produce a costed in-house provision probably won't be the countless Councillor in isolation, it would be working with neighbouring councils to make sure you get that competitiveness and then a price point at which the Council would need to decide which option even the market tend to price or it may well be that you've got one in costed in house service and that that might be the direction for the future day for so these market politicians tend to be in cycles, but we will produce costed options for for Cabinet to consider, and that's great to hear. Thank you
can I just pick up on the, I think what you call it, the crocodile graph.
I mean, we've always known that these contracts were coming up Radio in 2027.
we know the direction of travel in terms of what.
other councils are having to pay for waste contractors, now park maintenance, leisure, running leisure centres, and they've all moved in a very unpleasant direction for two or three years now.
what options are to?
2, to make a dramatic saving in.
in in in in expenditure, so that we can actually cover those those those contracts.
the third first thing is your specification, what you're going out to market with, so there are options around waste in terms of frequency.
and also about what it is, you're, you're collecting that those options around who you procure with at the moment we just procured with one council, there may be economies of scale by expanding that contract, it's all about understanding how the market operates, what service levels the public and councillors are willing to accept.
and that all gets pricey, so it's a package of options to to come forward for for consideration, Lee I'm thinking less about less about that specific contract and more about the Council's overall financial performance I mean for for 10 years we were looking at shared services with other councils on, you know for an awful lot of are for an awful lot about routine services.
I just wondered how how far this can actually go or whether there's an option to?
to look at to look at some of our costs as a as a means of.
sharing them out completely and to try and achieve the level of service that we're providing.
without yeah.
making savings in other significant ways and building on the SE shared services option it is it is it reasonable reading, realistic to have a?
shared, shared chief executive shared finance functions I mean, does this happen in in in in other Councils, and one is this, you know, are those sorts of options that in any way feasible.
so any anything is possible where you're delivering the service required, so we've had extension.
share services, so every single service where it is sensible to share, we we have done so, and we've even pushed the boundaries a bit further in services that we brought back in because it wasn't working in planning support buildings are example, so we already have a large portfolio of shared services.
other councils have looked further, share management, changed their chief executive, and this Council could do so, but there are also examples where those decisions have not worked and had been needed to both be brought back in, but what's important when we set our budget estimates is the rigour with which the head of service the finance department, the portfolios go through those costs. So if I can give you one example, temporary accommodation costs are rising significantly. My counterparts across Kent are reporting 800,000 a million pounds of additional costs of meeting temporary accommodation. You won't see that line that being increased our revenue budget,
why, because this Council took the decision to acquire doubting house and therefore it manages its temporary accommodation costs in a different way, it has put a lid on those that those those rising costs, so there are a number of because.
using financial acumen and being ahead of the market, though there are ways to look at what your costs are rising, understand those cost drivers and doing things differently, and that's that's the challenge of our job ready and the portholes to make sure that we don't just cut increasing budgets by inflation, we look at what the cost drivers are explore benchmarking ALMO relative solutions that others have tried and bring those to the table to see whether they are they are viable for this Council.
thank you.
muck
just a really quick question in connection with contrast reserves I mean, is there a scope to go in the other direction here, rather than actually having larger contracts, things like parks, recreation, breaking down to smaller attenders where you have actually a BBC to have smaller companies as she mentioned that tender and contract itself at a new cost announced from the middle management costs so raw because one ways economies of scale the other way is actually to deliver something which is the service based on the local people providing that,
you are absolutely right as part of the procurement planning is to look at the market and understand what is the optimum package in terms of economies of scale, there was a movement towards larger and larger companies and then you get a movement back towards actually you lose some of that that local knowledge, you lose that responsiveness, so it is important that procurement consideration looks at or how the market is functioning or not, and whether there may be,
economies of scale, actually that can be derived by a number of small companies working together, all options will come forward as part of that procurement consideration.
well, I think.
Chris Lee, thank you very much, thank you very much for very clear exposure of what's happening.
what might happen, thank you,
it is.
item 8 is our work programme.
there are a couple of issues I wanted to mention and one is the
audit and governance committee.
the paper here.
yes, the audit and governance committee thought that the overview and scrutiny committee would be well-placed to look at.
consultation, I think, in the sort of questions that are ask is of the public in consultations.
and
that?
that is a question I'm putting to you.
do you think that this is the sort of thing that we might have a task and finish group to look at?
how we go about consultation.
the sort of questions that are asked and yeah, any advice that we can, then we can give to the Council.
views, please put them, I do think that's something we should look at, I have some personal concerns about the overview reports that we are provided with and our access to the raw data from which they were derived, and whether there is a mismatch between the two which I would like to explore.
David
yes, actually following up from what, Polly from Councillor Cary there.
it is obviously at the overview and scrutiny committee members who have to have more power with a small p over the data that is available, so I would actually concur with that that possibly we would have should it be required better access to,
reports.
does anyone feel this is something we should not get involved with?
in which case, I think I'll say to the audit and governance committee, will we will do that?
and I will ask for a nomination through Caroline for who would like to sit on a tough task and finish group to to to look at that issue.
the other issue that we've got, we've got a task and finish group which we hope we'd have on the agenda Mark you're finalising a report, and I take it that it'll be last which is finally snuffed yeah a couple of actually questions have got to ask the officers as well taking them back on that. Thank you, and can we set a target our next meeting for that? Yes, I think we catch up not OK thanks Mark
finally.
we have this, we have the finance director and finance portfolio here today.
who do we want to have at our next meeting?
can I make a suggestion that the Forward Plan?
now includes the I think they're calling it the strategic plan, I I think that's the new five-year plan for the council and that will be emerging in the course of in the course of the new year and I thought that if we asked Ben to come and talk about the strategic plan at our next meeting that would be quite useful quite a useful thing to do.
we are happy with that.
yeah, yeah so yeah, we we think about it, that's right, isn't it Karen had been in 29th March.
January Year
that seems to be when it's emerging through Cabinet and the Cabinet advisory boards, and I think we could have quite an interesting discussion on that.
right well, that's our work programme for all happy with that we will put that into place.
8 Work Programme
9 Urgent Business
next item is urgent business, I can confirm there's no urgent business and the final item of the date of our next meeting.
which is Monday, the 29th of January.
10 Date of the next meeting
thank you, I hope we all thought the session with SE Water was useful and I thought that the session with the finance director useful to so I'm sorry, it's been a longer meeting than what would normally have but hope you've all thought it worthwhile.
thank you.
- 1 Apologies for Absence, opens in new tab
- 2 Declarations of Interest & Party Whip, opens in new tab
- 3 Notification of Persons Registered to Speak, opens in new tab
- Minutes , 25/09/2023 Overview and Scrutiny Committee, opens in new tab
- 5 Items Called-In, opens in new tab
- Work Programme November 2023, opens in new tab
- 10 Urgent Business, opens in new tab
- 11 Date of the Next Meeting, opens in new tab