Budget worries, York joins region, Crawley treasury move, Brentwood property push, Woking PFI, Southampton energy and outsourcing, LGPS costs
0Audit Commission concerned about council budgets
The Audit Commission has voiced worries about the ability of one in ten councils to deliver their 2013/14 budgets. The commission, which carried out a survey of auditors, said it was concerned about the risk of councils not making adequate savings, rising cost pressures, weaknesses in financial controls and uncertain prospects for income. The research said about two-thirds of councils are well placed to deliver their medium-term financial plans, but had concerns about the remainder. In aggregate, councils increased their reserves by £0.9 billion in 2012/13 (7%) – a smaller increase than in 2011/12.
York set to formally join Leeds city region authority
City of York Council is next week likely to endorse plans to join a new combined authority covering the Leeds city region. The new body will cover council areas in Bradford, Calderdale, Kirklees, Leeds and Wakefield, as well as York, and will control around £1.5 billion of spending on transport, infrastructure, economic development and regeneration over the next 10 years.
Crawley takes back control of investment management
Crawley Borough Council has taken the management of its treasury investments in-house, ending its relationship with asset management firm Investec. The move will save £48,000 a year in management costs, with the council not expecting to need to take on extra staff to look after the funds. A report to the council said: “Investments procured by the council’s external treasury management company have continued to underperform in the second quarter, primarily due to volatility in the gilt market.”
Brentwood to set up as a landlord
Brentwood District Council has agreed to progress plans to raise income by building homes for private sector rent. The council says the plan would involve borrowing £50 million in order to achieve a net return of £500,000 each year over and above capital repayments. The plan would set up a delivery vehicle to build the homes, which would charge full market rents. A full business plan will be presented to councillors in June next year.
PFI deal signed off in Woking
Woking Borough Council has signed a contract with a consortium between contractor Kier and Thames Valley Housing to deliver 224 affordable homes in the borough. The council received approval for £40.5 million of funding from government, which will be paid in monthly instalments to the council over the 25-year period of the contract. The council will then use this funding, plus a council contribution, to pay the consortium.
Southampton set to roll out energy delivery model
Southampton City Council has awarded a £30 million contract to outsourcing firm MITIE to carry out energy efficiency improvements to more than 2,000 council homes in the city. The partnership is one of the largest Green Deal contracts to be awarded, and will see the firm installing insulation, improved heating systems, new windows and other improvements. The partnership will form the basis of a unique delivery model to be rolled out to other Housing Authorities across the South of England, the council said.
Southampton renews Capita vows
Southampton City Council has extended its 10-year strategic partnership with Capita by a further five years, to September 2022. The extension will save £24 million for the council and generate £124 million of extra revenue for Capita, according to the parties. Capita delivers a range of services for the council under the contract including customer services, IT, procurement, post room and the administration of HR, payroll, revenues and benefits, occupational health, property and health and safety services.
Think tank calls for LGPS fund mergers
Reform of the Local Government Pension Scheme could save the taxpayer £860 million each year, according to a report released this week by think tank the Centre for Policy Studies. The report, by analyst Michael Johnson, says that all 101 existing funds in the scheme are underfunded, and says they are in a “death spiral”. The paper includes a cost comparison of the LGPS funds, which shows combined administration and investment costs per member ranging from £25.60 a year at the West Yorkshire Superannuation Fund to £359.70 a year at the City of London fund. The costs were not set out in the context of investment strategy or performance. The report calls for mergers between small funds and that all investment management should be brought in-house.
