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 country have closed libraries and children’s services but we have not done that.

The Assistant Director of Resources drew Commission members’ attention to Page 130 of the agenda pack which highlighted that the majority of the savings are efficiencies rather than service reduction.

Councillor Badenoch asked what percentage of savings in 2015/16 is based on failure to deliver pre-agreed savings.

 The Director of Corporate Resources said the savings for which alternatives were brought forward is approximately £500,000.

Councillor McCabe asked for clarification on how much  20% of government funding equates to in monetary terms.

The Assistant Director of Resources said the service specific grants are around £20 million.

Councillor Hanna said Stephen Hammond MP had recently given an interview and said the council has been irresponsible in its failure to use its reserves of £100 million. Councillor Hanna asked the Director of Corporate Services to write to Mr Hammond and confirm her advice to the Commission about the actual level of reserves we hold and that they are not excessive.

The Chair confirmed that we currently have general fund reserves of £18.8 million which will reduce to £14 million by the 31^st March.

The Director of Environment and Regeneration gave an overview in regards to savings E&R43.  Safer Merton had recently cut the Head of Service post which was totally through efficiencies as there was no reduction in service. The department is now looking for further savings which will save £70,000 in two years in non- statutory services. The detailed proposals will be worked up over the next two years.

The Head of Public Protection said they are looking for opportunities to bring forward efficiencies before 2017-18.

Councillor Southgate said he is concerned about prolific offenders who are small in number but cause disproportionately high social and economic costs.

The Director of Environment and Regeneration said we are working with Mayor’s Office of Police and Crime to tackle this issue.

The Assistant Director of Infrastructure and Transactions gave an overview of the saving proposals in his area (CSD1-CDD8)

Councillor Southgate asked why CSD2 has not been extended to 2016-17

The Assistant Director Infrastructure & Transactions said we cannot extend the programme yet as we do not know the level of government funding for the future.

Councillor Badenoch asked if there are any savings for 2015-16.  The Assistant Director of Infrastructure and Transactions confirmed that there is a rolling programme of savings.

The Assistant Director of Corporate Governance introduced the proposed savings in relation to CSD43 - CSD45  highlighting we currently have legal service shared with Richmond, Kingston, and the proposed shared services will allow us to share information across four councils.

The Chair highlighted that the proposed cuts include webcasting costs £15,000 per year and attracts around 1000 views per month.  The scrutiny support fund would be cut but training for councillors  would be available through the learning and development budget.

The Assistant Director of Corporate Governance clarified that we currently have around 1,500 views per month and most take place after the event, two hundred for planning with the remaining for Full Council.

Councillor Badenoch asked if the following savings can be brought forward: CSD16, CSD17,CSD22.

The Director of Corporate Services said that further investigations would be required to see if this would possible.

RESOLVED

The Commission were concerned about the proposed savings and the impact upon vulnerable residents. Officers have been asked to consider which savings can be brought forward and The Financial Monitoring Task Group will consider alternative sources of revenue.