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, officers clarified:

·         The £9.3m growth for Adult Social Care has been proposed based on further research conducted by Cabinet Members looking at delivery, overspend, savings and the need to deliver safe services against a backdrop of more complex needs.  Further meetings are happening to better understand the cost implications of the reduction in residential and shift to home care; and

·         Agreed that if increases to Council Tax are insufficient to cover budget gaps, it will be difficult for Corporate Services, as the only department without a growth budget, to cover any budget gap;

·         Pressures on the budget for the Children’s Schools and Families Department (CSF) are being caused by a range of factors including; demographic increases, the more complex needs of Merton’s children, the requirement to support children in care for longer (potentially up to the age of 25 for those with complex needs or in education) and the increase in Unaccompanied Asylum Seeking Children (and for families for which there is no recourse to public funds);

·         Examples of how CSF is seeking to alleviate budget pressures were highlighted; a new contract has been put in place to reduced SEND transport costs and placements are being negotiated to provide best value and cost reduction where possible.  The success achieved in reducing SEND transport costs was noted as demonstrating saving proposals can be achieved despite being difficult;

·         The cost to the Council of the new Harris Wimbledon Academy is not yet finalised but officers expect it to be in the region of £7.5m net.  This represents a considerable saving on the typical cost of £30-40m for a new secondary school with the Education Funding Agency providing the rest of the funds.  Merton’s contribution includes approximately £200K towards the refurbishment of the new Adult Social Care centre and contingency costs;

·         Proposed savings resulting from staff reductions will need to be carefully managed in order not to destabilise services.  These will be carefully reviewed and managed in order to achieve required changes whilst maintaining services;

·         Changes to revenuisation were explained as resulting from changes to definitions of capital expenditure;

·         Proposed savings to be achieved from setting-up a multi-borough adoption service are a work in progress and will continue to be refined as the deadline gets closer; and

·         Savings proposed now for 2019/20 will continue to be reviewed and assessed over the intervening period to ensure they are realistic.  Where it is assessed that they cannot be achieved or only partially achieved, alternative savings will need to be brought forward.  Given the extent to which the department is delivering statutory services, all savings and any alternatives require great care.

Councillor James Holmes proposed a motion; “The role of the Children and Young People Overview and Scrutiny Panel is to challenge and champion the role of the Children, Schools and Families Department.  We therefore recommend to Cabinet that the Adult Social Care precept be taken in subsequent years to reduce the pressure on the Children, Schools and Families Departmental budget”.  The motion put to the vote and fell.