Policy And Resources Committee - 22/04/2019

At a MEETING of the POLICY AND RESOURCES COMMITTEE held at Dundee on 22nd April, 2019.

Present:-

BAILIES

COUNCILLORS

Bailie Willie SAWERS, Depute Convener, in the Chair.

The minute of meeting of this Committee of 11th March, 2019 was held as read.

Unless marked thus * all items stand delegated.

I DECLARATIONS OF INTEREST

Depute Lord Provost Campbell, Bailie Roberts and Councillors Ross, McIrvine and Richardson declared non-financial interests in respect of Article III by virtue of being Council representatives on Tayside Contracts Joint Committee.

Councillor Rendall declared a non-financial interest in respect of Article IV by virtue of being a Trustee of Feisty Women.

Bailie Scott declared a non-financial interest in respect of Article IV by virtue of his employment with the Department of Work and Pensions and left the Chamber during consideration of this item.

Bailie Roberts and Councillors Dawson and Marra declared non-financial interests in respect of Articles XIII and XIV by virtue of being Council representatives on Leisure & Culture Dundee.

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

The minute of meeting of the Pension Sub-Committee and Pension Board of 3rd December, 2018, a copy of which is appended hereto, was submitted for information and record purposes (Appendix I).

III TAYSIDE CONTRACTS - FREEDOM OF INFORMATION

After considering Agenda Note AN22-2019 the Committee agreed to delegate to Tayside Contracts the answering of Freedom of Information requests, and further agreed to delegate to the Managing Director the role of determining internal Reviews of decisions, where appropriate, and to deal with any appeals to the Scottish Information Commissioner, all in respect of requests which were made in respect of Tayside Contracts' activities in the Dundee area.

IV FEISTY WOMEN

It was reported that this item had been placed on the agenda at the request of Councillor Rendall.

The Committee resolved to congratulate Feisty Women on becoming a Scottish Charity (SCO49016) which had been set up and headquartered in Dundee to advance equality and economic justice for women over the age of 60 and called once more for the UK Government to make fair transitional arrangements for women born in the 1950s who had unfairly borne the burden of the increase of the state pension age through lack of appropriate notification.

V WEST END OFF-STREET PARKING

This item was deferred.

VI LOCAL GOVERNMENT BENCHMARKING FRAMEWORK PERFORMANCE INDICATORS 2017/2018

There was submitted Report No 103-2019 by the Chief Executive advising elected members on the performance of Dundee City Council, including functions delegated to the Integration Joint Board, for the financial year 2017/2018, as defined by the performance indicators compiled by the Improvement Service for the Local Government Benchmark Framework and, in particular, in relation to the other peer local authorities in the Council's Family Group which had similar characteristics such as urban density and deprivation.

The Committee:-

(i) noted the results contained in the report;

(ii) remitted the report to the Scrutiny Committee for further consideration;

(iii) remitted the Council Management Team to review the selected areas for improvement detailed in paragraph 8 of the report; and

(iv) agreed to the publication of the Local Government Benchmarking Framework report on the Council's website.

VII IMPROVING SERVICES THROUGH LISTENING TO CUSTOMERS AND SERVICE USERS

There was submitted Report No 160-2019 by the Chief Executive highlighting improvements which had been made to Council services as a result of listening to the views of customers and service users over the past year and reporting on feedback from the range of customer contact channels.

The Committee:-

(i) noted the contents of the report, and agreed that similar reports should continue to be submitted annually;

(ii) agreed that highlights from the report, as detailed in Appendix 1, be published on the "We Listened, We Acted" page of the Council's website; and

(iii) remitted to services to maintain their efforts to listen to and respond to feedback from customers and to identify any further customers who should be consulted with a view to achieving service improvements.

VIII MAINSTREAMING EQUALITY AND EQUALITY OUTCOMES PROGRESS REPORT 2017/2019

There was submitted Report No 117-2019 by the Chief Executive seeking approval for the Mainstreaming Equality and Equality Outcomes Progress Report 2017/2019 in accordance with the Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012.

The Committee:-

(i) approved Dundee City Council's Mainstreaming Equality and Equality Outcomes Progress Report 2017/2019; and

(ii) approved the Children and Families Services (Education Authority) Mainstreaming Equality and Equality Outcomes Progress Report 2017/2019.

IX COMMUNICATION STRATEGY 2018/2021

There was submitted Report No 143-2019 by the Chief Executive providing an update on the Council's Communication Strategy 2018/2021 and associated Action Plan.

The Committee:-

(i) noted the progress being made on the Communication Strategy as detailed in Appendices 1 and 2 to the report; and

(ii) agreed the 2019/2020 Action Plan as appended to the report at Appendix 3.

X BREXIT UPDATE

There was submitted Report No 167-2019 by the Chief Executive providing an update on the Brexit process and outlining the work being done to prepare for the implications thereof.

The Committee:-

(i) noted developments on the Brexit process; and

(ii) noted the work being done to prepare the UK for exiting the European Union.

XI BUILDING STRONGER COMMUNITIES - FUNDING AND UPDATE

There was submitted Report No 169-2019 by the Chief Executive updating the Committee on how a range of funding streams were delivering improvements and enhancing the quality of life of our citizens.

The Committee:-

(i) agreed to the Community Regeneration Funding allocations for 2019/2020 as set out in paragraph 5.1.6 of the report;

(ii) noted the summary of funding streams that were delivering improvements and enhancing quality of life in communities across the city as detailed in paragraph 5; and

(iii) noted the highlights of some of the key projects completed or supported by these funding streams during 2018/2019 as detailed in the report and in Appendix 1 (Community Regeneration) and Appendix 2 (Dundee Decides) appended thereto.

XII DELIVERY OF DUNDEE PLAY FRAMEWORK

On a reference to Article III of the minute of meeting of this Committee of 31st October, 2016, there was submitted Joint Report No 175-2019 by the Executive Director of Children and Families Service and the Executive Director of Neighbourhood Services outlining progress to date on the delivery of the Dundee Play Framework and seeking approval on the priority actions for the next two years.

The Committee:-

(i) noted and approved the contents of the report;

(ii) noted the achievements and agreed to the priority actions for inclusion in the Play Delivery Plan to be taken forward by the Play Leadership Group as outlined in Appendix 2 and at paragraphs 5 and 6 of the report;

(iii) instructed the Executive Directors to report back on progress in one year;

(iv) agreed to sign the National Position Statement and Coalition on Outdoor Play and Learning as indicated in paragraph 4.7 of the report; and

(v) remitted to the agencies involved in the Play Leadership Group to take forward the priorities actions detailed in Appendix 2 of the report and create a Play Delivery Plan for 2019/2021.

XIII ACCREDITED MUSEUMS COLLECTIONS DEVELOPMENT POLICY

There was submitted Report No 105-2019 by the Director, Leisure & Culture seeking approval for the Collections Development Policy 2019/2024 for Dundee City's collections which were managed, maintained and developed by the Cultural Services Section of Leisure & Culture Dundee.

The Committee approved the policy appended to the report.

XIV MENZIESHILL COMMUNITY HUB MANAGEMENT ARRANGEMENTS

On a reference to Article VII of the minute of meeting of the City Development Committee of 12th March, 2018, there was submitted Joint Report No 115-2019 by the Executive Director of Neighbourhood Services and Director, Leisure & Culture seeking approval on the management and operational arrangements for the Menzieshill Community Hub which it was proposed would be jointly operated by Dundee City Council, Leisure & Culture Dundee and the Local Management Group.

The Committee noted and approved the proposed management arrangements as detailed in the report.

XV TREASURY POLICY STATEMENT

On a reference to Article XI of the minute of meeting of this Committee of 23rd April, 2018, there was submitted Report No 164-2019 by the Executive Director of Corporate Services revising the Council's Treasury Policy Statement which was intended to govern all borrowing and lending transactions carried out by the Council.

The Committee approved the policies and procedures laid out in the Treasury Policy Statement 2019/2020 appended to the report.

XVI TREASURY MANAGEMENT STRATEGY 2019/2020

On a reference to Article XI of the minute of meeting of this Committee of 23rd April, 2018, there was submitted Report No 165-2019 by the Executive Director of Corporate Services introducing the Council's Treasury Management Strategy Statement and Annual Investment Strategy for 2019/2020, the preparation of which was a requirement of the Council's Treasury Policy Statement and the CIPFA Code of Practice on Treasury Management.

The Committee:-

(i) noted that, in terms of the Treasury Policy Statement, the Executive Director of Corporate Services was obliged to present the annual Treasury Management Strategy at the start of each financial year; and

(ii) approved the strategy proposed by the Executive Director of Corporate Services for 2019/2020 as set out in the Treasury Management Strategy 2019/2020 appended to the report.

XVII CAPITAL EXPENDITURE MONITORING 2018/2019

There was submitted Report No 144-2019 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.

XVIII REVENUE MONITORING 2018/2019

There was submitted Report No 146-2019 by the Executive Director of Corporate Services providing elected members with an analysis of the 2018/2019 protected revenue outturn as at 28th February, 2019 monitored against the adjusted 2018/2019 Revenue Budget.

The Depute Convener, seconded by Councillor Dawson, moved that the Committee:-

(i) note that the overall General Fund 2018/2019 projected revenue outturn as at 28th February, 2019 is projecting an underspend of 533,000 against the adjusted 2018/2019 Revenue Budget. The latest projected outturn is a favourable variance compared to the breakeven position reported at 31st December, 2018;

(ii) note that the Housing Revenue Account as at 28th February, 2019 is projecting a breakeven position against the adjusted HRA 2018/2019 Revenue Budget. The projection is unchanged from the position reported at 31st December, 2018;

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

(iv) instruct 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.

As an amendment, Bailie Keenan, seconded by Councillor Richardson, moved that:-

The Committee agrees to ask the Executive Director of Corporate Services to review the Revenue Monitoring process to ensure that elected members are provided with the most accurate and up-to-date information possible.

Resolves that at the time of the Council Tax Setting Meeting in 2020 and in all future years all Motions and Amendments must contain an estimate of the savings which Leisure and Culture Dundee and Dundee City IJB will require to make as a result of the revenue settlement proposed to be given to them in the Motion or Amendment.

On a division, there voted for the motion - Bailie Sawers, Councillors Cordell, Dawson, Flynn, Hunter, Lynn, Rendall, Ross, Short and Smith, Bailie Roberts, Depute Lord Provost Campbell and Lord Provost Borthwick (13); and for the amendment - Councillors Cruickshank, McCready, McIrvine, Malone, Marra, Richardson, Hay and Duncan, and Bailies Keenan, Wright and Scott (11) - whereupon the motion was declared carried.

XIX COMMON GOOD FUND

There was submitted Report No 148-2019 by the Executive Director of Corporate Services providing details of the Council's Common Good Fund Revenue Budget for 2019/2020 and making recommendations for the disbursement of funds for the financial year.

The Committee:-

(i) approved the Common Good Fund 2019/2020 Revenue Budget as detailed in Appendix 1 of the report; and

(ii) noted that the 2019/2020 balance of 115,000 would be allocated during the year following an assessment through the Dundee Partnership process approved by the Executive Director of Corporate Services.

XX DESKTOP PRODUCTIVITY AND COLLABORATION TOOLS

There was submitted Report No 170-2019 by the Executive Director of Corporate Services recommending the purchase and supply of Microsoft Cloud Based Office 365, Email, Instant Messaging, Video, Chat, Document Collaboration facilities and mobile device management products to replace the existing Microsoft Office 2013, IBM Notes mail, personal file shares and mobile device management facilities.

The Committee:-

(i) remitted to the Executive Director of Corporate Services to procure and implement Microsoft Cloud Based Office 365 incorporating Email, Instant Messaging, Video, Chat, Document Collaboration, Enterprise Mobility Suite and Windows 10 licensing and functionality; and

(ii) remitted to the Executive Director of Corporate Services to procure supplies and services to facilitate the implementation and maximise the benefits realisation of the products.

The 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 6 and 9 of Part I of Schedule 7A of the Act.

XI DATA CENTRE UPGRADE

There was submitted Report No 172-2019 by the Executive Director of Corporate Services relative to the above.

The Committee approved the recommendations contained within the report.

XII DUNDEE RAIL STATION

There was submitted Report No 159-2019 by the Executive Director of City Development relative to the above.

The Committee approved the recommendations contained within the report.

Willie SAWERS, Depute 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 December, 2018.

APPENDIX I

Present:-

PENSION SUB-COMMITTEE

BAILIES

COUNCILLORS

PENSION BOARD

Councillor Gregor MURRAY, in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II MINUTE OF PREVIOUS MEETING

The minute of meeting of 3rd September, 2018 was submitted and approved.

III APPOINTMENT OF CHAIRPERSON OF PENSION BOARD

There was submitted Agenda Note AN81-2018 whereby it was reported that, in accordance with the Public Service Pensions Act 2013, the Sub-Committee were asked to note the appointment of Kenny Dick as Chair of the Pension Board for the period of 12 months.

The Sub-Committee noted this appointment and thanked the outgoing Chair, Arthur Nicoll for his service.

IV TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 383-2018 by the Executive Director of Corporate Services updating the Risk Register for Tayside Pension Fund.

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

- Risk 11 Active Manager Risk

This was the risk that an active investment manager failed to meet their required investment objective, resulting in financial loss to the fund in the short term. Although the fund was well diversified, the recent global market environment had resulted in sharp moves in individual portfolio valuations. As the outlook remained challenging, there was an increased active manager risk at this present time. Risk to the longer term investment performance remain unchanged.

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

- Risk 17 failure to communicate properly with stakeholders resulting in members not aware of their rights

Both of the above risks were raised as a result of the Consolidated LGPS (Scotland) Regulations 2018 being issued in June without transitional regulations. Although transitional regulations were still awaited, the letter of comfort issued by the Scottish Public Pensions Agency (SPPA) in July has assisted, and additional clarity has been given from the SPPA as to the key areas of potential discrepancies. Both staff and employers had now been provided with training and guidance to enable correct treatment in the meantime.

V PENSION ADMINISTRATION PERFORMANCE QUARTERLY UPDATE

There was submitted Report No 384-2018 by the Executive Director of Corporate Services providing information on the recent quarters performance in relation to Pension Administration.

The Sub-Committee and Board noted the content of the report.

VI TREASURY MANAGEMENT ACTIVITY 2018/2019 (MID-YEAR REVIEW)

There was submitted Report No 385-2018 by the Executive Director of Corporate Services reviewing Tayside Pension Funds Treasury Management activities for the period 1st April, 2018 to 30th September, 2018

The Sub-Committee and Board noted the content of the report.

VII PROPOSED TIMETABLE OF MEETINGS FOR 2019

There was submitted Report No 386-2018 by the Executive Director of Corporate Services proposing a suggested programme of meetings of the Pension Sub-Committee and Pension Board in 2019.

The Sub-Committee and Board examined the dates set out in the timetable in Appendix 1 and agreed the proposed programme of meetings.

VIII APPLICATION FOR ADMITTED BODY STATUS

There was submitted Report No 387-2018 by the Executive Director of Corporate Services seeking agreement of the Sub-Committee and Board to admission of a new body to be set up following a procurement exercise by the Scottish Fire & Rescue Service into the Local Government Pension Scheme as an Admission Body. Currently the name of the successful bidder under the procurement exercise was not known.

The Sub-Committee and Board agreed that from the date of contract, and for the period of their current contract (3 years plus option to extend for one further year), that the successful bidder be admitted to the Local Government Pension Scheme as an Admission Body and to make and enter into an appropriate admission agreement.

IX REVIEW OF THE STRUCTURE OF THE SCOTTISH LOCAL GOVERNMENT PENSION SCHEME - RESPONSE BYDUNDEE CITY COUNCIL AS ADMINISTERING AUTHORITY OF TAYSIDE PENSION FUND

There was submitted Report No 388-2018 by the Executive Director of Corporate Services providing a draft response to a review being carried out by the Pensions Institute on behalf of the Scottish Local Government Pension Scheme Advisory Board.

The Sub-Committee and Board agreed to:-

(i) note the contents of this report;

(ii) consider the response attached at Appendix A; and

(iii) approve the response for circulation to Tayside Pension Funds participating employees.

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 1 of Schedule 7(A) of the Act.

X TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 389-2018 by the Executive Director of Corporate Services relating to Performance Summaries for the quarter, 1,3, and 5 year time periods to 30th September, 2018 reviewing the investment performance of the Funds Investment Managers for the quarter to 30th September, 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 noted 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 366-2018 by the Executive Director of Corporate Services summarising investments and transactions during the period 1st July to 30th September, 2018 reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 30th September, 2018.

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

The Sub-Committee and Board noted 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 390-2018 by the Executive Director of Corporate Services which considered report by the Fund Actuary, reviewing the current funding level of the Fund.

The Sub-Committee and Board noted the report by the Fund Actuary.

XI PROPOSAL TO RESUME SECURITIES LENDING ACTIVITIES

There was submitted Report No 391-2018 by the Executive Director of Corporate Services presenting a proposal to the Sub-Committee and Board seeking to resume Securities Lending activities.

The Sub-Committee and Board agreed to:-

(i) note the content of the report; and

(ii) authorise the officers to resume Securities Lending within the pension portfolio for applicable asset classes.

XII TAYSIDE PENSION FUND BENCHMARK REVIEW

There was submitted Report No 392-2018 by the Executive Director of Corporate Services presenting a proposal to amend the main fund benchmark in view of changed underlying investment components and criteria.

The Sub-Committee and Board agreed to:-

(i) note the contents of the report; and

(ii) authorise the officers to implement the proposed benchmark.

XIII TAYSIDE PENSION FUND INVESTMENT STRATEGY REVIEW

There was submitted Report No 393-2018 by the Executive Director of Corporate Services considering a Fund Investment Strategy Review and its opinion and recommendations.

The Sub-Committee and Board agreed to:-

(i) note the report in Appendix 1;

(ii) agree to restructure a specific fund managers mandate to a market capitalisation weighted benchmark;

(iii) agree to the following further allocations within the opportunistic portfolio with the transition arrangements delegated to officers;

- 50% to diversified alternatives via a procurement exercise for an appropriate Diversified Alternatives Manager

- 25% allocation to opportunistic direct investment

- 25% allocation to opportunistic market investment

(iv) agree to delegate officers to:

- consider reconstructing the current property allocation in line with recommendation of introducing a direct property mandate, offering diversification and cost reduction

- consider increasing inflation and illiquid assets as appropriate.

(v) note that any of the above changes may occur over a longer timeframe (e.g. IV) due to the illiquidity of existing investments, and all investment changes would be fully considered prior to implementation regarding the timing and appropriateness to the changing market conditions. Furthermore, the Funds actuary would also be consulted on any proposed changes ahead of implementation to understand if changes will impact the underlying funding basis. The Sub-Committee and Board would be informed of these changes as they progressed.

XIV SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 394-2018 by the Executive Director of Corporate Services whereby reference was made to Article V of the Minute of Meeting of this Committee of 4th June, 2018 reviewing the progress by the Fund Managers regarding positive engagement in line with the Policy on Environmental, Social and Corporate Governance approved by the Sub-Committee

The Sub-Committee and Board noted the information contained within the report with regards to the activities of the Fund Managers during the six month period ended 30th September, 2018.

XV PRESENTATION

Jason Freeman, Max Ramirez and Jeremy Cave from GSAM gave a short presentation.

A summary of the performance of the Portfolio was given, noting the key performance contributors and detractors and comparison of this to benchmark figures. It was noted that the Portfolio had slightly over performed its benchmark in the last quarter, however volatility in the market due to Brexit was continuing to cause instability.

Thereafter the Sub-Committee and Board were given a brief outline of the strategy within the real estate element of the mandate, noting that investment aims were to generate risk adjusted returns by investing across the debt capital structure.

Future fund strategies were discussed, with members having an opportunity to ask questions of the Fund Managers.

Thereafter, the Chair thanked Jason, Max and Jeremy for their presentation.

Gregor MURRAY, Chair.