There were no declarations of pecuniary interests. Councillor Makin informed the Commission that he is on the Board of Merton Community Transport

Apologies for absence were received from Colin Powell, Simon Bennett and Peter Connellan.

Agreed.

The Chair pointed out that that officers would not be able to discuss detail about  specific companies as it is commercially sensitive information.

The Assistant Director of Business Improvement gave an overview of the report stating that we now have two bidders, both whom could deliver the contract, final tenders will be received shortly then the evaluation process will begin.

Councillor Makin queried what support would be available for residents who do not use the internet.

The Assistant Director of Business Improvement said we will retain other channels of access and people will not be disadvantaged if they do not have on-line access but we will  encourage as many people to go on line as possible.

Councillor Moulton asked whether the budget for the customer contact project was set aside in 2012-13, If more money will be  required and what will be on the website this year.

The Assistant Director of Business Improvement said the bidders will submit an implementation plan and timescale by September; it will include interactive portals on waste, streets and parking services. By April 2016 we expect further services including those relating to parks and leisure, planning and complaints and freedom of information requests to be on the website.  We have scheduled in resources, we have asked bidders to state in their tenders what resources they require and this will be taken into consideration during the evaluation.

The Director of Corporate Services said there is an overall price and bidders must come within that.

Councillor Grocott asked for clarification on how bidders will be incentivised to include the maximum number of services in their integration and the link between department savings and how this will feed into the customer contact programme.

The Assistant Director of Business Improvement said the bidders’ quality score is weighted by the number of service integrations they include in their tender. 

The Customer Contact programme underpins activity set out in the Medium Term Financial Strategy. We also looked at the Target Operating Model for each service to determine where services are looking to move customers on line so that the programme helps departments to meet their savings targets.

The Director of Corporate Services said it may not immediately be apparent which savings are linked to the customer contact programme, for example libraries and the on-line booking system will be delivered through the customer contact programme.

Councillor Badenoch asked officers to clarify if we are spending £3.5 million on the customer contact programme, including the electronic document management system, with the savings embedded although we do not know what they are.

The Director of Corporate Services said it was agreed not to build in savings until we are sure what can be achieved. This was agreed in the 2012 Cabinet paper and once the final solution is selected we can state with confidence the expected savings. The basis on which the programme was agreed by Cabinet was that it was part of making the council more business like and efficient and is being  ...  view the full minutes text for item 4.

The Chair asked the Director of Corporate Services to give a brief overview of the Business Plan highlighting current changes and risk to deliverability of savings.

The Director of Corporate Services said we currently have a budget gap of £15.3 million if all proposals put forward to members are accepted. To put it into context this could mean a loss of 367 posts if the council choose to make the savings through staffing. We have used capital receipts to fund some short term assets, it takes time for these savings to appear in the funding of the programme. The Budget for 2015-16 is balanced. The budget for 2016-17 is balanced at this stage although the assumptions are based on the current Treasury projections. This could change after the general election.

The level of risk for savings  is increasing year on year, some details of deliverability of high risk savings for the future need to be finalised and we will do this closer to the time. We have delivered on high reputational risks so far. We are constantly reviewing and challenging managers regarding delivering savings. The Human Resources and Procurement teams are also helping to manage the change. We are also working with councils across South West London who are dealing with similar issues.

Councillor McCabe asked for clarification on what has happened to the council finances and why are we facing this.  What has happened to our support from Central Government, what are our boundaries and flexibilities, should we be increasing council tax and are our level of reserves too high.

The Director of Corporate Services said the government grant funding regime has changed; there has been a separation out of the Business Rates. The council has had a 20% reduction in funding since 2010. We have also lost £12 million a year in area based grants.

Increasing Council Tax is an option available to the council, we currently have a council tax freeze grant, this is reducing over time. If we increase council tax above 2%, it would trigger a local referendum, which would cost £300,000. A 1% increase in council tax would yield £800,000. Therefore a council tax increase cannot close the budget gap over a four year period but an increase is still an option for the future.

Our current levels of reserves are not too high. We currently have £14 million in the general fund reserves, after allowing for the current overspend. Some of our reserves are dedicated to schools which cannot be used by us. We also have monies set aside for the Transforming Families and Apprentices Programmes. There are limits on the way we can use capital receipts but we will be using some which will reduce the reserves.

Councillor Grocott said the majority of savings seemed to come from reduction in service rather than making efficiencies.

The Director of Corporate Services said we are constantly ensuring that we focus on efficiency savings, but it is not always possible.  Many councils across the  ...  view the full minutes text for item 5.

The Chair said he is concerned about the savings but has not been able to reject them as it is difficult to find alternative savings. There may be other things we can do and the Financial Monitoring Task Group will be well placed to consider other ideas. Possible alternative sources of funding could include the pension deficit; look at the council’s estate, higher values gained from property being converted from office to residential use, inflation, charging a fee for diesel cars. There are some revenue opportunities and if we had had time we could have considered alternative options.

The Director of Corporate Services said we have built in assumptions based on the rise in interest rates. We also need to ensure that we do not reconstitute a housing revenue account if we attempt to change the use of council property.

The Chair asked the Director of Corporate Services to work with the Financial Monitoring Group to look for alternative sources of revenue to fund some of the savings.

Councillor Grocott expressed concern about saving CH13 suggesting that it should be re-considered. Councillor Grocott moved a motion asking for CH13 to be referred back to Cabinet. Councillor Lewis Lavender seconded the motion.

The motion was defeated by 5 votes to 4.

The Commission asked Cabinet to note its concerns in three main areas: 

The commission expressed serious concern about the loss of the council’s Youth Service. (CSF06)

The Commission had serious concerns about proposed reduction in planning enforcement and ask that officers further develop the proposals and bring back suggestions for further scrutiny. (ER30)

The Commission has serious concerns about the reduction in services in day care centres. (CH13).

Councillor Badenoch said all political parties have said they will maintain the current funding levels for local government after the election. However we do have choices, some councils have cut communications teams to support adult social care. We need to think radically and holistically about changing the way we work to protect services for vulnerable people.

Councillor Badenoch said there were opportunities to bring forward some savings. The Director of Corporate Services said bringing forward savings would only benefit us for one year.

RESOLVED

That a reference is sent to Cabinet highlighting the Commission’s areas of concern in regards to the savings.

That the Director of Corporate Services work with the Financial Monitoring Task Group to identify alternative sources  of revenue to fund some of the savings.

The Chair asked Commission members if they wished to join a task group looking at public sector delivery models.

Councillor Makin expressed an interest in joining the task group. Commission members expressed concern that the scope of the work is very broad. It was agreed that a refined scope should be considered at the March meeting.

RESOLVED

That the scope for a possible task group on public sector delivery models should be refined and  brought to the Commission in March 2015.

The Commission  noted the work programme.