Agenda item

Report of the Chamberlain.

The Sub Committee received a report of the Chamberlain regarding the bases for apportioning costs of the Town Clerk’s Department, City Procurement and the IT Division. The Chamberlain advised that recharges for the Barbican and Markets were determined separately owing to service user charges.

Members noted that the apportionment of support service costs (or overheads) was designed to share costs across all the activities of the organisation on a reasonable basis; however, the limitations of such a technique were recognised. The City currently accounted for central support service costs in accordance with CIPFA’s Service Reporting Code of Practice (SeRCOP). For local authorities SeRCOP had statutory force, but, with regard to the City’s non-local authority funds, there was no requirement to follow SeRCOP. The Chamberlain advised that, although the main reason for non-inclusion for internal reporting purposes would be that central support costs were not within the control of front line services, this was not sufficient to justify the operation of two parallel accounting systems.

Members also noted that a further detailed benchmarking task, using soft market testing, was being carried out for other aspects of the Finance function. It was noted that, for a number of the City’s financial services, the breadth and complexity of the organisation made benchmarking less straightforward than a simple comparison with local authorities, and these factors were being reflected in the approach and timescales for the task.

RESOLVED – That

(a)  The methodologies being used to apportion the costs of the Town Clerk’s Department, City Procurement, and the Information Technology Division together with the redistributional impacts be noted;

(b)  It be agreed that the costs of central support services should continue to be apportioned to all funds and services in accordance with the local authority requirements set out in CIPFA’s Service Reporting Code of Practice (SeRCOP); and

(c)  The soft market testing task being undertaken for aspects of the Finance function be reported at a future meeting, along with recommendations for adding update reports and reviews of other departments to the Work Programme.