Issue - meetings

The report provides an update to the Joint Committee of the financial position of Orbis

4.1       The Committee considered a report by Nigel Manvell (Deputy Chief Finance Officer Brighton & Hove City Council), Kevin Foster (Chief Operating Officer East Sussex County Council), Leigh Whitehouse (Executive Director of Resources Surrey County Council) which highlighted:

• The Quarter 1 position, previously reported to the three partner authorities, which shows a £965k overspend, in part due to pausing of planned restructures during the pandemic
• Past performance in over-delivery of savings, with 2020/21 being year 2 of a three year plan
• Targeting of support to IT and Agile programmes, to enable staff to work flexibly during the pandemic, and supporting suppliers and their payments, and ensuring payroll continues to operate
• Some targets had been set at an ambitious level, based on traded services and process automation, neither of which have been achievable during the pandemic 
• Surrey and East Sussex have major financial system replacement programmes under way, which are a large factor in delivery of future efficiencies and savings

4.2       The Committee asked questions about:

• Whether Business Operations savings targets are achievable
• Spend on Agency staff, and the patterns across the authorities
• Traded services
• Increased expenditure on staff during the pandemic, and whether that could be set against Government Covid-19 related funds
• Staffing cost figures shown in table 2

4.3       Officers responded

• Business Services is developing proposals to meet its savings target, with stricter control on recruitment and strategic oversight of vacancies. Further savings may come with service implications: any options and proposals will be developed together with the potential impacts, and be presented to the Committee before any determination by each partner authority.  The new finance systems are due to come online in 2022/23 and 2023/24.   
• Spending on agency staff is being managed down, with a reduction on spend to cover vacancies.  The remaining area of spend is mainly project-based to cover increased demand, much of it IT related with niche and specialist staff.  Monthly figures are provided to the officer team to monitor and challenge the position, and Orbis is not an outlier.
• Focus has been on serving the three partner authorities rather than expanding traded services, with the re-procurement of the finance systems as a factor, as it is an intensive process.  There would be a risk of focus on the traded service impacting on delivery of the change programme.  The correct pricing structure, to ensure the balance of risk, would need to be assessed.  There is also a risk under-performing and impacting on the quality of the service provided and exposure to claims. The service is looking to a future growth agenda with longer term gains rather than short term activity.
• The Government’s Covid-19 funding did not match the expenditure, but the Finance Teams are overseeing that transactions are coded correctly to ensure that all claims are accurate.
• Staffing costs show an impact of the pandemic, with increased agency spend during the quarter which will not occur in future quarters.  The spend profile needs analysis and can be affected by vacancy rates, and finance managers meet regularly  ...  view the full minutes text for item 4

To provide an update to the Joint Committee on the financial position of Orbis

6.1       The Committee considered a report by the Nigel Manvell (Deputy Chief Finance Officer Brighton & Hove City Council), Kevin Foster (Chief Operating Officer East Sussex County Council), Leigh Whitehouse (Executive Director of Resources Surrey County Council)  together with a presentation by officers which highlighted:

• Achievement of the 2019/20 budget targets, including some challenging savings targets of £3.1m
• Finance and Property services had overspends, but these have been disaggregated from the partnership, with temporary resources put in place to support disaggregation process
• Underspends in IT&D and Procurement, which will hopefully be carried forward, linked to open positions in the service structure
• Covid-19 will impact the modelling of the savings target going forward
• Challenges in relation to savings for 2020/21, which will be reported through the usual monitoring channels of each authority

6.2       Members asked questions about:

• Total expenditure and operating budget figures provided in the report

6.3       Officers responded:

• There are significant levels of traded services, treated as income, which reduces the net total expenditure.  The figures will be clarified for the next meeting. 

6.4       The Committee RESOLVED to note the report.

To provide an update to the Joint Committee on the financial position of Orbis at the end of February 2019.

David Kuenssberg (Executive Director of Finance and Resourcing, Brighton & Hove City Council) introduced the report to the committee.

Key points raised during the discussion:

The Committee discussed the relevant income streams and over spends. The Committee were informed that over spends often result from employing agency staff to fill gaps in service teams. Contract staff are more expensive as the salaries are more competitive. A general discussion on attracting staff ensued. The support of university students was discussed as a way of streaming new staff into council jobs. It was noted that apprenticeships already exist for local authorities and guiding university students into jobs would be a challenge as the ORBIS members have different polices. The Committee discussed the lack of younger members of staff and agreed this was challenging for all members of ORBIS. The Committee exchanged ideas and gave anecdotal evidence on how different approaches worked. It was noted that the council hierarchy was seen as off putting and considered old fashioned in relation to private companies approach to modern working patterns. It was noted that looking for the right mind-set as opposed to experience had achieved better results in certain areas.

Resolved: That the Committee dually noted the recommendations in the report.

To provide an update to the Joint Committee on the financial position of Orbis at the end of August 2018. 

Declarations of interest:

None

Witnesses:

Michael Coughlin, Director of Customer, Digital and Transformation, Surrey County Council

Kevin Foster, Chief Operating Officer, East Sussex County Council

David Kuenssberg, Executive Director of Finance and Resourcing, Brighton and Hove City Council

Louise Lawson, Senior Principal Accountant, Surrey County Council

Adrian Stockbridge – Head of Strategy, Performance & Change, Surrey County Council

Key points raised during the discussion:

1.         Clarity was sought on why the Full Year Variances for Services within the Orbis Partnership had been omitted from the report. Officers indicated that spending across service areas was difficult to predict several months prior to the end of the financial year due to a lack of clarity around potential areas of underspend and overspend. Members were, however, advised that there was the likelihood of an underspend of £100,000 within the Finance Team, a saving which would benefit all partners. Further information was requested on whether the savings forecast for Orbis in 2018/19 were achievable and the Committee was advised that there was uncertainty around some of the savings projected but that steps were being taken to mitigate the risks to delivering these.

2.         Discussions turned to the Orbis Joint Operating Budget for the financial year 2018/19, the Brighton and Hove City Council (BHCC) contribution to which had been increased by £0.2 million. Members were informed that this was a technical adjustment in BHCC’s financial contribution to Orbis as funding allocations had been moved from one area of the budget to another. This enabled the variance to be agreed through BHCC’s Targeted Budget Management process. Officers agreed to highlight variations in BHCC’s contribution to Orbis more clearly through financial reporting mechanisms in future.

3.         Further information was requested on the overspend within the Property Service. The Committee was advised that it may be necessary to recruit more staff into the Property Service to meet core objectives. Members heard that the Service was holding a number of vacancies and that a restructure would be undertaken in 2019 to determine posts that could be deleted.

4.         Clarity was sought on progress that had been made in implementing the recommendations made through the Internal Audit report. Members were advised that the audit had taken place immediately following BHCC’s inclusion in the partnership which meant that delivering against these recommendations was about continued integration. Specific reference was made to the work of the Finance Team which was working to automate more aspects of its financial reporting and the support that it provided to individual services with the partnership.

5.         The Committee was advised that the Property & Design Service within BHCC had resisted efforts to integrate with Orbis which had not been as proactive as other BHCC services in terms of integration with Orbis which had created some challenges around implementing Orbis budget processes. Efforts were being made to ensure that this service plays a bigger part in budget processes. BHCC would become part of the budget setting and management process from the 2019/2020 financial year and this would support  ...  view the full minutes text for item 15

To inform the Joint Committee of the 2017/18 Orbis Outturn and to seek approval of transfers to and from the Orbis operating budget.

3.1     Officers introduced the report which showed that there had been a net underspend of the budget driven by meeting efficiency targets and savings in staffing costs as the number of agency staff declined.

3.2     In response to Councillor Wealls, Officers stated that the £70,000 transfer reflected several items moving in and out of the operating budget as listed in the appendix.

3.3     In response to Councillor Standley, Officers stated that the additional savings from staff vacancies would be a one off saving as these posts would be filled in the next financial year bringing the budget back in line with targets. The posts had not be recruited to as they were part of teams going through restructuring, but it would not be viable for these posts to be deleted in the long run.

3.4     In response to Councillor Clack, Officers stated that they would be able to provide a written response to confirm the total spend on redundancy. Officers confirmed that redundancy payments had been higher than expected due to the volume of voluntary redundancies taken across the authorities.

3.5     RESOLVED:

          That the Committee noted:

1.       Orbis operating budget variance of -£2.5m at year end

2.       £1.5m spend on Orbis investment and redundancies

3.       Services achieved £5m efficiencies by year end

4.       Agency expenditure of £2m (4% of staffing)

          That the Committee agreed:

5.       £0.07m transfer to the Orbis operating budget

To provide an update to the Joint Committee on the financial position of Orbis at the end of November 2017.

The Committee considered the Budget Monitoring position for November 2017,  introduced by the Chief Operating Officer.

Witnesses:

Kevin Foster , Chief Operating Officer, East Sussex County Council

Louise Lawson, Senior Principal Accountant, East Sussex County Council 

David Kuenssberg, Executive Director of Finance and Resources, Brighton & Hove City Council 

Key points raised during the discussion:

1.    Officers set out the projected over-delivery of savings, together with the spend on agency staff and absence levels, as requested at a previous Committee meeting.

2.    Officers clarified that the budgets had been set two years ago with estimates of the technology input that would be required.  This work had been delivered within budget and so the declared underspends had been returned to the sovereign authorities to fund further change programmes.   

3.    Other savings had been achieved by using secondments to the programme teams (rather than recruitment) and using existing resources. 

4.    Members asked questions about the absence levels, and were informed that BHCC will be adopting First Care, using the learning from ESCC and the purchasing power of the Orbis partnership. 

RESOLVED:

Members noted the updated budget position.

This report provides an update to the Joint Committee on the financial position of Orbis at the end of August 2017.

Declarations of interest:

None

Witnesses:

Kevin Foster, Chief Operating Officer, East Sussex County Council

Sheila Little, Director of Finance for Orbis and Surrey County Council

David Kuenssberg, Executive Director of Finances and Resources, Brighton & Hove City Council.

Key points raised during the discussion:

1.           Officers highlighted that Brighton and Hove would be integrated into the budget from the start of the financial year 2018/19.

2.           Members noted that Orbis are forecasting an over-delivery of savings in 2017/18 with all areas rated at either green or amber and acknowledged that some early delivery of 2018/19 savings had also been achieved.

3.           Members questioned the nature of the £350,000 budget for external advice which was approved as part of the original Orbis business plan.  Officers explained that this was a budget provision for the services of EY as part of creating the Orbis integrated shared service and there was no commitment to spend the full provision.  This was not contractual, but typically bought quarterly and is priced based on need using the partnership framework.  EY consider working with Orbis to be of value to them and as such, charge a reduced rate for their services.

4.           Members sought clarity regarding the savings status of Business Operations in Table 3.  It was explained that £420,000 of savings were rated as on track, whilst £80,000 were at risk.

RESOLVED:

Members noted the Budget Monitoring Report.

To provide an update to the Orbis Joint Committee on the financial position of Orbis at the end of November 2016.

Declarations of interest:

None

Witnesses:

Kevin Foster, Chief Operating Officer, East Sussex County Council

Key points raised during the discussion:

1.           Officers introduced the report and highlighted that Orbis was on course to deliver £1.8 million in efficiency savings for 2017/18 early. Members noted that there were ongoing discussions in Orbis regarding officers accepting voluntary severance packages which would lead to future savings.

2.           A discussion was had regarding the level of investment that the partnership would make in technology in order to increase efficiency through the integration of self-service methods. Officers highlighted that work was still ongoing. 

3.           Members sought clarification on if the savings outlined in the report were proportional to the level of investment made by each local authority in the partnership. Officers confirmed that the savings in the report were proportional. 

4.           A discussion was had regarding redundancy costs in which it was highlighted that a separate finance provision would be used for East Sussex County Council’s (ESCC) redundancy costs. 

Actions/ further information to be provided:

None.

RESOLVED: That;

the Orbis Joint Committee notes the:

             i.               Services forecast -£1.8m budget variance at year end on the joint operating budget and £1.7m variance on the investment fund.

            ii.               Services forecast to achieve £3m efficiencies by year end.

To provide an update to the Joint Committee on the financial position of the Orbis Joint Operating Budget and the Orbis Investment Programme as at the end of July 2016.

The Committee considered the Orbis Budget Monitoring report, which was introduced by the Chief Property Officer.

Key points raised during the discussion:

1.          The first year (2016/17) of the Orbis Business Plan has an efficiency savings target of £1.8 million.  The Orbis Partnership is on track to achieve the 2016/17 efficiency savings target and is forecast to achieve an additional £0.5million of savings mainly due to holding some posts vacant. There is some uncertainty around achieving the efficiency savings targets in Business Operations for income & staffing and e-invoicing, but officers are comfortable that the Partnership will deliver the savings target for 2016/17.

2.           Members asked if holding vacancies, particularly in Property and Information Communication Technology (ICT) functions is likely to cause any slippage in the delivery of the efficiency targets. The Chief Property Officer responded that that holding posts vacant would not affect the delivery of the efficiency targets. Orbis is taking a structured approach to filling vacancies and is taking the opportunity to review roles to ensure recruitment only takes place where necessary.

3.           The Committee noted that current Orbis investment expenditure is mainly on redundancies and asked whether the remaining budget will be spent this year.  The Programme Director, People and Change explained that the redundancies were mainly voluntary redundancies and a voluntary severance scheme is being offered to staff across the Partnership. The Chief Operating Officer added there are some voluntary severance discussions in progress with staff, which are not reflected in the figures. There will be expenditure on ICT during this year and the investment expenditure budget is on target to be spent.

4.           The Committee commented that they were surprised by the slippage on the e–invoicing efficiency targets and asked for further information on this and the income & staffing risks. The Orbis Programme Manager responded that there had been a slight delay in incorporating suppliers into the e-invoicing system. The Chief Operating Officer added that the Partnership had not made e-invoicing from suppliers mandatory at first, but is now doing this after giving them notice to register on the e-invoicing system. The Committee asked for an update to be provided on these two issues.

Actions/ further information to be provided:

The Committee requested an update on the e-invoicing project including details of the income risks and possible delayed savings from the Head of Business Operations.

Resolved:

The Orbis Joint Committee:

             i.                         noted the services forecast -£0.5m budget variance at year end on the Joint Operating Budget and zero variance on the investment fund.

            ii.                         noted the services are forecast to achieve £1.8m efficiencies by year end.

To provide an update to the Joint Committee on the financial position of the Orbis Joint Operating Budget and the Orbis Investment Programme as at the end of May 2016.

Declarations of interests:

None

Witnesses:

Kevin Foster, Chief Operating Officer, East Sussex County Council

John Stebbings, Chief Property Officer, Surrey County Council

Key points raised during the discussion:

1.   Attention was drawn to Table 1 on page 42 of the agenda, the Committee indicated that there appeared to be an underspend in expenditure on staffing which appeared to result in a significant saving to Orbis. The Chief Operating Officer advised Members that there was a discrepancy in when costs hit the ledger and that by the end of the year the amount of savings made through reduced expenditure on staff would not be as significant as that suggested in the report.

Actions/ further information to be provided:

None

RESOLVED:

The Orbis Joint Committee:

i.    note the forecast zero budget variance at year end on both the joint operating budget and investment fund; and

ii.   note that Orbis forecast to achieve £1.2m efficiencies by year end.