Policy And Resources Committee - 07/01/2019

At a MEETING of the POLICY AND RESOURCES COMMITTEE held at Dundee on 7th January, 2019.

Present:-

BAILIES

COUNCILLORS

Councillor John ALEXANDER, Convener, in the Chair.

The minute of meeting of this Committee of 10th December, 2018 was held as read.

Unless marked thus * all items stand delegated.

I DECLARATION OF INTEREST

Councillor Marra declared a non-financial interest in Article III by virtue of his employment with Dundee University.

II MINUTE OF PENSION SUB-COMMITTEE AND PENSION BOARD OF 3RD SEPTEMBER, 2018

The minute of meeting of the above Sub-Committee and Board, a copy of which is appended hereto, was submitted for information and record purposes.

III TAY CITIES DEAL UPDATE

There was submitted Report No 16-2019 by the Executive Director of City Development providing an update on the Heads of Terms for the Tay Cities Deal and noting the governance arrangements for the management of the Tay Cities Deal.

The Committee:-

(i) noted and welcomed the 300 million package of new resources for the Tay Cities Deal; and

(ii) noted the governance arrangements for the Tay Cities Deal.

IV AWARD OF CONTRACT FOR THE SUPPLY OF COMMUNITY EQUIPMENT FOR THE DUNDEE AND ANGUSEQUIPMENT LOAN SERVICE

There was submitted Report No 7-2019 by the Executive Director of Corporate Services seeking approval for the award of a Framework Agreement for the supply of equipment to the Dundee and Angus Equipment Loan Service.

The Committee:-

(i) approved the Equipment Framework Agreement to the suppliers named at paragraph 4.2.5 of the report; and

(ii) approved the award of a four year Framework Agreement consisting of two years, with the option of a further 1 + 1 years.

V DUNDEE FAIRNESS COMMISSION AND FAIRNESS ACTION PLAN

The Committee acceded to a request for a deputation to address the Committee relative to this item. After the deputation had stated their case and answered questions from members of the Committee they were thanked for their attendance and withdrew.

There was submitted Report No 17-2019 by the Chief Executive presenting the recommendations and follow up arrangements for Dundee Fairness Commission and the review of the Dundee Fairness Action Plan.

The Committee:-

(i) endorsed the recommendations of the Dundee Fairness Commission 2018 as appended to the report;

(ii) approved the establishment of a further Dundee Fairness Commission (DFC) and agreed to the development of a proposal for a Fairness Leadership Panel that would bring together members, chief officers and community representatives before the end of 2019;

(iii) agreed to the appointment of two elected members to the forthcoming Dundee Fairness Commission; and

(iv) instructed the Chief Executive's Service to produce a revised Dundee Partnership Fairness Action Plan.

VI LOCAL GOVERNANCE REVIEW

There was submitted Report No 15-2019 by the Chief Executive advising members of a Review of Local Governance and seeking agreement on the Council's response.

The Committee:-

(i) noted that the Scottish Government and COSLA were jointly consulting as part of a Review of Local Governance; and

(ii) agreed the Council's response to the consultation as set out in Appendix 1 of the report.

VII BREXIT UPDATE

There was submitted Report No 13-2019 by the Chief Executive providing information on developments on the Brexit process and outlining work being done to prepare for the implications thereof.

The Committee:-

(i) noted developments in the Brexit process; and

(ii) noted the work being done to prepare for the implications thereof.

VIII OUR PEOPLE STRATEGY UPDATE REPORT: STRATEGY IN ACTION 2019

On a reference to Article IV of the minute of meeting of this Committee of 7th December, 2015, there was submitted Report No 27-2019 by the Executive Director of Corporate Services informing elected members on the progress of the City Council's Our People Strategy - Strategy in Action 2019.

The Committee:-

(i) noted the progress of Our People Strategy outlined in the update report, Strategy in Action 2019, appended to the report; and

(ii) agreed to build on the success of Our People Strategy 2015 with the creation and implementation of a new Strategic Workforce Plan in 2019.

IX CAPITAL STRATEGY 2019/2020

There was submitted Report No 19-2019 by the Executive Director of Corporate Services presenting the Council's first annual Capital Strategy.

The Committee approved the Capital Strategy appended to the report.

X CAPITAL EXPENDITURE MONITORING 2018/2019

There was submitted Report No 2-2019 by the Executive Director of Corporate Services appraising elected members of the latest position regarding the Council's Capital Plan 2019/2024.

The Committee noted the contents of the report.

XI REVENUE MONITORING 2018/2019

There was submitted Report No 1-2019 by the Executive Director of Corporate Services providing an analysis of the 2018/2019 projected revenue outturn as at 30th November, 2018 monitored against the adjusted 2018/2019 revenue budget.

The Committee:-

(i) noted that the overall General Fund 2018/2019 projected revenue outturn as at 30th November, 2018 was projecting a breakeven position against the adjusted 2018/2019 Revenue Budget. The projection was unchanged from the position reported at 30th September, 2018;

(ii) noted that the Housing Revenue Account as at 30th November, 2018 was projecting a breakeven position against the adjusted HRA 2018/2019 Revenue Budget. The projection was unchanged from the position reported on 30th September, 2018;

(iii) agreed that the Council Management Team would take every reasonable action to ensure that the 2018/2019 revenue expenditure was below or in line with the adjusted Revenue Budget; and

(iv) instructed the Executive Director of Corporate Services, in conjunction with the Council Management Team, to continue to monitor the Council's 2018/2019 projected revenue outturn.

XII TREASURY MANAGEMENT ACTIVITY 2018/2019 (MID YEAR REVIEW)

There was submitted Report No 14-2019 by the Executive Director of Corporate Services reviewing the Treasury Management activities for the period 1st April to 30th September, 2018.

The Committee noted the information contained in the report.

The Committee agreed that the undernoted item of business be considered as a matter of urgency in terms of Standing Order No 17(b) in view of the timescales involved.

XIII LOCAL GOVERNMENT FINANCE SETTLEMENT 2019/2020 AND FINANCIAL IMPLICATIONS FOR THE CITYCOUNCIL

There was submitted Report No 18-2019 advising members of the announcement made by the Cabinet Secretary for Finance, Economy and Fair Work on 12th December, 2018 in respect of the Local Government Finance Settlement 2019/2020. The report identified the likely implications for the City Council and set out the current position on the Council's Provisional 2019/2022 Revenue Budget and 2019/2024 Capital Plan. The Council's medium-term financial strategy was also set out.

The Committee:-

(i) noted the contents of the report;

(ii) noted the Council's Revenue and Capital Funding Allocations for 2019/2020 as announced by the Cabinet Secretary for Finance, Economy and Fair Work on 12th December, 2018, and the associated implications;

(iii) noted the package of measures that made up the settlement to be provided to local government as advised by the Cabinet Secretary for Finance, Economy and Fair Work in a letter to COSLA dated 12th December, 2018;

(iv) noted the current position on the Council's Provisional 2019/2020 Revenue Budget and 2019/2024 Capital Plan;

(v) noted that the financial information included in the report would be updated as necessary and included in the Council Tax proposals to be submitted to the Special Policy and Resources Committee on 21st February, 2019;

(vi) agreed the procedures to be followed for setting the 2019/2020 Revenue Budget and Council Tax level, as set out in Section 11 and Appendix 1 of the report;

(vii) noted the medium-term financial strategy as set out in Section 8 of the report; and

(viii) noted that paragraph 6.1 of the report highlighted a real terms cut in non-ringfenced funding, called on the Leader of the Council to lead a cross-party lobby of the Scottish Government, Scottish Parliament and the UK Government for a better settlement, which protected jobs and services, for Dundee City Council in particular and local government in general.

John ALEXANDER, Convener.

At a JOINT MEETING of the PENSION SUB-COMMITTEE of the POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held at Dundee on 3rd September, 2018.

APPENDIX I

Present:-

PENSION SUB-COMMITTEE

BAILIES

COUNCILLORS

PENSION BOARD

Bailie Willie SAWERS, Convener in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II MINUTE OF PREVIOUS MEETING

The minute of meeting of the Pension Sub-Committee and the Pension Board of 4th June, 2018 was submitted and approved.

III TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 271-2018 by the Executive Director of Corporate Services updating the Risk Register for Tayside Pension Fund.

The Sub-Committee and Board agreed to approve the updated Quarterly Risk Register for Tayside Pension Fund and to note the following changes to the risk profile from the previous report:-

(i) Risk 12 - Failure to comply with LGPS and other regulations which could result in wrong payments given or estimates provided

"Consolidated LGPS (Scotland) Regulations 2018 were issued in June without transitional regulations. To enable service continuity and to prevent retiring members not being without payment, pension estimates and payments are being calculated on the assumption that transitional regulations would be issued as expected from the letter of comfort issued by the Scottish Public Pensions Agency (SPPA) in July."

(ii) Risk 17 - Failure to communicate properly with stakeholders resulting in members not aware of their rights

"Due to the lack of clarity due to the omission of transitional regulations, we have been unable to communicate with stakeholders effectively in relation to the new regulations, particularly in relation to the ability for members between the age of 55 and 60 years being able to take their pension benefits (albeit reduced) without their employer's consent. Scottish LGPS funds were preparing a joint statement which would be submitted to the National Scheme Advisory Board requesting assistance in gaining immediate action from SPPA to issue transitional regulations as soon as possible."

IV PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 272-2018 by the Executive Director of Corporate Services providing information on the recent quarters operational performance in relation to Pension Administration.

The Sub-Committee and Board agreed to note the content of the report.

V TAYSIDE PENSION FUND ACCOUNTS 2017/2018

(a) TAYSIDE PENSION FUNDS 2017/2018 - ACCOUNTS AND AUDIT

There was submitted Report No 273-2018 by the Executive Director of Corporate Services on the outcome of the external audit of Tayside Pension Funds for the year to 31st March, 2018.

The Sub-Committee and Board agreed to note the content of External Auditor's Annual Audit Report, in particular that Audit Scotland anticipated issuing an unqualified audit opinion.

(b) DRAFT AUDITED STATEMENT OF ACCOUNTS 2017/2018

The above report was submitted and noted. (Report No 274-2018).

(c) EXTERNAL AUDITOR'S ANNUAL REPORT

The above report was submitted and noted. (Report No 275-2018).

(d) TAYSIDE PENSION FUND AUDIT OF 2017/2018 ANNUAL ACCOUNTS

The above report was submitted and noted. (Report No 289-2018).

VI APPOINTMENT OF INVESTMENT CONSULTANT

There was submitted Report No 276-2018 by the Executive Director of Corporate Services informing of the appointment of KPMG as Investment Consultants for Tayside Pension Fund for a period of three years with a further two year extension based on satisfactory performance. This contract commenced on 2nd July, 2018.

The Sub-Committee and Board agreed to note the content of the report.

VII THE LOCAL GOVERNMENT PENSION SCHEME (SCOTLAND) REGULATIONS 2018

The Financial Services and Investment Manager reported that the Consolidated LPGS (Scotland) Regulations 2018 had been issued in June, 2018 without transitional regulations. Clarity as to the transitional regulations was awaited and any issues arising therefrom would be included in future Pension Administration Performance Reports.

The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the press and public be excluded from the meeting for the undernoted items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

VIII TAYSIDE PENSION FUND

(a) PERFORMANCE SUMMARIES

There was submitted Report No 277-2018 by the Executive Director of Corporate Services reviewing the investment performance of the Funds Investment Managers for the quarter to 31st March, 2018. The report compared investment performance of the Fund with the Funds specific benchmarks which consisted of various stock and security market indices.

The Sub-Committee and Board agreed to note the information contained therein with regard to the performance of the Tayside Main Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 264-2018 by the Executive Director of Corporate Services reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 30th June, 2018.

The report summarised the transactions of each Fund Manager and showed the market values of the Main Fund.

The Sub-Committee and Board agreed to note the information contained therein with regard to the activities of the Tayside Pension Fund and its Fund Managers.

(c) QUARTERLY FUNDING REPORT

There was submitted Report No 279-2018 by the Executive Director of Corporate Services reviewing the current funding level of the Fund as assessed by the Fund Actuary.

The Sub-Committee and Board agreed to note the report.

IX PRESENTATIONS

(a) FIDELITY

David Barber and Jeremy Podger of Fidelity gave a short presentation outlining the transition from individual regional equity funds to a single global equity portfolio in March, 2018. Members noted the benefits of the single global equity fund and improvements to fund performance since the transition.

After they had completed their presentation and answered questions from members of the Sub‑Committee and Board, they were thanked for their attendance and withdrew.

(b) KPMG

Dave Lyon and David O'Hara from KPMG gave a short presentation, introducing themselves to the Sub-Committee and Board, and outlining their previous experience in dealing with the Tayside Pension Fund. Thereafter, they outlined proposals to revisit the investment strategy to enhance performance of the portfolio.

After they had completed their presentation and answered questions from members of the Sub‑Committee and Board, they were thanked for their attendance and withdrew.

Willie SAWERS, Convener.