Agenda item

The Committee was asked to consider a call-in in respect of the decision taken by Cabinet Member for Corporate Services and Budget to approve the allocation of £0.480m from the Feasibility Reserve to support development on the next stages of the East Midlands County Combined Authority (EMCCA).

 

On 18 April 2023 the Cabinet Member for Corporate Services and Budget considered a report of the Executive Director Place and agreed:

 

a) To approve an allocation of £0.480m from the Feasibility Reserve in

order to support the development of the next stage of the EMCCA.

 

b) To delegate to the Managing Director, in consultation with the S151

officer, approvals and management of expenditure within this

amount.

 

A copy of the report considered by the Cabinet Member was attached at

Appendix 3 to the report.

 

In accordance with the provisions of the County Council’s Constitution,

Councillors Joan Dixon, Ruth George, Philip Rose, and Alex Stevenson

have asked that the decision be called-in and considered by this

Committee.

 

The call in had been requested on the basis that the decision breaches

Articles:

• 7.2 (c) proportionality (i.e. the action must be proportionate to the

desired outcome);

• 7.2 (f) a presumption in favour of openness;

• 7.2 (g) clarity of aims and desired outcomes.

 

 

The principal objections, as given in the call-in notice, were stated as

follows:

 

"On 22nd March 2023, a report went to Full Council (Agenda item

8) with regards to the proposed Devolution Deal for the EMCCA.

In Appendix 1, the financial implications of the decision are

addressed (page 48.) It states that “there will be an ongoing

need for enabling activities from the Constituent Councils to

continue pending Government approval and receipt of capacity

and other funding.” There is mention of government capacity

funding for enabling activities and also that the investment

funding of £38m can be used to meet the costs of enabling

activities, if the capacity funding is insufficient to meet such costs.

At no point in the report is there any reference to any monies

required from the County Council - so elected members would not

think the decision would place a financial burden on the County

Council.

 

The decision taken on 18th April 2023 comes less than a month

after that meeting and the majority of elected members were not

sighted that the decision they had made previously would now

mean there were £0.480m worth of financial implications for the

county council as a result of the decision made on 22nd March.

The amount of approval at £0.480m comes just below the level of

funding needed for this decision to be made at Cabinet and in

public. It was not done in an open and transparent way.

 

The report is not clear how much of the burden of the costs for

enabling activities falls on DCC in comparison with the other three

Unitary authorities, so the proportionality of the level of financial

input between the four authorities is not clear."

 

Councillors Dixon, George and Rose attended the meeting and were invited to address the committee as to why they considered the Council’s decision making principles to have been breached as raised in the signed Call – In Notice lodged with the Monitoring Officer and detailed above.

 

Councillor Dixon focussed on proportionality, openness and Transparency and the outcome and desires as detailed in the Call -In notice.

 

Councillor George echoed these comments adding that the papers that went to public consultation and full council did not make clear the cost implications and that £0.5m could be spent on so many other areas/services that desperately needed resources. She also referred to their being no transparency of how it would be funded and what the contribution from the other authorities would be. She also asked how would it be administered who was making the payments.. She concluded by saying that there were so many questions relating to clarity, transparency and accountability.

 

Councillor Rose echoed his colleagues comments and questioned what proportion of funds had been allocated to this process from the feasibility reserve set up in April 2022.

 

There were no questions from committee members at this point.

 

Councillor Spencer, Cabinet Member for Corporate Services and Budget addressed the committee a follows :

I would ask the Committee to uphold that the decision-making principles of this Council were met when I took the decision to approve allocation of the feasibility reserve

 

Let me start by being clear about what this decision is – namely, the allocation of funds within an existing reserve when those funds are required and only then on the basis of further delegated decisions by the Managing Director in consultation with the Section 151 Officer

 

This is a technical decision which will enable the efficient expenditure of funds, only when required, for the purpose of implementing a decision properly taken by Full Council on 22 March this year

 

The need for the use of these funds and specifically, the use of the Feasibility Reserve, was first set out in a decision by Cabinet on 7 April 2022 when the report of the Managing Director stated – ‘In order to progress the securing of a County Deal for Derbyshire and Derby by Autumn/November 2022 a programme team will be required. Funding to meet the costs of the programme team will be met from the Council’s Feasibility Reserve’

 

More recently, the Full Council decision of 22 March 2023 set out ‘an ongoing need for enabling activities from the Constituent Councils to continue pending Government approval and receipt of capacity and other funding’

 

The recent decision is therefore rooted in the context of:

 

Firstly, historic use of the Feasibility Reserve for activity to secure our Devolution Deal.

 

Secondly, the clear statement that there will be an ongoing need for these activities before capacity and other funding is received.

 

These activities will need to be paid for.  Given the timing of the receipt of capacity funding is currently not certain – we have taken the perfectly sensible decision to set aside funds from the Feasibility Reserve for this purpose.

 

I will now address the specific reasons on which the latest decision has been called in:

 

Firstly ‘At no point in the (22 March) report is there reference to any monies required by the County Council’ – in fact the report is clear that the is an ‘ongoing need for enabling activities from the Constituent Councils to continue pending Government approval’

 

Secondly, ‘The decision taken on 18 April (to allocate the Feasibility Reserve) comes less than a month after the (22 March) meeting’.  The 22 March report was taken by all four top tier authorities in a standard way, in order to enable the joint presentation of a devolution proposal to Government.  The 18 April was a report taken by Derbyshire County Council independently. The other authorities will be taking in their own funding decisions in accordance with their constitutions as they deem appropriate

 

Thirdly, ‘The amount of approval at £0.480m comes just below the level of funding needed for this decision to be made at Cabinet’.  This is the amount that officers estimate will be required to meet our commitments over the coming months – although future capacity funding may enable us to recoup this outlay.  Our financial regulations enable this decision to be made, perfectly properly, by a Cabinet Member on the basis of a published report.

 

Finally, ‘the report is not clear how much of the burden of costs for enabling activities falls on DCC in comparison with the other three authorities’.  We are working on the basis of partnership and all four authorities have devoted significant resources and time to the Devolution Deal.  We anticipate that this will continue and a number of specific costs will be specifically shared equally (for example costs of external consultancy and advice). We will be monitoring resource commitments by all four authorities to support fairness and transparency within this partnership. However, the full set of costs has not been calculated and allocated as yet.

 

Hence the reason why our decision ear-marks funding and requires further decisions to spend it.

 

On this basis, I would ask the Committee to reject any notion that our decision-making principles – of proportionality, a presumption in favour of openness and clarity of aims – have in any way been breaches.

 

Councillors were invited to comment:

 

Councillor Innes felt it was a shame that the procedure didn’t allow for questions couldn’t be asked but would like to know what other authorities were doing and has the Feasibility revenue been used. There was no openness and I don’t think it’s a good deal for Derbyshire Taking politics away from it it’s a terrible thing as £0.5 million could be better used on many things.

 

Councillor Clarke commented that from a transparency perspective it was not explicit as to what was being required from DCC funds and what other costs were forthcoming.

 

Councillor Woods commented as to why it couldn’t have been included in the Full Council Papers.

 

Councillor Ford commented that the wider benefits for the area were clear to see and would outweigh any expenditure.

 

The Chairman asked each member  in turn to state whether they considered the decision making principles identified in the Call- In Notice were, or were not breached giving reasons,

 

Cllr Major  - No breach as the rules had been properly followed in setting up Feasabilty reserve and the amount approved was below the limit for the need for  Cabinet decision and it was not unusual for spending being required before final decisions being made.

 

Cllr Ford – No breach, decision making principles properly followed and huge benefits to the area

 

Cllr Foster – No breach; decision making principles properly followed

 

Cllr Innes  - Breached due to lack of openness and no favourable outcome for Derbyshire

 

Cllr Clarke – Breached due to lack of openesss and transparency

 

Cllr Murphy  -   No breach, decision making principles properly followed

 

Cllr Muller -  No breach, decision making principles properly followed

 

Cllr Woods  - Breached, transparency issues and openness

 

The Chairman stated that he also believed that there was no breach and the decision making principles had been properly followed.

 

RESOLVED that the decision made by the Cabinet Member for Corporate Services and Budget on 18 April 2023 and identified in the Call In Notice, did not breach the decision-making principles set out in Article 7.2 (c), (f) and (g).