Agenda and draft minutes

To receive any apologies for absence

There were apologies for absence from Mr Poppy, Independent Person, and Councillor Williamson.

To approve as a correct record the minutes of the meeting held on 27 November 2024.

Mr Sharman noted that his and Mr Poppy’s names were missing from the attendance list on the first page of the minutes. It was confirmed that they should be added as both were present at the meeting on 27 November.

It was moved by Councillor Willcocks and seconded by Councillor Deering, that the Minutes of the meeting of the Committee held on 27 November 2024 (as amended) be confirmed as a correct record and signed by the Chair. After being put to the meeting and a vote taken, the motion was declared CARRIED. It was noted that Councillor Nicholls abstained from the vote. 

RESOLVED – that the Minutes of the Committee meeting held on 27 November 2024 (as amended) be confirmed as a correct record and signed by the Chair.

The Chair thanked Members for attending the recent Joint Meeting of the Scrutiny Committees which was held on 29 January 2025. He said that this meeting was useful and that he hoped it would be repeated next year to scrutinise the budget.

To receive any declarations of interest.

There were no declarations of interest.

Report to follow

This report was not included on the agenda, and so was not considered by the Committee. The Interim Head of Strategic Finance said that information pertaining to Quarter 2 of 2024/25 could be seen in Appendix A of Agenda Item 6.

The Executive Member for Financial Sustainability introduced the report which gave an overview of the expected outturn at the year-end based on current expectations. He said that a revenue forecast at the end of Quarter 2 was provided in Appendix A, but had been superseded by the forecast at the end of Quarter 3, which was in Appendix B.

The Executive Member for Financial Sustainability said that the overall overspend was now expected to be £955,000. He said that this was made up of an overspend on services of just over £2 million, plus savings in interest payments and investment income of £561,000, and a reduction in reserves contributions of £486,000 making up most of the balance.

The Executive Member for Financial Sustainability referred Members to Appendix C of the report which detailed a list of key variances in the cost of services. He said that BEAM made up almost 75% of the total differences.

The Executive Member for Financial Sustainability said that the change in accounting policy (to allow the capitalisation of interest during the build phase of major construction projects) had resulted in a reduction of interest payments in the expenditure account of £340,000. He said that updates to the capital spending programme were provided in Appendix D, with key changes being the reprofiling into 25/26 of the reduced budget for Refuse and Recycling vehicles and containers, which was now anticipated in Quarter 1 of 2025/26.

The Executive Member for Financial Sustainability referred to paragraph 2.7 of the report which outlined the work being done to tackle outstanding debt. He said that debt aged over 180 days stood at £2.27 million, with a few key accounts responsible for at least half of this.

The Executive Member for Financial Sustainability said that the mitigations being considered for the overspend were discussed at paragraphs 2.8 – 2.11 of the report.

The Chair thanked the Executive Member for Financial Sustainability for the report.

Councillor Deering referred to the council’s debt, saying that this was significant and old, and asked what was being done to address this, and how procedures would be improved to avoid debt occurring in the first place.

The Executive Member for Financial Sustainability said that the detail of the debt was being looked at. He said that key accounts had been identified for around half of the total debt, but there were delicate issues surrounding some of these. He said that a dedicated team was now in place to deal with debt, but this was an ongoing project which would take time and would prioritise large debts first. He added that transformation, in the shape of automated payments, would help. 

The Interim Head of Strategic Finance said that direct debit collection would be used for the garden waste charge, and that this could be extended to other services to enable payments upfront or when due, and flag problems more quickly. 

Councillor Deering asked how long the debt team had been in place and when it was constituted.

The  ...  view the full minutes text for item 338.

The Interim Head of Strategic Finance introduced the report which was the mid-year treasury management review and prudential indicators or 2024/25. He highlighted the key issues of the report, noting that the council’s total borrowing on 30 September 2024 was £46.5 million, with investments of £19 million, giving net borrowing of £27.5 million – almost all of which was now short term.

The Executive Member for Financial Sustainability said that the report also showed the reduction in property investments as the Loftbury fund was gradually being wound up, and the council’s second fund, Hermes was likely to see changes in the next few months. The latter giving the possibility for the council to get the majority of its investment back.

The Chair thanked the Executive Member for Financial Sustainability for the report.

Mr Sharman said that he found the report difficult to understand and suggested that the inclusion of an executive summary which gave key points at its outset would be helpful.

The Interim Head of Strategic Finance said that the inclusion of key points would be considered going forward. 

It was moved by Councillor Nicholls and seconded by Councillor Hart, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) Members examine and comment on the Mid-Year Treasury Management Review and Prudential Indicators for 2024/25.

The Executive Member for Financial Sustainability introduced the report which detailed the council’s new procurement strategy. He said that East Herts previously followed the National Procurement Strategy for Local Government 2022, and that the new strategy was underpinned by the Procurement Act 2023, which came into force in February 2025.

The Executive Member for Financial Sustainability said that the new act reformed the existing procurement rules, focussing on cutting red tape, supporting innovation, and improving transparency, which meant that everyone would have access to public procurement data. He said that the new act also simplified the process of working with the public sector, supporting more small businesses to bid for contracts, and aligning with the council’s LEAF priorities.

The Chair thanked the Executive Member for Financial Sustainability for the report.

Councillor Nicholls said that it was really good to see the new policies alignment with the council’s LEAF corporate strategy, especially with regards to transparency as this would help to dispel talk of ‘brown envelopes’. She asked if the new policy would involve more checks and balances, thus creating a longer procurement process. 

The Interim Head of Strategic Finance said that the new process would be different, not longer, with the open market allowing smaller companies to bid.

Councillor Willcocks referred to residents’ comments regarding the waste centre in Bishop’s Stortford and said it would be good for the council to give a better explanation of how money was spent.

The Executive Member for Financial Sustainability said that better/more council communication could be considered, to include social media. He said that the ground markings at the Bishop’s Stortford waste centre were however the responsibility of Hertfordshire County Council. 

Councillor Nicholls asked for further clarity on the strategy’s formula, and how it would offset each of the five principal elements.

The Interim Head of Strategic Finance said that different ratings would be applied, and so the lowest price did not have to be the only factor when bidding.  

Councillor Deering asked if the primary reason for the new policy was the new act which came into force in 2025.

The Interim Head of Strategic Finance said this was the exact reason, and this was also good for the council’s policy.

Mr Sharman said that cost versus other criteria was linked to good process, and the capability for officers to be able to assess and judge. He said that the contract process could be difficult, which made it unattractive to small companies.

The Interim Head of Strategic Finance said that the council had a good shared service procurement team, who were appropriately resourced and professional in their approach. 

It was moved by Councillor Nicholls and seconded by Councillor Hart, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) the draft Corporate Procurement Strategy 2025-2030 and actions within it as set out in Appendix A be reviewed and the Executive advised of any significant issues.

The Executive Member for Financial Sustainability introduced the report which detailed a proposed change to the accounting policy, which would  allow the capitalisation of interest during construction.

The Executive Member for Financial Sustainability referred to paragraph 2.4 of the report which detailed the amount of interest that could be capitalised from each of the councils’ major construction projects, this totalled £1.358 million. He said of this, £340,000 could be applied to the current year, with a further £1.017 million being capitalised in 2023/24, which if appropriate could be moved into the Interest Equalisation Reserve.

The Executive Member for Financial Sustainability said that minimum revenue provision charges would increase slightly in future years to consider the increase in asset value.

The Chair thanked the Executive Member for Financial Sustainability for the report.

Councillor Nicholls asked if there were any drawbacks to the policy change.

The Interim Head of Strategic Finance said that there were no drawbacks. He said that the minimum revenue provision would increase over the life of the asset.

It was moved by Councillor Willcocks and seconded by Councillor Nicholls, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) the Committee reviews the inclusion of a new Accounting Policy that allows the capitalisation of interest during construction: and

B) that the effect that this change in Accounting Policy will have on the associated values of relevant assets and the interest charged in 2023/24 to the CIES are noted.

The Head of the Shared Anti-Fraud Service introduced the report which was an update to the Anti-Fraud Plan for the current year. He referred to page 2 of the report and said that in collaboration with the former Head of Strategic Finance and Property the planned review of policies had been pushed into next year. He also drew Members attention to several key points:

·            35 urgent fraud alerts had been issued for the period April 2024 – December 2024.

·            4 detailed reports had been issued for the above period, relating to multiple employment fraud, ID fraud, ‘deliberate’ overpayments – linked to money laundering, and MS account takeovers. 

·            Training had been planned and delivered (as detailed in the report).

·            77 referrals had been received for the above period, to include allegations of housing, Council Tax and Blue Badge fraud.

·            9 cases had been closed – from those closed and those still under investigation £317,000 in fraud loss was reported, with a further £89,000 of fraud loss prevented. 2 of these cases pertained to long period Housing Benefit fraud and involved work with the Department for Work and Pensions (DWP). Prosecutions for these cases was being considered.

·            National Fraud Initiative (NFI) – data matched and under review.

·            Fraud Hub – slower process due to limited resources, but urgent matters prioritised.

·            Council Tax Review – fully funded by Hertfordshire County Council

·            Empty Homes Review – enabling recovered properties to be re-let to those on the council’s housing register.

·            Key Performance Indicators (KPIs) – all 6 on target, except for 3A - due to a lack of reporting function on the SAFS case management system.

The Chair thanked the Head of the Shared Anti-Fraud Service for his report.

The Executive Member for Financial Sustainability asked what the recovery rate for fraud was.

The Head of the Shared Anti-Fraud Service said that in relation to Housing Benefit, 40% was clawed back immediately via subsidy. He said that unfortunately recovery would generally be from individuals who did not have much money. He added that East Herts’ collection rate for Council Tax was excellent. 

The Chair asked if the use of artificial intelligence (AI) in fraud was widespread.

The Head of the Shared Anti-Fraud Service said that this was seen in tenancy fraud, and although the council did not have its own housing stock, detection of this type of fraud did free up stock for its housing register. He said that AI was being developed with the Shared IT Service, to verify who a person was at the front end of services, which would cascade down and divert to SAFS if a possible fraud was detected. 

RESOLVED – that (A) the progress by officers and the Shared Anti-Fraud Service (SAFS) to deliver the Anti-Fraud Plan for the Council be noted. 

The Head of the Shared Anti-Fraud Service introduced the report which set out the Anti-Fraud Plan for 2025/26, establishing a plan for resources. He said that the risk of fraud was significant for local authorities, and it was important to be aware of how fraud was changing.  He added that the plan was based on best practice, including guidance from the Local Government Association (LGA) and The Chartered Institute of Public Finance (CIPFA).

The Head of the Shared Anti-Fraud Service said that the plan had been developed over several years of working with East Herts, with an increase in fees of 4% agreed by the board on which the former Head of Strategic Finance and Property sat (and which the Interim Head of Strategic Finance would now attend). He said that the amount of service days would rise from 267 to 300 following several SAFS apprenticeships coming to end, which made the 4% fee increase good value for money.  

The Head of the Shared Anti-Fraud Service said that as discussed in the previous agenda item, KPI 3A would be tweaked. He however gave assurance to Members that triage on reports of fraud ensured high profile management.

The Chair thanked the Head of the Shared Anti-Fraud Service for the report.

It was moved by Councillor Deering and seconded by Councillor Willcocks, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) the Anti-Fraud Plan 2025/26 be reviewed and approved. 

The Interim Head of Strategic Finance introduced the report, which updated the Committee’s work programme for the coming year based on current known events.

The Interim Head of Strategic Finance said that the council’s previous auditors (EY LLP) were expected at the next meeting of the Committee, with their reports covering both 2021/22 and 2022/23. He said that there was an assumption that the accounts would be available by the end of June 2025, with a normal cycle of reporting to then return going forward.

The Chair thanked the Interim Head of Strategic Finance for the report.

Councillor Deering questioned EY attending the next meeting of the Committee, as they had been unhelpful during their previous appearance.

The Interim Head of Strategic Finance said that it was hoped that EY would talk Members through their reports. He said that EY also intended on issuing the council with a statutory notice, for which they would give an explanation and answer Members questions.

Councillor Nicholls noted the gap between the meeting of the Committee in May 2025 and September 2025, and asked if this was too long, with the number of items on each meeting’s agenda in mind.

The Interim Head of Strategic Finance said that this could be looked at, pending availability, but it was hoped that matters would become more manageable once the audit cycle had caught up.

Mr Sharman thanked the Interim Head of Strategic Finance for his work, and said that a catch up would be good, but was dependent on the auditor. He said that the work programme looked better for 2026.  

It was moved by Councillor Deering and seconded by Councillor Nicholls, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) the work programme as set out in the report be approved; and

(B) that any training requirements be specified.

To consider such other business as, in the opinion of the Chairman of the meeting, is of sufficient urgency to warrant consideration and is not likely to involve the disclosure of exempt information.

There were no urgent items.