Category: Wirral Council

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.

Annual Meeting (Part 1) (Wirral Council) 14th May 2013 Highlights of Mayor Gerry Ellis’ year

Annual Meeting (Part 1) (Wirral Council) 14th May 2013 Mayors Communications | The Mayor Gerry Ellis gave an update on the highlights of his year in office

Continued from Annual Meeting (Part 1) (Wirral Council) 14th May 2013 Mayors Communications, Mayor of Wirral Cllr Gerry Ellis “It’s been an amazing, exciting, unbelievable experience”.

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Highlights of Mayor Gerry Ellis’ year

Annual Meeting Part 1 (Wirral Council) 14th May 2013 Civic Hall Mayor Cllr Gerry Ellis arrives

The Mayor said he would tell people of some of the highlights of his Mayoral year. A few days after becoming Mayor he had been introduced to the Queen as she came off the Yellow Duckmarine in Liverpool. He said to her, “Did you enjoy your trip on the Duck?”, the Queen didn’t answer the question and it was later pointed out to him that it was a breach of etiquette to ask the Queen a question.

Another event he’d been to had been in Woodchurch when it was raining, so sheets had been used to stop them getting wet. Unfortunately one of the sheets had blown over sending water cascading down over the Mayor. The Mayor continued his speech and referred to a good relationship with other cultures, the work of the Wirral Multicultural Organisation and the monthly citizenship ceremonies.

Remembrance Sunday was the first time the Mayor had been to the “splendid” Remembrance Service in Birkenhead, as in previous years he’d attended the Remembrance Service held in West Kirby. The Cockleshell Heroes event “turned out to be one of the highlight’s of the Mayoral year” and the “best publicity Wirral had”.

He loved going to theatres and the Mayor was Honorary President of a couple of theatre groups. The Chrysanthemums Pantomime Society were particularly pleased that he was Mayor as he was a former member.

Annual Meeting (Part 1) (Wirral Council) 14th May 2013 Mayors Communications, Mayor of Wirral Cllr Gerry Ellis “It’s been an amazing, exciting, unbelievable experience”

Annual Meeting (Part 1) (Wirral Council) 14th May 2013 Mayors Communications | The Mayor thanked various people that had helped him during his year in office and gave an update on fundraising for the Mayor’s charities

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Annual Meeting (Part 1) 13th May 2013 (Wirral Council) Part 1

Mayor of Wirral Cllr Gerry Ellis “It’s been an amazing, exciting, unbelievable experience”

Annual Meeting Part 1 (Wirral Council) 14th May 2013 Civic Hall Mayor Cllr Gerry Ellis arrives

The Annual Meeting (Part 1) is the only Council meeting to be held in the Civic Hall. As you can see from the photo hundreds of people are invited not just to the public meeting itself, but to the social event held afterwards.

The Mayor Gerry Ellis entered along a red carpet preceded by the Mace-bearer in a scene that reminded me of Black Rod at the State Opening of Parliament. Once he got to the stage he welcomed people and gave a short speech. He referred to the year he had been Mayor as an “amazing, exciting and unbelievable experience” and that if he was to write a book about it he’d call it “Ellis in Wonderland”.

He thanked various people, Cllr Jeff Green and the senior Conservative councillors for choosing him and Cllr Phil Davies for seconding the motion. The Mayor also thanked Cllr Phil Davies for his support as Leader and went on to thank various Town Hall staff. He thanked Sue Carroll, Sonia Norman and his drivers and attendants specifically referring to Alan’s wit. The Mayor also thanked Shirley Hudspeth, Surjit Tour, Tony Hope (from the press office) and all the Town Hall desk staff (Peter, Tom, Phil, Nick, Hazel, Mike and Greg) who he remarked were “always friendly and helpful”.

He also thanked Carol Jackson for helping to run the Mayor’s charity fundraising and Cllr Phil Davies’ Secretary Barbara Turner. The Mayor also thanked Margaret McGee and a number of councillors including Cllr George Davies, Cllr Brian Kenny and Cllr Steve Williams. He also thanked Cllr Geoffrey Watt’s wife Ann for selling a quarter of the tickets to the Mayor’s Ball.

On the fundraising for the Mayor’s charities, they had passed £40,000, but there were still funds to come in. They had given a cheque for £10,000 to three charities, as well as cheques to thirty-five others ranging from £50 to £500. He said he was “very sorry not to help every charity” but that it “had been amazing to see the charity work that goes on, on the Wirral”.

The three charities that had received £10,000 were YMCA Wirral (for their work with the homeless), Wirral and West Cheshire Prostrate Cancer Appeal and the Wirral Scouts and Guides Association. He then went on to give a brief speech on his year as Mayor.

Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr Darren Dodd “this is what the people of Wirral have been asking for for a very long time”

Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr Darren Dodd “this is what the people of Wirral have been asking for for a very long time”

Continued from Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr John Hale “these proposals should be consigned to the dustbin where they belong”.

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Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr Darren Dodd “this is what the people of Wirral have been asking for for a very long time”

Cllr Darren Dodd was next to speak and told people he had been along to many meetings was surprised that some councillors hadn’t gone to one. He said he had been elected almost three years ago and ever since then councillors had been talking about change, he referred to several difficult reports received all calling for change. Cllr Dodd said they had voted unanimously for change on several occasions and that “this is what change looks like” [referring to the constitutional changes]. He said, “Let us not forget this is what normal Councils do, this is what normal looks like”.

Cllr Dodd said that the Tories had raised concerns about power being taken away from councillors, but he felt the new arrangements gave “more opportunity to raise issues of concern, not less”. He said, “It’s always been my view that of all the meetings I attend, full Council meetings are often pointless.” Cllr Dodd said it’s not because full Council doesn’t make important decisions, but that they nod through business as quickly as possible to get to the Notices of Motion.

He said the Notices of Motion are always on important things, but often carry little weight, at the end of the meeting “usually a lot of hot air has been expelled”, but very little action agreed. Cllr Dodd pointed out that out of fifteen to twenty motions, often only one or two are properly discussed and that the new arrangements would be “clearly a better system” and “this is what the people of Wirral have been asking for for a very long time”.

Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr John Hale “these proposals should be consigned to the dustbin where they belong”

Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr John Hale “these proposals should be consigned to the dustbin where they belong”

Continued from Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr Foulkes “it was the committee system that actually put in the policies that led to the overcharging within the Klonowski report”

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Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr John Hale “these proposals should be consigned to the dustbin where they belong”

Council meeting Extraordinary 30th April 2013 Revisions to the constitution Cllr John Hale

Cllr Hale thanked Cllr Tom Harney for his kind remarks. He referred to the Chief Executive’s report to Cabinet of the 18th April, page 46 (page 8 on the file that’s linked to) and quoted from 5.3 “The views of the Democracy Working Party which has met on a number of occasions have helped inform these proposals.”

He considered it to be misleading as it could be read that there was general support for the proposals, in fact a majority of the Democracy Working Party were opposed to the proposals. The Democracy Working Party had only met on five or six occasions for one and a half hours at a time, although it did overrun by ten minutes at its last meeting. Cllr Hale said that this was to review a constitution of one hundred and ninety-nine pages. He said, “I don’t believe this to be anything else except a cynical exercise carried out in order to claim full cross-party consideration and consultation when nothing could be further from the truth.”

Cllr Hale said the result would be to give greater power to Cabinet and the Chief Officers. Fourteen months ago over 70% of councillors voted for a return to the committee system. He said even if they assumed that the new councillors were against a return to the committee system that there would still be a majority in favour of it. Cllr Hale said that this had been the result of a secret ballot.

He said democracy was best served when all parties in proportion to their numbers were represented in the decision making process at all levels of the Council. Cllr Hale referred to the freedom that overview and scrutiny committees have and that no new powers were given to them, just their names were changed.

Cllr Hale said the coordinating committee would have ample opportunity to interfere with and constrain the overview and scrutiny committees. He felt the changes to the Council meeting procedures would reduce the time for opposition councillors whilst increasing the time for the majority party councillors. Cllr Hale said “any third world dictator would be proud” and that “these proposals should be consigned to the dustbin where they belong”.

Continued at Council (Extraordinary) (Wirral Council) 30th April 2013 | Revisions to the Constitution | Cllr Darren Dodd “this is what the people of Wirral have been asking for for a very long time”.