Category: Cabinet

Wirral Council writes off £11 million of bad debt by using £millions of financial reserves

How Wirral Council wrote off £11 million of bad debts by using £millions of financial reserves

Wirral Council writes off £11 million of bad debt by using £millions of financial reserves

Reading these two articles, Wirral Council social services in £27m ‘toxic debt’ shock (Wirral Globe) and Wirral council failed to collect £10m of debts (Daily Post) you may be a little confused about what the true financial situation is at Wirral Council.

I’ll deal first with the Wirral Globe article, the figure of £27 million for DASS (Department of Adult Social Services debt) seems to be incorrect. According to page 2 of the independent report and this table here, the figure for outstanding DASS debt was £24.7 million (not £27 million) on New Years Eve 2012 (the figure as of last month is £11.8 million).

This explains why the figures quoted in the article (14.8 million and “more than £10m” (which is £10.9 million) don’t add up to £27 million, but £25.7 million. There is also a discrepancy of a million pounds between this figure and the £24.7 million in the independent report as the figures for collectable debt (£14.8 million) and debt to be written off (£10.9 million) don’t add up to the figure given in the report (£24.7 million) but £25.7 million.

The independent report itself dated 15th March 2013 (ten days after the 2013/2014 Budget was agreed) states “The recent review concluded that only £14.8 million is collectable and recommended writing off £10.9 million of debt of which £4.8 million is already provided for in the financial accounts.” This reads to me that the 2013/14 Budget had a provision for writing off £4.8 million of debt which needs to be increased to £10.9 million (an increase of £6.1 million which would need to be found either from reserves and/or cuts to services).

However this report going to the same Cabinet meeting written by the Interim Director of Finance Peter Timmins states at 9.4 “There is a Bad Debt provision of £4.8m, against estimated bad debts of £10.9m. The further write-off of £6.1m was built into the 2013-14 budget, as part of the exceptional items that featured in the 2013-14 budget process.”

Now, seemingly they can’t both be right as they’re saying different things. How would a £10.9 million bad debt provision (which appeared in a report dated ten days after the Budget for 2013/2014 was agreed) be “built into the 2013-14 budget)? Of course it is possible that Wirral Council received earlier drafts of the report prior to March 5th hence why the report is entitled “Final report”.

So what figure was used for bad debt when this year’s budget was agreed?

This report to Budget Council entitled “Budget 2013/16 – Chief Officer Financial Statement” states at 7.3 in table 3 “Review of outstanding debts – potential write-off” “To be funded from reserves per the Revenue Monitoring report to Cabinet 24 January”.

This report, which was later revised does give a figure (both reports give the same figure) of £6.55 million of “unachieved income” in the Department of Adult Social Services. The report recommends using the £7.941 million in the “Debt Restructuring Fund” reserve to cover the shortfall in income. At the same meeting the Chief Executive estimates the bad debts to be £10 million, that their current provision for bad debts is £4 million, with the impact on the 2013/14 Budget as being £6 million. Interestingly he also states “Mr Sullivan had indicated that he would complete the investigation by mid February and his report would be available initially to the Cabinet and publicly shortly afterwards”. Mr. Sullivan’s final report is dated mid March and as to “his report would be available … publicly shortly afterwards”, a whole two months have passed between the date on his report and its publication in mid-May.

What next for demolished Proudman Oceanographic Laboratory site (Joseph Proudman Building) on Bidston Hill?

A story about the former Proudman Oceanographic Laboratory (Joseph Proudman Building) site on Bidston Hill, Wirral, England

What next for demolished Proudman Oceanographic Laboratory site (Joseph Proudman Building) on Bidston Hill?

                     

Demolished Proudman Oceanographic Laboratory, Bidston Hill

First, a quick history of what’s been happening about this site. Last year in June, Wirral Council’s Cabinet received a report recommending demolition. People had asked the Cabinet about the effect of the Unitary Development Plan change in 2004 on a decision to demolish it, so as nobody seemed to know whether this was still in effect, a decision on it was deferred to the meeting on the 9th July 2012.

The Cabinet meeting on the 9th July 2012 was in postponed to the 10th July 2012 and was told that the bit of the Unitary Development Plan relating to Proudman Oceanographic Laboratory had been deleted in 2007. However between June and July an application had been made to English Heritage for listed status. A decision was then deferred again to Cabinet’s meeting of the 6th September (in the hope that English Heritage would’ve decided on listed status by then).

It wasn’t on the Cabinet agenda of the 6th September or the next meeting of the 27th September. By October a decision had been reached by English Heritage not to accept the application for listed building status and on the 8th October 2012 the Cabinet Member for Corporate Resources, Cllr Adrian Jones gave consent to demolition (effective from the 16th October) for the Joseph Proudman Building. Since then it has been demolished by Hunter Demolition.

Wirral Council owns the site of the former Proudman Oceanographic Laboratory, but NERC (the Natural Environment Research Council) has a 99-year lease from 1973. Wirral Council receive £1,800 a year rent from NERC. However NERC have tried to sell their lease. Local residents are concerned that now the building has been demolished that there could a residential development on this site, especially as the Lighthouse Cottage and Bidston Observatory are now being used for this purpose.

In the evidence base (see page 112) for Wirral Council’s Strategic Housing Land Availability Assessment 2012 it is listed as a site (it lists it as Bidston Observatory but the coordinates are for the Joseph Proudman Building) with a capacity for thirty-eight dwellings. This document gives it an achievability score of 3 (which means development of the site could be achieved in the next five years). It states in that document “Car park and other building require demolition/conversion” (which has already happened).

Any decision on new housing on the site of the Joseph Proudman Building would be first need planning permission and being a major development would be decided by Wirral Council’s Planning Committee. A future request for planning permission would attract opposition from local residents wanting to keep Bidston Hill as it is, its impact on the existing listed buildings (the Lighthouse and the Observatory) would also need to be considered. Until that happens the future of the site is up to NERC and Wirral Council.

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Council (Wirral Council) Budget Meeting 5th March 2013

Council (Wirral Council) Budget meeting of the 5th March 2013

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The full Council meeting to decide the 2013/14 Budget was nothing if not predictable and the papers and reports for this meeting are here.

Two large petitions were submitted during the meeting, one was against closure of the Youth Centres, another of over 14,000 against closure of the Day Centres.

The Conservative Budget amendment was debated first and proposed saving the day centres and setting a 0% Council Tax rise which would’ve been achieved through savings (reducing amounts awarded to those taking redundancy, 5 days unpaid leave, “leaning Council bureaucracy” and reducing support to councillors.

Not unsurprisingly (despite Lib Dem support) the Conservative budget was defeated by Labour councillors.

The Lib Dem Budget went further and proposed saving a whole raft of services the day centres, youth centres, grants to voluntary groups, school crossing patrols, Birkenhead kennels and ruling out a charge for collection of garden waste. It also proposed keeping the Area Forums and reducing councillors to sixty. This would’ve been achieved through savings in agency workers, reductions in councillors allowances and senior management pay, capping the redundancy payouts, less glossy brochures, reduced audit fees and some other minor savings. This Budget also would’ve led to a 0% increase in Council Tax. The Lib Dem Budget was also rejected.

So the Budget that passed was the unamended Labour Cabinet’s budget recommendation of the 18th February 2013, this Budget will lead to an overall increase in 2% in Council Tax (any higher would trigger a referendum) and includes closure of one of the day centres, cancelling the Tranmere Rovers sponsorship, getting rid of Area Forums, a cut of £1.5 million to the budget for Childrens Centres/Surestart, a cut of £1 million to the Street cleaning budget, a cut of nearly £1 million to the Home Insulation scheme and various other cuts to Council services. For the full details of Labour’s budget you can read the papers on Wirral Council’s website.

Council Meeting (Wirral Council) (11th February 2013) Kate Wood made Honorary Alderman, Debates on Taxes and Spending

A report on the Council meetings (Wirral Council) of 11th February 2013 along with video footage of the latter. The first was an extraordinary meeting to confer the title of Honorary Alderman on Kate Wood. The second was a regular meeting with motions on local government funding, health, housing, elections, benefits, Area Forums, tax credits, payday loans, public sector contracts and Universal Credit.

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Above is the first 2 1/4 hours of the Wirral Councill meeting of 11th February 2013.

Unfortunately the day this finally uploaded, someone rang up my ISP pretending to be the bill payer (my wife) and cancelled the ADSL line (which took a week to set up with another provider).

Prior to the main meeting there was a short (well by Council standards fifteen minutes is short) Extraordinary Meeting to make Kate Wood an Honorary Alderman. As a slight legal footnote for the last two and a half years Wirral Council could also confer the title of Honorary Alderwomen as the last Labour government changed the legislation in 2010. The papers and minutes for that meeting can be found on Wirral Council’s website.

The main meeting that night was much longer.

The first controversial point (at least if you’re a Conservative councillor) was the recommendation from Cabinet for approval by Council that Cllr Steve Foulkes be the Deputy Mayor for 2013/14. However to avoid any long drawn out debate on the merits of Cllr Foulkes as Deputy Mayor, the matter was simply noted on the basis that it’ll be decided at the Annual Council meeting of the 13th May 2013.

As usual only three notices of motion were debated, the first being Labour’s entitled Unfair Cuts in Local Government Funding, along with a Lib Dem amendment.

The second notice was a Conservative motion entitled Council Tax Referendum along with a Labour amendment and Lib Dem amendment.

Around this point I ran out of battery as the meeting was by now two and a quarter hours long.

The last notice of motion debated was a Lib Dem motion entitled Council Finances along with a Labour amendment.

A few of the motions not debated were unanimously agreed (well unanimous except for the abstention of the Mayor) (Vascular Services Review (about moving vascular services from Arrowe Park to the Countess of Chester), “Health Homes” and the Case for Selective Licensing of the Private Rented Sector and Construction Industry Blacklists).

For the rest of the motions and objections there were splits in the vote among party political lines. The first was “Attack on Democracy in Wirral” – a Conservative motion against the move to four yearly elections from 2015/6, the second was “The Empty Rhetoric of Localism” – a Labour motion about Council Tax Benefit, Crisis Loans and Community Care Grants, the third a Conservative objection against abolishing Area Forums and calling for consultation, the fourth a Lib Dem objection to abolishing Area Forums calling for it to be referred to a group of councillors to make recommendations on, the fifth a Labour motion entitled “Cuts to Tax Credits” (as well as a Conservative amendment and Lib Dem amendment), the sixth a Labour motion on “Payday Loans” (as well as a Conservative amendment and Lib Dem amendment), the seventh a Lib Dem motion on “Tax Avoidance and Public Sector Contracts” (as well as a Labour amendment) and the eighth a Lib Dem motion on “Universal Credit” as well as a Labour amendment.

The meeting finished with a number of changes agreed to committee places, after the recent by elections and resignation.

Cabinet (Wirral Council) 8th February 2013: Trade Unions Agree to Cabinet’s Decision to Change Severance Scheme

Report on Cabinet meeting of the 7th February 2013 Part 1 with video. UNISON Wirral welcome agreement on severance scheme

Wirral Council: Trade Unions Agree to Labour Cabinet’s Decision to Change Severance Scheme

Wirral Council’s Cabinet decided to reject Chief Executive Graham Burgess’ advice that Wirral Council’s severance scheme should be reduced to the minimum required by law. Councillors opted instead for a multiplier of 1.8 (uncapped) compared to the previous scheme’s multiplier of 2.2 (reports for this agenda item).

A trade union representative gave councillors credit for not going for the statutory scheme. He said the enhanced scheme would help to bring forward volunteers for redundancy. Joe Taylor that had the Cabinet followed the advice to move to just fulfilling their legal requirements then they would’ve balloted their members for strike action.

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