Tag: Chief Executive

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.

Interim Chief Executive (Wirral Council) Graham Burgess

Graham Burgess As regular readers of this blog will know the previous permanent Chief Executive of Wirral Council Jim Wilkie retired early on the 7th July 2012. Since then to great fanfare a Graham Burgess was appointed to the role of Interim Chief Executive on Monday evening 16th July 2012 (although technically until he signs an employment contract he’s just a member of the public).

Fine you may say, for once things are running “smoothly” at Wirral Council and they’re not spending around a year trying to recruit someone? Well not exactly, as the plan is that Graham Burgess won’t be stepping down as Chief Executive of Blackburn with Darwen Council and NHS Blackburn with Darwen Care Trust Plus for another three months (which takes us to October 2012 September 2012). He’ll be the fourth Chief Executive Wirral Council has had this calendar year. All these Chief Executives (as Wirral’s constitution reserves this power to them) have been appointed by Wirral Council councillors.

Employment and Appointments Committee 22/3/2012 Wirral Council

As it was a short meeting I’ve already uploaded it to Youtube. It’s in two parts, part 1 (the first twelve minutes) and part 2 (the last eight minutes), which are also below.

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The agenda and reports can be found on Wirral Council’s website except at the time of writing this, the AOB item entitled “Proposed Change to Senior Management Position”. It’s four pages which I’ve scanned in, Page 1, Page 2, Page 3 and Page 4.

The result of these changes will be that:-

(a) David Armstrong is appointed Acting Deputy Chief Executive,
(b) Surjit Tour becomes Deputy Monitoring Officer and stops being Scrutiny Officer (Head of Legal and Member Services) and
(c) Shirley Hudspeth, Democratic Services Manager stops being Democratic Services Manager and becomes Scrutiny Officer (Head of Legal and Member Services).

The Committee agreed to recommend (a) and (c) to Council and noted (b).

Items 5 (Chief Executives Office) and 7 (Department of Regeneration, Housing and Planning: Senior Management Structure) were deferred to a future meeting.

Employment & Appointments Committee – 27th January Part 15 – Chief Executive

Cllr Holbrook suggested they use North West Employers. The officer answered that was part of the subscription.

Cllr Green said he had written something down and read out the motion (which wasn’t circulated to the members of the public present).

His motion proposed a subcommittee in the proportion 2:2:1. It was agreed it was not appropriate to share a Chief Executive. The Head of Human Resources would consult with the subcommittee and it would be advertised at a salary of ~£130,000. The subcommittee’s duties would be advertising, job description, timetable/selection and a recommendation to Council. There would be no external consultants, but a local Chief Executive would be used as an external adviser.

Labour said they would agree to the motion if he removed the word local.

Cllr Bridson mentioned something else. She said a shared Chief Executive would’ve let to the furore over a shared MP. The officer said there was a robust performance management process. Cllr Mitchell seconded Cllr Green’s motion. It was agreed the makeup of the committee would be the Labour leader, Labour Deputy Leader, Conservative Leader and Conservative Deputy Leader and Lib Dem Leader.

Cllr Bridson confirmed that that was agreed unanimously. There was no item of non-exempt AOB. The motion to exclude the press and public from the remainder of the meeting was then passed and the press and public left.

The other items on the agenda considered in a closed session were allegations against employees, and early voluntary retirement/voluntary severance requests.

Employment & Appointments Committee – 27th January Part 13 – Chief Executive

Cllr Davies said he accepted that. He hoped the appointment would be a success. There have been examples elsewhere and he made an assurance that it would be a permanent appointment. He then went on do talk about performance management, delivery and details.

Cllr Green said there was consensus, but he would start from the top. A clear appraisal would be really good and would refresh minds and whether it was necessary or right. There could be tweaking but this is what we expect. Cllr Davies agreed and the discussion moved onto timescale.

Cllr Green said another issue was the use of external consultants to which he had given some though. He didn’t believe they were needed as such over the selection process. However they could provide support with longlisting as well as supporting Chris and the people on the subcommittee. Their expertise and professionalism would be welcome in weeding out dodgy applications from those with a track record of success.

Cllr Holbrook asked for the committee’s views on consultants. He said they didn’t need them with regard to search, but will need support as the application process progresses from longlisting to shortlisting. There would be a mix of internal and external applicants. There was a level of difficulty for staff in giving fair and impartial advice. His view was that HR staff could access independent, impartial support and advice to assist. If it was with consultants it was a better economy. Support was necessary and he said we must make sure we take the necessary steps.