Agenda and minutes

To note apologies and confirm the quorum of 11 members is met.

Apologies for absence was received from Councillor David Jones.

The meeting was confirmed as quorate, with 14 members present out of 11 needed for quorum.

There were no declarations of disclosable pecuniary interests.

There were no items requiring the exclusion of the press and public.

The Committee considered a report of the Scrutiny Support Officer outlining governance arrangements, terms of reference, Scrutiny Standing Orders, quorum, and substitute rules agreed by the Combined Authority at its annual meeting in June 2022. 

The Chair welcomed the new members to the committee and outlined the main change to the committee remits which has ensured that Transport Scrutiny covers more of the environmental and place related topics that coincide with transport.

A clarification on substitute rules was provided; that any scrutiny member can substitute for another member who is from the same party and district on another scrutiny committee – any member without a pair, can nominate a personal substitute from their own council. Scrutiny officers will circulate a list of members who need to appoint a personal substitute.

Resolved:  That the report be noted.

Under matters arising, an update was provided on the workforce issues raised at the last meeting, WYCA’s involvement with Welcome to Yorkshire, and the Accommodation Project closure and benefit reports.

Resolved: 

i)               That the minutes of the meeting held on 11 March 2022 be approved.

ii)              That the Director of Corporate and Commercial Services circulate the closure and benefits reports for the Accommodation Project to members when available.

The Committee received a verbal update from the Chair which covered his activities and meetings over the summer.

Resolved:  That the Chair’s verbal update be noted.

The Committee considered a report of the Director of Corporate and Commercial Services providing an update on the impact of inflation on CA spending and budgets, including the capital programme and revenue pressures, and the prospective approach to budget and business planning for 2023/24.

Discussion took place around the following topic areas:

1)    Risks and uncertainty around funding for tendered bus services: The two main risks of bus funding are wider budget pressures from cost increases affecting the level of funding available for existing tendered services and cuts of commercial services by bus operators could lead to extra pressure for the CA to tender more ‘socially necessary’ services – both of these represent a high social impact on residents. The committee noted the balance of monitoring spending and risk without straying into the Transport Scrutiny Committee’s remit on buses and transport.

2)    Initial assumptions around inflation level: In November/December 2022, the CA Members took the decision to operate under an assumption of 2% inflation, which was in line with similar analysis by most Local Authorities, generally based on then Bank of England estimates. The Committee noted that Scrutiny felt last year that, despite pressures on the revenue budget, a 2% assumption in the pay award was unrealistic and a 4% assumption might have been more accurate. Some Members reported their own places of work working on assumptions of inflation as high as 9% late last year as it appeared evident, even before the Ukraine War Crisis, that inflation would rise across the economy. The committee suggested inflation be focused on when budget 2023/24 scrutiny takes place later this year. 

3)    Gainshare and inflation: As the committee noted last year, Gainshare is not inflation indexed and this was a risk, so it would lose its initial value over time at a minimum of 2% a year (based on historic average of inflation). In light of recent inflation rises, this loss of value has accelerated at an alarming rate – a rise in inflation of 10%, as predicted this year, would essentially wipe off nearly £4m in funding a year from now on, and it is only the first year of Gainshare funds being available to the CA. The CA decided as a deliberate strategy last year to ‘front load’ spending in order to fully maximise the full value of Gainshare, and any borrowing against it, and focus on revenue generating schemes. It was also decided to over programme, similar to capital programmes, to ensure there is always a project in the pipeline to spend the money on to ensure there isn’t a situation where funds are not being deployed where needed. The committee asked to see a monitor of gainshare spending at each meeting.

4)    Possible cancellations of capital programme schemes: The CA, in coordination with the local authorities (through directors of delivery) who usually sponsor and manage many of the schemes in the capital programme, is currently reviewing all schemes to determine the effect inflation costs  ...  view the full minutes text for item 7.

The Committee considered a report of the Head of Procurement and Commercial on the outcome of the Social Value Portal trial procurements that had been undertaken since the committee last considered this topic in March 2022.

Discussion took place around the following topic areas:

• Additionality: It was difficult to ascertain exactly where the additional social value was being obtained in the examples given in the report. In one example of the rebrand contract, a social value of 44% of the contract’s value was quoted due to the supplier engaging in equality and diversity (EDI) initiatives. It was felt that commitments of that nature amounted to a lack of additionality as the companies would be engaging in those things anyway, even without the contract. It was perceived as the suppliers ‘marking their own homework’. It was confirmed that the companies were supposed to choose additional elements that they were not currently doing and the examples would be reviewed to ensure compliance with that requirement.

• Notional nature of the calculated ‘Social Value’: The fundamental nature of the concepts behind determining social value meant the values were very notional and could be difficult for people to understand and reconcile, especially when compared to the approach taken by some local authorities which simply asked for a direct financial contribution to a pooled social fund. Some people could mistake the notional social value for a real monetary value – which implied the supplier was being paid, using the previous example, 44% of the contracts value to engage in the EDI work.

• Additional real value cost to the CA and suppliers: Even if the ‘social value’ is notional, the Social Value Portal and TOMs system nonetheless have a real cost in running and administering them – both for the CA and for the businesses. In this case, as with any spending, value for money is important and must be demonstrated. It might the case that some businesses are incurring extra cost to satisfy social value requirements, which they may pass onto the CA within the contract or might otherwise affect the quality of their output – especially smaller businesses. Any future report would likely focus on this element, in addition to the clarifications requested elsewhere.

Resolved: That the report be noted and the Committee’s feedback and conclusions be considered further by the Head of Procurement.

The Committee considered the Work programme for 2022/23 and discussed adding additional workshops on workforce issues and budget scrutiny before Christmas – in addition to the usual planning session ahead of Mayors Questions, which was scheduled for the next meeting in November. 

Resolved:

i)               That the appended work programme be noted and approved.

ii)              That a workshop involving a smaller group of interested members be arranged by scrutiny officers and the Director of Corporate and Commercial Services to consider workforce issues in greater detail and offer direction for the wider committee discussion at the January 2023 meeting.

iii)            That the usual workshop focusing on pre-budget scrutiny be arranged by scrutiny officers and the Director of Corporate and Commercial Services for all members at an appropriate time in the budget setting process, before Christmas.

iv)            That the usual Mayors Question Time planning session be arranged by scrutiny officers for all members in October or November prior to the Mayors Question Time session to be held on 18 November 2022.