Agenda item

At its 25^th March 2021 meeting, the Committee approved arrangements whereby Surrey County Council (SCC) would provide a comprehensive finance function to TDC comprising the Section 151 role; leadership and management of a full range of financial functions; and support through the Tandridge Finance Transformation (TFT) plan. Ricky Fuller (Surrey County Council’s TFT programme manager) presented a report which informed the Committee about the outcome of the initial due diligence phase, including an analysis of current weaknesses and suggested actions to address them as part of the TFT plan. This analysis had been shared with a ‘Member / Officer Reference Group’ on 17^th June. The coverage of the report included:

• guiding principles for the finance function and the role of finance within TDC;

• an ‘overall mission’ to:

Ø  blend the skills, experience and expertise of the Surrey and Tandridge teams into a high performing, resilient, finance function for the Council

Ø  build a trusted, proactive and insightful Finance Service which is at the heart of a strong culture of financial management, accountability and evidence-based decision making across the Council

Ø  improve processes and use systems more effectively to increase efficiency, free up capacity and strengthen controls

• five workstreams to transform the finance function and the role of finance within the Council, i.e.

Ø  a new finance model and staffing structure, with a blend of TDC directly employed staff and senior members of the SCC finance team

Ø  a transition of the SCC team to provide management oversight, best practice guidance and (in some cases) take on delivery of services to TDC

Ø  organisational development to strengthen financial management

Ø  measures to strengthen the exchequer function

Ø  effective delivery of the 2021/22 budget and the savings required while incorporating any key outcomes of the Grant Thornton forensic review.

• proposed ‘roadmaps’ of activities for the finance and exchequer functions until the first quarter of 2022

• a governance regime for the TFT plan.

The report explained the need to invest in strengthening the finance team to allow the shared SCC service to fulfil its objectives. The anticipated increased staffing costs were £27,000 in 2021/22 and up to £76,000 in 2022/23 and annually thereafter. Two additional one-off investments would also be required, namely:

·                  £30,000 associated with the role of a Finance Transformation Lead (0.5 FTE) which had been offered as a development opportunity to the TDC finance team – the cost would allow backfilling for the successful candidate

·                  £50,000 for a short-term exchequer services change team.

A risk analysis of the TFT plan was provided within the report, together with the outline terms of a proposed Joint Working Agreement (JWA) to act as the legal basis for the partnership. The Chief Finance Officer advised that, had the risks been ‘RAG’ rated, they would be classified as ‘amber’. It was agreed that the Vice-Chair of the Committee (in addition to the Chair and Group Leaders) should be consulted by the Chief Executive regarding the completion of the JWA (Resolution C below refers). 

During his presentation, Ricky Fuller emphasised that the need to strengthen the exchequer function was not a negative reflection of the Tandridge team which he regarded as being diligent and committed. He was convinced that the proposed investments were necessary to restore the finance function onto a resilient footing. In response to Members’ questions, Ricky Fuller and the Chief Finance Officer explained the potential corporate benefits to justify the proposed increase in finance staffing costs.

Following the ‘due diligence’ and ‘transformation’ phases, the partnership would enter a ‘steady state’ (Phase 3) with the option of a managed exit whereby full control of the finance function could pass back to TDC. It was confirmed that this would be a genuine choice for the Council and that the longer term future of the partnership was not predetermined.

R E S O L V E D – that:

A.        the one-off investment of £80,000 required to develop and deliver two of the key        workstreams within the Tandridge Finance Transformation Plan be supported;

B.        the case to strengthen the finance function within the Council and the additional         investment required of (up to) £76,000 in the 2022/23 financial year (and a                     potential part-year impact in 2021/22 of circa £27,000) be supported; and

C.        the Chief Executive be authorised to complete the Joint Working Agreement and       the final detailed operating model with Surrey County Council, following further         detailed discussion and consultation with Group Leaders and the Chair and Vice        Chair of the Strategy & Resources Committee.

COUNCIL DECISION

(subject to ratification by Council)

            R E C O M M E N D E D – that the one-off investment of £80,000 required to develop and deliver two of the key workstreams within the Tandridge Finance Transformation Plan be met through the use of the Council’s flexible capital receipts.

(In accordance with Standing Order 25, Councillors Black and Pursehouse wished it recorded that they abstained from voting on all the above resolutions / recommendation).