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Agenda item

Business Plan Update 2019-23

Meeting of Overview and Scrutiny Commission, Wednesday 23 January 2019 7.15 pm (Item 4.)

Minutes:

Members agreed to take items 4, 5 and 6 together.

The Director of Corporate Services, Caroline Holland, introduced the two Business Plan Update reports (item 4 – Cabinet 10 December and item 6 – Cabinet 14 January), outlining the content and highlighting the new information in the January report. She drew the Commission’s attention to progress that had been made on balancing the budget and the gaps that remained for future years.

Caroline Holland provided additional information in response to questions about the Medium Term Financial Strategy:

· The most up-to-date draft of the Medium Term Financial Strategy 2019-23 is set out on page 133 of the agenda pack

· The £24 police precept for police authorities has been set by the government;

· Council tax is likely to increase by about 5%. Note that Council agreed to extend the council tax support scheme;

· The 2% increase in council tax from 2020/21 onwards assumes that government will return to the previous capped level

· Use of the balancing the budget reserve will be spread over two years rather than one as reported in September

· An update on the use of reserves will be provided to Cabinet’s February meeting

Savings proposals for Corporate Services

Members asked questions and made comments about individual savings proposals:

New savings
CS03 Remove premises contribution to voluntary sector grant recipients	Noted that the reputational risk should read “high” and not “very high”. Expressed concerns about repercussions for the rest of the voluntary sector. Expressed concern about viability of MVSC and CAB finding alternative sources of funding to meet these running costs. AGREED to refer back to Cabinet for reconsideration.
CS04 Reduce strategic partner grant by 10%	Noted the high risk rating. Noted that saving is proposed for 2022/23.
CS05 Reduction in staff	Confirmed that member of staff no longer needed now that Home Office have removed nationality checks from local authorities. Saving AGREED.
CS06 Reduction in staffing in Revenues and Benefits	The Assistant Director of Resources said that he was confident that the saving could be achieved without a material impact on performance and that the quality impact assessment categorised the impact as 1 (the lowest impact category). Saving AGREED.
CS07 Increase in investment income	Saving AGREED.
CS08 Reduction in staffing	Saving AGREED.
CS09 CHAS dividend	Noted that this would be an ongoing saving and that opportunities for increasing the dividend would be kept under review. Saving AGREED.
CS10 Recharges to Merantun Developments	Saving AGREED.
CS11 Amend discretionary rate relief policy	Saving AGREED.
CS12 Increase charge for long term empty properties	Noted that charges are set by government and this is the maximum that can be achieved. Saving AGREED.
CS13 Improve collection of Housing Benefit overpayments and reduce bad debt provision	Noted that this is already underway and will not have a material impact. Saving AGREED.
CS14 Impose civil litigation cap at £20k	Saving AGREED.
CS15 Reduce civil litigation legal support by 50%	Saving AGREED.
CS16 Close Morden Park House & relocate staff to Civic Centre	Members said that they greatly valued the building and noted the recent work carried out. They asked questions about the business model and were informed that the level of income would not offset costs. Members asked for more information on the level of corporate overheads charged to the service - the Director of Corporate Services undertook to provide this. Noted the costs incurred by vacant sites and suggested that closure might be a false economy. AGREED to refer back to Cabinet for reconsideration.
CS17 Close Chaucer Centre & relocate staff to Civic Centre	Noted that the SMART centre meals would be provided through the school meals contract. Saving AGREED.
CS18 Close Gifford House & relocate staff to Civic Centre	Endorsed the policy of moving staff from other buildings into the Civic Centre. Saving AGREED.
CS19 Reduction in repairs and maintenance budgets	The Assistant Director of Infrastructure and Technology said that the reduction would be achieved by reducing the number of buildings and that there would be minimal impact on the fabric of the Civic Centre. Saving AGREED.
CS20 Reduction in energy invest to save budget	The Assistant Director of Infrastructure and Technology said that all the quick wins and low budget measures had already been taken to improve energy efficiency and that this could only be further improved through large capital projects, therefore less revenue budget now required. Saving AGREED.
CS21 Implement phase 2 of flexible working programme	Saving AGREED.
CS22 Reduce frequency of cleaning in corporate buildings	Members expressed concern about potential impact on staff and on public areas. The Assistant Director of Infrastructure and Technology assured members that this saving had been discussed with the provider to identify ways of working differently without having a significant impact. He assured members that the frequency of cleaning in the toilets and kitchen areas would not be reduced. Saving AGREED.
CS23 Introduce means assessed charging	Saving AGREED.
CS24 Redesign HR services	Saving AGREED.
CS25 Charge for voluntary sector payroll	Noted that there are other payroll providers and that this saving was flagged to the voluntary sector two years ago so many of them have already switched providers. Saving AGREED.
CS26 Review of HR contract arrangements	The Director of Corporate Services said that officers were planning to achieve this in conjunction with neighbouring boroughs. Saving AGREED.
CS27 Merge Democracy Services and Electoral Services	Members noted that scrutiny would be less busy around election times. Members asked the Director of Corporate Services to be mindful of their desire for the scrutiny function to continue to be led by someone with experience and understanding of its aims and objectives. Saving AGREED.
CS28 Cash collection reduction	Saving AGREED.
Replacement savings
CSREP (1) Increase legal charges income	Saving AGREED.
CSREP (2) Reduce internal insurance fund contribution	Saving AGREED.
CSREP (3) Increase income from enforcement service	Saving AGREED.
CSREP (4) Increase in investment income	Saving AGREED.
CSREP (5) CHAS dividend	Saving AGREED.
CSREP (6) Legal services budget reduce HR support	Saving AGREED.
Deferred savings
CSD7 Restructure post and print section	Saving AGREED.
CS 2015-03 Restructure of transactional services	Saving AGREED.
CS03 Infrastructure and Transactions – adjust Local Authority Liaison Officer arrangements	Saving AGREED.

Capital programme

Members discussed the overall cost of the capital programme and its implications for the revenue budget. They asked questions about slippage and whether there was scope to further reduce the capital programme.

Caroline Holland advised that it was difficult to estimate the spread of costs for largescale programmes that ran over a number of years. She said that the funding of the capital programme took into account a certain level of slippage and assured members that there was a rigorous level of challenge for capital programme items.

Caroline Holland said that the capital programme was already committed for 2019/20 so any review of its content would have little impact. Members discussed the potential for impacting on the capital programme beyond 2020 and RESOLVED to ask the Financial Monitoring Task Group to carry out a deep dive review of the future capital programme.

ACTION: Head of Democracy Services

Members also AGREED to include a request in its reference to Cabinet, asking Cabinet to re-review the future capital programme and associated financial implications for the revenue budget.

Reference to Cabinet

The Commission RESOLVED to forward the following comments and recommendations to Cabinet:

1. The Commission noted the Local Government Association’s statement “ It is disappointing that the government has not used the budget to provide further desperately needed resources for councils next year ...It is vital that the government provides new funding for all councils in the final settlement , and uses the 2019 Spending Review to deliver truly sustainable funding for local government”;

2. The Commission recommended that Cabinet agree to support the Local Government Association in lobbying government for a more sustainable basis for the funding of local government;

3. The Commission invited Cabinet to reconsider savings proposal CS03 – remove contribution to E&R for funding premises occupied by VS grant recipients (MVSC and CAB). Members of the Commission asked whether there were alternative sources of funding that MVSC and CAB could access and expressed concern about the impact that this proposed saving might have on the rest of the voluntary sector.

4. The Commission invited Cabinet to reconsider savings proposal CS16 – closure of Morden Park House and relocation of statutory services to operate at the Civic Centre. Members of the Commission said that they greatly valued the building and asked questions about the business model and whether closure might be a false economy. The Director of Corporate Services undertook to provide information on the level of corporate overheads charged to the service;

5. The Commission would have liked to have received more information about the level and funding consequences of the capital programme. It therefore recommended that the Financial Monitoring Task Group should carry out a deep dive review of the capital programme and requested that, in the meantime, Cabinet re-review the future capital programme and associated financial implications for the revenue budget.

Supporting documents:

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Agenda item

Business Plan Update 2019-23