Decisions

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Decisions published

17/06/2019 - Delegated Decision - Publication of new Children's Safeguarding Arrangements in Somerset ref: 1249    For Consideration

Decision Maker: Director of Children's Services

Decision published: 26/07/2019

Effective from: 17/06/2019

Lead officer: Caroline Dowson


11/07/2019 - Improving Lives to Prevent Demand Fund - Slim My Waste Feed My Face ref: 1248    Recommendations Approved

Decision Maker: Public Health Director

Decision published: 25/07/2019

Effective from: 11/07/2019

Lead officer: Public Health Director


10/07/2019 - Recruitment of Director of Finance ref: 1281    Recommendations Approved

Decision Maker: Chief Executive

Decision published: 10/07/2019

Effective from: 10/07/2019


10/07/2019 - To accept ERDF grant funding for the Bruton Enterprise Centre and sign the subsequent terms and conditions of finding agreements ref: 1240    Recommendations Approved

Decision Maker: Cabinet Member for Economic Development, Planning and Community Infrastructure

Decision published: 10/07/2019

Effective from: 18/07/2019

Lead officer: Katriona Lovelock


20/06/2019 - Internal Audit Progress Report ref: 1228    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Committee considered this report that was introduced by the Assistant Director of SWAP who provided a very thorough of the work completed since the last meeting by the Internal Auditors in delivering the 2018/9 Audit Plan.

 

The summary of the audits finalised in the period were noted and a partial opinion had been awarded to 3. A brief overview was provided about each audit and it was agreed that a progress report about each of these partial opinions would be brought to a future meeting.

 

It was noted that delivery of the plan had progressed well in the last quarter and the backlog of audits had been addressed and all the timetabled work had been completed. It was noted that the 2019/20 plan was on track and Officers were confident it would remain on track.

 

There was a question about the audit on the Discovery contract management and it was noted that preparatory work had been undertaken and a meeting with the service arranged for September.

 

The Committee accepted the report.

 


20/06/2019 - Internal Audit Annual Opinion ref: 1227    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Committee considered and discussed this report that contained information about the internal auditors’ opinion on the adequacy and effectiveness of the Council’s internal control framework.   

 

It was noted that despite a limited number of control issues previously reported to the Committee, SWAP had given an opinion of ‘medium assurance’. This is the same conclusion in 2015/16 and the opinion had been incorporated in to the Annual Governance Statement.

 

Members noted that there were a higher number proportion of Partial assurance audits and it was explained that this was a result of the Council asking the Auditors to specifically target their work in areas that managers and/or auditors consider to be high risk, and where they have asked for help. It was accepted that on that basis is work in such areas would result in more partial audit findings and it would therefore not be a sensible use of SWAP time to audit areas where strong assurance had been reported.

 

In response to a question it was stated that there would be a continuation of the practice of the former Audit Committee in the last quadrennium of scheduling all Partial assurance audits to report back to the Committee at a future public meeting, and for the relevant manager/s to attend and report on the progress against the agreed Action Plan from those audits. Only one third of audits had a partial opinion. 18 follow up audits, 11 risk has reduced to a satisfactory level and come off the risk management system (JCAD).

  

There was a brief discussion of the report and Appendix 2 which detailed the progress of delivery of the work plan for 2018/19 with answers being provided for specific questions on various services areas and it was noted that some recommended actions that appeared to be outstanding for some time were due to programmed improvements and therefore did not mean that the required remedial work had not been addressed.

 

Members accepted the report and the Internal Audit Annual report and its conclusions.

 


20/06/2019 - Annual Governance Statement ref: 1225    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Committee considered this report and the attached draft Annual Governance Statement (AGS) for the County Council. It was explained that the Council was required to carry out, at least annually, a review of effectiveness of its governance framework. This review of internal controls provided additional assurance that the Statement of Accounts gave a true and fair view of the Council’s financial position at the reporting date and its financial performance during the year.

 

The Committee considered the report and it was explained by the Council’s Monitoring Officer that the process carried out had been in line with guidance published in 2016 by CIPFA / SOLACE in the new “Delivering Good Governance in Local Government”. This updated framework would now apply to all Annual Governance Statements prepared for the financial year 2018/19 onwards. It was therefore a highly prescriptive process and for example as part of the Healthy organisation report compliance had to be demonstrated against 91 separate behaviours. 

 

The Committee discussed the report and there was a brief discussion about the Council’s MTFP process and the work undertaken to improve financial resilience and the value for money. It was noted best practice suggests that the Annual Governance Statement should reflect the unique features and challenges of the County Council, and that it should also anticipate known and potential governance challenges ahead.

 

It was reported that this year’s Statement had again deliberately included Somerset examples of both good governance measures that have been implemented locally, and the significant challenges ahead. It also highlighted some of the areas, which if not controlled adequately, could present additional corporate risks in 2019/20.

 

Members noted that there were 3 reviews that would feed into the forward-looking actions for 2019/20 and there were listed as follows:

·         the follow up Corporate Peer Review feedback (review undertaken in April 2019 and formal feedback report pending);

·         the findings from the Centre for Public Scrutiny (CfPS) review (undertaken in April 2019 and formal feedback reports to Scrutiny Committees in early Autumn 2019), and;

·         the external auditors VFM Assessment (which will form part of the Councils Statement of Accounts audit to conclude by 31 July 2019).

 

There was a brief discussion of the report and Members thought the AGD was a very thorough and accessible document. It was noted the before publication of the final accounts for 2018/19, the Committee would have a final opportunity (at the July meeting) to review and confirm any final changes.  

 

The Committee approved the draft Annual Governance Statement prior to it being signed by the Leader of the Council and the Chief Executive, and members noted the Statement would form part of the 2018/19 Statement of Accounts.


20/06/2019 - Partial Audits and ORG0043 Risk Update ref: 1226    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Chair invited the Interim Director of Finance and the Corporate Risk Manager, Insurance Service, Finance to introduce this report that provided details of the latest position of each of the 11 identified strategic risks to the Council achieving its objectives.

 

There was a discussion of the report, particularly Appendix A the Strategic Risk Report, with the Risk Manager explaining the information in the register including the rating of the risks and the actions being taken to mitigate each. It was noted that regarding ORG0043 ‘maintain a sustainable budget’ both the description and mitigation had been updated but it remained the most critical risk to the Council.

 

Members heard that the Council’s Senior Leadership Team continued the work to over view and review the Council’s strategic risks including identifying, quantifying, and mitigating any risk that affected or was inherent in the Council’s business strategy, strategic objectives, and strategy execution.

 

Attention was directed to Appendix B which detailed the Internal Audits partial recommendations report and highlighted the progress of individual partial audits through to completion. Members noted there were several partial audits that had remained open after several years and after a discussion it was agreed the Interim Director would invite the relevant managers to attend future Committee meetings to provide assurance that progress was being made.

 

The report was accepted, and it was noted that good progress was being maintained.


20/06/2019 - Draft Annual Audit Committee Report for Council ref: 1224    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Chair invited the Interim Finance Director to introduce the report, which was to come before the July County Council meeting, noting that the Committee had met 6 times during the year.

 

The report gave general information about the committee and its governance role, with details about the work programme and training. It was noted that  the Committee’s report to Council would in future be submitted to the July Council meeting each year rather than the May meeting.

 

The report was accepted.


20/06/2019 - Debt Management Report ref: 1223    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Chair invited the Strategic Manager – Chief Accountant to introduce this report that provided progress on the recovery of outstanding debts (monies owed to the Council) and the current performance.

 

It was noted that services’ total outstanding debt reported on the Accounts Receivable system stood at £16.577mas at 30 April 2019. This compared with a figure of £11.355m at the same point last year, and represented a sizeable increase from £12.883m, which was the 31 December 2018 figure in the last report to the Committee. The percentage of debts over 90 days at 30 April 2019 was 13.87%, which represents an increase on 30 April 2018 which stood at 9.11%, and 12.00%, at 31 December 2018.

 

Members heard that SWAP had finalised its 2018/2019 Accounts Receivable audit in March 2019 and had again offered only Partial Assurance which had been disappointing given that the Income Code of Practice has been in force for over a year, and that Accounts Receivable staff have provided significant training to Debt Chasers, often tailored to specific services’ needs.

 

Despite this, the auditor does not consider any of the recommendations made to be highest priority. The main concern raised is that services and their Debt Chasers are still failing to deliver the actions required under the Income Code of Practice in a prompt and on-going manner. (The Accounts Receivable staff have previously focussed their training and guidance efforts to services that have been non-complaint).

 

There was a brief discussion and it was noted collection rates and amounts owed did fluctuate, and each report represented a snap shot in time and it was more appropriate to focus on treads and trajectory and this indicated that processes and performance was now more consistent. There was a question about if there was an alert system and it was explained there were several indicators that could assist Officers and there were a range of indicators that had helped to improve collections.

 

The report was accepted and it was noted that Officers were mindful of pursuing debts in an appropriate way and they would not seek to recover those debts not recoverable.


20/06/2019 - Value For Money Tracker ref: 1222    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Chair of the Committee invited the Interim Director of Finance to intorduce this report that provided details of the value for money tracker, first considered by the Committee at its meeting last September, following recommendations from the Council’s External Auditors on how to improve both budget monitoring and setting.

 

It was reported that following the 7 recommendations made by the External Auditor written responses from the Council had been provided regarding each, and several commitments had been made to improve the processes. Those responses had subsequently been loaded in JCAD, the Council’s recognised tracking and reporting mechanism for risk management, so that a format like the regular risk management reports was used.

 

Since the March 2019 meeting, progress continues to be made in a number of

areas as set out in the tracker. Members are asked to note in particular:

i) Robust control of the 2018/19 in-year budget resulted in a significant financial turnaround being reported to the Cabinet on 10 June 2019 in the revenue Budget Outturn report. The same rigorous process is being continued in budget monitoring of 2019/20 budgets;

ii) Although the most recent MTFP (2019-22) was only recently approved by Council (February 2019), planning for the next MTFP (2020-23) has begun to ensure the Council is proactive in setting future years budgets;

iii) The External Auditor will issue an up-dated Value For Money assessment by the end of July 2019 alongside the audit of the Councils Statement of Accounts. Once received, officers planned to produce an appropriately updated tracker to ensure relevant actions were taken, with a level of detail to be determined.

 

The Chair noted that the Committee was pleased to see the continued improving progress and Members confirmed they wishes to receive an update report at each meeting. 

 


20/06/2019 - External Audit Progress report ref: 1221    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Committee considered this report introduced by the External Auditors Engagement Lead which summarised the work of the External Auditors since the last report. An overview was provided of the Financial Statements Audit, the Value for Money work which included informed decision making, sustainable resource deployment and working with partners and other third parties.

 

Members noted the key finding of the interim work, and it was reported there had not been any findings of significance. In response to a question that External Auditor confirmed they had been able to access all the information required to enable them to complete their work towards this year’s Annual report. This had been helped with regular meetings with officers to ensure the audit process was a smooth and effective as possible and he noted that progress on current audit work had been satisfactory and that value for money assessments were almost completed.

 

There was a brief discussion about the planned CIPFA financial resilience index which had been designed to provide reassurance or prompt challenge to Councils depending on their rating/score. CIPFA had invited all interested parties to respond to questions in the consultation by the 24 August so that it could gauge the sector’s views and there had been much feedback and discussion. It was hoped that the final index would be able to provide a fair representation of each Council’s overall progress and situation, and not be a blunt tool that produced figures/outcomes in isolation.  

 

There was a brief discussion about the possible impacts of Brexit on the Council and the External Auditor confirmed although they had not completed any work specific to the Council they were mindful of the changes for all stakeholders and joint services, including the impact for EU nationals and settled status.   

 

There was a question about the fee regarding the Audit of the Pension Fund’s accounts and Members heard the External Auditors, were also the Auditors for the Brunel Partnership, in to which the Council’s Pensions Fund was now being pooled. It was noted that the Auditors were considering how best to get assurance of the investments and understand the changed arrangements in respect of the Fund’s custodian and to this effect the External Auditors had written to Brunel to seek assurance from them.

 

The Committee noted that the External Auditor confirmed they had been able to access all the information required to enable them to complete their work towards this year’s Annual report. This had been helped with regular meetings with officers to ensure the audit process was a smooth and effective as possible. The Committee accepted the report.


20/06/2019 - Internal Partial Audits Update ref: 1220    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Chair of the Committee invited the Director of HR and OD to provide an update on the recommendations that came out of the South West Audit Partnership (SWAP) report into the Role of the Somerset Manager, which was issued last October.

 

He reported that there has been good progress made on the recommendations and the work had been identified as a key part of the Council’s People Strategy and the Transforming the Council to Improve Lives programme. He had commissioned the Audit and although it had provided a ‘Partial’ audit opinion, it had identified several areas of good practice.

 

The report also identified one significant weakness, with a finding that significant numbers of managers had not completed important training that included: systems to identify and address non-completion of training were not effective; there was no corporate training policy (for managers); and mandatory training (for managers) was not clearly identified. It also suggested that a Management & Leadership Training Framework be implemented as this would help to address the weaknesses found.

 

Consideration of the report was aided with a PowerPoint presentation and in response to a question it was noted that the Learning Centre was now used to identify and report on mandatory training for managers. This included a recent programme on Financial Management Training, as well as courses such as Health & Safety and those reports were included as part of quarterly HR reporting to the Council’s Senior Leadership Team.

 

There was a discussion of the report and it was thought that commissioning the audit had been a good use of the SWAP team. There was a question about resources and the Committee heard that the improvements were linked to the Council’s transformation programme and had been adequately delivered through a couple of additional posts and coupled with technology this meant there were adequate resources to deliver required improvements.

 

On the topic of analysing the effectiveness of performance management and staff appraisals it was noted that there was now a about 90% completion rate for staff annual appraisals. The Director of HR and OD thought it important for all staff to be able to have regular 1-1 meetings with their line manager and this approach might suit more staff than an annual appraisal meeting.  

 

It was noted that the good overall progress had been made with regards to making staff more aware of changes and opportunities to participate and last year the Leader of Council and Chief Executive had seen over 800 staff at ‘roadshow’ events. Members heard that the Council’s Learning Centre held a variety of interesting and informative courses for staff and last year 17.5k modules had been completed.

 

There was a brief discussion about the SLT development programme and it was stated that the procurement process had resulted in 35 bids being shortlisted and it was envisaged after inviting a few to make presentations the contract would begin in September.

 

The report was accepted, and the Chair requested that the Council’s Corporate training policy be circulated. It was agreed to request an update report for the November meeting.

 

The Chair invited the Strategic Manager for Estates to introduce the report, on the recommendations made in the South West Audit Partnership (SWAP) report into Corporate Property’s maintenance of the school estate with particular reference to Schools Annual Condition Surveys issued last May.

 

It was noted that the objective of the Audit had been to ensure that ‘adequate arrangements were in place so that schools were safe and any closures due to structural and maintenance issues were minimised; and to ensure the risk of reputational damage to the Council was mitigated as far as possible. Controls within three areas of the Council had been reviewed: Corporate Property; Corporate Health and Safety; and Support Services for Education (SSE).

 

The Audit report noted that the annual condition survey was an important control in helping to ensure that school buildings were safe, with most surveys performed by SSE. Some weaknesses had been identified in the recording of those surveys, in some cases there had been no permanent record of the individual surveys being completed and they were unable to verify if they were being carried out on an annual basis.

 

Members heard that improvements had also been identified in the monitoring of the condition surveys undertaken by schools. A significant number of schools were found not to be making an annual return on health and safety items, despite the Corporate H&S team performing monitoring and follow up. In response to a question it was noted that good information was provided to schools by the Corporate H&S Unit and there had been a good take up of the Premises Manager training course.

 

There was a question about SSE and as it was a traded service Officers knew which schools were buying the service and those who were not and as SSE managing a wider portfolio it was able to gain more experience. Members sought reassurance regarding completion by schools of the annual statement and it was noted that processes were in place to ensure all schools reported an annual statement and each was well monitored.

 

It was noted that the recent changes regarding the designation of schools had created a variety of different school types, meaning less were now maintained by the Council. Recent work now ensured that the Council had a better understanding of the buildings it owned and the condition of those properties. The properties would have an annual inspection, and this helped to close the gap of omissions and possible errors and ensure all responsibilities were being met.

 

The Committee accepted the report and welcomed the progress made and noted the determination to ensure improvements were maintained.


20/06/2019 - Committee Future Workplan ref: 1229    Recommendations Approved

Decision Maker: Audit Committee

Made at meeting: 20/06/2019 - Audit Committee

Decision published: 09/07/2019

Effective from: 20/06/2019

Decision:

The Committee noted the report that listed future agenda items and reports for the next 2 meetings (25 July 2019 and 19 September 2019) of 2019. There were 7 and 5 reports respectively, scheduled for those meetings.

 

The Chief Accountant reminded Members there would be a training session on the Statement of for Members of the Committee, after the meeting.

 

The workplan was accepted.


08/07/2019 - Month 2 Revenue Budget Monitoring ref: 1239    Recommendations Approved

Decision Maker: Cabinet

Made at meeting: 08/07/2019 - Cabinet

Decision published: 09/07/2019

Effective from: 08/07/2019

Decision:

The Cabinet approved:

1. The contribution of £3.390m to the Corporate Priorities Reserve as detailed in section 1.4 and 2.6 of the report which further supports the council’s long term financial resilience.

2. The transfer of £0.498m of Corporate Contingency to support the pressure in Home to School Transport as detailed in section 2.2 of the report.

 

The Cabinet further noted the projected balanced outturn position for the 2019/20 financial year.

 


08/07/2019 - MTFP Approach 2020 to 2023 ref: 1238    Recommendations Approved

Decision Maker: Cabinet

Made at meeting: 08/07/2019 - Cabinet

Decision published: 09/07/2019

Effective from: 08/07/2019

Decision:

The Cabinet:

 

1. approved the high-level budget setting timetable and the approach for updating the Medium Term Financial Plan, incorporating the 2020/21 revenue budget proposals and the capital programme.

 

2. Noted the progress with a number of key strategies since the Full Council budget meeting in February 2019.

 

3. Noted the Council’s responses to technical consultations on the future of Local Government Funding submitted in Spring 2019.

 


08/07/2019 - Treasury Management Outturn ref: 1237    Recommendations Approved

Decision Maker: Cabinet

Made at meeting: 08/07/2019 - Cabinet

Decision published: 09/07/2019

Effective from: 08/07/2019

Decision:

The Cabinet approved this report and recommended that it is submitted to Full Council on 17th July 2019.

 


08/07/2019 - Somerset Safeguarding Children Partnership Arrangements ref: 1236    Recommendations Approved

Decision Maker: Cabinet

Made at meeting: 08/07/2019 - Cabinet

Decision published: 09/07/2019

Effective from: 08/07/2019

Decision:

The Cabinet approved and endorsed:

 

1. The proposal to implement new Safeguarding Partnership arrangements alongside changes to the Children’s Trust arrangements at Executive (Tier 1) and Partnership (Tier 2) level. 

2. The publication of the new safeguarding arrangements in June 2019 on behalf of the County Council, CCG and Avon and Somerset Constabulary by 29 June, as delegated to the Director of Children’s Services in March 2019.

3. Sign-off on the published arrangements by the County Council Chief Executive. 

4. That the Director of Children Services and the Head of Legal services undertake further discussions with local and regional Safeguarding Partners with a view to agreeing contractual arrangements whereby certain safeguarding duties and tasks will be undertaken by identified members of the regional Safeguarding Partnership.

 


04/07/2019 - SCC Response to the Environment Agency's Draft National Flood and Coastal Erosion Risk Management Strategy Consultation Document ref: 1235    Recommendations Approved

Decision Maker: Cabinet Member for Economic Development, Planning and Community Infrastructure

Decision published: 04/07/2019

Effective from: 10/07/2019

Lead officer: Daniel Martin


28/06/2019 - Creation of New Academies ref: 1234    Recommendations Approved

Decision Maker: Director of Commissioning and Lead Commissioner for Economic Community Infrastructure

Decision published: 28/06/2019

Effective from: 06/07/2019

Lead officer: Elizabeth Smith


07/06/2019 - LGPS Pooling of Investments ref: 1175    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report that provided an update on the Council’s work to adhere to the “Local Government Pension Scheme (LGPS): Investment Reform Criteria and Guidance” published in November 2015 which required the pooling of the Fund’s investment assets with other LGPS funds from April last year.

 

Members were reminded that for the purposes of pooling the Council had aligned itself with 9 other funds in South West England and was working with those funds to create an FCA regulated investment Company, Brunel Pension Partnership Ltd, (BPP).

 

It was reported that £507.8m of passive assets were transferred from management by the internal team to Brunel (sub-managed by LGIM) last July and £436.5m of active UK equity assets were transferred from management by Aberdeen Standard Investments to Brunel (sub-managed by Aberdeen Standard Investments, Baillie Gifford and Investec) last November.

 

It was also noted that the Private Markets team was now fully established and had taken some initial commitments from funds, but not Somerset at this stage. Preparations for the move of the Fund’s property assets from LaSalle to Brunel were also underway.

 

In response to a question it was stated that it was anticipated that the Brunel Pensions Partnership would allow the fund to make significant savings over time with the Pension Fund estimated to make savings of £27.8m in the period to 2036, after costs. A significant portion of the likely costs were front loaded, and it was anticipated that the Fund would breakeven in 2024.

 

The report and update were accepted.

 

 


07/06/2019 - 2020 Meeting Dates ref: 1188    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report and agreed the following dates for meetings in 2020. 

 

·         Friday 6 March 2020 at 10.00 am at County Hall, Taunton;

·         Friday 5 June 2020 at 10.00 am at County Hall, Taunton;

·         Thursday 17 September 2020 at 2 pm at County Hall, Taunton;

·         Friday 4 December 2020 at 10.00 am at County Hall, Taunton.

 

It was noted that meetings were currently being held in the Taunton Library meeting room, due to County Hall being refurbished, and the location of next year’s meetings would be confirmed in due course.


07/06/2019 - Exclusion of Press and Public ref: 1190    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee agreed to pass a resolution under Section 100A (4) of the Local Government Act, 1972 that the press and public be excluded from the remainder of the meeting on the basis that if they were present during the business to be transacted there would be a likelihood of disclosure to them of exempt information of the following description:

 

The amount of any expenditure proposed to be incurred by the authority under any particular contract for the acquisition of property or the supply of goods or services.

 

Also the Committee agreed that in all the circumstances of the case the public interest in maintaining the exemption outweighs the public interest in disclosing the information.


07/06/2019 - Policies and Statements ref: 1189    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Funds and Investments Manager advised Members that he had reviewed this topic and had agreed with the Chair of the Committee to defer this item to a future meeting.

 


07/06/2019 - Review of Independent Investment Advisor ref: 1191    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

Members considered this report regarding the continuing arrangements to employ an Independent Advisor (IA) for the Committee. It was reported that since her initial appointment in 2002 the IA had attended all Committee meetings, providing advice to the Committee as requested. The mid-term of each Council quadrennium had been selected to the review arrangements, and this was the third formal review of the contract.

 

An Internal Audit report on the Fund’s governance arrangements in 2009 recommended that the role of the independent advisor be reviewed by this committee at least once every 4 years. The contract is open ended and it was confirmed that 3 months’ notice would be required, on either side, to terminate the arrangement.

 

Members confirmed they were happy with the regular agenda item when the IA provided the Committee with a report and an overview of the financial situation in the United Kingdom and abroad and this had continued to be well received at each meeting.

 

It was suggested that Officers and the IA review the arrangement once the Committee’s interaction with the Brunel partnership had become clearer after assets had been transferred. It was also thought that it would be helpful if the IA be involved when considering future arrangements.

 

The Committee was agreed that the IA had fulfilled the role as requested and that the contract should be renewed.


07/06/2019 - Cash Management Strategy ref: 1187    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report that sought approval for the management of the Fund’s cash and the strategy and counter party strategy. It was noted that since 1 April 2010 the pension fund cash had been managed by the Council’s investments team on a completely segregated basis.

 

During the discussion Members considered the Cash Management Strategy attached as Appendix A to the report and the revised Counterparty criteria for the investment of sterling cash balances attached as Appendix B to the report.  

 

There was a discussion and the Committee agreed to:

Adopt the Cash Management Strategy;

Adopt the revised Counterparty strategy for the investment of sterling cash balances;

Re-appoint the in-house team to manage the cash balances on a segregated basis.

 


07/06/2019 - Resources Review, Budget Setting and Committee Objective Setting ref: 1186    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered a report that asked Members to consider the set objectives for the fund, the resources necessary to attain those objectives and a definition or measurement mechanism for success.

 

There was a discussion of the report and the Committee agreed the proposed budget and to maintain the absolute return target for the fund at 5.4%, and that the current resources were adequate.

 

The report was accepted.

 

 


07/06/2019 - Proposed Changes to LGPS Regulations ref: 1185    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report presented by the Funds and Investments Manager that provided an update on proposed new regulations at various stages of development or implementation within the Local Government Pension Scheme (LGPS).

 

A recent review by the Government Actuary Department (GAD) had determined that the costs of the LGPS were now below the target rate. To address this, the Scheme Advisory Board had proposed the following improvements to the Scheme, which had been implemented on 1 April 2019:

·         Removal of Tier 3 Ill Health;

·         Minimum Death-in-Service lump sum of £75,000 per member (not employment);

·         Enhanced Early Retirement factors for all active members from 1st April 2019 to be applied to all service;

·         Revised member contribution rates and bandings, which take account of varying tax relief:

a) a 2.75% contribution rate for salaries between £0 and £12,850;

b) an expansion of Band 2, which will now include salaries between £12,501 and £22,500, and a contribution rate reduction from 5.8% to 4.4%;

     c) an expansion of the 6.8% contribution band from £45,200 to £53,500.

 

Members attention turned to the 3 main areas highlighted in the report for consideration, those being: the period review of the cost of public sector pensions; the review of the Fair Deal provisions that govern the protections afforded to staff when they ‘TUPE’ between employers; and the review of the length of the actuarial cycle and related changes.

 

There was a discussion of the proposed changes and the Funds and Investments Manager answered questions and provided more information. It was noted that the actual cost of benefits against the projected cost of benefits had resulted in the scheme being ‘cheaper’ to employers than projected. It was also proposed to extend the period between actuarial valuations from every 3 years to 4 years, although there would be flexibility to do an interim valuation if required.

 

The Committee accepted the report, noting proposed changes to exit payments and Further Education establishments.


07/06/2019 - Voting and Engagement Report ref: 1184    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered a report which provided information about the voting and engagement activity of the Fund’s investment managers for the six-month period to 31 March 2019.

 

There was a brief discussion about PIRC advice and executive remuneration and remuneration voting details provided in the report were noted. It was noted that following the movement of the passive global equity portfolio last July and the UK active equity portfolio in November 2018, the Brunel partnership was now responsible for voting on a significant proportion of the Fund’s equity assets, and Brunel’s stewardship policy and voting records could be found on their website.

 

The Committee accepted the report and the Funds and Investments Manager noted that as more assets were pooled he would consider the most appropriate way of providing this information.


07/06/2019 - Review of Pension Fund Risk Register ref: 1183    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered and discussed the Pension Fund’s risk register. Members acknowledged the importance of considering the register at every meeting to allow them to review and monitor each risk and approve changes as necessary. 

 

It was noted that a more thorough review of the risk register had been suggested, with the Committee working with the Pension Board to review all the risks currently on the register and consider risks not currently covered and this had been added to the workplan for the end of 2019.

 

There was a brief discussion about PF2 and it was explained that an actuarial valuation was currently being undertaken and it was thought this might see a change from the last valuation when the Fund was 77% funded to a new valuation of around 90%.

 

The report was accepted.

 

 

 

 


07/06/2019 - Budget and Membership Statistics Update ref: 1182    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report about the position of the pension fund budget at 31 March 2019 and related matters. Members also considered the outturn position for the full year of the financial year to 31 March 2019 against budget, as set out in Appendix A to the report.

 

The Funds and Investments Manager highlighted: the changes in the membership statistics; and the Surplus of £50m in the full year accounts.

 

The Committee agreed to accept the report.


07/06/2019 - Business Plan Update ref: 1181    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report that provided Members with a business plan of topics to ensure the Committee met its responsibilities and considered all necessary issues, and a meeting work plan of proposed items of business.

 

It was noted that work on the LGPS pooling work within the Brunel Pension Partnership continued and would be highlighted in a separate report. Following year end, at 31 March, Officers have completed the production of the draft accounts by the required 31 May deadline and external Audit work has commenced.

 

It was also noted a full review of the Fund’s risk register had been scheduled for later in the year and added to the business plan. Attention was also drawn to an item added to the business plan to reflect the previously agreed position of reviewing Ethical, Social and Governance (ESG) investment issues following the completion of the transfer of listed assets to Brunel, this was envisaged to be during the second half of 2020.

 

The report and attached business plan and meeting workplan were accepted.


07/06/2019 - Review of Administrative Performance ref: 1180    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report from the Head of Peninsula Pensions detailing a review of the Administration’s performance. The Committee were informed of: the overall improvement in performance; the remaining backlog of work; the recent Peninsula staffing recruitment and restructure.

 

There was a brief discussion of the report and the Committee noted the variance of performance against some existing targets and it was stated that the team was currently looking at benchmarking against other pension administration teams to help inform its review of target setting.

 

The report was accepted, and it was requested that the next report provide an update on the review of target setting.


07/06/2019 - Review of Investment Performance ref: 1179    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee considered this report on the performance of the pension fund investments for the quarter ended 31 March 2019 and related matters.

 

The Funds & Investments Manager provided an overview of the report, including the performance of the individual fund managers against benchmarked performance. It was noted that at the end of the quarter the value of the Fund stood at £2.170bn.

 

The Committee agreed to accept the report.


07/06/2019 - Independent Investment Advisor's Report ref: 1178    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee’s Independent Advisor provided a verbal overview of the financial situation in the United Kingdom (UK) and Over-seas.

 

Members briefly discussed the points raised during the overview, including: the overall downward trajectory of the economic position; the U.K. interest rates; difficulties in the global motor industry as both diesel and petrol engine production continued to fall sharply; the possibility of a Brexit dividend and the impacts of a further extension to the date of the U.K.’s departure from the European Union.

 

The Independent Advisors update was accepted.

 

 


07/06/2019 - Any other urgent items of business ref: 1192    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

There were no other items of business meeting closed at 11.37.


07/06/2019 - Public Question Time ref: 1177    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Chair welcomed those Members of the public who were present and invited those who had registered to speak to address the Committee.

 

Mr Reimers said thank you for sight of the draft response to my question for the meeting of the Pensions Committee on 8 March 2019 which was cancelled. I note the reference in the draft response stating that the Pensions Committee is not tied in its investment decisions to the policies of Somerset County Council.

I wonder whether, three months on, there is now greater clarity about how Somerset County Council Pensions Committee, with due regard to its fiduciary duties, is taking the declaration by the County Council of a climate emergency on 20th February this year into account when deciding on its investments, despite its independence from the County Council itself

Most, if not all, of the other West Country Councils (as well as the Environment Agency), whose Pensions Committees are members of Brunel Pension Partnership have also declared a climate emergency. To date have any such declarations played a part in the investment decisions being made by Brunel Pension Partnership?

 

The Funds and Investment Manager thanked Mr Reimers for his statement and on-going interest in the work of the Pensions Committee and responded to the main points raised as follows:

 

It is not possible for the Committee to change its approach to any matter of policy outside of the formal decision making of Committee meetings, as the Committee has not met the position has not changed. You will note that the matter is not on the Agenda for today’s meeting but there will be a discussion regarding the future meeting workplan.

 

The Brunel Pension Partnership has been tasked by the founding Funds with delivering a range of investment portfolios which individual funds then get to choose from.  No fund has made a formal request for a change in the portfolios offered by Brunel to meet climate considerations.  Officers of Somerset CC are not aware of any informal discussions but it is possible these have taken place.

 

 

Mr Dunk made a statement about the potential future dangers of investing in fossil fuels in light of the current climate emergency and in summary he asked 3 questions of the Committee: 

 

1. Would the Committee immediately resolve to transfer some investments to the Brunel Pension Partnership’s Passive Low Carbon Equities Portfolio and look into the possibility of also investing in the Active Sustainable Equity Portfolio?

2. Would the Committee commit to phasing out pension fund investments in fossil fuels (including companies that provide services for fossil fuel extraction and delivery systems) over the next 5 years?

3. Would the Committee work with the Brunel Pension Partnership to ensure that the above target was met and work with the other Pension Fund holders in the Brunel Pension Partnership to reach a common approach to fossil fuel divestment as it would manifestly speed up the process and give Brunel the information it needed to tailor its portfolios accordingly?

 

The Funds and Investment Manager thanked Mr Dunk for his statement and responded to the main points raised as follows:

 

Q1.  The Committee chose not to revisit this decision at this time.  The process of moving assets to Brunel over a 2 to 3 year period is a very complex and potentially expensive undertaking.  When the Committee chose the investments, it wishes to make with Brunel it also noted the complexity and potential costs and recognised that changing the investment strategy within the transition window would bring significant additional risks.  The investment strategy is a key piece of committee work and will be reconsidered regularly in the future.

 

Q2.  The Committee has not committed to the phasing out of investments in fossil fuels.  ESG considerations are an important consideration within the investment strategy and the Committee will review this after the Brunel transition window and regularly thereafter.

 

Q3.  The Committee will only seek to change Brunel activity when it does not meet the Funds agreed policies and needs, this is currently not the case.  No other fund has formally asked Brunel to revisit the agreed policy of not divesting.

 

The Chair of the Committee thanked both members of the public for attending the meeting and asking questions. He noted that the Committee regularly considered its investment strategy and explained that taking a decision to disinvest in fossil fuels investments or with companies that were ‘ecologically sound’ was not as straight forward as it seemed, as it required a judgement that would be finely balanced and quite subjective.

 

He reiterated that the Committee regularly reviewed its investments and was mindful of its fiduciary duties and minimising potential future risks associated with some investments. He also confirmed that the Committee as it was currently transferring its to the Brunel Partnership would not discuss the issue of fossil fuels investments further at the meeting.


07/06/2019 - Minutes from the Previous Meeting ref: 1176    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

The Committee agreed that the minutes of the last meeting were correct and the Chair signed them.


07/06/2019 - Declarations of Interest ref: 1193    Recommendations Approved

Decision Maker: Pensions Committee

Made at meeting: 07/06/2019 - Pensions Committee

Decision published: 24/06/2019

Effective from: 07/06/2019

Decision:

Mrs Payne and Mr. Bryant declared personal interests as members of the Local Government Pensions Scheme in respect of agenda item 7.


24/06/2019 - Decision to award a contract for large passenger-carrying vehicles to operate on school contracts ref: 1232    Recommendations Approved

Decision Maker: Cabinet Member for Highways and Transport

Decision published: 24/06/2019

Effective from: 02/07/2019

Lead officer: John Perrett


14/06/2019 - Supply of new passenger transport vehicles for Transporting Somerset in-house Fleet for 2018/19 and 2019/20 requirements ref: 1207    Recommendations Approved

Decision Maker: ECI Operations Director

Decision published: 24/06/2019

Effective from: 22/06/2019

Lead officer: John Perrett


17/06/2019 - Leader appointments to Junior Cabinet Member role, Somerset Waste Board and Outside Bodies ref: 1209    Recommendations Approved

Decision Maker: Leader of the Council

Decision published: 17/06/2019

Effective from: 17/06/2019

Lead officer: Scott Wooldridge