Caroline Holland, Director of Corporate Services, introduced the budget and business plan item:

·         At the time of the October 2016 report to Cabinet, there was no budget gap in years 2017/18 and 2018/19, and only a small gap in 2019/20;

·         However, subsequent to this substantial growth has been built into the budget from 2017/18 to benefit Adult Social Care, waste and regeneration, futureMerton and Children, Schools and Families;

·         This will be funded using the balancing the budget fund leaving a gap (£1.6m in 2017/18, rising to £14.3m in 2018/19, £15,107m in 2019/20 and £21,450m in 2020/2021); and

·         Other budget complications were noted including whether the level of funding from the Better Care Fund (from the Merton Clinical Commissioning Group) will remain unchanged, the announcement in the Financial Settlement of a potential Adult Social Care precept of 3% for 2017/18 and 2018/19, and the redistribution of the new homes bonus (now being given over 5 and not 6 years) for which the effect is roughly even for Merton in 2017/18 only.

In response to member questions, the Director of Corporate Services clarified:

·         The 3% Adult Social Care increase for 2017/18 includes 1% for service improvement.  This equates to a £800k budget and as yet there is no guidance on what is meant by service improvement;

·         Changes to revenuisation result from new definitions with items moving from capital to revenue expense if no improvement is provided.  For example, replacing a flat roof like-for-like would be classified as a revenue expense as there is no improvement provided on what existed previously.  Whereas, replacing the flat roof with a pitched roof would provide an improvement and be classified as a capital expense;

·         The cost implications of the Freedom Pass are being carefully monitored.  It was noted that increases to this budget result from travel price increases (notably train fares) and some from increased usage; and

·         Any underspend in the capital programme, will be clawed back to reduce the overall capital spend, decrease costs overall and the overall revenue cost of borrowing.

New departmental savings proposals

Members considered each individual new departmental savings proposal:

ENR1: this saving will be realised from the expansion of the regulatory shared service about which advance discussions are in progress with Wandsworth (the saving has already been built into the Medium Term Financial Strategy [MTFS]) with a new borough partner to be identified. 

ENR2: free parking for Blue Badge holders in Pay & Display parking bays in off-street car parks is in excess of statutory requirements.  Research has also found that designated Disabled Parking bays off-street are not being fully utilised.  The introduction of fees for Blue Badge holders using Pay & Display parking off-street is therefore intended to ensure full utilisation of designated Disabled Parking bays and to free other bays for use by other drivers.  The estimated revenue is based on research conducted on usage of Disabled Parking bays on 1 December 2016 with the resulting potential revenue estimate consider conservative by the department.  Whilst three new Disabled Parking bays have been installed recently, numbers and usage will continue to be monitored in the run-up to the launch of the new policy with the potential to increase the number of Disabled Parking bays in off-street parking.  Any change in charges for Disabled Badge holders using Pay & Display parking bays will be fully communicated in advance with implementation planned for 2019/20.  Members noted the need to balance the provision of sufficient Disabled Parking bays with retention of sufficient Pay & Display parking bays to ensure the saving can be realised;

ENR3: it is intended to increase the cost of a town centre parking season ticket in Morden, Mitcham and Wimbledon from £300 to £450 per annum.  It was noted that these are much in demand.  RESOLVED: the Panel resolved to recommend to Cabinet that this saving be brought forward and achieved earlier than currently indicated in the MTFS;

ENR4: the Panel welcomed the aspiration of realising Merton’s investment in its CCTV facilities to offer CCTV services to existing and new partners to gain a new income stream;

ENR5: this saving reflects that Phase C of the South London Waste Partnership means one management post in transport services can be deleted.  RESOLVED: to recommend to Cabinet that this saving be brought forward and achieved earlier than currently indicated in the MTFS;

ENR6: this saving reflects the waste services back office will shift from a support function to a commercialised commissioning and client services team, and therefore there is a need to explore and deliver efficiency savings.  The Panel requested that the department look at bringing part of this cost saving forward into 2018/19;

ENR7: this will realise the efficiencies to be gained from one council managing a shared transport fleet.  Income will be achieved by charging Sutton for these services;

ENR8: this item realises the additional income being gained from annual rent reviews which have resulted in increases beyond original budget estimates;

ENR 9: the shift from engagement to enforcement around waste disposal activities will bring an increased income.  It was noted by the department that as a result of the South London Waste Partnership, the new provider is liable for waste collections and street cleaning and will be taking more responsibility for engagement and education; and

CH67: whilst the first year of its operation is being funded by Arts Council England, this saving realises an income from the Merton Arts Space in subsequent years.   In response to member questions, it was noted that funding in its first year of operation is being used to showcase the space to providers and residents.  Also, the department is currently being reorganised to ensure it has the necessary commercial skills to achieve this income.  It was highlighted that Crown House Creative is a pop-up creative space which is not a longer term option for a commercial income given it will be reoccupied.

Amendments to previously agreed savings

Members considered amendments to previously agreed savings:

Waste services

It was noted that this saving was predicated on a three percentage increase to recycling but, as is happening elsewhere in London, rates of recycling have plateaued.  However, it has also been shown that the forthcoming service changes can increase recycling.  This saving (achieved through a reduction in landfill costs) has been pushed back to 2019/20.  It was highlighted that this slippage has already been built into budget projections.

Building Control

As discussed at the previous meeting, a shared planning service is not viable and therefore this previously proposed cost saving cannot be realised.  Alternative cost savings have been brought forward.  Members expressed their concern about the proposed saving to be realised from no longer sending consultation letters on building applications and relying on site notices only (D&BC6).  It was noted that sending consultation letters is beyond statutory duties and has been stopped by Croydon and Lambeth.

RESOLVED: the Panel resolved to recommend to Cabinet that the cessation in consultation letters be reconsidered given it is a relatively small saving compared to the potential impact on the Council’s reputation.

Growth proposals

It was confirmed that the growth proposal for Morden and Wimbledon regeneration makes allowance for the recharging of costs to Transport for London.

Additional budget motions

Free Christmas parking

Councillor Bull moved a motion for an additional cost saving; “To recommend to Cabinet an end to current free Christmas parking at weekends during December which is losing revenue and is inefficient.  This should be replaced with free Christmas parking on Thursday evenings in December to encourage greater throughput of shoppers”.  The motion was seconded by Councillor Holden.  It was noted by the department that this initiative currently costs the Council £60K in lost revenue and both the Merton Chamber of Commerce and LoveWimbledon have requested a different approach that would be more beneficial to local businesses.  However, it was also noted that the implications of free parking on Thursday evenings in December have not yet been fully explored.  The Panel noted it would like to understand this better.  The motion was moved to the vote and fell.

Minimising commercial risk

Councillor Bull moved a motion; “To recommend to Cabinet that the private sector be utilised as far as possible to insulate the Council from the risk in hosting popular events in Wimbledon Park”.  The motion was seconded by Councillor Holden.  Officers noted that such an approach may hamper the Council in achieving a commercial income, (for example, the annual fireworks event which the Council delivers directly, without a commercial partner and from which it has been receiving a commercial income for some years).  It was also noted that the Panel is awaiting the Commercialisation Task Group action plan.  The motion was moved to the vote and fell.

Adult Social Care precept

Councillor Bull moved a motion; “To recommend to Cabinet that the 3% precept for Adult Social Care be utilised for 2018/19”.  This was seconded by Councillor Holden.  The motion was moved to the vote and fell.